New Zealand Peak Oil Presentation

The attachment was presented to the Transport and Urban Linkages Committee of Auckland City at 1:30, on Wednesday 13th April. The speech was accompanied by a graph of the Brent oil price going from $32 to $52 in one year, a graph of the peak of oil discovery in the 60s and effectively nothing of consequnce since the 90s, the Hubbert Bell for peak 2005 and the cartoon of the peak oil brick wall across the road.
The response was very mixed, with some (clearly very shocked) councillors demanding urgent follow up, whilst one suggested that the city council should not concern itself with global or national issues -leave it to the government -an interesting prespective, since Auckland is notably deficient in oil wells.
Ohter councillor comments included: "I'm sick of seeing heaters allover the place wasting energy..." "We are aware of the situation and it's about time we sarted to act instead of debating."
Questions included: "How did you get here?"  - "150cc fourstroke motor scooter that uses around $7 per two weeks."
"What about alternatives?" -"The time for alternatives was in the 1980s. The oil shock of the late 70s depressed demand and smaller cars were becoming popular, but unfortunately the Reagan administration promoted consumption, as did the Thatcher government and here in New Zealand the mid-80s governments promoted consumption to the point of having adverts on television telling us to use more electricity -so we did. The crisis we have now is a direct result of those failed policies."
"Who do you represent?" -" I am self-motivated and am concerned that unless Peak Oil and Global Waming are addressed, my granddaughter won't have a planet to live on."
"What are you qualiifcations?" - "Honours Degree in Chemistry; many years experience in industrial chemistry and education; book published in 2001 alerting this problem; numerous presentations on energy, commencing in Taiwan......"
"What is the government doing?  - " If you ask Trevor Mallard he will tell you peak oil won't occur till 2037, based on IEA projections of six months ago -projections that the IEA is now backing rapidly away from. Indeed the IEA now recognises it has a crisis on its hands and is talking about carless days or petrol rationing. The minister of energy has just been appointed and clearly has no understanding of energy at all.  You cannot rely on the government to deal with this issue. The government is in total disarray at this moment."
The meeting had started to degerate somewhat at this stage and I my time was well and truly up, but I was able to raise the issue of 'soft landing', though I pointed out it was now rather late for that.
Since I had been reminded that I had 5 minutes to speak and the meeting was into its twenty-fifth minute with no consensus as to how to formualte a motion, left, with the matter of what motion to put to the council unresolved.
TVOne had a cameraman at the meeting, but I believe there will be no reporting of any of this, since it challenges pretty well everything TVOne stands for at the moment - outlandish, off the cliff consumption, based on totally flawed assumptions.
I left then with the comment that 10,000 copies of 'Peak Ignorance' had been printed, so even if the council doesn't deal with the matter, at least the students of Auckland were now informed about Peak Oil.
I don't think I will be invited back. I think the city council is incapable of dealing with peak oil  -it's just too hard for them and it seems to me it will be 'off the cliff' from here. I have a gut feeling there are just too many vested interests and there is just too much ignorance and inertia for anything appropriate to happen. But maybe I will be proven wrong. We will see.
It is all very interesting, if nothing else.

Kevin Moore
Auckland New Zealand



Presentation to the Auckland City by Kevin Moore -April 2005

Countdown to disaster

In 1956, Hubbert predicted a peak in oil extraction for the 48-state US to occur around 1970. Initially thought to be daft, because extraction was rising at the time, he was proven correct. The US, once a world supplier, now imports over 60% of its oil, and extraction continues to decline. Hubbert also predicted a worldwide peak early in the twenty-first century. That peak hasn’t conformed to prediction, simply because the oil wars of the 1970s delayed it.

In 1998 Colin Campbell et al warned of the coming peak in ‘The End of Cheap Oil’ and suggested around 2010.

Since then, reserves have been downgraded, further extraction declines have been recorded and consumption has increased, bringing peak oil forward.

Dick Cheney was well aware of the problem, long before 9/11, and promoted the policy of a never-ending war, to take control of the last remaining major reserves.

Throughout much of 2004 oil prices surged, in response to supply concerns. Most oil extraction pumps were running flat out, yet there was only a 1% cushion and the slightest interruption resulted in panic buying.

We entered 2005, knowing that Professor Deffeyes (Geology, Princeton) has calculated the date of the global peak as November 2005, after which the supply begins to decline, irrevocably. Other eminent oil geologists say that forced extraction may maintain production levels a little beyond then, but the consequence will be a sharper fall-off later.

Matt Simmons, head of Simmons International, warned in 2004 that over-pumping could jeopardise future extraction. Saudi Arabia is over-pumping, using sea water to force out oil.

The Association for the Study of Peak Oil and Gas, having matched extraction, decline and consumption data, is now on record as predicting peak oil during or before 2008.

Increasing demand can be expected to cause major difficulties well before 2008.

There is a mistaken belief that, because we survived the oil shocks of the 1970s, we will survive this one. Few people realise that the previous shocks were the result of the oil taps being turned off for political reasons. Now almost all the taps fully open.

Against this background of reality, economists say that oil extraction will continue to rise by nearly 50% over the next two decades and peak oil may not occur until 2067. This is of course utter delusion. The reason for this huge disparity between oil geologists and economists is that economists refuse to take account of energy profit ratio (indeed, I’m sure the vast majority of economists have never even heard of energy profit ratio!). Much of the remaining oil is of a much lower quality and lower extractability than we have been using.

Governments refuse to accept the reality of oil depletion for political reasons and base policies on unachievable future energy use. There has been, and continues to be, a massive misallocation of resources (e.g. motorway construction, airport expansion), on the basis of totally flawed assumptions.

Since gas supply is also in crisis, we must anticipate the partial collapse of the oil-based economy over the next 1 to 5 years, and since we have done next to nothing in the way of putting in place alternatives, we must at some stage, anticipate the complete collapse of society as we know it.

What few laypersons realise is that it takes oil to build a nuclear reactor, a windmill, a hydro-dam, a solar panel or to produce ethanol or hydrogen, so none of the so-called alternatives will be practicable after peak oil (and most of them are technically flawed anyway, because they are net losers of energy )

Numerous warnings of this impending disaster have been given; many by me personally. They have all been pretty much ignored, yet no one has presented any credible evidence to the contrary.

What does this mean for Auckland? The coming months will be the last opportunity to start to wean the region off oil dependence, by drastically reducing speed limits, imposing punitive taxes on vehicle use, banning SUVs (other than for farm use), banning leaf blowers, patio heaters and other energy wasting paraphernalia of the consumer society. The chances of appropriate polices being implemented appear to be close to zero -indeed at the moment, policy is predicated on ever greater energy use, so we are building roads and suburbs, for which there will be no energy source, other than muscle power, a few years hence. However, the real worry is: “How will we feed the population, when the oil-based agriculture system goes into decline?”

Quote of the year from ‘Time’ magazine: Alan Greenspan, Chairman of the US Federal Reserve, in a comment on the budgetary blowouts the US is now experiencing: “It turns out we were all wrong”. That statement pretty well sums up every mainstream economist on the planet, unfortunately.

Thus we have seen a number of U-turns from by IEA over recent months, indicating that they are starting to back down from the rosy projections of the past 5 years and we can anticipate a tacit admission that they too have ‘got it all completely wrong’ –probably later this year. Indeed, the IEA’s recently leaked emergency oil conservation plans are the first indication of the huge turn around that will come soon.

The question is of course: “Are the leaders of our society prepared to accept the evidence and take measures to ameliorate the inevitable effects of peak oil, or are they incapable of dealing with this issue?” Up to this point if time, all the evidence points to the latter. NZ society is sleepwalking off the cliff because our leaders don’t know the facts, don’t understand the facts or don’t want to face them.

Colin Campbell said: “If you don’t deal with reality, reality will deal with you.”

I requested 90 minutes to present the evidence for imminent peak oil, but to date, that request has not been granted.

We will almost certainly know within the next six months (after China’s new oil buying policy comes into effect) just how bad the situation is.

Kevin Moore
Environmental Consultant, Energy Analyst and Educator


Additional notes

The General situation

Two thirds of the world lives in poverty.
Most of those people spend their time trying to grow food.
Many are kept alive by food shipments.
Nevertheless, around 30,000 die every day.
New Zealand would be a pastoral nation in which everyone walked, cycled or rode horses if there were no cheap oil.
Mechanised production and distribution systems are 96% dependent on oil.
Illusory energy surpluses have enabled previously unknown activities, such as recreational shopping, mass tourism etc. to thrive.
These have been at the expense of our energy capital, of which there is little left.
Outlandish consumption (5 to 25 barrels per person per annum) is a short-lived aberration corresponding to approximately the period 1965 to 2005.
We have a house of cards economy that must collapse. It is inevitable.

There are no replacements for cheap oil: apart from fuel, it is used for 50,000 products.

The only point of debate is “When will the collapse occur?”

The best evidence -
actual proven oil reserves
actual pump rates
actual depletion rates
actual discovery rates
These indicate peak oil very, very soon.

Upsalla University Peak Oil Study Group says before 2010

Colin Campbell, Oil Geologist says before 2008

Professor Deffeyes, Oil Geologist, Princeton University says November 2005

Matt Simmons, Simmons International Energy Investment Corp, leading expert on Saudi Arabia says the wells of Saudi Arabia are in trouble and may be peaking right now.

These give us an average of 2006/7 for the year when oil supply begins to decline.

After that there can be no economic growth, just economic contraction.
But demand is increasing - China, India, even the US want more oil
A supply demand crisis is extremely likely this year.
This is a reality that all our leaders refuse to accept or prepare for.
Denial of reality a part of NZ culture.
A crisis is emerging before our very eyes, but the media still extols the virtues SUVs, powerboats, patio heater, leaf blowers, overseas holidays… endless list of delusion.

‘If you don’t deal with reality, reality will deal with you’.

‘Peak Oil is not a problem, if you don’t understand it or you don’t think about it’.

The evidence

In the 1956 M. King Hubbert, an extraordinarily talented oil geologist, predicted that crude oil extraction in the US would peak in early 1970s. He went on to predict a peak in worldwide production around the turn of the twenty-first century. His analysis for the US proved correct. However, severe disruption to the world economy in the late 70s (as a result of conflict and embargoes over oil) caused a temporary reduction in oil use, so his worldwide peak projection was delayed. Hubbert’s was the first to sound the alarm and it gave the world nearly 50 years to reduce petroleum dependence and prepare a new kind of economy.

M. King Hubbert’s warming was ignored

The Club of Rome’s warning was ignored

The UN Conference on the Human Environment 1972 was ignored

In 1998 Colin Campbell (an oil geologist with 35 years experience in oil exploration and extraction, and a senior oil company executive) together with Jean Laherrere, completed extensive research and wrote an article, published in Scientific American. The article was entitled ‘The End of Cheap Oil’. Campbell’s studies had confirmed Hubbert’s analysis and put the worldwide peak in oil extraction at around 2005. It could hardly have been more specific or clear than that. This was a major alarm and gave the world 7 years or so to reduce petroleum dependence and prepare for declining supply. The warning was largely ignored.

Colin Campbell’s warning 1998 was ignored

In 2001 I wrote ‘Burn Baby Burn’ and, having devoted an entire chapter to excessive oil consumption and its consequences, I highlighted the fact that we should anticipate severe disruption to the economy around 2010, (if not before) as supply failed to meet demand. Whilst some minor discoveries of oil have been made over the past three years, unanticipated surging demand from China and admission of falsification of reserves by companies such as Shell Oil has brought the deadline forward. Burn Baby Burn was yet another warning that gave considerable notice. Though endorsed by the environmentally aware community, was ignored by the establishment.

My warning in 2002 was ignored

Early in 2004, Matt Simons, Head of Simmons International, one of the largest energy investment companies in the world, published the results of an extensive survey of Saudi Arabia’s oil production capability (bearing mind that most of the fields had been discovered in the 1950s and 60s and were theoretically due to peak). He was dismayed to discover that brine injection [in order to force production] was close to the point of disrupting oil flow. All the evidence pointed to Saudi Arabia, the western world’s most reliable supplier, being at the point of peak He alerted his concerns to the world, via the several publications, including those of the Association for the Study of Peak Oil and Gas. Whilst his findings were accepted by the geological community, there were, once more, totally ignored by the politicians and economists. (Or were they? Dick Cheney in 1999 began speaking to New American Century about the never ending war and the need to secure oil -he knew). Early in 2004 ‘The End of Suburbia’ became readily available. It highlighted the unsustainable nature of American style suburban sprawl because of the impending peak oil. But for NZ these were yet more warnings that were largely ignored.

Matt Simmons, EOS warnings in 2004 were ignored

I personally made presentations to Manukau City Council in May 2003 and again in May 2004 alerting the coming energy crash. I made a further presentation to Waitakere City Council in July, and put forward strategies for a ‘soft landing’. At that time I suggested a one year time frame to prepare for Peak Oil. Sadly, those presentations, though grudgingly accepted by those present, were not acted upon. Manukau City Council in particular continued with off the cliff policies of converting productive farmland into dysfunctional suburbia. The two year warning was ignored and the one year warning was ignored. There will no point repeating the exercise this coming May because it is abundantly clear that Manukau has no intention of altering its ‘off the cliff’ policies.

My warnings in 2003 and 2004 were ignored

Throughout 2004, oil prices steadily climbed from around $32 a barrel (already well up on 2003) and reached the mid-$50s, as a direct result of inability of the oil supplies to meet demand. There could have hardly have been a more stark warning, yet it was once more it was ignored.

In November 2004, at the Energy Forum held at Deloitte House, I presented all the evidence that pointed to a severe crisis which required immediate attention. That really was the final warning for NZ. This six month warning was ignored.

This was the last warning for 2004 and was ignored.

Political pressure from the US persuaded the Saudis to over-pump, in order to quench the market, but the dip in prices was exceedingly short-lived and since December 2004 the glaring deficiency in supply has been perfectly obvious to everyone who bothers to look: that has resulted in crude prices surging from around $38 in Dec 2004 to the current $54+, with oil futures now fetching close to $60 and speculation in the $ 80-105 range, as financial markets wake up to reality of Peak Oil and seek to profit from it. This information has been presented to numerous organisations throughout NZ and all of them still appear totally incapable of dealing with reality and continue to promote policies predicated on cheap and abundant oil. The government, Transit NZ, the AA, Manukau City Council, TVNZ etc. are all locked into totally dysfunctional policies and, in the face of all the evidence, doggedly insist that there is no problem with oil supply. There will be no more warnings. All the evidence points to the supply-demand crisis that is a forerunner of Peak Oil being underway.

We will know in a few months just how bad the situation is. A dip in prices would indicate that we have still got a tiny bit more capacity, which will give us a few more months in which to prepare. A further escalation in prices would indicate the last window of opportunity to amend dysfunctional policies has already passed and that we should anticipate economic and social meltdown under the strain of ever more costly imports. We must also anticipate the breakdown of our transport, our food production and distribution systems. Much international trade will collapse as importing nations’ economies are torn apart by burgeoning deficits, as will tourism, when fuel costs escalate. No wonder nobody wants to talk about peak oil and everyone prefers to devote their attention to the distractions of road construction, car parks and shopping malls. The documentary “End of Suburbia’, released in April 2004, was the unheeded warning about the folly of more suburbia.

As always, I hope I am wrong, but nobody can present any credible evidence that I am. Indeed the evidence that I am correct accumulates by the day unfortunately.

At this point of time precious resources are still being wasted on concrete and asphalt, when they should be spent on soft landing strategies, such as permaculture.

Buddhists have the luxury of believing that if everything goes badly wrong first time round, we can have another try later. Fundamentalist Christians believe that an apocalyptic Armageddon is the only route to eternal salvation and that it should be brought on as quickly as possible. Just what those of us who do not adhere to either of those particular belief systems should do is unclear, especially when it is quite clear that the NZ government is still working toward the ‘Armageddon’ ending -collapse of society and collapse of the environment. (CO2 emissions are rising, not falling)