Andrew McNamara on Queensland's Oil Vulnerability Task Force
Andrew McNamara on Queensland's Oil Vulnerability Task Force - Global Public Media: "Andrew McNamara on Queensland's Oil Vulnerability Task Force
Andrew McNamara on Queensland's Oil Vulnerability Task Force
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29 August 2005
David Room: This is David Room of Global Public Media Interviewing Andrew McNamara, member of the Queensland Parliament for Hervey Bay, Australia, on the 24th of August, 2005.
Hello Andrew.
Andrew McNamara: Good morning David.
DR: How did you become aware of Peak Oil?
AM: Last Christmas a friend of mine gave me a book to read, it was Richard Heinberg's book on Peak Oil, and I found it quite startling. Like most members of Parliament I read a lot of stuff, and some of it's good and bad, but this one really made me sit up. And I thought because it's well written doesn't mean it's right, but if it is right it's got amazing implications, so I started talking to different people. A physicist I know in my part of the world, in Hervey Bay, Ian Richards is someone I respect and I said 'What do you know about this?' And he said 'Yeah, it's absolutely true.'
And so I started doing some research on it and talking to engineers and other people I'd met at various times and I was amazed that the scientific people that I got in touch with all were kind of blase about it, they weren't really startled. They said, well, it's quite obvious that oil is a finite resource and it's going to run out some time. This debate's been running for a long time, it's only a matter of when does it start to run down. And so I became convinced that this is completely correct and that the peak of world production was relatively near, and that the problems would begin not when we peaked but when demand outstripped the capacity of supply to keep up with it. And so I walked back into the Parliament after the Christmas break and the first sitting day of Parliament this year, the 22nd of February, made a speech and set out what I thought to be the basic premise, and that's had quite an extraordinary reaction with literally thousands of emails and an amazing response, particularly from the geology and broader scientific community who have really been quite unanimous in saying 'Yes, this is the case.'
DR: Can you tell me, how do you explain Peak Oil to your constituents?
AM: Well, I'm trying to put it in very simple terms, because most of the constituents are like me, they don't have scientific backgrounds, we're not all geologists- Which I have to say, one of the difficulties of explaining it to my colleagues in Parliament is that, again, far too few of us have scientific backgrounds. Overwhelmingly we're, like me, sort of lawyers, and economists, and, perhaps, teachers, and union officials, but very few people with any scientific qualifications in Parliament, so it's simply a matter of working with the things that people know. There's a universal acceptance that oil is a finite resource, and once you reinforce that point, that it must start to run out, then you start going case specific and point to some of the very public data.
The biggest oilfield in Australia is Bass Strait, down at the southern end of the country. It's been our mainstay for 40 years. Its production dropped last year by 18 percent, so it's well and truly in decline. And people don't know that, although it's reported in the financial pages of the papers. And I guess that's been one of the curiosities about this particular debate, is that it's actually there for all to see. But it hasn't been reported on the front pages, it's all through the financial pages, and if you go and dig into the resource sector stuff it's there, and I guess I've been pointing to industry publications like the Oil and Gas Journal. As you'd be aware they had a two part series in February of this year just after I made my speech, which has been very handy. And again it's very clear that they're expecting a staggered set of production peaks between now, effectively, for non-OPEC and excluding the former Soviet Union, through to the OPEC itself in 2015.
So, it's a matter of not getting too complicated about it. I've had good editorial support in my local newspaper, which is a little country journal, has come out twice and said "Yes, this would appear to be the case", and since I've been talking about it I've had stories in pretty well all of Australia's major dailies; the Auburn Age, the Sydney Morning Herald, and The Australian have all carried stories. It's certainly, I think, out there as an issue, but again there's still not quite the recognition of just how urgent this can be and what the implications will be.
DR: Tell me about your responsibilities as a member of Parliament in the context of global oil peak.
AM: A couple of my less kind colleagues referred to my first speech on the subject, I think I've made three now, but they referred to my first speech as "Peak Career". And although I don't necessarily agree that talking about such an issue puts you into vocational decline, nevertheless it's a big break from what we normally do as politicians. And I'm no different; my starting method is to tell people if they vote for me, tomorrow will be a brighter and sunnier day, and that what I promise is a better future. And I work hard to try and deliver that. This story is a difficult one, and I understand why politicians who are aware of it may be very loathe to get into it because at the heart of the Peak Oil story is that tomorrow there will be less of something, and that's a difficult sell for politicians. The way it works is that you promise more, not less. So I sort of read the stuff, and thought about it, but it seemed to me that I had no choice but to go on the public record at the first opportunity because it was so serious. Again, we're not talking about becoming aware that a factory somewhere might be unviable, you're talking about becoming aware that our entire lifestyle IS unviable. And so, it seemed to me that the risks of saying nothing and preparing too late far outweigh the risks of saying something too early, or preparing too early, and so I decided that I had no choice but to talk about it. And, I think in the relatively short run I've been proved right on that. I don't think that I've suffered any sort of backlash, and I think I would deserve one had I not raised the issue.
But I should defend my colleagues a bit, I don't think that there's lots and lots of politicians here, or anywhere else, who are just sitting on their hands and saying nothing when they know about it. I think it's a genuine blind spot that has just had this debate bubbling away in the geological community and out in broader fringes for quite some time without it ever really making it on your desk. As a politician there is just enormous amounts of reading; reports hit my desk every day. And you don't really need to go looking for work, it just comes at you. So to go and find something that's not coming at you, and Peak Oil really wasn't- There's an element of luck in it. One by one as I talk to my colleagues here there's a reaction of "Oh my God, how did this happen? How come I don't know about it?" And, that's one of the big arguments that people raise, is that "This can't be right, otherwise we'd all know about it". And, the reality is that we'll all know about it sooner rather than later.
DR: Tell our audience about Hervey Bay. To what extent is it freight and car dependant? Are many of the products made locally?
AM: That was my strongest motivation. The city that I represent, 50,000 people, lovely little ocean-side town, we have tourism as our main industry, we have humpback whales visit every year in large numbers and people come from around the world to go and look at the whales, and go to Fraser Island, which is a large, natural sand island that's quite beautiful. But we have no rail link, it was torn up in the economic rationalist exercises of the 90's, and we have no proper sea links. We have a port, but it's really at a low level, it's not a commercial port, in any way. So we're entirely road and rail dependant, and accordingly, it struck me that if the price of fuel doubled, and then doubled again and then doubled again, that the tourism industry, which provides the life blood of my town, would simply collapse. And, similarly, the issue of feeding a town like Hervey Bay becomes problematic. We have subdivided close-in rural land for urban subdivisions; Hervey Bay was only 8,000 people in 1976 and it's 50,000 now, so we've gone through all of the excesses of urban sprawl and kept little parks, but very little capacity to produce food. Locally, I think we're better than some, better than many larger cities, but our networks are built around cheap fuel, and if Peak Oil represents the end of cheap fuel, then it is a substantial threat to everything that happens in my part of the world. So again, the motivation was very simple. Hervey Bay is horribly exposed to rising fuel prices, and we need to get on the front foot and start talking about how we improve the transport links, in particular. So, along with simply talking about Peak Oil and its implications, I'm also talking about the need for improved transport links. I'm working on submissions for a major expansion of out boat harbor so that it can take larger passenger craft and coastal barge shipping. I'm talking about the need to reestablish rail links, so there's a range of policy imperatives that flow from an awareness of the impending likelihood of a peak in global oil production.
DR: You mentioned the economic rationalist exercise of the 90's, is this the globalization trend that was going on throughout the world?
AM: Well, that's part of it. We, in Australia in the 90's, signed up to National Competition Policy, which was a proposition that all government services should be offered on a competitive basis rather than a monopoly basis, and that inefficient government services should be privatized or corporatized, and that where there was private sector capacity to offer a service that the government should vacate the field. So it was a bundle of Neo-Classical economic prescriptions that, as part of a globalization swept the world, going back to the Reagan and Thatcher days. So in the early 1990's, one of the things that the then Queensland government did was it looked at country rail lines and said, Are these rail lines efficient? Are they profitable insofar as the number of people completely covers the cost of operating this service? And where that didn't stack up we shut the rail lines. But it was a belligerent exercise. We didn't merely stop operating the trains, we tore up the tracks and sold the corridors. So I think of it as a belligerent economic rationalism where we said 'Not only are we not going to do this but we're going to make it really hard to ever go back.' And so we burned our bridges, literally. That's, I think, going to be looked on as one of the major policy failings of the last quarter of a century in Queensland because the idea that rail had to be profitable for government to offer it, a rail service had to be profitable, is missing the point about building public infrastructure and public capacity, and indeed service to the public. But it's also made life very hard for many, many rural and regional cities that no longer have these rail links and are now entirely dependant on road transport, and to reestablish these rail links we now have to go and buy back corridors and re-lay track which was already there. There's some substantial policy difficulties in that regard, but it was one of the trends that I think is going to prove to be of very poor fashion.
DR: In the context of global oil peak, what mitigations or responses interest you?
AM: Well, I think we need everything. Whenever I was doing an exam as a student I always used to, when I was stuck, opt for option 'E' for all of the above, so I think we've got to look at everything we can do. That means, we have to, straight out, encourage more exploration for traditional oil, and that's not been something that we've been doing much in Australia. We have to encourage greater exploration for natural gas and coal seam methane gas. Those are reasonable substitutes that we can do a lot more on. But then we have to start looking very hard at the alternatives and non-conventionals, and my governments doing a fair bit of work on biofuels and ethanol.
The danger in this debate is that when you start saying 'We can do work with ethanol and hydrogen and other biofuels', is to give, however, the perception that all of these alternatives and non-traditional things like tar sands or whatever, are going to fill the gap. And that's the next danger, that having convinced people that global oil production's going to peak, and it certainly peaked in Australia, there's no question about that whatsoever. We were producing briefly in the 90's 100 percent of our local needs and that's down to 70 percent now. Having convinced people that global oil production is peaking, you don't want to fall into the trap of people saying 'Oh yeah, well, you're doing all that good work on ethanol and hydrogen', because there are major technical problems that require not just incremental movements in what we know, but fundamental in things like hydrogen, for example. And, then, there's just still a lack of understanding of how oil flowing from the ground at enormous volumes, it can't be replicated by growing cane and producing ethanol. The scale of the fuel resource that we've currently got flowing is not going to be replicated by renewable fuels, which means that the thing that's going to allow us to decide between having a slow step-back from the way we use energy now into a manageable future is demand restraint, or driving less, using less fuel.
And that's, I guess, the message that people don't want to hear. That's the really hard sell that I'm encountering. It's not convincing people that global oil and gas is going to peak, it's that scientists aren't, somehow, going to be their salvation. We have an annual event in the Queensland Parliament called Science in Parliament day, and a few hundred of Queensland's leading scientists come in and we have a big lunch and a series of seminars and a few scientists will spend time with politicians talking about the research their doing and it's a good way to get politics talking directly with science. But, it's an interesting thing with the transition that's gone on now; there's a belief in science that's almost religious, in that many people will look me in the eyes and say 'Scientists will come up with something.'
And scientists I talked to are touched by this faith, but they happily point out that research is a long and uncertain business, and that there are many blind gullies that you wind up in that produce no meaningful results, and that even with good technology and substantial research efforts the commercialization, roll out of new technology is a very slow and expensive business. And, unfortunately, we've just got this mindset, in Australia, I don't know if it's the same in the USA, that the scientists will fix it. If there's a hole, we'll invent something; if there's a shortfall we'll just create a new, better, and even cheaper way of doing it, and that mindset's really dangerous because it allows people to just say 'Yeah, yeah, yeah- Of course the world's running out, but we'll come up with something-' And I don't think we are 'Just going to come up with something,' I think there's a very bumpy landing in prospect and the sooner we start preparing the less bumpy it will be.
DR: Regarding the reliance on technology, or the thought that someone's going to fix this certainly seems to be the same in the United States. Many of my colleagues refer to folks that are talking about that as 'The Technofixers'.
AM: Hmm, that's right. Well, we in Australia have a long and proud history of innovation going back to the stump jump plow, but the trouble is that we've engineered our society in such a way that simple innovation won't fix it. We've laid out our suburbs and we've laid out our roads as the only way to deliver food, and goods and services, and we are just not structured in a way that going to allow some innovation to save us. We have to change the way we live.
My government's been doing, I think, some really leading work in Australia, in terms of urban planning, and we've just recently produced a plan for the southeast corner of Queensland which is where the capitol Brisbane is and where most of our big growth is happening. We're expecting another million people to move to the southeast Queensland in the next 20 years, and the population of the state's four million, so that's a major challenge. And we're trying to, perhaps, push people into higher density living, and living next to existing transport nodes, but we still, even with that objective in mind, are leaving green space, that sort of green on the sides of hills that isn't suitable for growing food, and we're still creating, on maps, future towns with populations of 100,000 that don't, at this point, have a rail line committed to them. And it's that kind of fundamental commitment to putting the right infrastructure in place for our future planning, given what we know now, if we're still not doing that 100 percent correctly for future stuff, you can see how hard it's going to be to reengineer the stuff we've already built.
The costs are exorbitant, and we're in the middle of an economic boom here at the moment, growth is terrific and unemployment's at the lowest rate it's been in a generation. Now's the time, while things are good, to be trying to change things, because the obvious implication of the peak of world oil production is a recession, and a fairly serious one in that there's no particular light at the end of the tunnel. And, I guess, you don't want to be having to reengineer your cities and lifestyles when everyone's unemployed and business is in an enormous slump and going down. We need to be doing these sorts of enormous structural changes at a time when there is confidence and there is prosperity. The challenge for me, and for all politicians I guess, for all of us who're talking about this, is how to raise the alarm without being alarmist. How to convince people that we need a fundamental change, and to commence that fundamental change without, at the same time, triggering a crisis in confidence and an economic meltdown. It's not easy.
DR: I can imagine. I was wondering about the urban planning that's being done now, and how much thought is given to relocalizing essentials such as energy, water, food, such that production is closer to consumption?
AM: Well, it's really only a matter of 'It's under discussion.' There's some trends that have come out of the States in New Urbanism, involving much more localized jobs, and walkability in city planning, and the requirements that you have city hearts with services available and not the desegregated planning that we've had over the last 30 to 40 years. But they're new ideas, they're not current planning imperatives, and the people who do that work are certainly becoming aware of the implications and the existence of Peak Oil.
Only three weeks ago I attended a planning session being run by the Brisbane City Council, and the Council got all of its senior planners and roads engineers and all its senior technical staff and departmental managers, and called them together and invited a series of speakers from state government to come and talk about the issues that arise in planning a large city with declining amounts of energy. That was really instructive. There was a very broad acceptance in the room that Peak Oil's happening, that we need to be moving away from reliance on cars and looking at our urban transit systems so that we maximize public transport, whether they're trains or trams or light transit systems, and a degree of urgency in the room that there are decisions that need to be taken now that are fundamental to this question.
Brisbane's currently going through a major debate about how to renew its urban transit. We have huge traffic congestion and it's a major issue with cars parked on roads not moving, and the current political plan for Brisbane at the Council level is to build massive car tunnels, road tunnels, rather than rail tunnels, and I think there was a strong appreciation in the room that the mixes of what's being currently proposed is, perhaps, all wrong. The emphasis needs to be on public transport and better rail links so that we can move people without cars rather than to continue building infrastructure specifically for cars. And similarly, there was broad discussion and acceptance of the need to reengineer and redesign suburbs so that kids can ride bikes to schools and people can walk to shops, and that jobs are in the suburbs where people live rather than a 25 minute car drive away.
Again, I was the only politician at that particular meeting, the rest of the people there were technical experts, but they're the people who advise the politicians at that level of government, and to a man and woman I think they were very consistent in the advice I expect they'll be giving. I suspect the issue's very much about to burst forth, but it's just getting that broad acceptance of what are the policy prescriptions, and I think, just returning to your earlier question, the policy prescriptions that are going to matter, that are going to be essential, will be demand restraint and the design of cities. That's where we have enormous potential to save energy. I think that those also might be the more difficult political pills to swallow.
DR: US Congressman Roscoe Bartlett says we need to redefine success. Do you have any thoughts about that?
AM: I think he's absolutely right! I've been following his speeches, he's been out there doing some very good work. We've clearly had a definition of success in the way we build out lives and build these large brick and tile mansions which are fully air conditioned and have a two car garage in the driveway that leads to our place of work 40 minutes away. We have set up a lifestyle that is unsustainable and is now, very quickly, going to come to a fundamental change.
And, yes, where we can- In the large and wealthy Western democracies like the United States and Australia we have the opportunity to confront issues and change the way we live quite quickly. We have resources available to us that a lot of nations simply don't. But, in squandering cheap energy, we have created a lifestyle and an economy that's really made us blind to the risks of what we're doing. And there's a famous cartoon on an Alcoholics Anonymous book of this guy falling off a building and clutching a bottle and he's sailing through the air as he heads towards the pavement saying 'So far, so good'. And I guess that the analogy of how we've created this successful cheap-fuel-based lifestyle that's 'So far, so good.' But the ground's coming up very fast.
DR: Are you familiar with the Rimini Protocol?
AM: Yes. Yes, I've had a look at some of the suggestions of the global ways of starting to look at rationing oil, is that what you're talking about?
DR: Yes, yes. I believe in the protocol it says that importing countries would reduce their demand by the world depletion rate.
AM: Mmm, that's right. And, the reality is, I think we have that potential easily, no question about it. We have in importing countries, the potential to save large amounts of energy quickly.
Australia's a net energy exporter at the moment, but not of oil. We're exporting coal and gas in large quantities. So you've got to watch some of those protocols as to what they really mean and look hard at the definitions because you wouldn't want to sign up for something that didn't effectively bind to make the savings. Having said that, I'm, at this stage, of the view that we're far too far down the path to commence on a round of international negotiations that will proceed at a snail's pace. I just think the time for action's now, and governments need to be taking dramatic steps to encourage the reduction of energy consumption.
Governments are, of course- You might be aware that the government of Thailand, only a matter of weeks ago, announced a target of 15 percent reduction in national fuel use, and they brought in really substantial restrictions on the use of power on signage being- bans on illuminated signs after ten at night. Thailand imports 90 percent of its fuel, so it's horribly exposed, in terms of its foreign exchange and its balance of payments, to skyrocketing world fuel prices, and so they've brought in all sorts of changes just instantly. The government of the Philippines, again earlier this year, has instituted a range of demand restraint measures such as changing the government working week from five days to four so that people don't drive to work five days a week, and those sorts of policy restraints by governments of large countries, will just simply have to happen.
Australia, because we are only importing 30 percent of our oil at the moment hasn't gone down that road, but we're already a signatory to the International Energy Agency treaty. If you're aware, the International Energy Agency put out a report earlier this year called Saving Oil in a Hurry, listing ranges of demand restraint measures that member nations should be considering. There's already some work in place among developed countries which set out some fairly clear measures that can be adopted which would save substantial amounts of fuel fairly quickly. It's simply about having the public understand the necessity for those moves and then implementing them. But those things can happen very quickly; when the OPEC oil shocks of the 70's happened, it simply only a matter of days before you have to introduce odd and even numbered driving days and those sorts of restrictions, and I think that there are things that can be done more quickly than embarking on a Kyoto-type round of negotiations that might last a decade.
DR: You began a speech in May, 2005, "The Howard government has many failings but in no area has its lack of attention to detail and planning for the future left Australia more exposed than in the vital national concern of energy policy." What prompted those remarks?
AM: I had a read of the Federal Government's White Paper on energy, and I was just appalled, because, my government is a state government, and while we have a very clear responsibility to mitigate risks and to take steps to do all those things I mentioned before about encouraging alternative fuels and encouraging demand restraint and encouraging exploration, our capacity is limited and we need a national response, indeed as you indicated you need a national response. So, I had a look at last year's white paper that the Federal Government put out and it was just such a disappointing document because it just simply didn't mention Peak Oil or global energy production at all. It just simply didn't consider the issue.
It was based on a reading of the price of oil at US $35 per barrel for the foreseeable future, and so within barely twelve months the prescriptions that were set out in that document were just blown out of the water by oil almost doubling, it's up close to $70 US a barrel. So the underpinnings of that White Paper, which is meant to be a guide to Federal Government planning for energy policy in Australia have been completely blown out of the water, but then, within the document itself, it simply didn't confront the major issues. Again, I'm aware, from discussions with numbers of scientists, that scientific agencies that advise out government are well aware of issues of global oil depletion, this isn't some secret that I've stumbled on, as you're aware, it's out there and being considered around the world. So, to produce an energy White Paper that says to the people of Australia 'Nothing to see here folks, just move along,' is just disgraceful. And, worse than that, it specifically goes into what sorts of energy issues we have and encourages the greater use of fossil fuels, and in fact discourages the use of alternatives and talks about the ways of putting tax incentives to use more diesel, and specifically talks about reliance on alternative fuels perhaps representing an energy threat to Australia. So, I don't know who wrote the paper, I suspect it was an economist called Rosy Scenario, but it really was a disappointment because as a planning document, as a lead document for where we're going, it really heads in the wrong direction with the blinkers on and the brakes thrown out the window.
DR: I must say, that policy report sounds very familiar. I'll just leave it at that.
AM: Yeah, and I guess there is a broad issue here that, in terms of advice governments get, we rely on economists, and I don't want to nag economists as a class, there nice people, some of my best friends are economists, but there's this belief that the price mechanism will sort out all problems, that supply and demand will come into equilibrium eventually and that the rising price of any good will make alternatives more attractive and make exploration and development of that particular product more attractive and therefore more will be found. The underpinnings of that analysis are that there is always more to be found, that there is no natural limit, and I guess there's a clash between the man-made laws of economics and the universal fundamentals of the laws of physics, and I think the laws of physics are always going to win. So, as we find oil, for example, becoming more and more expensive to find, it doesn't mean that, with the price of oil going up it'll always be worthwhile doing it. If it costs you more than a barrel of oil to get a barrel of oil out of the ground, then it doesn't matter whether the barrel of oil's worth a hundred dollars or a million dollars, it's not worth doing.
I had a speech just earlier this week on a different piece of legislation our government's putting through to allow for greater use of recycled water, and it's become very apparent to me that there are two debates that are completely intertwined, and they are water and energy. They're the same argument, without water you don't have energy and without energy the water supply doesn't work, and we in Queensland- Australia's a very dry place, and we constantly talk about suffering from drought, but what we're suffering from is effectively the normal conditions that apply in a country like Australia, and we have water shortages looming upon us, and each year those water shortages impacts very heavily on power generation because out electricity generators are among our very biggest customers of our state water supply, SunWater. So I was making a speech in relation to a bill on saving water, and my observation is that we need to stop measuring things in dollars, we need to start using more fundamental measures of What does this project or proposal mean in terms of energy? What is the cost in energy and what does it cost in water? Because the price of something is not a dollar value, it the ability to be satisfactorily replaced, and with fixed resources that can't be replaced the mere fact that you can buy it for a certain price is no guide to its real cost at all. So, I think that we need to get away from the traditional economist measures of supply and demand and the price mechanism providing a system of resolving these issues and impose a more traditional, hard science, based on physics, and say, What is the cost of transforming this energy? Even the second law of thermodynamics says that some energy is lost every time that energy is transported and transformed. Those are the measurements that we've got to be taking, and changing the way that governments and people look at the costs of building and running society.
DR: In Queensland, you've established an Oil Vulnerability Task Force.
AM: Yes, that's been a very positive thing for me. Our Premier Peter Beattie gave me his consent to establishing a task force across a number of departments to look at how vulnerable Queensland is to global oil depletion. I've managed to get some scientists from a number of departments who are assisting in writing that report. I've got scientists from our Department of Natural Resources, from Department of Energy, from Department of Primary Industries, and Department of Environment who are working on a report. We're getting there, we're half way through, we have been looking at, first, what's Australia's energy production profile? What's the prospect of changing that? What's the prospect of finding more conventional fuels? What are the likelihoods of global oil and gas production peaking? If so, when? What are the major predictions? What's the consensus? And then, moving on to given the likelihood of, at the very least, a plateauing where production can no longer keep up with demand growth ahead of production actually declining, what are the implications for food and transport, and society generally? And then, risk management. This will be the sexy but dangerous beast: What are steps that, as a society, we can take to mitigate the risks of global energy depletion?
And it's going very well. I've been pleased with the support that I've received from the various Ministers. I chair the Energy Minister's Backbench Committee, and so it was a terrific opportunity to be given the resources of a number of departments and a number of scientists to work on this report and I'm hoping to have that finished by October, and then hopefully that will spark a major debate in government here and in the broader community about where we go.
DR: What types of risks is the task force considering?
AM: Well, all risks are on the table, and it's very fundamental stuff. The reason that I have some scientific support from the Department of Primary Industries is the implications for food production are substantial. We have a food industry that is truly global, you can buy a tin of spinach off the shelf in Hervey Bay that was grown in Greenland and retailed in Australia for 95 cents. That's clearly a product that's built around very cheap transport. And, similarly, all of our fertilizer now is made from natural gas, all of our pesticides are made from oil, and there are very few alternatives. There are fertilizers made from natural gas because we've used all the world's bird poop, there's no more to be had.
So, the sorts of levels of production in crops that we are used to are entirely dependant on the fertilizers and pesticides which are oil and gas based. And then the cheap energy which runs the tractors and has mechanized our farms to a degree that virtually nobody works there anymore, and the threat is that, in this area, we have a rural production sector which employs 90 percent less people than it did 35 years ago, and that it's able to do that on the basis of cheap fuel and cheap energy generally. And, if those things stop, what happens?
Again, one of the messages I'm really keep to push very hard is that it's not about oil running out, it's not about the end of oil, it's just about the end of cheap energy. What does the end of cheap energy mean? Because, for what it's worth, I don't think oil will ever run out. We've lots of oil around the world produced at marginal sorts of prices, or very expensively, or not at all because it's simply not worth doing on the basis that it takes more than a barrel of oil to get a barrel out. So, the issue of the end of cheap energy in terms of agricultural production means that there are staggering risks to the cheap food that we've become very reliant on, and some of the material I've read suggests that the world's total energy production's gone up by two percent per year for each year out of the last hundred years and, interestingly, so has the world's population. It's also risen by two percent a year, and that the wealth that we had in energy has allowed us to produce the food and warmth to grow the population correspondingly. If we can't continue to produce the volumes of food that we do, and if that begins to decline, then there's a necessary population decline. So, at the far end of the scale in terms of the risk, there is the risk that if we don't properly manage this issue, that over a 50 year period the world's population begins to decline by two percent a year, and that could be a very unpleasant process, you know?
It's as fundamental as that, it's as fundamental as How secure is out food supply? Of cheap and easy to get food, food that's landing in markets where it's grown from places on the other side of the planet. Are we going to be able to do that? And then, in terms of our agronomic prosperity, Australia exports 70 percent of the food it grows, we're an exporting country. What does it mean if rising transport costs mean that the export markets decline, if not collapse? There are huge and serious issues that need to be confronted at that most basic level before you then flow through to the social issues of What does it mean for tourism? Tourism is one of those industries that's been fantastic for my part of the world. I would not like it if it became viewed as a phenomenon of the 20th century, something that people used to do back in the days of cheap energy. They used to jump on planes and travel round the world and go to far off places, and we can't do that anymore. There's a need to start recognizing that there are alternatives to some industries, but not others.
Air tourism is a classic case in point, there is no alternative whatsoever, at the moment, for mass air market tourism to air gas. You can't fly 747s on biodiesel or ethanol or hydrogen, it's air gas or nothing. So, consequently in Australia we're seeing our airway lines, I'm sure it's the same in the US, putting out profit warning downgrades of 40 percent because of rising fuel prices, and our budget airlines are under extreme stress because they're simply having to put fuel surcharges on. The viability of the international tourism industry by air transport is at stake here. It means we need to be looking very hard at how we use fuel for petrol, for those things that only petrol can do. There's an urgency to develop alternatives for those things where alternatives will work. So those are the sorts of risk issues that will cover, and I hope that the report is acted on with wide consideration.
DR: What are the deliverables, and might these be made public?
AM: The report's being prepared as a cabinet submission, so, strictly speaking, it's secret until Cabinet's considered it, so I'm not going into detail of precisely what's in it. My personal preference is that, as soon as it's been considered by Cabinet, it be released for public comment and debate, and I'll be hoping, of course, that the recommendations in it are similarly prioritized and embarked upon. There are certainly things that we're already doing that are worthwhile and it's simply a matter of accelerating those things.
We've recently brought in legislation mandating solar hot water systems, for example, in future homes. We need to continue on and mandate water tanks in all homes so that those twin issues of energy and water get addressed, localized and made more sustainable. There are lots of little things that can take substantial pressure off our energy demand, and we need to be switching government programs from ones that provide grants, for example, to provide more car parking spaces outside our schools, which we have, to grants that provide for walking busses so that, under adult supervision, children are collected on foot and walked to school. These programs are all out there, but they're being offered beside each other without a total energy perspective about where we're trying to go. We can shift existing resources into encouraging less use of cars and make very substantial impacts on our total energy use in those ways.
In Brisbane, for example, about 75 percent of people drive to work. I was in Tokyo earlier this year, and 25 percent of people drive to work there, and the reason for that is that if you don't have a car park under the building where you're going, you can't park. And they also have a public transport system that is efficient, and very vigorous. The trains come every couple of minutes. There's no reason why we can't commit to those sorts of outcomes. In our town planning laws we still allow people to build car parks in cities. Again, we need to make a commitment to reducing reliance on vehicles by saying well, as a matter of town planning, we're not going to build any more of them, and then put the other policies in place that say that, however, we'll lessen public transport costs. We need to be seriously considering subsidization of public transport as opposed to the subsidization of road transport. Those sorts of decisions can be taken very quickly, it's simply a matter of the collective recognition of the problem and then the collective will to deal with it.
DR: In the second half of the Task Force Investigation, will you be consulting any outside experts such as Colin Campbell, Matt Simmons, etc.?
AM: We've been talking to people- The balance here has been speed and thoroughness. We've had some Australian experts who have come and spoken to us, Dr. Bruce Robertson from the Commonwealth CSIRO, a commonwealth of scientific organizations came and presented to us. He was an Australian representative at the Lisbon Association for the Study of Peak Oil and Gas conference earlier this year, and so he came and presented to us and talked ideas.
We've been receiving lots of written submissions from people with good ideas, but if you get involved with public hearings and a road show, although that's good for politician's profile, it tends to slow down the process of producing the report, and I guess my overriding concern is to get the report produced and in front of the Premier and the Ministers so that we can get some decisions on the go. I guess my issue is that the case for global oil production peaking is fairly clear and fairly well made, the scientists and advisors have been working on this report don't need to be convinced. What we need is to consider all of the possible ways of dealing with this issue, and putting them into a cohesive policy framework, and for that I don't know that we need to be consulting internationally, we just need to, as we say here, get our fingers out and get on with it, and that's what I'm aiming to do.
DR: Why is Queensland the only state in Australia, if not the world, investigating this?
AM: Oh, I guess we're just lucky. Someone gave me a book to read-
That's not quite true; the West Australian Planning Minister, Alannah MacTiernan has made a number of statements on the record about the probabilities of Peak Oil and the need to deal with that. And I know the West Australian, and other state governments, Cabinet was addressed by Ali Bakhtiari, who's a senior oil production official from Iran about global production decline. So, I think it may well be that behind the scenes there's a greater awareness.
Certainly, as I've been doing what I've been doing, I've been pleasantly surprised that across the range of government departments there's already been some work done by public servants who have an interest in the area, and although it's not been government policy to embark on this area have been quietly beavering away producing reports. I suspect that it simply comes back to that earlier point that politicians, by and large, are very busy doing what they know, and an issue that hasn't been put in front of them doesn't exist. And, better or worse we suffer from that same belief that science will find a way, and that the market will provide an answer if prices go up. So it's really only just a matter of coming to terms with the end of a resource, which isn't a problem that we've, by and large, seen much of. In Queensland, I think we will do this work, but I think that other people will, very quickly, as well, pick up on this issue in the next year or two. I don't see us being some sort of world leaders for a very long time at all. And having said that I don't want to understate it either!
I'm a bench member of Parliament, I'm not a Minister, and although I chair the Energy Minister's Backbench Committee it's an advisory role and not a decision-making role. I'm one vote out of 89 in the Parliament, and a reaction to Peak Oil is something that still has to be formally considered and acted on. So, I'm very encouraged by the support that I'm getting from my government to do this work, but, having said that, the proof's in the pudding. When the report's produced, it's a matter of what we do then.
DR: Will there likely be an opportunity for state and local governments around the world to learn anything from your work?
AM: I very much hope so. Again, it will be my recommendation that the report be put on the internet, and tabled in Parliament, and made widely available. My preference here is that we need a global response, and we need a national response, and then we need state and provincial responses, and then we need local, very much local responses, and sharing information is the best way to do that. Nobody's got time to reinvent the wheel. If there's good works being done by governments anywhere then we need to all be taking notes on that and moving quickly. We have, I think, a very tight timeframe. Australia is already in serious oil production decline. There is, I think, at most ten years before we are looking at global production decline. We have, I think, a ten year window where we've got some options to engage in vigorous local policy activity we can give ourselves a window of opportunity to deal, or get ready for, the severe bump when OPEC passes its production peak, but ten years is a pretty short timeframe to change the way we grow and deliver food, the way we design and build our homes and cities, the way we move ourselves and everything else in our societies around, and I think it will be the Great Challenge for our global civilization, how we confront this ten year opportunity.
DR: Wow, thank you. Is there anything else you'd like to say or do you need to move on?
AM: No, I really thank you for the opportunity to have a chat, I hope you found it interesting, and I'll be back in touch when the report's able to be made public and perhaps we can have a little follow-up then.
DR: I'd love to!
AM: Great, thanks very much David
Andrew McNamara on Queensland's Oil Vulnerability Task Force
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29 August 2005
David Room: This is David Room of Global Public Media Interviewing Andrew McNamara, member of the Queensland Parliament for Hervey Bay, Australia, on the 24th of August, 2005.
Hello Andrew.
Andrew McNamara: Good morning David.
DR: How did you become aware of Peak Oil?
AM: Last Christmas a friend of mine gave me a book to read, it was Richard Heinberg's book on Peak Oil, and I found it quite startling. Like most members of Parliament I read a lot of stuff, and some of it's good and bad, but this one really made me sit up. And I thought because it's well written doesn't mean it's right, but if it is right it's got amazing implications, so I started talking to different people. A physicist I know in my part of the world, in Hervey Bay, Ian Richards is someone I respect and I said 'What do you know about this?' And he said 'Yeah, it's absolutely true.'
And so I started doing some research on it and talking to engineers and other people I'd met at various times and I was amazed that the scientific people that I got in touch with all were kind of blase about it, they weren't really startled. They said, well, it's quite obvious that oil is a finite resource and it's going to run out some time. This debate's been running for a long time, it's only a matter of when does it start to run down. And so I became convinced that this is completely correct and that the peak of world production was relatively near, and that the problems would begin not when we peaked but when demand outstripped the capacity of supply to keep up with it. And so I walked back into the Parliament after the Christmas break and the first sitting day of Parliament this year, the 22nd of February, made a speech and set out what I thought to be the basic premise, and that's had quite an extraordinary reaction with literally thousands of emails and an amazing response, particularly from the geology and broader scientific community who have really been quite unanimous in saying 'Yes, this is the case.'
DR: Can you tell me, how do you explain Peak Oil to your constituents?
AM: Well, I'm trying to put it in very simple terms, because most of the constituents are like me, they don't have scientific backgrounds, we're not all geologists- Which I have to say, one of the difficulties of explaining it to my colleagues in Parliament is that, again, far too few of us have scientific backgrounds. Overwhelmingly we're, like me, sort of lawyers, and economists, and, perhaps, teachers, and union officials, but very few people with any scientific qualifications in Parliament, so it's simply a matter of working with the things that people know. There's a universal acceptance that oil is a finite resource, and once you reinforce that point, that it must start to run out, then you start going case specific and point to some of the very public data.
The biggest oilfield in Australia is Bass Strait, down at the southern end of the country. It's been our mainstay for 40 years. Its production dropped last year by 18 percent, so it's well and truly in decline. And people don't know that, although it's reported in the financial pages of the papers. And I guess that's been one of the curiosities about this particular debate, is that it's actually there for all to see. But it hasn't been reported on the front pages, it's all through the financial pages, and if you go and dig into the resource sector stuff it's there, and I guess I've been pointing to industry publications like the Oil and Gas Journal. As you'd be aware they had a two part series in February of this year just after I made my speech, which has been very handy. And again it's very clear that they're expecting a staggered set of production peaks between now, effectively, for non-OPEC and excluding the former Soviet Union, through to the OPEC itself in 2015.
So, it's a matter of not getting too complicated about it. I've had good editorial support in my local newspaper, which is a little country journal, has come out twice and said "Yes, this would appear to be the case", and since I've been talking about it I've had stories in pretty well all of Australia's major dailies; the Auburn Age, the Sydney Morning Herald, and The Australian have all carried stories. It's certainly, I think, out there as an issue, but again there's still not quite the recognition of just how urgent this can be and what the implications will be.
DR: Tell me about your responsibilities as a member of Parliament in the context of global oil peak.
AM: A couple of my less kind colleagues referred to my first speech on the subject, I think I've made three now, but they referred to my first speech as "Peak Career". And although I don't necessarily agree that talking about such an issue puts you into vocational decline, nevertheless it's a big break from what we normally do as politicians. And I'm no different; my starting method is to tell people if they vote for me, tomorrow will be a brighter and sunnier day, and that what I promise is a better future. And I work hard to try and deliver that. This story is a difficult one, and I understand why politicians who are aware of it may be very loathe to get into it because at the heart of the Peak Oil story is that tomorrow there will be less of something, and that's a difficult sell for politicians. The way it works is that you promise more, not less. So I sort of read the stuff, and thought about it, but it seemed to me that I had no choice but to go on the public record at the first opportunity because it was so serious. Again, we're not talking about becoming aware that a factory somewhere might be unviable, you're talking about becoming aware that our entire lifestyle IS unviable. And so, it seemed to me that the risks of saying nothing and preparing too late far outweigh the risks of saying something too early, or preparing too early, and so I decided that I had no choice but to talk about it. And, I think in the relatively short run I've been proved right on that. I don't think that I've suffered any sort of backlash, and I think I would deserve one had I not raised the issue.
But I should defend my colleagues a bit, I don't think that there's lots and lots of politicians here, or anywhere else, who are just sitting on their hands and saying nothing when they know about it. I think it's a genuine blind spot that has just had this debate bubbling away in the geological community and out in broader fringes for quite some time without it ever really making it on your desk. As a politician there is just enormous amounts of reading; reports hit my desk every day. And you don't really need to go looking for work, it just comes at you. So to go and find something that's not coming at you, and Peak Oil really wasn't- There's an element of luck in it. One by one as I talk to my colleagues here there's a reaction of "Oh my God, how did this happen? How come I don't know about it?" And, that's one of the big arguments that people raise, is that "This can't be right, otherwise we'd all know about it". And, the reality is that we'll all know about it sooner rather than later.
DR: Tell our audience about Hervey Bay. To what extent is it freight and car dependant? Are many of the products made locally?
AM: That was my strongest motivation. The city that I represent, 50,000 people, lovely little ocean-side town, we have tourism as our main industry, we have humpback whales visit every year in large numbers and people come from around the world to go and look at the whales, and go to Fraser Island, which is a large, natural sand island that's quite beautiful. But we have no rail link, it was torn up in the economic rationalist exercises of the 90's, and we have no proper sea links. We have a port, but it's really at a low level, it's not a commercial port, in any way. So we're entirely road and rail dependant, and accordingly, it struck me that if the price of fuel doubled, and then doubled again and then doubled again, that the tourism industry, which provides the life blood of my town, would simply collapse. And, similarly, the issue of feeding a town like Hervey Bay becomes problematic. We have subdivided close-in rural land for urban subdivisions; Hervey Bay was only 8,000 people in 1976 and it's 50,000 now, so we've gone through all of the excesses of urban sprawl and kept little parks, but very little capacity to produce food. Locally, I think we're better than some, better than many larger cities, but our networks are built around cheap fuel, and if Peak Oil represents the end of cheap fuel, then it is a substantial threat to everything that happens in my part of the world. So again, the motivation was very simple. Hervey Bay is horribly exposed to rising fuel prices, and we need to get on the front foot and start talking about how we improve the transport links, in particular. So, along with simply talking about Peak Oil and its implications, I'm also talking about the need for improved transport links. I'm working on submissions for a major expansion of out boat harbor so that it can take larger passenger craft and coastal barge shipping. I'm talking about the need to reestablish rail links, so there's a range of policy imperatives that flow from an awareness of the impending likelihood of a peak in global oil production.
DR: You mentioned the economic rationalist exercise of the 90's, is this the globalization trend that was going on throughout the world?
AM: Well, that's part of it. We, in Australia in the 90's, signed up to National Competition Policy, which was a proposition that all government services should be offered on a competitive basis rather than a monopoly basis, and that inefficient government services should be privatized or corporatized, and that where there was private sector capacity to offer a service that the government should vacate the field. So it was a bundle of Neo-Classical economic prescriptions that, as part of a globalization swept the world, going back to the Reagan and Thatcher days. So in the early 1990's, one of the things that the then Queensland government did was it looked at country rail lines and said, Are these rail lines efficient? Are they profitable insofar as the number of people completely covers the cost of operating this service? And where that didn't stack up we shut the rail lines. But it was a belligerent exercise. We didn't merely stop operating the trains, we tore up the tracks and sold the corridors. So I think of it as a belligerent economic rationalism where we said 'Not only are we not going to do this but we're going to make it really hard to ever go back.' And so we burned our bridges, literally. That's, I think, going to be looked on as one of the major policy failings of the last quarter of a century in Queensland because the idea that rail had to be profitable for government to offer it, a rail service had to be profitable, is missing the point about building public infrastructure and public capacity, and indeed service to the public. But it's also made life very hard for many, many rural and regional cities that no longer have these rail links and are now entirely dependant on road transport, and to reestablish these rail links we now have to go and buy back corridors and re-lay track which was already there. There's some substantial policy difficulties in that regard, but it was one of the trends that I think is going to prove to be of very poor fashion.
DR: In the context of global oil peak, what mitigations or responses interest you?
AM: Well, I think we need everything. Whenever I was doing an exam as a student I always used to, when I was stuck, opt for option 'E' for all of the above, so I think we've got to look at everything we can do. That means, we have to, straight out, encourage more exploration for traditional oil, and that's not been something that we've been doing much in Australia. We have to encourage greater exploration for natural gas and coal seam methane gas. Those are reasonable substitutes that we can do a lot more on. But then we have to start looking very hard at the alternatives and non-conventionals, and my governments doing a fair bit of work on biofuels and ethanol.
The danger in this debate is that when you start saying 'We can do work with ethanol and hydrogen and other biofuels', is to give, however, the perception that all of these alternatives and non-traditional things like tar sands or whatever, are going to fill the gap. And that's the next danger, that having convinced people that global oil production's going to peak, and it certainly peaked in Australia, there's no question about that whatsoever. We were producing briefly in the 90's 100 percent of our local needs and that's down to 70 percent now. Having convinced people that global oil production is peaking, you don't want to fall into the trap of people saying 'Oh yeah, well, you're doing all that good work on ethanol and hydrogen', because there are major technical problems that require not just incremental movements in what we know, but fundamental in things like hydrogen, for example. And, then, there's just still a lack of understanding of how oil flowing from the ground at enormous volumes, it can't be replicated by growing cane and producing ethanol. The scale of the fuel resource that we've currently got flowing is not going to be replicated by renewable fuels, which means that the thing that's going to allow us to decide between having a slow step-back from the way we use energy now into a manageable future is demand restraint, or driving less, using less fuel.
And that's, I guess, the message that people don't want to hear. That's the really hard sell that I'm encountering. It's not convincing people that global oil and gas is going to peak, it's that scientists aren't, somehow, going to be their salvation. We have an annual event in the Queensland Parliament called Science in Parliament day, and a few hundred of Queensland's leading scientists come in and we have a big lunch and a series of seminars and a few scientists will spend time with politicians talking about the research their doing and it's a good way to get politics talking directly with science. But, it's an interesting thing with the transition that's gone on now; there's a belief in science that's almost religious, in that many people will look me in the eyes and say 'Scientists will come up with something.'
And scientists I talked to are touched by this faith, but they happily point out that research is a long and uncertain business, and that there are many blind gullies that you wind up in that produce no meaningful results, and that even with good technology and substantial research efforts the commercialization, roll out of new technology is a very slow and expensive business. And, unfortunately, we've just got this mindset, in Australia, I don't know if it's the same in the USA, that the scientists will fix it. If there's a hole, we'll invent something; if there's a shortfall we'll just create a new, better, and even cheaper way of doing it, and that mindset's really dangerous because it allows people to just say 'Yeah, yeah, yeah- Of course the world's running out, but we'll come up with something-' And I don't think we are 'Just going to come up with something,' I think there's a very bumpy landing in prospect and the sooner we start preparing the less bumpy it will be.
DR: Regarding the reliance on technology, or the thought that someone's going to fix this certainly seems to be the same in the United States. Many of my colleagues refer to folks that are talking about that as 'The Technofixers'.
AM: Hmm, that's right. Well, we in Australia have a long and proud history of innovation going back to the stump jump plow, but the trouble is that we've engineered our society in such a way that simple innovation won't fix it. We've laid out our suburbs and we've laid out our roads as the only way to deliver food, and goods and services, and we are just not structured in a way that going to allow some innovation to save us. We have to change the way we live.
My government's been doing, I think, some really leading work in Australia, in terms of urban planning, and we've just recently produced a plan for the southeast corner of Queensland which is where the capitol Brisbane is and where most of our big growth is happening. We're expecting another million people to move to the southeast Queensland in the next 20 years, and the population of the state's four million, so that's a major challenge. And we're trying to, perhaps, push people into higher density living, and living next to existing transport nodes, but we still, even with that objective in mind, are leaving green space, that sort of green on the sides of hills that isn't suitable for growing food, and we're still creating, on maps, future towns with populations of 100,000 that don't, at this point, have a rail line committed to them. And it's that kind of fundamental commitment to putting the right infrastructure in place for our future planning, given what we know now, if we're still not doing that 100 percent correctly for future stuff, you can see how hard it's going to be to reengineer the stuff we've already built.
The costs are exorbitant, and we're in the middle of an economic boom here at the moment, growth is terrific and unemployment's at the lowest rate it's been in a generation. Now's the time, while things are good, to be trying to change things, because the obvious implication of the peak of world oil production is a recession, and a fairly serious one in that there's no particular light at the end of the tunnel. And, I guess, you don't want to be having to reengineer your cities and lifestyles when everyone's unemployed and business is in an enormous slump and going down. We need to be doing these sorts of enormous structural changes at a time when there is confidence and there is prosperity. The challenge for me, and for all politicians I guess, for all of us who're talking about this, is how to raise the alarm without being alarmist. How to convince people that we need a fundamental change, and to commence that fundamental change without, at the same time, triggering a crisis in confidence and an economic meltdown. It's not easy.
DR: I can imagine. I was wondering about the urban planning that's being done now, and how much thought is given to relocalizing essentials such as energy, water, food, such that production is closer to consumption?
AM: Well, it's really only a matter of 'It's under discussion.' There's some trends that have come out of the States in New Urbanism, involving much more localized jobs, and walkability in city planning, and the requirements that you have city hearts with services available and not the desegregated planning that we've had over the last 30 to 40 years. But they're new ideas, they're not current planning imperatives, and the people who do that work are certainly becoming aware of the implications and the existence of Peak Oil.
Only three weeks ago I attended a planning session being run by the Brisbane City Council, and the Council got all of its senior planners and roads engineers and all its senior technical staff and departmental managers, and called them together and invited a series of speakers from state government to come and talk about the issues that arise in planning a large city with declining amounts of energy. That was really instructive. There was a very broad acceptance in the room that Peak Oil's happening, that we need to be moving away from reliance on cars and looking at our urban transit systems so that we maximize public transport, whether they're trains or trams or light transit systems, and a degree of urgency in the room that there are decisions that need to be taken now that are fundamental to this question.
Brisbane's currently going through a major debate about how to renew its urban transit. We have huge traffic congestion and it's a major issue with cars parked on roads not moving, and the current political plan for Brisbane at the Council level is to build massive car tunnels, road tunnels, rather than rail tunnels, and I think there was a strong appreciation in the room that the mixes of what's being currently proposed is, perhaps, all wrong. The emphasis needs to be on public transport and better rail links so that we can move people without cars rather than to continue building infrastructure specifically for cars. And similarly, there was broad discussion and acceptance of the need to reengineer and redesign suburbs so that kids can ride bikes to schools and people can walk to shops, and that jobs are in the suburbs where people live rather than a 25 minute car drive away.
Again, I was the only politician at that particular meeting, the rest of the people there were technical experts, but they're the people who advise the politicians at that level of government, and to a man and woman I think they were very consistent in the advice I expect they'll be giving. I suspect the issue's very much about to burst forth, but it's just getting that broad acceptance of what are the policy prescriptions, and I think, just returning to your earlier question, the policy prescriptions that are going to matter, that are going to be essential, will be demand restraint and the design of cities. That's where we have enormous potential to save energy. I think that those also might be the more difficult political pills to swallow.
DR: US Congressman Roscoe Bartlett says we need to redefine success. Do you have any thoughts about that?
AM: I think he's absolutely right! I've been following his speeches, he's been out there doing some very good work. We've clearly had a definition of success in the way we build out lives and build these large brick and tile mansions which are fully air conditioned and have a two car garage in the driveway that leads to our place of work 40 minutes away. We have set up a lifestyle that is unsustainable and is now, very quickly, going to come to a fundamental change.
And, yes, where we can- In the large and wealthy Western democracies like the United States and Australia we have the opportunity to confront issues and change the way we live quite quickly. We have resources available to us that a lot of nations simply don't. But, in squandering cheap energy, we have created a lifestyle and an economy that's really made us blind to the risks of what we're doing. And there's a famous cartoon on an Alcoholics Anonymous book of this guy falling off a building and clutching a bottle and he's sailing through the air as he heads towards the pavement saying 'So far, so good'. And I guess that the analogy of how we've created this successful cheap-fuel-based lifestyle that's 'So far, so good.' But the ground's coming up very fast.
DR: Are you familiar with the Rimini Protocol?
AM: Yes. Yes, I've had a look at some of the suggestions of the global ways of starting to look at rationing oil, is that what you're talking about?
DR: Yes, yes. I believe in the protocol it says that importing countries would reduce their demand by the world depletion rate.
AM: Mmm, that's right. And, the reality is, I think we have that potential easily, no question about it. We have in importing countries, the potential to save large amounts of energy quickly.
Australia's a net energy exporter at the moment, but not of oil. We're exporting coal and gas in large quantities. So you've got to watch some of those protocols as to what they really mean and look hard at the definitions because you wouldn't want to sign up for something that didn't effectively bind to make the savings. Having said that, I'm, at this stage, of the view that we're far too far down the path to commence on a round of international negotiations that will proceed at a snail's pace. I just think the time for action's now, and governments need to be taking dramatic steps to encourage the reduction of energy consumption.
Governments are, of course- You might be aware that the government of Thailand, only a matter of weeks ago, announced a target of 15 percent reduction in national fuel use, and they brought in really substantial restrictions on the use of power on signage being- bans on illuminated signs after ten at night. Thailand imports 90 percent of its fuel, so it's horribly exposed, in terms of its foreign exchange and its balance of payments, to skyrocketing world fuel prices, and so they've brought in all sorts of changes just instantly. The government of the Philippines, again earlier this year, has instituted a range of demand restraint measures such as changing the government working week from five days to four so that people don't drive to work five days a week, and those sorts of policy restraints by governments of large countries, will just simply have to happen.
Australia, because we are only importing 30 percent of our oil at the moment hasn't gone down that road, but we're already a signatory to the International Energy Agency treaty. If you're aware, the International Energy Agency put out a report earlier this year called Saving Oil in a Hurry, listing ranges of demand restraint measures that member nations should be considering. There's already some work in place among developed countries which set out some fairly clear measures that can be adopted which would save substantial amounts of fuel fairly quickly. It's simply about having the public understand the necessity for those moves and then implementing them. But those things can happen very quickly; when the OPEC oil shocks of the 70's happened, it simply only a matter of days before you have to introduce odd and even numbered driving days and those sorts of restrictions, and I think that there are things that can be done more quickly than embarking on a Kyoto-type round of negotiations that might last a decade.
DR: You began a speech in May, 2005, "The Howard government has many failings but in no area has its lack of attention to detail and planning for the future left Australia more exposed than in the vital national concern of energy policy." What prompted those remarks?
AM: I had a read of the Federal Government's White Paper on energy, and I was just appalled, because, my government is a state government, and while we have a very clear responsibility to mitigate risks and to take steps to do all those things I mentioned before about encouraging alternative fuels and encouraging demand restraint and encouraging exploration, our capacity is limited and we need a national response, indeed as you indicated you need a national response. So, I had a look at last year's white paper that the Federal Government put out and it was just such a disappointing document because it just simply didn't mention Peak Oil or global energy production at all. It just simply didn't consider the issue.
It was based on a reading of the price of oil at US $35 per barrel for the foreseeable future, and so within barely twelve months the prescriptions that were set out in that document were just blown out of the water by oil almost doubling, it's up close to $70 US a barrel. So the underpinnings of that White Paper, which is meant to be a guide to Federal Government planning for energy policy in Australia have been completely blown out of the water, but then, within the document itself, it simply didn't confront the major issues. Again, I'm aware, from discussions with numbers of scientists, that scientific agencies that advise out government are well aware of issues of global oil depletion, this isn't some secret that I've stumbled on, as you're aware, it's out there and being considered around the world. So, to produce an energy White Paper that says to the people of Australia 'Nothing to see here folks, just move along,' is just disgraceful. And, worse than that, it specifically goes into what sorts of energy issues we have and encourages the greater use of fossil fuels, and in fact discourages the use of alternatives and talks about the ways of putting tax incentives to use more diesel, and specifically talks about reliance on alternative fuels perhaps representing an energy threat to Australia. So, I don't know who wrote the paper, I suspect it was an economist called Rosy Scenario, but it really was a disappointment because as a planning document, as a lead document for where we're going, it really heads in the wrong direction with the blinkers on and the brakes thrown out the window.
DR: I must say, that policy report sounds very familiar. I'll just leave it at that.
AM: Yeah, and I guess there is a broad issue here that, in terms of advice governments get, we rely on economists, and I don't want to nag economists as a class, there nice people, some of my best friends are economists, but there's this belief that the price mechanism will sort out all problems, that supply and demand will come into equilibrium eventually and that the rising price of any good will make alternatives more attractive and make exploration and development of that particular product more attractive and therefore more will be found. The underpinnings of that analysis are that there is always more to be found, that there is no natural limit, and I guess there's a clash between the man-made laws of economics and the universal fundamentals of the laws of physics, and I think the laws of physics are always going to win. So, as we find oil, for example, becoming more and more expensive to find, it doesn't mean that, with the price of oil going up it'll always be worthwhile doing it. If it costs you more than a barrel of oil to get a barrel of oil out of the ground, then it doesn't matter whether the barrel of oil's worth a hundred dollars or a million dollars, it's not worth doing.
I had a speech just earlier this week on a different piece of legislation our government's putting through to allow for greater use of recycled water, and it's become very apparent to me that there are two debates that are completely intertwined, and they are water and energy. They're the same argument, without water you don't have energy and without energy the water supply doesn't work, and we in Queensland- Australia's a very dry place, and we constantly talk about suffering from drought, but what we're suffering from is effectively the normal conditions that apply in a country like Australia, and we have water shortages looming upon us, and each year those water shortages impacts very heavily on power generation because out electricity generators are among our very biggest customers of our state water supply, SunWater. So I was making a speech in relation to a bill on saving water, and my observation is that we need to stop measuring things in dollars, we need to start using more fundamental measures of What does this project or proposal mean in terms of energy? What is the cost in energy and what does it cost in water? Because the price of something is not a dollar value, it the ability to be satisfactorily replaced, and with fixed resources that can't be replaced the mere fact that you can buy it for a certain price is no guide to its real cost at all. So, I think that we need to get away from the traditional economist measures of supply and demand and the price mechanism providing a system of resolving these issues and impose a more traditional, hard science, based on physics, and say, What is the cost of transforming this energy? Even the second law of thermodynamics says that some energy is lost every time that energy is transported and transformed. Those are the measurements that we've got to be taking, and changing the way that governments and people look at the costs of building and running society.
DR: In Queensland, you've established an Oil Vulnerability Task Force.
AM: Yes, that's been a very positive thing for me. Our Premier Peter Beattie gave me his consent to establishing a task force across a number of departments to look at how vulnerable Queensland is to global oil depletion. I've managed to get some scientists from a number of departments who are assisting in writing that report. I've got scientists from our Department of Natural Resources, from Department of Energy, from Department of Primary Industries, and Department of Environment who are working on a report. We're getting there, we're half way through, we have been looking at, first, what's Australia's energy production profile? What's the prospect of changing that? What's the prospect of finding more conventional fuels? What are the likelihoods of global oil and gas production peaking? If so, when? What are the major predictions? What's the consensus? And then, moving on to given the likelihood of, at the very least, a plateauing where production can no longer keep up with demand growth ahead of production actually declining, what are the implications for food and transport, and society generally? And then, risk management. This will be the sexy but dangerous beast: What are steps that, as a society, we can take to mitigate the risks of global energy depletion?
And it's going very well. I've been pleased with the support that I've received from the various Ministers. I chair the Energy Minister's Backbench Committee, and so it was a terrific opportunity to be given the resources of a number of departments and a number of scientists to work on this report and I'm hoping to have that finished by October, and then hopefully that will spark a major debate in government here and in the broader community about where we go.
DR: What types of risks is the task force considering?
AM: Well, all risks are on the table, and it's very fundamental stuff. The reason that I have some scientific support from the Department of Primary Industries is the implications for food production are substantial. We have a food industry that is truly global, you can buy a tin of spinach off the shelf in Hervey Bay that was grown in Greenland and retailed in Australia for 95 cents. That's clearly a product that's built around very cheap transport. And, similarly, all of our fertilizer now is made from natural gas, all of our pesticides are made from oil, and there are very few alternatives. There are fertilizers made from natural gas because we've used all the world's bird poop, there's no more to be had.
So, the sorts of levels of production in crops that we are used to are entirely dependant on the fertilizers and pesticides which are oil and gas based. And then the cheap energy which runs the tractors and has mechanized our farms to a degree that virtually nobody works there anymore, and the threat is that, in this area, we have a rural production sector which employs 90 percent less people than it did 35 years ago, and that it's able to do that on the basis of cheap fuel and cheap energy generally. And, if those things stop, what happens?
Again, one of the messages I'm really keep to push very hard is that it's not about oil running out, it's not about the end of oil, it's just about the end of cheap energy. What does the end of cheap energy mean? Because, for what it's worth, I don't think oil will ever run out. We've lots of oil around the world produced at marginal sorts of prices, or very expensively, or not at all because it's simply not worth doing on the basis that it takes more than a barrel of oil to get a barrel out. So, the issue of the end of cheap energy in terms of agricultural production means that there are staggering risks to the cheap food that we've become very reliant on, and some of the material I've read suggests that the world's total energy production's gone up by two percent per year for each year out of the last hundred years and, interestingly, so has the world's population. It's also risen by two percent a year, and that the wealth that we had in energy has allowed us to produce the food and warmth to grow the population correspondingly. If we can't continue to produce the volumes of food that we do, and if that begins to decline, then there's a necessary population decline. So, at the far end of the scale in terms of the risk, there is the risk that if we don't properly manage this issue, that over a 50 year period the world's population begins to decline by two percent a year, and that could be a very unpleasant process, you know?
It's as fundamental as that, it's as fundamental as How secure is out food supply? Of cheap and easy to get food, food that's landing in markets where it's grown from places on the other side of the planet. Are we going to be able to do that? And then, in terms of our agronomic prosperity, Australia exports 70 percent of the food it grows, we're an exporting country. What does it mean if rising transport costs mean that the export markets decline, if not collapse? There are huge and serious issues that need to be confronted at that most basic level before you then flow through to the social issues of What does it mean for tourism? Tourism is one of those industries that's been fantastic for my part of the world. I would not like it if it became viewed as a phenomenon of the 20th century, something that people used to do back in the days of cheap energy. They used to jump on planes and travel round the world and go to far off places, and we can't do that anymore. There's a need to start recognizing that there are alternatives to some industries, but not others.
Air tourism is a classic case in point, there is no alternative whatsoever, at the moment, for mass air market tourism to air gas. You can't fly 747s on biodiesel or ethanol or hydrogen, it's air gas or nothing. So, consequently in Australia we're seeing our airway lines, I'm sure it's the same in the US, putting out profit warning downgrades of 40 percent because of rising fuel prices, and our budget airlines are under extreme stress because they're simply having to put fuel surcharges on. The viability of the international tourism industry by air transport is at stake here. It means we need to be looking very hard at how we use fuel for petrol, for those things that only petrol can do. There's an urgency to develop alternatives for those things where alternatives will work. So those are the sorts of risk issues that will cover, and I hope that the report is acted on with wide consideration.
DR: What are the deliverables, and might these be made public?
AM: The report's being prepared as a cabinet submission, so, strictly speaking, it's secret until Cabinet's considered it, so I'm not going into detail of precisely what's in it. My personal preference is that, as soon as it's been considered by Cabinet, it be released for public comment and debate, and I'll be hoping, of course, that the recommendations in it are similarly prioritized and embarked upon. There are certainly things that we're already doing that are worthwhile and it's simply a matter of accelerating those things.
We've recently brought in legislation mandating solar hot water systems, for example, in future homes. We need to continue on and mandate water tanks in all homes so that those twin issues of energy and water get addressed, localized and made more sustainable. There are lots of little things that can take substantial pressure off our energy demand, and we need to be switching government programs from ones that provide grants, for example, to provide more car parking spaces outside our schools, which we have, to grants that provide for walking busses so that, under adult supervision, children are collected on foot and walked to school. These programs are all out there, but they're being offered beside each other without a total energy perspective about where we're trying to go. We can shift existing resources into encouraging less use of cars and make very substantial impacts on our total energy use in those ways.
In Brisbane, for example, about 75 percent of people drive to work. I was in Tokyo earlier this year, and 25 percent of people drive to work there, and the reason for that is that if you don't have a car park under the building where you're going, you can't park. And they also have a public transport system that is efficient, and very vigorous. The trains come every couple of minutes. There's no reason why we can't commit to those sorts of outcomes. In our town planning laws we still allow people to build car parks in cities. Again, we need to make a commitment to reducing reliance on vehicles by saying well, as a matter of town planning, we're not going to build any more of them, and then put the other policies in place that say that, however, we'll lessen public transport costs. We need to be seriously considering subsidization of public transport as opposed to the subsidization of road transport. Those sorts of decisions can be taken very quickly, it's simply a matter of the collective recognition of the problem and then the collective will to deal with it.
DR: In the second half of the Task Force Investigation, will you be consulting any outside experts such as Colin Campbell, Matt Simmons, etc.?
AM: We've been talking to people- The balance here has been speed and thoroughness. We've had some Australian experts who have come and spoken to us, Dr. Bruce Robertson from the Commonwealth CSIRO, a commonwealth of scientific organizations came and presented to us. He was an Australian representative at the Lisbon Association for the Study of Peak Oil and Gas conference earlier this year, and so he came and presented to us and talked ideas.
We've been receiving lots of written submissions from people with good ideas, but if you get involved with public hearings and a road show, although that's good for politician's profile, it tends to slow down the process of producing the report, and I guess my overriding concern is to get the report produced and in front of the Premier and the Ministers so that we can get some decisions on the go. I guess my issue is that the case for global oil production peaking is fairly clear and fairly well made, the scientists and advisors have been working on this report don't need to be convinced. What we need is to consider all of the possible ways of dealing with this issue, and putting them into a cohesive policy framework, and for that I don't know that we need to be consulting internationally, we just need to, as we say here, get our fingers out and get on with it, and that's what I'm aiming to do.
DR: Why is Queensland the only state in Australia, if not the world, investigating this?
AM: Oh, I guess we're just lucky. Someone gave me a book to read-
That's not quite true; the West Australian Planning Minister, Alannah MacTiernan has made a number of statements on the record about the probabilities of Peak Oil and the need to deal with that. And I know the West Australian, and other state governments, Cabinet was addressed by Ali Bakhtiari, who's a senior oil production official from Iran about global production decline. So, I think it may well be that behind the scenes there's a greater awareness.
Certainly, as I've been doing what I've been doing, I've been pleasantly surprised that across the range of government departments there's already been some work done by public servants who have an interest in the area, and although it's not been government policy to embark on this area have been quietly beavering away producing reports. I suspect that it simply comes back to that earlier point that politicians, by and large, are very busy doing what they know, and an issue that hasn't been put in front of them doesn't exist. And, better or worse we suffer from that same belief that science will find a way, and that the market will provide an answer if prices go up. So it's really only just a matter of coming to terms with the end of a resource, which isn't a problem that we've, by and large, seen much of. In Queensland, I think we will do this work, but I think that other people will, very quickly, as well, pick up on this issue in the next year or two. I don't see us being some sort of world leaders for a very long time at all. And having said that I don't want to understate it either!
I'm a bench member of Parliament, I'm not a Minister, and although I chair the Energy Minister's Backbench Committee it's an advisory role and not a decision-making role. I'm one vote out of 89 in the Parliament, and a reaction to Peak Oil is something that still has to be formally considered and acted on. So, I'm very encouraged by the support that I'm getting from my government to do this work, but, having said that, the proof's in the pudding. When the report's produced, it's a matter of what we do then.
DR: Will there likely be an opportunity for state and local governments around the world to learn anything from your work?
AM: I very much hope so. Again, it will be my recommendation that the report be put on the internet, and tabled in Parliament, and made widely available. My preference here is that we need a global response, and we need a national response, and then we need state and provincial responses, and then we need local, very much local responses, and sharing information is the best way to do that. Nobody's got time to reinvent the wheel. If there's good works being done by governments anywhere then we need to all be taking notes on that and moving quickly. We have, I think, a very tight timeframe. Australia is already in serious oil production decline. There is, I think, at most ten years before we are looking at global production decline. We have, I think, a ten year window where we've got some options to engage in vigorous local policy activity we can give ourselves a window of opportunity to deal, or get ready for, the severe bump when OPEC passes its production peak, but ten years is a pretty short timeframe to change the way we grow and deliver food, the way we design and build our homes and cities, the way we move ourselves and everything else in our societies around, and I think it will be the Great Challenge for our global civilization, how we confront this ten year opportunity.
DR: Wow, thank you. Is there anything else you'd like to say or do you need to move on?
AM: No, I really thank you for the opportunity to have a chat, I hope you found it interesting, and I'll be back in touch when the report's able to be made public and perhaps we can have a little follow-up then.
DR: I'd love to!
AM: Great, thanks very much David
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