1

A View from the Top, Downunder:

Peak Oil & New Zealand

©Simon Tegg, January 2008

2

Contents

List of Figures 3

Acknowledgements 4

Introduction 5

A Note on Production Flows 6

Part I: Oil Depletion: 7

Unconventional Oil 15

Economic Constraints 18

Physical Constraints 19

The Net Export Dilemma 20

Top Net Exporters 24

Oil Export Scenarios 27

Infrastructure Attacks & Fourth Generation Warfare 32

Other Factors 35

Part II: Government &Technological Responses 36

Vehicle Fuel Efficiency & Electric Vehicles 36

Economic Effects 38

Problems with Efficiency 41

New Zealand Fuel Production 43

The Fate of Suburbia 46

Part III: Appropriate Responses to Peak Oil 47

Conclusion 50

References & Notes 51

3

List of Figures

Figure Page

1 A Hubbert Curve:

Regional Production vs. Individual Wells 8 2 Regional Peak Oil: Texas 9 3 Oil Discovery 10 4 World Production (CO + NGL) 11 5 Oil Price & Production 12 6 Monthly Average Oil Price (2006$ Brent) 13 7 All Liquid�s Components 13 8 Energy Watch Group Projection 14 9 Conventional + Unconventional Production Projections 16 10 Required Growth from Unconventional Supplies 17 11 A Truck Used in Tar-Sand Production 19 12 New Zealand Production, Consumption & Net Exports 21 13 Indonesia & UK: Production, Consumption & Net Exports 22 14 UK & Indonesia: Annual Decline Rates:

Production Vs. Net Exports 23 15 Price of Petrol in Top 20 Net Exporters 24 16 Fuel Policy by Net Export Volume 24 17 Top 10 Net Exporters: Volumetric Change in Production,

Consumption & Net Exports: 2007 vs. 2006 25 18 The Oil Import Crisis 26 19 Top 20 Net Exporters: Volumetric Changes from 2002 27 20 Top 20 Production, Consumption & Net Export Scenarios 28 21 Nigerian Oil Production 33 22 Top 20 Net Exporters

Plotted Vs. Fund for Peace Stability Scores 34 23 Projection for Car Fleet Fuel Efficiency 36 24 Change in Motor Vehicle Sales & Real GDP 39 25 Change in US Vehicle Usage; Petroleum Transport Demand;

& Fleet Fuel Efficiency since 1980 41 26 A Response Framework 48

4

Acknowledgements

This paper would not have been possible without the hard work of the staff and contributors at The Oil Drum and Energy Bulletin. In particular, I draw heavily on the work of the following analysts: Jeffrey Brown & Samuel Foucher The Net Export Dilemma Nathan Hagens Physical Constraints on Alternative Fuels;

Appropriate Responses Chris Nelder Economic Constraints on Alternative Fuels Stuart Staniford Efficiency Robert Rapier Alternative Fuels:

Indigenous Alternative Fuel Production Jeff Vail Fourth Generation Warfare &

Oil Infrastructure Attacks; Efficiency

John Robb Fourth Generation Warfare &

Oil Infrastructure Attacks; I would also like to thank Tim Jones for his input and criticisms. The views expressed, and any mistakes remain my own.

5

Introduction

Pray to God, but row away from the rocks.

-Hindu Proverb Recent history can be seen as an era of oil production expansion. Oil extraction began in the mid 19th century and its use became rapidly embedded in our daily life. Almost every year we extracted more oil than the previous year. This now appears to be changing. While a lot of oil remains in the ground the rate at which it flows out of the ground and into the world�s fuel tanks has stalled. A growing consensus, including Prime Minister Helen Clarki and former US Secretary of Energy Dr James Schlesinger ii, believe a peak in oil production has, or is about to be, reached. An irreversible decline follows. Two radically different views of Peak Oil frame the debate: Economics informs the first, �transition to alternatives� view. Here, Peak Oil represents a transition away from conventional petroleum, to unconventional liquid fuels. As oil falls away, more expensive, but readily available biofuels and alternate liquefied fossil fuels step in. Apart from perhaps a slight hiccup near the peak, total liquid fuel supply continues to expand; eventually allowing another transition to electric or hydrogen powered vehicles. In this view, it is the fuel in our tanks and the technology under the bonnet that changes. Our suburban-commuter living arrangements, freight and transport networks stay much the same. Ecology and physics informs the second, �energy descent� view. Here, the peak represents a transition from an era of expanding liquid fuel supply to an era of contracting liquid fuel supply. The immense resources required and the difficulties of concentrating diffuse energy sources into high-quality liquids impose limits on how fast and far alternative fuels grow. Total liquid supply falls along with oil and the common themes of the last half-century: globalisation; frequent air travel; and an automobile-centred way of life begin to unwind through forced conservation. �Transition to alternatives� has appeal whereas the implications of �energy descent� for our whanau, New Zealand, and industrial society may tempt us to reject �energy descent�. Without examining these views for accuracy we risk an inadequate response. Blind faith in a seamless market response would be unwise. With a clear understanding of our predicament we can row away from the rocks and chart a course through the choppy seas of the twenty-first century. This paper has the following objectives:

1. Provide a clear understanding of Peak Oil and the surrounding issues. 2. Demonstrate that the �energy descent� view is much more likely. 3. Expand the analysis of peak oil to include �above-ground� geopolitical factors.

-Factors that make a gradual decline of New Zealand�s oil supply unlikely; and oil shortages a real probability. 4. Evaluate government strategies to date. 5. Propose appropriate responses and a framework for action.

6

A Note on Production Flows

When discussing energy and in particular oil many commentators talk about energy reserves and energy prices. This paper will focus on production flows for the following reasons:

• Flows of energy, not reserves, power society. Oil flows out of a well, into a tanker or pipeline, through a refinery, to emerge as petrol. Engines combust petrol, transforming its energy into the useful work we value. Reserves sit in the ground, and on oil company�s books.

• Oil reserves are not useful unless they can feasibly be transformed into oil flows. • When flows reach a maximum and begin declining, less oil flows out of the well

at one end; and less oil-fuelled work is performed at the other. • Oil prices indicate the balance between supply and demand but reveal little else.

When supply contracts demand must equilibrate. A global recession could cause demand to fall faster than supply and bring prices down. In this scenario lowered prices may lull observers into thinking supply problems have been solved when they have not. A focus on prices also excludes discussion on oil shortages �a realistic outcome of oil depletion.

The terms �production� or �supply� are used interchangeably. Production is usually measured in million barrels per day (mb/d) or thousand barrels per day (kb/d). The two main agencies that compile production data are the Paris-based International Energy Agency (IEA) and the Washington-based Energy Information Agency (EIA)

7

Part I: Oil Depletion

�Producing oil is obviously a self depleting activity�

-Dick Cheney, Speech to the London Institute of Petroleum, 1999iii Unhelpfully, mainstream discussion of depletion often uses �X number of years of current consumption remaining� to conceptualize depletion. For example, if we consume 5 units of a resource per year and there are 200 units remaining in the ground then we have (200 / 5 =) 40 years remaining before the resource �runs out�. This gives a false impression of how we use resources:

• Demand for a resource is not constant. Demand increases exponentially with population and with the invention of more ways of using a resource. 5 units one year become 6 units later on etc.

• Extraction (usually called production) of a resource is not constant: o The low hanging fruit principle.iv

-The larger, more accessible sources tend to be found, exploited, and depleted first; leaving the smaller less accessible sources to be exploited later on. o The Law of Diminishing Returns.

-A field operator can initially extract the oil under pressure. Oil can gush out without the need for pumping. As time goes on, less oil in the field means less pressure. The field operator must spend more effort to keep extraction rates up.v Eventually the pressure drops bringing the extraction rate down with it. Other resources also follow this pattern. In a coal mine, the coal near the surface is mined first; more effort is progressively required to mine the deeper remaining coal.

The production of depletable resources over time typically follows a bell-shaped or hubbert curve. We do not wake up one day to discover that oil has �run out�. Initially production rises exponentially, then slows and plateaus briefly:

8

Figure 1: A Hubbert Curve

Regional Production vs. Individual Wells

Source: Peak Oil Associatesvi

When roughly half of the resource has been extracted production peaks and begins to decline. This is true of a particular oil field; an oil producing region (i.e. the sum of its individual fields); and eventually, of global production (i.e. the sum of all oil producing regions). Other important resources, notably natural gasvii, coalviii, and phosphorousix follow this pattern as well. If the resource is unimportant, or a ready substitute is available decline is not usually a problem. In the case of oil which:

• is the world�s primary source of high quality energy; • lacks a ready substitute; • fuels landscapes of infrastructure and machinery that take decades to change out.

It becomes difficult to overstate the importance of its peak.

9

Many argue that improving technology, free markets, private investment and restrained government regulation are solutions to declining production. According to this theory, production decline will raise prices and spur investment in new technologies. These new technologies will allow a constant or increasing extraction rate of a finite resource to continue indefinitely or will at least delay its decline significantly. Subscribers to this theory should try to explain the case of Texas:

Figure 2: Regional Peak Oil: Texas

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Figure 2: Texas oil production and number of active oil wells (both left scale); Oil price (Brent $US2006, right scale, logarithmic). Source: Texas Railroad Commissionx; BPxi. Texas oil production peaked in 1972. Oil discovery and extraction technology has improved considerably in the 34 years since.xii 34 years of dramatically higher prices; more drilling activity; improving technology; unfettered access; and private investment have failed to raise production above the 1972 record, or even maintain flat production. Despite all the �ideal� conditions, the Texas average yearly production has declined in 33 out of the 34 years since. Geology trumps human endeavour.

10

Figure 3: Oil discoveryxiii

Many argue that because higher oil prices increase the incentive to discover more oil, more oil will be found. In fact, oil discoveries peaked in the 1960s and have trended downwards for 40 years. We have discovered less oil on average in every following decade, and produced more oil than was discovered in every year since 1980. The oil shocks of the 1970s and the associated spikes in oil prices made little difference to the long-term trend of declining discovery.

11

Figure 4:

Figure 4: Historical Production and median and mean of 13 oil production models that forecast a peak before 2020 with IEA�s 2006 forecast. Crude Oil + Natural Gas Liquids. Source: The Oil Drumxiv With a peak in discovery 40 years ago eventually production must follow. A variety of different analysts using different methods conclude we are on the top of the plateau now. The median forecast sees an acute decline in conventional liquids production starting in about 2012. Unfortunately, the IEA continues to use a demand based forecast, i.e. demand is forecast to reach 100 mb/d in 2020 therefore production will equal demand.

12

Figure 5:

Oil Price & Production

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Figure 5: Yearly average all liquid production (left scale); Yearly average oil price (brent crude $US2006, right scale). 2007 production data Jan � September; Source: EIAxv; BPxvi Oil production has declined in the past. According to EIA data, yearly average all liquids production has declined seven times (red lines) since 1970.

• In five out of seven cases (1, 2, 3, 4 & 6) a production decline correlated with a drop in prices.

• (1 & 2): During the 1970s oil shocks, production decline was preceded by a sharp rise in prices for political reasons and coincided with a price decline as consumers adopted conservation measures.

• (3, 4 & 6): In three of the following cases producers arguably reduced production in response to falling demand.

• (5, - �98-�99): In one case prices rose from near historic lows. This could be attributed to slowing demand from the Asian Economic Crisis and/or a glut of oil in �98 followed by production cutbacks from producers trying to support higher prices.

• (7, �05-�07): Our current situation is unusual in that production has declined while demand remains strong. Prices have risen from already high levels. This suggests geological limits are in play.

13

Figure 7: All Liquids' Components

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Figure 6: Monthly Average Oil Price (Brent 2006 US$)

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14

Figures 6 & 7: Zooming in on monthly data we see that both Crude Oil and All liquids have essentially plateaued since mid-2004. Oil prices have trended upward since the start of 2004. Unconventional liquids (oil produced from tar-sands, biofuels etc.) have grown but still make up only 2.5% of All Liquid production. Almost 4 years of above average prices has not led to significant production gains.

Figure 8: Energy Watch Group Projection

Figure 8: Energy Watch Group conventional oil production forecast. The most recent and one of the more pessimistic forecasts from a Germany based group. Note: WEO = World Energy Outlook, the IEA�s annual energy report. Source: Energy Watch Groupxviii Chris Skrebowski, editor of Petroleum Review and one of the more optimistic Peak Oil analysts, bases his projection on forthcoming oil projects. His comments in a recent interview where he discusses the Energy Watch Group report are instructive:

��the legendary Texan oil man, T. Boone Pickens has made not millions, but billions betting against the oil industry conventional wisdom, has just announced that he thinks we have hit peak oil and that it will go down pretty rapidly from here on in. So, I wouldn't wish to bet against Mr. Pickens. He's got a good track record for actually getting it right, and we have a very careful report, very thorough report [Energy Watch Group], which seems to be saying the same thing�

15

�So my work, basically tells us that if everyone does what they say they're going to do, and all the things work as they are expected to - that's a pretty heroic assumption - we could get out to about 2011, but no further�What the Energy Watch Group, in effect, is saying is there are enough things that are going wrong, not working as people might have hoped, to bring us all the way back to it being an immediate peak now.� xix

Peak Oil is here. The start of an irreversible decline in oil production will be obvious by 2015.

16

Unconventional Oil

�The biofuel potential of the entire human food supply is quite a small amount of energy

compared to the global oil supply�10-15% on an energy basis.xx -Stuart Staniford

Many commentators dismiss concerns about oil shortages by pointing to the vast reserves of unconventional oil such as oil shale and tar sands. Others talk of the potential of biofuels. Can flows of liquid fuels from unconventional sources grow fast enough to allow a continued expansion in total liquid fuel supply?

Figure 9: Conventional + Unconventional Production Forecasts

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Unconventional Oil"Demand Flat"

"Demand Dampened"

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Figure 9: Conventional oil stays flat until about 2010 when it begins to decline along with all liquids (Conventional + Unconventional) Unconventional liquids grow but not enough to prevent an all liquids peak. Source ASPOxxi, EIAxxii

17

Figure 10:

Required Growth from Unconventional Supplies

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"Demand Flat"

"Demand Dampened"

"Business As Usual"

ForecastHistorical

Figures 9 and 10 show the EIA�s projections for unconventional supply in two price cases compared to the amount unconventional supply must grow to maintain three liquid supply paradigms.

• In the EIA�s Reference Case unconventional oil grows from 3 mb/d in 2007 to 10.5 mb/d in 2030. • In the High Oil Price Case a $US30 increase in the EIA�s price assumptions stimulates the unconventional oil market and adds 4 mb/d by 2030. With the assumption that conventional supplies follow a decline path close to the median projection, by 2030 unconventional supplies must grow to:

• 33 mb/d to maintain flat demand; • 45 mb/d to maintain a .75% annual growth �demand dampened� paradigm; • 65 mb/d to maintain the 1.5% annual growth �Business As Usual� paradigm that industrial society is accustomed to. Even to maintain flat liquid supply unconventional oil would have grow more than twice as fast as the EIA�s high oil price case. Using the blunt arithmetic here, perhaps two decades of $US 200+ oil would allow this incredibly high growth. Or more likely, unconventional oil growth depends more on physical reality than economic models.xxiii

18

Conventional wisdom asserts that high oil prices brought on by a conventional production peak will stimulate the unconventional market sufficiently. The Albertan tar sands in Canada are the largest single source of unconventional production. Following the conventional wisdom we would expect the price increases of recent years to be boosting tar sand production forecasts. Despite the rise in prices Canada�s National Energy Board has revised tar sand production forecasts downward.xxiv The Globe & Mailxxv reported further IEA pessimism on tar-sand production:

�The IEA doesn't believe the oil sands, in spite of their rapid growth, will make anything more than "an important dent" in the global oil market�The point being that with exceedingly high development, operating and environmental costs, production increases may happen more slowly than [the province of] Alberta expects.�

The IEA has taken a similarly pessimistic slant on biofuels. Early in 2007 the Financial Timesxxvi quoted IEA head Claude Mandil:

�Even in the most optimistic scenarios, the contribution from biofuels would be very small,�

And the petroleum consultancy Wood Mackenzie:

�Even if there is a breakthrough to those �second-generation� biofuels, Wood Mackenzie�estimates they might displace only up to 4 per cent of world oil demand in the next decade.�

Despite the glaring example of physical constraints preventing conventional oil rising to demand expectations, the idea that unconventional production suffers similar limits does not enter mainstream discussion. Many accept that conventional supplies are peaking but predict that total liquid fuel supply can continue to grow, or at worst, will plateau. They must account for the huge discrepancy between the EIA�s unconventional supply projections and the amount of unconventional growth required to maintain total supply growth. The onus is on those who make predictions of total supply growth to demonstrate how the combined total flows from exactly which projects will prevent an all liquid peak. Pointing to non-liquid reserves of energy and uttering the words �technology� does not suffice.

19

Economic Constraints

Conventional Economic Wisdom: If the oil price exceeds the price of alternatives, then alternatives will substitute it. The long-term price of oil is determined by the price of alternative energy supplies. Conventional wisdom does not include the oil price as an input into the cost of alternative production. Oil is the �lifeblood� of the industrial economy. Oil scarcity impacts any and every industry that uses it, including alternative fuel production. A crop-biofuel operation uses oil to power the tractors, the harvesters and the trucks that transport feedstock between field and biofuel plant. Oil fuels the mining and transport machinery of a tar sands operation. A rise in oil prices will directly and indirectly increase the production costs of both these operations. In conventional wisdom an alternative becomes profitable at a certain oil price level. Analysts once considered tar-sands profitable at an oil price above $US25 -$35xxvii. In theory, as long as oil prices stay above this level, tar-sand companies can cover costs and ensure a profit. In theory, the much higher oil prices of recent years ensures that tar-sand production would grow by leaps and bounds. Reality has been a lot harsher to tar-sand prospects. In 2006 Citigroup estimated that tar-sand operations do not look �particularly compelling�xxviii unless oil remained above $US50. In 2007 Wood-Mackenzie reports that tar-sand costs have increased by 55% since the start of 2005.xxix Its seems as the price of oil and other depletable resources used in alternative production rise, then price at which an alternative is marginally profitable has to be continually revised upward.

Figure 11: A truck used in tar-sand productionxxx

Fuel efficient?

20

Physical Constraints Turning biomass and low quality hydrocarbons into liquid fuels suffers fundamental constraints governed by physical laws.

• Alternative sources are spread out. �collecting them into a central location for processing requires energy and presents a logistical challenge.

• Alternatives are energy sparse solids that must be processed into the energy

dense liquid fuels that power automobiles. -Much greater quantities are required and concentrating them into a dense liquid format requires energy. Tar-sand production, for example, relies on natural gas for processing.xxxi

• If large quantities of energy are spent in the collection and processing of feed-

stocks into liquid fuels, then the �alternative� will have a poor or negative net energy balance. This may make economic sense for a niche producer �the liquid fuel might be worth more than the energy inputs required, but does not allow the �alternative� to scale up. Where are the vast quantities of energy inputs going to come from?

• Alternative fuels often use large amounts of land and water.xxxii Food, fiber and

timber production also use land and water. How will alternative production grow without impacting these other necessities?xxxiii

• Biomass, whether algal, woody cellulose, or from food plants requires specific

conditions and nutrients to grow. �Nutrient inflows, (The vast majority of which currently come from

unsustainable sourcesxxxiv) must balance with the nutrient outflows of exported biomass or degrade their growing base.

In New Zealand, the biofuels with the greatest success so far have come from waste biomass (tallowxxxv, wheyxxxvi and potentially sewagexxxvii). Waste biomass streams supply a cheap, already centrally collected biomass. While a viable source for biofuel production, waste flows do not amount to more than a fraction of current consumptionxxxviii.

Alternatives will grow but will not prevent total liquid supply following conventional supply down. The declining availability of liquid fuels turns current assumptions on their

head. The US Department of Energy commissioned Hirsch Report notes that:

��without timely mitigation, the economic, social, and political costs [of Peak Oil] will be unprecedented.�

21

The Net Export Dilemma

�Domestic demand growth of as much as five per cent per year in key oil producing countries is already beginning to cannibalize exports and will increasingly do so in the

future as production plateaus or declines in many of these countries,�

- Jeff Rubin, CIBC Chief Economistxxxix New Zealand and other net oil importing countries produce less oil than they consume and draw the difference from the oil export market. The state of world export market is therefore of greater direct concern to New Zealand than the world production total.

Figure 12: New Zealand Production, Consumption & Net Imports

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Figure12: New Zealand Consumption, Productionxl & Net Imports (Consumption minus production) of petroleum products. Consumption includes petroleum for international transport. Source: Ministry of Economic Developmentxli The vast majority of this exported oil comes from, not surprisingly, countries that produce more oil than they consume. In other words, net exporting countries. Net oil exports are a country�s oil production less domestic oil consumption. Oil exporting countries typically supply domestic consumption first before exporting the remainder.

22

When a country�s oil production peaks their net oil exports decline much faster than their oil production.

Figure 13:

Indonesia & UK: Production, Consumption & Net Exports

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Figure 13: When production peaks, consumption remains stable or continues to grow leading to rapid net exports collapse. Source EIAxlii Indonesia and the UK consumed about 50% and 65% respectively of their production in 1996. Production began a terminal decline in 1996 in Indonesia and in 1999 in the UK. Consumption continued to rise after production peak in Indonesia and stayed flat in the UK. By 2005, net exports from both of these formerly significant exporters was effectively 0.

23

Figure 14:

UK & Indonesia: Annual Decline Rates: Production vs Net Exports

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Figure 14: The net exports from the UK and Indonesia went into an accelerating decline, much faster than production declines. Consider a tap (production) filling a bucket with a small hole (consumption) in the bottom. When the water from the tap flows freely the bucket overflows (net exports). When the flow from the tap slows the overflow diminishes rapidly. If the hole is simultaneously getting bigger (consumption growth) then the overflow shrinks even faster, stopping well before the flow from the tap. Source EIAxliii

24

Top Net Exporters The 2006 top 10 net oil exporting countries made up about 70% of the world export market. The top 20 net oil exporting countries made up about 90% of the world oil export market. This analysis will focus on the top 10 or the top 20 when space permits. Smaller exporters face the same issues. Oil Consumption in the Top 20 Net Exporters Figure 15: Fuel Policy by Net Export Volume

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Figures 15 & 16: Most net exporting countries subsidize petrol. For example, petrol costs NZ4 cents per litre in Venezuela. Oil consumers in these countries have little incentive to conserve oil. Source: GTZxliv Collectively the population of the Top 10 net exporters grows by more than 2.5 million people annually. Per capita oil consumption is also growing as the economies of the top 10 industrialize.xlv Oil consumption growth in net exporting countries looks set to continue.

Figure 16: Price of Petrol in Top 20 Net Exporters

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Figure 17: Top 10 Oil Exporters:

Volumetric Change in Liquids Production, Consumption & Net Exports: 2007 vs 2006

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Figure 17: Assuming that consumption follows recent rates of change and using 2007 January to October production data: production and net exports fall in 8 of the top 10 compared with 2006. Net exports decline more than production in 7 of those 8 cases.xlvi In the two that show production increases (Russia and Algeria); increased production is partially offset by rising consumption, leading to a smaller increase in net exports. Source: EIAxlvii

26

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Oil Export Scenarios

Figure 19: Top 20 Net Exporters: Volumetric Change from 2002

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Figure 19: In 2007, The Top 20 Net Exporters should consume about 2 mb/d more than in 2002. Production has been flat since 2005. The preliminary net export average for 2007 is down about 1 mb/d from 2005. Source: BPxlix; JODIl; EIAli

28

Collectively the top 20 net exporters consume about 25% of their production and consumption is growing at about 2.5% per year. Using the top 20 as a model for the export market as a whole, if we assume that:

• production stays flat until 2010 then begins to decline between -2% to -5% per year;

• net exporter domestic consumption continues to grow 2.5% per year; Net exports will take a path shown in figure 22:

Figure 20: Top 20 Production, Consumption & Net Export scenarios

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Figure 22: Net exports continue declining slowly through to 2010. The production plateau ends and enters decline. Domestic consumption in net exporting countries increases from 15 mb/d in 2007 to 18 mb/d in 2015 and 20 mb/d in 2020. Net export decline accelerates and roughly doubles the production decline rate. The net export market shrinks to 60 � 80% (loses 9-17 mb/d) of 2005 size (43 mb/d) by 2015lii and 30 � 60% of its 2005 size by 2020. Source BP; JODI; EIAliii As long as consumption in net exporting countries continues to rise, plateau, or even decline slower than production, it is mathematically certain that net exports will decline more rapidly than production.

29

Peak Exports is here. While production may continue on a plateau in the medium-term, the amount of exported oil will decline in the short-term. Growing oil shortages in poor

countries and consumption cutbacks in rich countries will absorb reductions. When production enters decline, likely by 2012, export decline will accelerate eventually

leading to oil shortages and/or rationing in New Zealand and other OECD importing countries.

30

Though impossible to predict exactly how the net export effect will play out precisely, the two main questions are: 1. Will exporters increase production? Post-peak, oil exporters have less incentive to invest in production and maintain export volume to oil consumers. Oil prices and oil export revenues can rise regardless. Former Saudi Arabian exploration and production head Sadad Al-Husseini comments:

�There has been a paradigm shift in the energy world whereby oil producers are no longer inclined to rapidly exhaust their resource for the sake of accelerating the misuse of a precious and finite commodity. This sentiment prevails inside and outside of OPEC countries but has yet to be appreciated among the major energy consuming countries of the world.�liv

Dr. Robert Hirsch adds that:

�Some of [the oil exporting nations] I think, are very likely to say that they will cut back on their exports in order to husband the resource for a longer period of time for their own country. In fact Mr. Putin in Russia already has said as much.

Other people in the Middle East have made noises that they may do something like that also�that would mean that peaking would occur earlier than might otherwise be the case, and be much more abrupt. So the decline rates in a situation like that would be I think much larger than one would calculate if one thinks only about the geology.�lv

31

2. Once production peaks, drastic and continuing reductions of domestic consumption in net exporting countries provide the only escape from a rapid net export decline. Will net exporters reduce domestic consumption? About 60% of exports come from authoritarian regimes and a further 30% from countries with questionable democratic participation.lvi Arguably, the legitimacy of the state in these countries rests largely on welfare and a monopoly on violence. Persistent cuts to oil consumption, constitutes a substantial reduction of state welfare. The recent turmoil in Burma provides an example of what can happen when a dictatorship removes petrol subsidieslvii. Contracting production means that consumption must come down eventually. However, in the near-term, the undermining effects on state legitimacy suggest that exporters will not enforce the strict measures necessary in fear of political and economic instability. Oil export sales provide a substantial if not the primary, source of government revenue for the major net exporting countries, and are a major stimulus to the local economy. A spike in oil prices can buoy revenue even as net export volume falls. This has two effects:

• Reduces the incentive to cut consumption. Officials may ignore export volume decline when export income remains buoyantlviii.

• If one accepts a link between increased income -- increased economic activity � and increased energy consumption, then an oil price spike will accelerate oil consumption growth in net exporters.

Eventually declining export volume must overwhelm price rises and export revenue will fall. Net exporters have a choice:

� economic disruption now (through consumption cuts);

� or later (through revenue collapse).

32

Infrastructure Attacks & Fourth-Generation Warfare

�Efforts to shut down the flow of oil could conceivably have a significant impact." - Dick Cheneylix

We have seen how a combination of geology, population growth, the �low-hanging fruit� principle, and the law of diminishing returns produces a peak in oil production. Furthermore, once production peaks, how the resident population of exporting countries takes a stable or increasing share of the oil available for export, leading to rapid net export decline. Attacks on oil infrastructure pose a third threat to New Zealand�s oil supply. Before reaching the consumer, oil must pass through a delivery network of rigs, pipelines, refineries & shipping; all managed by specialist personnel. Attacks on oil delivery infrastructure by various criminal groups have choked oil flows, particularly from Iraq and Nigeria. In the fourth generation warfare of today, conflict typically occurs between state and non-state actors rather than the state vs. state conflict of the previous generation. Non-state actors include nationalist groups denied economic and political power; ideological groups bent on a state�s dissolution; and profit-motivated criminal gangs. These groups do not go head-to-head against modern state-funded militaries, but prefer to use their advantages to cripple a state�s capabilities.lx Often, they seek not to completely destroy and replace the state, but an unstable �hollow state�lxi, where they can operate power without the burdens of government. We see this kind of conflict in Iraq. Engaging in oil infrastructure attacks and oil personnel kidnappings has many advantages for a non-state actor in this type of conflict:

• Denies the state oil revenues. • Disrupts the legal economy, which:

o Weakens state legitimacy o Forces more of the populace into the illegal economy, which:

! Provides a steady stream of recruits • Cheap. High Return on Investment. • Lucrative. Self-sustaining. Oil piracy and personnel ransom provide income to fund further attacks. • Targets highly vulnerable, hard to defend, sprawling networks (e.g. pipelines). • In a constrained production environment, the ability to influence the price of oil (and the geopolitical leverage that goes with it) shifts from producers to disrupters.lxii

33

Figure 21: Nigerian Oil Production

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Figure 21: Nigerian oil production (left scale) as a percentage of proven capacity before and after (right scale) the start of militant attacks. Before the start of militant attacks, Nigeria produced at an average of 95% of proven production capacity. Since militant attacks began in January 2006, production has averaged 89% of capacity and trends downward. Source: EIAlxiii Drawing on developments in Nigeria, two analysts with military experience, John Robb and Jeff Vail argue that this type of conflict can evolve from a relatively stable conflict to a dynamically unstable one that seriously impacts a country�s exports and lacks a clear path to resolution. Initially, politically-motivated nationalist groups, such as The Movement for the Emancipation of the Niger Delta (MEND) in Nigeria, attack infrastructure to leverage political goals, normally a greater share in the country�s wealth. The government regularly concedes to these demands and keeps the conflict relatively stable. The conflict intensifies when profit-motivated groups, �guerrilla entrepreneurs�, enter the fray. When attacks by politically-motivated groups prove successful at generating revenue, criminal gangs copy this tactic.lxiv These gangs arise from impoverished urban areas with little connection to traditional loyalties and few prospects in the legal economy. Loyal only to short-term profit, the state cannot keep them in check with political concessions. As the situation deteriorates, there is more incentive for actors to switch to short-term profit motivation. Infrastructure attacks intensify, and modern global communications ensure that successful tactics spread rapidly. Nigeria, the world�s seventh largest net exporter, provides an example where a fourth generation conflict has transitioned from a relative stability to a dynamic instability. This has severely hampered production and exports without a �traditional� production peak. In recent months, a guerrilla group has begun attacking oil infrastructure in Mexicolxv; Yemeni tribesmen have blown up a pipelinelxvi; Kurdish guerrillas have threatened to attack a major pipeline that crosses Turkish territory in retaliation for Turkish incursion into Northern Iraq;lxvii and Saudi authorities have arrested 208 suspects accused of plotting an attack on oil infrastructure.lxviii

34

Figure 22: Top 20 Net Exporters Plotted vs. Fund for Peace Stability Scores.

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Figure 22: Bubble size represents net export volume; New Zealand reference only; hashing indicates infrastructure attacks have occurred. Source: Fund for Peacelxix; EIA Most of the world�s oil exports come from countries with a legacy of vengeance-seeking group grievance or group paranoia; and a high level of uneven economic development along group lines. In other words, groups antagonistic to their host states; and potentially willing to agitate for a larger share of oil export wealth already exist in these countries. The likelihood of groups adopting oil piracy and infrastructure attacks increases with every spike in the price of oil. When enforced oil consumption cutbacks or falling government revenues wreck legal economic prospects in net exporting countries, where will the populace go for income? Many already belong to groups with zero loyalty to the state, and have large opportunities for oil piracy. We can expect infrastructure attacks to spread to more exporting countries and accelerate the decline of oil flows beyond geological models.

35

Other Factors �I am saddened that it is politically inconvenient to acknowledge what everyone knows:

the Iraq war is largely about oil,�

-Alan Greenspan, Former Governor of the Federal Reserve, September 2007 Due to space concerns this paper does not address in great depth other factors that make a rapid and abrupt decline in New Zealand�s oil supply likely. Other factors include:

• A shortage of oil rigslxx and personnel.lxxi • The apparent acceleration of the fields in production decline rate.lxxii • A wider war in the Middle East.

Unfortunately, as Greenspan agrees, it is still politically incorrect to point out that the world�s largest oil consumer has invaded and occupied a country in the heart of the world�s largest oil producing region; and maintains military bases throughout that region. Some continue to maintain that this is entirely coincidental, despite insiders, such as Greenspan, and retired General John Abizaid having publicly statedlxxiii that oil is a motivating factor for the Iraq invasion. With oil transitioning from a freely traded commodity, to an increasingly scarce, yet still vital resource, recent American foreign policy takes on a brutal logic. Further military efforts to secure supplies for American, rather than say, Chinese, consumers are possible. The resulting disruptions could be catastrophic. In a world where military force and proximity determines oil supply access, New Zealand consumers, at possibly the very end of the oil supply chain, will luck out.

New Zealand�s oil supply depends on vulnerable links to regimes where the resident population has little interest in maintaining our oil-consumptive lifestyle. This system

may have worked in an era of production expansion. In an era of production contraction, the rules change. We should make plans on the assumption that

Peak Oil and the accompanying �above ground� factors will cut New Zealand�s fuel supply in half by 2020 and continue cutting it thereafter.

Above ground factors may also conceal a definitive production peak for some time.

Geology does not fit into a thirty-second TV news sound bite, immediate above-ground factors do. Many commentators will blame militant attacks; Middle Eastern conflict;

nationalized oil reserves etc for production decline ahead of the underlying geological factors that drive them.

36

Part II: Government & Technological Responses:

"The nicest thing about not planning is that failure comes as a complete surprise rather than being preceded by a period of worry and depression"

- John Harvey-Jones

Fleet Fuel Efficiency & Electric Vehicles

�There is always an easy solution to every problem � neat, plausible and wrong.� -H. L. Mencken

Can improving vehicle fuel efficiency or electric cars mitigate the impacts of Peak Oil?

Figure 23: Projection for Car Fleet Fuel Efficiency

Figure 23: Projections for the total car fleet show average fuel efficiency improving from about 8 Litres per 100km today to roughly 7.5Litres/100km in 2020 (an improvement of about 6%) and 7.25Litres/100km in 2030. Source: Energy Efficiency and Conservation Authoritylxxiv

37

Clearly the improvements shown in figure 23 add up to small beans compared to the decline of oil supply outlined above. The projection highlights the difficulties of improving efficiency and replacing some 2 million vehicles:

• Technological improvements in efficiency become more difficult as efficiency approaches its theoretical maximum (note the slope in the curve)

• The average age of a car on New Zealand�s roads is 12 years old and the turnover rate is about 8% per year.lxxv

A low turnover rate means the vehicle fleet lags vehicle sales by about 5 or 6 years. Consider that with an extraordinary push for advanced vehicles, sales might reach 50% of the total by 2015 and continue growing. In this highly optimistic scenario the majority of the national vehicle fleet would still consist of regular internal combustion vehicles until 2021.

38

Economic Effects of Peak Oil

�We have a potential collision between a 21st century financial crisis and a good old-fashioned 1970s oil shock�There is the potential for a �perfect storm�.�

-Simon Johnson, IMF Chief Economist, November 2007lxxvi

Higher petrol prices increase the incentive to purchase smaller, more efficient cars. Responding to oil depletion (and climate change) the government may attempt incentive schemes for purchasing fuel-efficient or electric vehicles. Conceivably, these factors could quicken fleet turnover. We should not view these measures out of economic context. We know that temporary oil price shocks harm the economylxxvii and inflate the price of goods transported with oil. A permanent supply contraction will have a much greater effect. Robert Hirsch comments in a recent interview:

�When oil goes into decline yes. World GDP will decline, I am perfectly convinced of that. In talking to economists, they believe very much in their models and their models are econometric so they don�t deal directly with shortage, they deal with oil price and their models can handle oil prices changing relatively slowly but to a person, economist that I have talked to and I have talked to a number of very significant economists, they admit that their models cannot handle significant changes, rapid changes, shock changes, and that is what peak oil is likely to be.�

Who will buy an expensive new electric car during a recession, when the cost of basic goods is rising? Additionally, used inefficient cars do not go straight to the scrap heap. As more used inefficient cars are sold on the re-sale value of these cars will fall. Low-income motorists shopping for a car may find a used inefficient car more affordable in the short-term than an expensive new electric car. Stuart Staniford has noted that in the American experience, change in fleet fuel efficiency correlates to change in GDP

�I assume that what is happening is that as the economy slows, people buy fewer cars, and thus are less prone to replace older less efficient vehicles with newer more efficient ones. This is probably particularly true of lower income consumers who are particularly likely to be driving older vehicles��lxxviii

39

For New Zealand, comprehensive data on fleet fuel efficiency is unavailable though we can draw similar conclusions from comparing Motor Vehicle Sales and GDP.

Figure 24: Change in Motor Vehicle Sales & Real GDP

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Figure 24: Change in Real GDP (right scale); Change in Motor Vehicle Sales (left scale) Source: Statistics New Zealandlxxix

Not surprisingly, Change in motor vehicle sales correlates closely with change in real GDP. When GDP grew by less than 2% per year consumers held on to their wallets and motor vehicle sales fell by as much as -10.5% relative to the previous year.

If oil supply contraction weakens the economy as expected and this correlation holds, then slower (or negative) GDP growth makes for:

• Less vehicle sales.

• A slower fleet turnover.

• A stalling in fleet fuel efficiency improvement and a limited uptake of electric cars.

40

Some commentators point out that electric vehicle technology is still in its infancy and an increasing economy of scale will bring down costs as the manufacturing of electric cars is ramped up. Discussion:

• In the era of globalization a complex technological product like a modern vehicle is rarely manufactured from resources and components sourced in the country of manufacture. Typically a mining company extracts a source metal in one country (with oil powered machinery); then exports the metal to another country (on oil-fuelled ships); a component manufacturer produces a vehicle component, a battery for example (likely with fossil-fuel based electricity); then exports the battery to another country (oil fuelled ships again); the vehicle manufacturer puts all the components together (fossil-fuelled electricity again); and finally exports the vehicle to New Zealand (those ships again).lxxx

• The source metals may also be finite resources without ready substitutes and also subject to a production peak.

Before grasping at technological straws, we should consider whether a mass market for the technology exists in a �post-peak GDP� context; whether the technology relies on an oil-fuelled global supply chain and fossil-fuelled electricity for its manufacture; and whether the technology depends on other finite resources. These important obstacles are often glossed over by commentators stuck with pre-peak assumptions. Planners should adopt a �systems thinking� approach that takes into account the vulnerabilities of a highly interdependent world. To take one recent example, in late January 2008, Southern Africa experienced a cross-border power crisis that shut down production in platinum,lxxxi copper,lxxxii and manganeselxxxiii mines. All are important metals for various industrial and electrical applications.

A scenario, where in 2020, a high and increasing proportion of motorists drive electric or advanced cars is less likely than a scenario where the national fleet is mostly

comprised of cars currently on the road.

41

Problems with Efficiency

Efficiency Reduces Potential Demand Only

Figure 25: Change in US Vehicle Usage; Transport Petroleum Demand; & Fleet Fuel Efficiency since 1980

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Figure 25: In the USA, fleet fuel efficiency has improved 30% since 1980 but petroleum demand is up 45%. Actual demand did not fall, only potential demand. Arguably, improved efficiency has allowed the US economy to base more activity on the consumption of an unsustainable resource. Source: US Department of Transport: Bureau of Transportation Statistics.lxxxiv

The Rebound Effect Mutes Improved Efficiency

If all other factors stay constant an improvement in fleet fuel efficiency from 8L/100km to 7.5L/100km will reduce fuel consumption by 6%. Of course, in the real world all other factors do not stay constant and we can expect the �rebound effect�lxxxv to mute even this marginal improvement. Improving vehicle-fuel efficiency reduces demand in the short term. Drivers of efficient vehicles find them cheaper to drive. In response, many choose to drive more than they did in their old vehicle, causing demand to �rebound�. Studies suggest that this effect erases 10-30%lxxxvi of the improvements in fuel efficiency. In other words, if fuel-efficiency improves by 6%, demand shrinks by only 4.2-5.4%

42

A government-assisted drive for greater efficiency will have little effect and questionable

benefit. Fleet efficiency will never catch declining oil supplies. A drive for electric vehicles will benefit the wealthy few only.

Currently, government policy and popular discussion focuses on efficiency and private electric vehicles. As the crisis deepens national government may waste time and

resources on narrow, limited policy.

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New Zealand Fuel Production As of early 2008, there are two proposals and one possibility that claim the potential to replace a substantial portion of our oil use.

Coal-to-Liquid. State-owned company Solid Energy is preparing an 18-month pre-feasibility study for an $8 billion dollar, 50 kb/d coal-to-liquid plant in the South Island. The plant would produce about a third of our current consumption.lxxxvii Discussion:

• The Future of Coal, a study form the Massachusetts Institute of Technology, notes that �A [50 kb/d] plant consumes over 5 times as much coal, and emits over 3 times as much CO2 as does a 500 [megawatt coal-fired electricity plant.]�lxxxviii

• It is difficult to see how such a plant could possibly square with the current political consensus around reducing greenhouse gas emissions.

• A government desperate to �keep the cars running at all costs� might support coal-to-liquids, although the shameless about-face on Climate Change would be so brazen that political delays seem likely.

• After surmounting the political and resource consent hurdles, construction could not realistically begin until 2010-2012 at the very earliest.

• Coal-to-Liquid Plants take five to seven years to buildlxxxix. Long lead times and massive upfront capital investment make these projects risky.

• Construction would overlap with an era of oil supply contraction and shortages: o Inflating the already huge capital outlay. o Likely leading to construction delays.

• One would hope that the government compares an $8 billion dollar coal-to-liquid plant to an $8 billion dollar rail electrification and expansion scheme.

• NZ and world coal will eventually peak too. Attempting to replace one unsustainable resource with another does not qualify as a �solution�.

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Salix Willow Cellulosic Ethanol

The government has sensibly prohibited biofuel production from food cropsxc. Cellulosic ethanol, an alternative biofuel, is brewed from inedible woody plant matter. Significant obstacles remain before we could see commonplace production. A New Zealand company, Biojoule plans to have a commercial plant in operation by 2010-11 and advocates greater government investment in cellulosic ethanol production. If of a similar scale to their stated model their commercial plant would produce 27 million litres of ethanol per year or enough to displace 0.6% of our current petrol consumptionxci. Discussion:

• In 2007 Cellulosic Ethanol is still unproven at a commercial scale. Ethanol researcher Tad Patzek cites a study showing that distilling a cellulose-derived 4% ethanol brew into 100% ethanol requires more energy than the resulting ethanol contains.xcii

• Biojoule argues that by using geothermal energy for distilling the ethanol brew an ethanol biorefinery could operate with a favourable net energy balance. Without a geothermal, or similar �free�, source of heat energy, the net energy balance of cellulosic ethanol remains controversialxciii.

• Biojoule�s proposal outlines the availability of marginal land suitable for energy farming in the North Island. According to Biojoule, there are 183,412 hectares of marginal land within 100 km of the Mokai geothermal field suitable for biomass energy farming. If converted to Salix willow ethanol production this land could potentially yield enough ethanol to displace 23% of our current petrol usage.

• However, using Biojoule�s figures, an operation this size would require transporting 3.6 million tonnes of wet biomassxciv per year from dispersed locations to the biorefinery. Roughly 10 thousand tonnes or 350 truck loadsxcv per day. If the biorefinery operated 365 days a year, 24 hours a day, one truck must arrive every 4 minutes on average. A logistically implausible situation. Trucks (and mechanized planters and harvesters that this operation requires) run on diesel. The operation could not fuel its own machines and would have to obtain diesel from elsewhere (subject to availability).

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The Great South Basin

A question mark hangs over New Zealand�s southern ocean. Recent news reports have touted the oil potential of the Great South Basin and several oil companies have made exploration bids.xcvi Even if significant oil discoveries are made oil will not start flowing for at least another 14 years.xcvii Optimists who hope this could be fast-tracked should note that delays are common in oil field developments;xcviii and offshore production in the southern ocean would be up against some very challenging conditions.xcix We should not base current preparations on the roll of the dice.

Indigenous alternative fuels will not supply more than a fraction of New Zealand�s

current consumption any time soon. In the interim, fuel shortages will likely disrupt alternative development and lead to further delays. Barring the discovery, development (and nationalisation) of a major oil field in New Zealand we will not produce anywhere

near enough liquid fuels to maintain current levels of consumption.

An efficient car can give an individual motorist more utility and biofuels can provide some supply. However, planners should recognize that a combination of efficiency

incentives, electric cars, and indigenous fuel production will not catch declining supplies. Scarcity will force changes; not only in behaviour but in the structure of our oil use. Road-based freight; living far from necessities; and other oil-consuming arrangements

may not survive in the energy descent era.

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The Fate of Suburbia

�The future is already here. It's just not very evenly distributed� -William Gibson

Oil depletion will impact many important areas, though it is worth considering the impacts on the mundane here. Most of us live away from work and other amenities in the suburbs. Allocating massive quantities of energy to private transport between home and workplace may become a luxury we cannot afford. Four contemporary trends stand out that will shape New Zealand living arrangements in the long term: Business Almost as Usual More efficient and advanced cars; the elimination of unnecessary trips; and an emphasis on conservation, carpooling and two-wheeled transport keeps your suburb moving. Biofuels provide a small but important supply. Private transportation is still commonplace but much more restrained in post-peak New Zealand. Most of your neighbours still work and study some distance from where they live. NetWorks. Responding to a series of deepening oil shocks the government goes into crisis mode. A consensus forms and rolls out an extensive broadband infrastructure. We rapidly electrify and extend the rail network; introduce electric buses and the renewable electricity generation required to power these projects. These efforts reach your suburb. Many in your neighbourhood telecommute a few days a week and take the train to the city centre. Relocalization The government is paralyzed as oil depletion wreaks the economy and the price of transported goods shoots up. Out of necessity your neighbours plant food gardens and start cottage businesses out of their garages. Everyday essentials increasingly come from your own hands or those of someone nearby. The mall lies vacant though the church stays full. Long distance trips often involve squeezing into a van with a dozen neighbours and pooling your oil rations. Dislocation Oil shocks spur inflation keeping interest rates high. Squeezed between high interest rates and rising energy and food costs many in your neighbourhood cannot keep up on their mortgage payments. The bank forecloses their home and they shift into the spare bedroom of friends or family nearer the urban centre. For sale signs go up but do not come down. Your suburb decays and weeds take over the abandoned lots. Depending on various factors, (income, distance to urban centre, community solidarity, arable land, existing public transport etc) a particular suburb may have all four trends present to various degrees.

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Part III: Appropriate Responses to Peak Oil

��Keep your wool on your own backs; harness your own water power; get your fertilising nitrates from your own air; develop your own manufactures and eat your own

food�

�What you have to do in these islands is to eat your own butter and to see that everybody in New Zealand has plenty of butter to his bread��

-George Bernard Shaw, New Zealand, March 1934

Undoubtedly, a contraction of liquid fuel supply will affect society at every level. The Peak Oil aware individual must deal with four key challenges:

1. The �transition to alternatives� view of Peak Oil is persistent, psychologically appealing and the official position of the NZ Government. Presenting the reality-based view outlined above to the average voter is not necessarily a recipe for electoral success. Reality based assessments of peak oil are dense; complicated; run against the grain of popular discourse; and essentially unmarketable. The associated �above ground� ground factors (infrastructure attacks etc) and a global recession may obscure a definitive peak for some time. These factors and fantasies about bio-fuels and efficiency will likely prevent a large scale awakening until the fallout is upon us.

2. Policymakers are ill-prepared for oil depletion. They and the public may blame middle-easterners, �terrorists�, oil companies, and MPs who occupy the opposite side of the debating chamber for our predicament. None of these usual suspects are ultimately responsible. Nor will the much-reached-for tools of policy: higher/lower taxes; regulation/free market; prevent fewer oil tankers from berthing off Marsden Point. A massive effort towards reality-based planning and mitigation may occur but a period of political paralysis and an attempt to �keep the cars running at all costs and bugger the consequences� is at least as likely.

3. Declining fuel supply will dramatically affect other areas of society outside of transportation.

4. Time and effort are finite. Where should the peak oil aware individual invest their resources for the greatest impact?

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In light of the above challenges, I propose the following framework for Peak Oil Responses.

Figure 26: A Response Framework

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At the international scale an individual could lobby their representatives to lobby other nations to adopt an international depletion management agreement a la the Kyoto Protocol. If comprehensively adopted, and complied with, this might smooth the decline more manageably. Unfortunately, International agreements like the Kyoto Protocol have a turnaround time of several years if not decades. Two major consumers of oil, China and the US, show signs of adopting a self-interested approach.

Similarly at a national scale, the New Zealand government is not a neutral bystander but controversially attempting to frame peak oil as a �transition to alternatives�. Adopting this position avoids discussion of helpful but politically daring measures that the electorate might punish. Peak Oil activists must spend substantial effort to overcome embedded resistance and shift policy towards appropriate responses.

49

The larger the scale of organisation, the greater its inertia, leaving large scale responses stuck in a catch-22. Elected officials are unlikely to address the unpopular implications of Peak Oil without widespread understanding. Due to their unpopularity, these implications will not be widely realized until events force them upon us. Though it is far from certain, the public may eventually compel government to respond appropriately. At this later stage, even if government was spurred into action, the declining availability of liquid fuels and the associated social upheaval will impede large-scale mitigation efforts. Attempting to fund mitigation efforts with inflating costs from a declining revenue base, while also reacting to multiple crises is one scenario.

If appropriate large-scale responses occur many will �bubble up� from lower levels. A community garden becomes more likely after you have established a food-garden yourself. A local transport plan becomes more likely once your neighbourhood has worked out a car sharing arrangement. A nationwide investment in electric rail and smart design becomes more likely when cities who have initiated such moves locally can provide working models.

Directing efforts at large-scale change is chancy. Directing efforts at the smaller scale can have short-term payoffs and helps large-scale mitigation efforts in the long-run.

Current preparations should focus on:

• Actions. Personal actions such as starting a vegetable garden and going by bike provide a model for others and will help outreach efforts. These actions are likely to be common-place in 10 years. Pre-adapting now allows time to re-skill and eases the transition.

• Peak Oil outreach through personal networks.

• Parallel planning. Your local government has probably not started the necessary planning for energy descent. The Transition Towns movement provides a framework where citizens begin that process, and engage with local government periodically.

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Conclusion �You never change things by fighting the existing reality. To change something, build a

new model that makes the existing model obsolete.�

-Buckminster Fuller

When the punt goes up it pays to stay calm, keep your eye on the ball and position yourself according to where it is likely to fall. The fans and coaches are screaming at the sidelines and willing the ball to fall where they would like it to but they cannot change the laws of physics. With oil depletion it looks likely the ball will land well inside the �energy descent� half; even as the New Zealand government positions itself in the �alternatives� half.

Physical laws governing the transformation of energy; resource scarcity in general; and a culture blind to those realities will shape the future to a greater extent than optimistic technological visions.

At its heart Peak Oil is a geological phenomenon; but when the world�s most important energy source shifts from expansion, to plateau, to contraction, geopolitical and economic effects spin off and destabilize global society. This makes pre-Peak assumptions obsolete and renders the large-scale, top-down change from institutions stuck in pre-peak mode ineffectual and delayed.

Our technology-obsessed culture grasps at technical solutions without realising the sands are shifting. Technology is no substitute for the vast endowment of highly useful, highly dense energy that oil represents. Various technologies will improve, but hoped for large-scale applications will likely end up messy and piecemeal.

In lieu of technological solutions, ad-hoc social responses starting at the grass roots will do most of the peak oil mitigation heavy lifting. There are plenty of smart dedicated people out there. An excellent place to start is the Transition Towns movement.1

©Simon Tegg, January 2008 simontegg@yahoo.co.nz

1 See http://transitiontowns.org.nz/

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References & Notes

i Scoop Audio: April 18th 2006. PM Talks Palestinian Aid, Health 'N' (Peak) Oil. �because we're probably not too far short of peak production, if we're not already there� PM Helen Clark retrieved August 10th 2007 from http://www.scoop.co.nz/stories/HL0604/S00206.htm ii David Strahan: podcast. September 17th 2007: We are all peakists now � Schlesinger. retrieved September 19th 2007 from http://www.davidstrahan.com/blog/?p=42 iii Aleklett, K. (May 12 2004) Dick Cheney, Peak Oil & the Final Countdown. Association for the Study of Peak Oil & Gas. Retrieved January 15th, 2008 from http://www.peakoil.net/Publications/Cheney_PeakOil_FCD.pdf (PDF Warning) iv For a technical discussion of oil discovery see The Oil Drum (November 27 2007) Application of the Dispersive Discovery Model. Retrieved November 27 2007 from http://www.theoildrum.com/node/3287#more v Strahan, D. (Dec 1, 2007). Surfing the ultimate peak. Energy Bulletin. Retrieved December 1 2007 from http://www.energybulletin.net/37959.html vi Peak Oil Associates International. (2007) Peak Oil Report. Retrieved October 16th 2007 from http://peakoilassociates.com/ vii Jean Laherrere of ASPO, forecasts that world natural gas production will peak about 10 years after oil. See Laherrere, J. (May 2004) Future of Natural Gas Supply. The Association for the Study of Peak Oil & Gas retrieved September 12th 2007 from http://www.peakoil.net/JL/JeanL.html viii Energy Watch Group Coal Report (September 2007) Energy Watch Group. retrieved October 1st 2007 from http://www.energywatchgroup.org/fileadmin/global/pdf/EWG-Coalreport_10_07_2007.pdf (pdf warning). The Energy Watch Group predict that �Global coal production to peak around 2025 at 30 percent above present production in the best case� ix Dery, P. & Anderson, B. (August 17, 2007) Peak Phosphorous. The Oil Drum. retrieved October 12th 2007 from http://www.theoildrum.com/node/2882 & Abelson, P (March 1999) A Potential Phosphate Crisis. Science. x Oil & Gas Statistics & Reports. (2007) Texas Railroad Commission. Retrieved August 30th 2007 from http://www.rrc.state.tx.us/divisions/og/statistics/index.html xi BP (2007) BP Statistical Review of World Energy. retrieved September 17th 2007 from http://www.bp.com/productlanding.do?categoryId=6848&contentId=7033471 xii See the Petroleum Technologies Timeline available at http://www.greatachievements.org/?id=3675 xiii Energy Watch Group. (October 2007). Oil Report. retrieved October 28th 2007 from http://www.energywatchgroup.org/Oil-report.32+M5d637b1e38d.0.html xiv Foucher, S. (September 2007) Peak Oil Update - September 2007: Production Forecasts and EIA Oil Production Numbers. The Oil Drum. http://www.theoildrum.com/node/3001#more xv Energy Information Agency (October 2007) International Petroleum Monthly. Retrieved October 28th 2007 from http://www.eia.doe.gov/ipm/supply.html xvi BP (2007) BP Statistical Review of World Energy. retrieved September 17th 2007 from http://www.bp.com/productlanding.do?categoryId=6848&contentId=7033471

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xvii Ibid. And petroleum price data http://tonto.eia.doe.gov/dnav/pet/hist/rbrtem.htm. Normalized to real 2006 dollars with inflation data from the Bureau of Labor Statistics ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt xviii Energy Watch Group. (October 2007). Oil Report. retrieved October 28th 2007 from http://www.energywatchgroup.org/Oil-report.32+M5d637b1e38d.0.html xix Global Public Media (October 23 2007) Chris Skrebowski on alarming new peak oil report (transcript) Retrieved October 25th 2007 from http://globalpublicmedia.com/transcripts/2820 xx Staniford, S. (Jan 7, 2008) Fermenting the Food Supply. The Oil Drum. Retrieved January 16th 2008 from http://www.theoildrum.com/node/2431#more xxi The 2004 Association for Peak Oil and Gas (ASPO) Production Projection has been used here. This projection is not the most recent but is the closest to the median of 13 projections. Available from http://www.aspo-ireland.org/index.cfm/page/newsletter xxii EIA (2007) International Energy Outlook. Retrieved August 14th 2007 from http://www.eia.doe.gov/oiaf/ieo/ieopol.html xxiii We should also note that the mainstream agencies have a reputation for conventional supply optimism. See Tegg, S. (2007) Oil Outlooks. Available from http://greens.org.nz/campaigns/peakoil/OilOutlooks.pdf. (PDF warning). In light of this bias, unconventional oil supply projections from mainstream agencies may also turn out to be overly optimistic. xxiv Whipple, T. (November 26 2007) Peak Oil Review - November 26th, 2007. Energy Bulletin. Retrieved November 27th 2007 from http://www.energybulletin.net/37636.html. �...the Board now believes that we should expect a daily production of 2.8 million b/d by 2015, down from the 3.0 million b/d that had been forecast.� xxv Reguly, E. (October 12 2007). Oil sands as an industry saviour? The numbers tell the real story. The Globe & Mail. Retrieved October 22nd 2007 from http://www.theglobeandmail.com/servlet/story/LAC.20071012.IBREGULY12/TPStory/Business xxvi Crooks, E., Blas, J. (June 7 2007) Biofuels no threat to Opec, says IEA. Financial Times. Retrieved August 3rd 2007 from http://www.ft.com/cms/s/0/a4cd7272-151a-11dc-b48a-000b5df10621.html xxvii Stepek, J. (August 25 2006). The Future of Oil & How to Profit from It. Moneyweek. Retrieved October 23rd 2007 from http://www.moneyweek.com/file/17441/the-future-of-oil---and-how-to-profit-from-it.html xxviii Ibid xxix Wood MacKenzie Press Release (March 5 2007) Canadian Oil Sands Developments: Will Cost Hyper-inflation Curb Attractiveness? Retrieved October 25th 2007 from http://www.woodmacresearch.com/cgi-bin/corp/portal/corp/corpPressDetail.jsp?oid=826190 xxx Nelder, C. (August 24 2007) Tar Sands: The Oil Junkie's Last Fix, Part 1. Energy & Capital. Retrieved August 31st 2007 from http://www.energyandcapital.com/articles/oil+sands-tar-peak+oil/499 xxxi Cohen, D. (June 19 2006). Oh, Canada! -- Natural Gas and the Future of Tar Sands Production. The Oil Drum. Retrieved August 10th 2007 from http://www.theoildrum.com/story/2006/6/19/1571/97105 xxxii International Water Management Institute. (October 2007). Press Release - Study Warns That China and India's Planned Biofuel Boost Could Worsen Water Scarcity, Compete with Food Production. Retrieved October 25th 2007 from zhttp://www.iwmi.cgiar.org/News_Room/Press_Releases/releases/2007/IWMI_Biofuels_%20Release.pdf (PDF Warning)

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xxxiii See Hagens, N. (Nov 30, 2007). The Implications of Biofuel Production for United States Water Supplies. The Oil Drum. Retrieved November 30 2007 from http://www.theoildrum.com/node/3285#more xxxiv �Another problem with inorganic fertilizers is that they are presently produced in ways which cannot be continued indefinitely. Potassium and phosphorus come from mines (or from saline lakes such as the Dead Sea in the case of potassium fertilizers) and resources are limited. Nitrogen is unlimited, but nitrogen fertilizers are presently made using fossil fuels such as natural gas. Theoretically fertilizers could be made from sea water or atmospheric nitrogen using renewable energy, but doing so would require huge investment and is not competitive with today's unsustainable methods.� Fertilizer: Health & Sustainability issues. Wikipedia. available online at http://en.wikipedia.org/wiki/Fertilizer#Health_and_sustainability_issues xxxvBiodiesel Oils NZ Ltd. (January 17 2007) Press Release: Biodiesel plant boost for Waikato. Retrieved September 4th 2007 from http://www.e-centremassey.org.nz/The+e-centre/Press+Releases/Biodiesel+Plant+Boost.html xxxvi The Dominion Post (August 6 2007) Gull ties up local supply of ethanol. Retrieved September 7th 2007 from http://www.stuff.co.nz/4154823a13.html xxxvii Press Release: Aquaflow Bionomic Corporation. (May 11 2006). World�s First Sample Of Bio-Diesel From Algae. Scoop. Retrieved October 7th 2007 from http://www.scoop.co.nz/stories/SC0605/S00030.htm xxxviii Oil companies are considering importing biofuel to meet the government�s 3.4% by 2012 biofuel sales mandate. This strongly suggests that indigenous biofuel production will be limited for some time and that waste biomass sources cannot realistically supply more than a fraction of current demand. See The Dominion Post (August 6, 2007) Gull ties up local supply of ethanol. Retrieved September 7th 2007 from http://www.stuff.co.nz/4154823a13.html xxxix CIBC World Markets. (Sept 17, 2007) OPEC, Russia and Mexico export capacity to drop 2.5 million barrels a day. Retrieved November 29th 2007 from http://micro.newswire.ca/release.cgi?rkey=1509171131&view=92835-0&Start=0 xl Note: the Tui oil field has come online in 2007 and should boost future production for some time. xli Ministry of Economic Development: Quarterly Energy Supply & Demand Balance Tables. Retrieved October 9th 2007 from http://www.med.govt.nz/templates/StandardSummary____21236.aspx xlii EIA International Data. Production is all liquids. Retrieved September 1st 2007 from http://www.eia.doe.gov/emeu/international/contents.html xliii Ibid xliv GTZ. International Fuel Prices 2007. Retrieved October 22nd 2007 from http://www.gtz.de/en/themen/umwelt-infrastruktur/transport/10285.htm xlv Calculated from UN population figures and EIA consumption figures available from http://www.un.org/popin/data.html & http://www.eia.doe.gov/ipm/ xlvi Norway�s consumption projected to fall marginally. xlviiProduction Data is Crude Oil + Natural Gas Liquids from EIA International Petroleum Monthly. See http://www.eia.doe.gov/ipm/ Consumption data from BP Statistical Review of World Energy http://www.bp.com/productlanding.do?categoryId=6848&contentId=7033471 xlviii See the list of countries experiencing energy shortages at http://energyshortage.blogspot.com/ xlix Consumption figures taken form BP Statistical Review of World Energy. Retrieved November 14th, 2007 from http://www.bp.com/productlanding.do?categoryId=6848&contentId=7033471

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l The Joint Oil Data Initiative. (October 2007). Retrieved November 15th, 2007 from http://www.jodidb.org/ li Note: 2007 data Jan � July average only; 2007 Consumption projected from 2006 data and average growth rate of the preceding 5 years. lii This projection is consistent with Brown & Foucher�s projection for the Top 5 Net Exporters. They see exports from Saudi Arabia, Russia, Norway, Iran and UAE collectively falling -6.2% (+/- 4%) annually to 2015(from about 24 mb/d to 12 mb/d in the medium case scenario) See Brown, J., & Foucher, S. (October 2007). Quantitative Assessment of Future Net Oil Exports by the Top Five Net Oil Exporters. Association for the Study of Peak Oil & Gas �USA. Retrieved November 4th 2007 from http://www.aspousa.org/proceedings/houston/presentations/Jeffrey_Brown_Net_Exports.pdf (PDF warning) liii Consumption figures taken form BP Statistical Review of World Energy. Retrieved November 14th, 2007 from http://www.bp.com/productlanding.do?categoryId=6848&contentId=7033471 and The Joint Oil Data Initiative. Retrieved November 15th, 2007 from http://www.jodidb.org/ liv Chen, D. (20 June 2007). A Paradigm Shift. Association for the Study of Peak Oil and Gas -USA. Retrieved November 2nd, 2007 from http://www.aspo-usa.com/index.php?option=com_content&task=view&id=155&Itemid=76 lv Strahan, D. (October 22, 2007) Robert Hirsch : « Avec le pic pétrolier, la croissance est condamnée ». Conterinfo.info. Retrieved October 24th, 2007 from http://contreinfo.info/article.php3?id_article=1358 lvi Economist Intelligence Unit Democracy Index (2006). The Economist. Retrieved November 4th, 2007 from http://www.economist.com/media/pdf/DEMOCRACY_INDEX_2007_v3.pdf (pdf warning) lvii Head, J. (October 2, 2007). The hardship that sparked Burma�s unrest. BBC News. Retrieved November 7th, 2007 from http://news.bbc.co.uk/2/hi/asia-pacific/7023548.stm lviii Parra-Bernal, G. (October 16, 2007). Venezuela Will Avert Devaluation as Oil Soars, Citigroup Says. Bloomberg. Retrieved November 7th, 2007 from http://www.bloomberg.com/apps/news?pid=20601086&sid=ajdAvfVtAl5c&refer=news Mohan Kumar, H. (September 28, 2007). UAE Economist warns against raising domestic fuel prices. Gulfnews.com. Retrieved November 8th, 2007 from http://archive.gulfnews.com/articles/07/09/29/10156868.html lix Easton, N. (November 26 2007) Cheney: No bailouts, no tax hikes...more oil. CNNMoney.com. Retrieved November 26th 2007 from http://money.cnn.com/2007/11/22/magazines/fortune/cheney_news.fortune/index.htm lx See Lind, W. S. et al (1989) The Changing Face of War: Into the Fourth Generation. Marine Corps Gazette lxi Robb, J. (April 13, 2007). Hollow States. Global Guerillas. Retrieved November 20th 2007 from http://globalguerrillas.typepad.com/globalguerrillas/2007/04/hollow_states.html lxiiVail, J (March 2007) Nigeria: Energy Infrastructure Firestorm. The Oil Drum. Retrieved November 20th 2007 from http://www.theoildrum.com/node/2348; & Robb, J. (March 2006) Burning Down the House in Nigeria. Global Guerrillas. Retrieved November 20th 2007 from http://globalguerrillas.typepad.com/globalguerrillas/2006/03/journal_burning.html lxiii EIA international production data. Retrieved December 20th 2007 from http://www.eia.doe.gov/emeu/international/oilproduction.html.

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lxiv Houreld, K. (July 11, 2007) Ransoms Fuel Surge in Nigeria Kidnapping. Washington Post. Retrieved November 3rd 2007 from http://www.washingtonpost.com/wp-dyn/content/article/2007/07/11/AR2007071101271.html lxv Bloomberg (Sept 10, 2007). Pemex Blames Sabotage in 6 Separate Pipeline Blasts. Retrieved November 8, 2007 from http://www.bloomberg.com/apps/news?pid=20601086&sid=aIhtsi1yZPyY&refer=latin_america lxviReuters. (November 5, 2007) UPDATE 3-Yemeni tribesmen blow up oil pipeline. Retrieved November 6, 2007 http://uk.reuters.com/article/oilRpt/idUKL0564840220071105 lxvii Gulf news.com (Oct 21 2007) . Oil pipeline 'will be hit' if Turks attack. Retrieved November 2nd 2007 from http://gulfnews.com/region/Iraq/10161665.html lxviii Hall, C., Gienger, V. (Nov 28, 2007) . Saudi Arabia Arrests 208 Suspects; Oil Attack Feared (Update1). Bloomberg. Retrieved November 29 2007 from http://www.bloomberg.com/apps/news?pid=20601087&sid=ainDsVAXMESE&refer=home lxix Fund for Peace Failed State Index (2007). See indicators I-3 & I-5. Retrieved 20th October 2007 from http://www.fundforpeace.org/web/index.php?option=com_content&task=view&id=229&Itemid=366 lxx Simmons, M. (September 18, 2006) Limits To Growth: The Impact Of Rig Scarcity (Presentation to the Oil & Money Conference). Simmons & Company International. Retrieved 20th October 2007 from http://www.simmonsco-intl.com/files/Oil%20And%20Money%20Conference.pdf lxxi Von Drehle, D. (November 20, 2007). New Oil Crisis: An Engineer Shortage. Time. Retrieved 20th November 2007 from http://www.time.com/time/business/article/0,8599,1686084,00.html lxxii Staniford, S. (November 19, 2007) Is the Decline of Base Production Accelerating? The Oil Drum. Retrieved November 22nd from http://www.theoildrum.com/node/3236 lxxiiiPaterson, G. (September 16, 2007) Alan Greenspan claims that Iraq war was really for oil. The Sunday Times. Retrieved 22nd October 2007 from http://www.timesonline.co.uk/tol/news/world/article2461214.ece �I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil,� �Alan Greenspan Shih, G & Montes, S. (October 15 2007) Roundtable debates energy issues. The Stanford Daily. Retrieved 22nd October 2007 from http://daily.stanford.edu/article/2007/10/15/roundtableDebatesEnergyIssues �Of course it�s about oil, we can�t really deny that,� Abizaid said of the Iraq campaign early on in the talk.� lxxiv Denne T et al. (2006) Sustainable Energy Value Project. Energy Efficiency & Conservation Authority. Retrieved 18th October 2007 from http://www.eeca.govt.nz/eeca-library/eeca-reports/neecs/report/stage-one-potentials-report-06.pdf (PDF warning) lxxv New Zealand Ministry of Transport. (October 2001) Improving Vehicle Fleet Fuel Economy - Investigation of Supply Side. Measures for New Zealand Retrieved 18th October 2007 from http://www.transport.govt.nz/vehicle-fleet-fuel-economy/ lxxvi Crooks, E. (November 21 2007). Threat of $100 crude raises global alarm. Financial Times. Retrieved November 27th 2007 from http://www.ft.com/cms/s/0/8d1227be-9868-11dc-8ca7-0000779fd2ac.html?nclick_check=1 lxxvii Jiménez-Rodríguez, R. & Sánchez, M. (2004) Oil price shocks and real GDP growth: empirical evidence for some OECD countries. European Central Bank. Retrieved November 5th 2007 from http://ideas.repec.org/p/ecb/ecbwps/20040362.html lxxviii Staniford, S (September 2007) US Peak Oil Adaptation: Prognosis in a Credit Crunch The Oil Drum. Retrieved September 5th 2007 from http://www.theoildrum.com/node/2896?nocomments

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lxxix GDP data available from http://www.stats.govt.nz/products-and-services/hot-off-the-press/gross-domestic-product/gross-domestic-product-jun07qtr-hotp.htm?page=para004Master Motor vehicle sales data available from http://www.stats.govt.nz/products-and-services/hot-off-the-press/retail-trade-survey/retail-trade-survey-sep07qtr-hotp.htm?page=para004Master lxxxi CNNMoney.com. (January 28, 2008) Metals - Platinum holds near record as South African power shortage cuts output. Retrieved Jan 28, 2008 from http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-22571981.htm lxxxii Shacinda, S. (Jan 22, 2008). Power blackouts disrupt Zambia copper operations. Reuters. Retrieved Jan 28, 2008 from http://africa.reuters.com/business/news/usnBAN229271.html lxxxiii Seccombe, A. (Jan 28, 2008). S.Africa power crisis bites deep. Miningmx. Retrieved Jan 28 2008 from http://www.miningmx.com/mining_fin/835604.htm lxxxiv Bureau of Transportation Statistics. (December 2006). National Transportation Statistics 2006. Retrieved November 7th 2007 from http://www.bts.gov/publications/national_transportation_statistics/2006/index.html lxxxv For another example of the Rebound Effect see BBC News. (November 1, 2007) UK energy savings 'miscalculated' Retrieved November 8th 2007 from http://news.bbc.co.uk/2/hi/science/nature/7071463.stm lxxxvi Gottron, F. (July 30, 2001) RS20981: Energy Efficiency and the Rebound Effect: Does Increasing Efficiency Decrease Demand?. Congressional Research Service. Retrieved November 5th 2007 from http://www.ncseonline.org/nle/crsreports/energy/eng-80.cfm?&CFID=8528214&CFTOKEN=36683570 lxxxvii The Press. (October 11 2007) Miner eyes $8b lignite project. Retrieved November 5th 2007 from http://www.stuff.co.nz/stuff/thepress/4233213a6430.html lxxxviii Katzer, J et al. (2007) The Future of Coal p. 154. Massachusetts Institute of Technology. Retrieved November 5th 2007 from http://web.mit.edu/coal/ lxxxix Coal To Liquids Coalition. (undated) Economy: CTL for a stronger economy. Retrieved November 5th 2007 from http://www.futurecoalfuels.org/economy.asp xc Fitzsimons, J. (October 9, 2007) Green biofuel change ensures food not taken from the hungry. Green Party of Aotearoa New Zealand. Retrieved November 6th 2007 from http://greens.org.nz/searchdocs/PR11272.html xci Biojoule Limited. (May 24, 2007) Submission from Biojoule Limited on the Draft New Zealand Energy Strategy: No. 149: Biojoule Limited. New Zealand Ministry of Economic Development. Retrieved November 7th 2007 from http://www.med.govt.nz/templates/MultipageDocumentTOC____27289.aspx xcii Patzek, T. (September 11, 2007) Can We Outlive Our Way of Life? (p16 17). University of California Berkeley. Retrieved November 6th 2007 from http://petroleum.berkeley.edu/papers/Biofuels/MyBiofuelPapersTop.htm The distillation energy cost is the third figure in the denominator in formula 1. xciii Biojoule Limited. (May 24, 2007) Submission from Biojoule Limited on the Draft New Zealand Energy Strategy: No. 149: Biojoule Limited. New Zealand Ministry of Economic Development. Retrieved November 7th 2007 from http://www.med.govt.nz/templates/MultipageDocumentTOC____27289.aspx xciv Assuming that wet Salix willow biomass has 35% moisture content. xcv Assuming that the trucks have a similar 28.5 tonne capacity of logging trucks

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xcvi MED �Crown Minerals (July 11, 2007) Great South Basin - Questions and Answers. Retrieved 30th Jan, 2008 from http://www.crownminerals.govt.nz/cms/about/media-centre/great-south-basin-media-pack-1/great-south-basin-questions-and-answers xcvii Ibid xcviii Hart, K. (Jan 26, 2008). Massive delays plague regions expansion drive. Emirates Business 24/7. Retrieved 28th Jan 2008 from http://www.business24-7.ae/cs/article_show_mainh1_story.aspx?HeadlineID=1467 xcix TVNZ. (Dec 1, 2005) Oil, gas search heads south. Retrieved Jan 30, 2008 from http://tvnz.co.nz/view/page/425823/634452