Academic journal article Rural Society

Peak Oil and Significant Change for Rural Australia

Academic journal article Rural Society

Peak Oil and Significant Change for Rural Australia

Article excerpt

INTRODUCTION

This paper argues that the peaking of world oil supply has now been well researched in terms of its form and possible maximum supply constraints, although this has yet to significantly penetrate mainstream academic, planning and policy thinking worldwide. The likely timeframes and depletion rates will quickly push it up the hierarchy of issue and risk awareness. When this occurs we will begin to look how we maintain our current economic and social structures but will find that we will not be able to match the bounty that conventional oil has supplied with regards to the net energy available, its ability to do work in the economy, its flexibility, transportability and function as a chemical stock for a range of goods and services that we use in our modern industrial civilisation. Our generally poor understanding of the nature and role of energy has led to the building of a model of consumption that will not be sustainable and we will likely be forced to transition to a lower low hydrocarbon society. This will involve substantially reduced mobility and economic activity. Whilst this may have benefits in regards to the relocalisation of agriculture and rural communities it could also mean further environmental destruction and social disruption as we attempt to maintain unviable models and structures. Planning in Australia has failed to both adequately recognise and respond to this and it is timely that we begin to understand and act to manage that transition.

PEAK OIL

Conventional oil has enabled much of the economic activity of the post-war period. It has provided a flexible, energy-rich hydrocarbon fuel stock not only for the internal combustion engine but also a range of plastics, fertilisers, pharmaceuticals and the just-in-time, long-chain economic systems that now form the basis of our complex industrial civilisation. Conventional oil has a higher 'energy return on investment' (EROI), as it is easier to find, produce, refine (than heavier oils or tar sands) and as a result provides a greater return to the economy in terms of available work delivered (Bakhtiari, 2005; Cleveland, 2005; Cleveland, Kaufmann, & Stern, 2000; Deffeyes, 2005; Fleming, 2001; Hall, Tharakan, Hallock, Cleveland, & Jefferson, 2003; Heinberg, 2003; Kummel & Linderberger, 2002; Trainer, 2004). As economic growth is linked directly to primary energy consumption (Ayres, 1998; Ayres & Warr, 2002; Cleveland, Kaufmann, & Stern, 1998; Fleay, 2003; Hirsch, Bedzek, & Wendling, 2005; Kummel & Linderberger, 2002; Poldy, 2003; Tainter, Allen, Little, & Hoekstra, 2003),we will see economic changes in terms of increased costs in production, transport, point of sale and in those long-chain industrial systems that support modern agriculture (Dunlop, Poldy, & Turner, 2004; Hamilton, 2009; Pimentel & Giampietro, 2008; Poldy, 2003).

Creditable analysis places world supply of conventional oil on a plateau of maximum production with the potential for supply constraint developing mid-decade (Aleklett et al., 2010; Hirsch, 2008; Hook, Hirsch, & Aleklett, 2009; Industry Taskforce on Peak Oil & Energy Security, 2010; International Energy Agency, 2010; Sorrell et al., 2009). An immediate peak (within 5 years) at an estimated decline rate of 3% was found to have significant negative economic impacts (Hirsch, et al., 2005; Zittel & Schindler, 2007). However it is possible we will see global depletion rates of up to 5-6% within a 5-10 year period, with many off-shore wells now recording double-digit depletion figures (Simmons, 2008). Due to its ability to meet most of its domestic needs from local oil fields Australia was buffered from the oil shocks of the 1970's, drawing upon its own reserves of light sweet crude which was traded for imported crude suitable for tasks such as petroleum, diesel fuel, lubricating oils and heavy oils for bituminous road surfaces. According to ABARE statistics, Australia's production reached a point of maximum production in 2000 and has since been in decline (Akehurst, 2002; Commonwealth of Australia, 2007; CSIRO Future Fuels Forum, 2008; Foran, 2009). …

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