Australian Fuel Security Review ignores peak oil in China 2015 (part 3)
Australia increased its internal oil dependency & vulnerability
Let’s summarize what we covered in part 1 and 2
- Australian oil production peaked in the year 2000 while oil consumption is going up relentlessly
- 3 Australian refineries closed, resulting in fuel imports dramatically increasing, mainly from South Korea and Japan. This is a big problem if there is a military conflict in the South China Sea
- Australia’s emergency oil stock is only 60% of IEA requirements since 2014. The government has no firm plans to improve this situation
- Asian oil production started to peak in 2010 while consumption is still going up
- China’s oil production started to decline after 2015. Oil imports are now around 10 mb/d. No one really knows where China will import its oil from in the next 5-10 years, not to mention in the next decades
- China’s maritime silk road project is to be seen as securing China’s oil import routes
- Asia imports around 16 mb/d from the Middle East, making it highly vulnerable to the next ME war
- US shale oil will peak in a yet unknown year, but it will peak due to extraordinarily high decline rates
- The Fuel Security Review argues that the global oil industry will always solve problems of supply disruptions and return to business as usual. This is an untested assumption because there will be fierce competition as Asia has entered the era of peak oil.
So what should Australia have done to prepare for this change? It should have REDUCED its oil use by
- developing alternative transport fuels and building up associated infrastructure
- introducing bio-fuels for sole use in agricultural production and for transport of food to the cities
- electrifying rail: intercity, freight and urban rail including expanding and modernising manufacturing capacities for rolling stock and other rail equipment
- NOT planning and building additional oil dependent infrastructure like freeways, road tunnels and airports
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