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Download the printable 13-page PDF (includes appendix) here.
By Peter Lang. Peter is a retired geologist and engineer with 40 years experience on a wide range of energy projects throughout the world, including managing energy R&D and providing policy advice for government and opposition. His experience includes: coal, oil, gas, hydro, geothermal, nuclear power plants, nuclear waste disposal, and a wide range of energy end use management projects.
Introduction
The Australian Bureau of Agricultural and Resource Economics (ABARE) is an Australian government economic research agency that provides analysis and forecasting of, among other things, our energy production and usage. ABARE’s projections have been criticized by some hoping for large scale changes in our energy sector as unreliable, biased towards the fossil fuel industry, and as underestimating the contributions that will be achieved in the future by renewable energy, energy efficiency, smart grids and the like.
To test these criticisms I have compared ABARE’s projections [1] for the year 2004-05 with the actual figures for 2004-05 [2] [3] [4] [5] [6]. I have compared the following: primary energy production, electricity consumption, resource reserves, and CO2 emissions. I also comment on what was being advocated by green energy proponents in 1990, and point out how little has changed. The same arguments are being repeated again now by the same sorts of groups with similar beliefs and agendas.
The reason I’ve used the year 2004-05 for the comparison is because ABARE’s 1991 projections were for the period 1990-91 to 2004-05. I have my own hard copies of that and earlier reports but not of later reports so I used this readily available source.
- ABARE’s projections are the best we have to work with. We can’t do better than follow their projections.
- The arguments about what can really be achieved with renewable energy, energy efficiency improvements, smart grids and the like, have all been had before. Twenty years later, nothing has changed.
These ideas proved excessively optimistic in the past, as shown here, and people with sound engineering judgement and experience are warning against repeating the same mistakes. The effective solution is not to try to apply draconian methods. The priority should be on developing rational policies, largely aimed at facilitating rational fuel switching.
Primary energy production
Table 1 compares ABARE’s 1991 projection of Australia’s 2004-05 primary energy production with the actual production in 2004-05.
Table 1: Primary Energy Production 2004-5: ABARE 1991 Projection, and Actual Production
Points to note:
ABARE’s 1991 projections of Australia’s primary energy production in 2004-05:
- underestimated total energy production by 22%
- significantly underestimated the 2004-05 production of fossil fuels except oil. It overestimated the production of oil by 8%, which most would consider good forecasting for a 15-year projection.
- underestimated uranium production by 11%
- overestimated the hydro-electricity production by 18%
Electricity generation
Table 2 compares ABARE’s 1991 projection of Australia’s 2004-05 electricity generation with the actual generation in 2004-05.
Table 2: Electricity Generation 2004-5: ABARE 1991 Projection, and Actual Generation
Points to note: ABARE’s 1991 projections of the electricity demand in 2004-05
- underestimated the electricity demand in 2004-05
- overestimated the amount by which energy efficiency improvements would reduce demand growth.
- underestimated the fossil fuel generated electricity by 12%
- overestimated hydro-electricity generation by 18%
Resource reserves
Table 3 compares our known economically recoverable energy resources in 1989 and 2009. This is not a comparison of ABARE’s projections but is interesting to see how our estimated energy resources have changed over that 20 year period.
Table 3: Known, economically recoverable energy resources in 1989 and 2009 (PJ).
Points to note:
- ABARE’s figures for known mineral and energy reserves in 1989 were based on reports by the Bureau of Mineral Resources (BMR) and Department of Primary Industries and Energy (DPIE). Now they come from Geoscience Australia (formerly BMR). ABARE does not undertake its own estimates of resource reserves, so are not accountable for errors.
- Over the intervening 20 years, our estimates of known economically recoverable resources have been revised. Coal has been revised down and oil, natural gas and uranium have been revised up by 39%, 220% and 145% respectively.
- Known uranium resources have increased by a factor of nearly 2.5 in 20 years and we’ve hardly even looked. There is little activity in uranium exploration being undertaken. Most of Australia is locked up against uranium exploration.
CO2 emissions
Table 4 compares ABARE’s 1991 projection with the actual CO2 emissions from Australian energy consumption for the year 2004-05. ABARE’s 1991 projection of 379 Mt is for the ‘Business as Usual’ (BAU) case. ABARE also defined what we’d have to do to achieve the government’s target (20% below 1988 levels by 2005) and what would be needed to achieve a ‘half way’ target.
Table 4: ABARE’s 1991 forecast with the actual CO2 emissions in 2004-05 from Australia’s energy consumption.
Points to note:
- ABARE underestimated by 4% (based on BAU). This is excellent given the state of knowledge 20 years ago.
- The government set an extremely low target but made it impossible to achieve by banning nuclear power from being an option. Nuclear was not even to be considered in analyses by government departments.
- There was strong pressure by the green lobby groups at the time to set lower targets and for governments to mandate stringent regulations for energy efficiency improvements and renewable energy, but no nuclear.
- The same groups are still advocating the same failed policies now.
- Some people never learn!
See Attachment 1, an extract from the 1991 ABARE report. It is fascinating to be reminded how much we knew, the policies, the CO2 emissions reduction targets, and the realities. It demonstrates little has changed in 20 years.
Conclusions
ABARE’s projections are good. I am not aware of any organisation that has made consistently better forecasts of Australia’s energy demand and supply.
I believe the consistently optimistic pressure from green advocacy groups, pushing for projections that align with their beliefs of what governments should do, influenced ABARE to underestimate energy demand, underestimate fossil fuel demand, overestimate renewable energy contribution and over-estimate how much energy efficiency improvement can be achieved over the projection period.
References
[1] ABARE (1991) Projections of Energy Demand and Supply; Australia 1990-91 to 2004-05, ISBN: 0 664 13716 9
[2] ABARE (2006) energy update
http://www.abare.gov.au/publications_html/energy/energy_06/energyupdate_06.pdf
[3] ABARE (2006), Australian energy: national and state projections to 2029-30
http://www.abare.gov.au/publications_html/energy/energy_06/nrg_projections06.pdf
[4] ABARE (2007), Table A Update 07, Table A1 Australian energy supply and disposal, 2004-05 – energy units,
http://www.abare.gov.au/interactive/energy_july07/excel/Table_A_update_07.xls
[5] ABARE (2009), Energy in Australia 2009
http://www.abareconomics.com/publications_html/energy/energy_09/auEnergy09.pdf
[6] ABARE (2010), Energy in Australia 2010
http://www.abare.gov.au/publications_html/energy/energy_10/energyAUS2010.pdf
Attachment 1
(Download the 8-page PDF of the ABARE extract here)
Extract from: ABARE (1991)
Projections of Energy Demand and Supply: 1990-91 to 2004-05, pp 31-37.
“4. Greenhouse gas reduction: an illustrative scenario”
Here I attach a chapter “Greenhouse gas reductions: an illustrative scenario” extracted from the 1991 ABARE report. It makes fascinating reading. It shows:
1. how much we knew back then;
2. how little has changed;
3. we knew the targets were impossible given the policies being advocated;
4. we knew that renewable energy and energy efficiency could not make significant improvement over and above what was already included in the Business as Usual (BAU) projections;
5. we knew then that if we wanted to really cut GHG emissions we had to go nuclear.
But politics dictated nuclear could not be on the agenda. The reason was Labor needed the Green vote to hold onto power.
Many conclude the Greens have been the cause of the delay all along!!
Filed under: Emissions, Renewables
Don’t miss Attachment 1; it is an extract from the 1991 ABARE report concerning the projections of CO2 emissions from energy consumption.
Hi Peter,
I never rejected ABARE’s demand estimations for various energy types. I agree with everything you say about needing rational energy policies moving forward. My main concern has been their price estimates of oil in particular.
I think they were misled by certain Middle Eastern countries that oil supply was guaranteed for decades to come.
My main concern was for their price estimates. Price = interactions between supply and demand. The head of ABARE reported to the Senate Committee on peak oil that he had not bothered to factor in peak oil when considering price!
I didn’t know one could work out the price without considering supply of a product. 😉 That’s “Dog ate my homework” material!
Until such time as I see ABARE engaging the majority of peer-reviewed oil reports circulating in the peak oil discussion, I cannot and will not respect their opinion on oil price forecasts.
I cannot understand how they think Australia’s oil reserves have *increased* by 39% when we passed our peak of production in 2000 and are now producing under half what we produced back then. Are we about to see a massive increase in domestic production or something? A ‘second peak’? Is this based on REAL technological improvement leading to reserve growth, or wishful thinking like so much oil related data?
Otherwise, I agree with you that their energy demand projections are probably reliable, and they may even be reliable in other resource sectors where supply and demand issues are more transparent.
Have I missed something? Martin Nicholson said ABARE recently claimed Australia’s energy use was 3,915 PJ a year http://bravenewclimate.com/2010/07/14/zca2020/#comment-82801
From the above table excluding all uranium and LPG as exports and half the black coal gives more like 7,600 PJ in 2005.
If we had a confirmed current figure we could assume say 2.5% annual demand growth to get ‘aspired’ future energy use in n years time. For example 1.025^20 = 1.64 or 64% more than now except there will be virtually no cheap fossil fuels left by 2030. Forget efficiency it will be hard finding enough primary energy sources.
How does that ABARE graph track with the graph at the top of ASPO Australia’s page? It shows the rate of decline in Australian oil production.
It seems to me that ABARE have been smoking some whacky tobaccy.
http://www.aspo-australia.org.au/introduction/oil-production-decline.html
Whoops LPG is mainly an oil refining byproduct that stays here. Maybe subtract another 400 PJ of the gas figure that was exported as LNG.
Understanding of Attachment 1 should be essential prior knowledge for those wishing to enter the renewables debate. It is amazing how careful, fact-based, reviewed formal report writing such as this example from ABARE can provide very high quality, lasting insights into issues.
Many thanks, Peter.
Hi John,
sure, but what do you make of their oil figures?
@ eclipsenow, on 22 August 2010 at 15.49:
ABARE have runs on the board, as demonstrated by Peter’s article.
Perhaps, Eclise, you should refer your question to your selected site, the one with the name which indicates its bias.
As Peter stated, ABARE adopts production and reserve figures from Geoscience Australia and do not acquire them via the smoke of “wacky tobacco” as you so unkindly suggested.
If, after response from ASPO’s authors has been obtained and after you have also obtained corresponding data from Geoscience Australia, you might choose to enlighten us all.
Meanwhile, I choose to stick with the expert opinion.
@eclipsenow
I reckon you’re barking up the wrong tree being hypercritical of oil price forecasts. To be sure, supply and demand interact in price formation, but that is highly mediated by speculation in the futures markets.
We saw a classic speculative bubble not only in oil but also in things like ag chemicals. If you don’t believe me go and have a look at price charts of stocks like POT, MOS in Nth America and Incitec in Australia. This speculative activity was ultimately fueled by debt and the house of cards came tumbling down.
These speculative bubbles are notoriously difficult forecast years ahead and the prices reached are both unsustainable and reflect the demand for and supply of futures contracts as much as real economic demand for and supply of the underlying physical commodity.
Eclipsenow,
I think the problem is you’ve been reading and accepting sensationalist, junk media like Crickey. Crickey is basically a politically biased web site, so why would you take any notice of it?
As I said in my previous posts on other threads on this matter, ABARE’s primary function is not about forecasting prices. It gets this information from others and the only purpose is to help with its demand and consumption forecasts. And no one is good at forecasting long term prices well. Just look at all the forecasts of renewable energy that have been made over the same time by various organisation for comparison. And who forecast the 1970’s oil price shocks or the GFC.
So, if you are using price forecasts as your basis for criticising ABARE, then that is your problem. I am not interested. It is just a beat up.
If you know an authoritative organisations that has done better forecasting then I suggest you need to post and argue the case, not simply make unsubstantiated statements that ABARE is biased and incompetent.
John Newlands,
Can I suggest you read the references to understand. You are confusing production and domestic consumption. Production includes exports. It is all included in the ABARE reports. It can’t all be covered i=on the blog site, so if you have questions or comments, you really do need to go to the source document and understand
ABARE or APPEA, who actually understand oil geology?
Warning: this was written 5 years ago
http://www.energybulletin.net/node/5213
@ eclipsenow, on 22 August 2010 at 15.57:
See P 357 onwards of Peter’s linked reference to the ABARE quarterly. It is not 5 years old and they have no partisan axe to grind.
Oil and gas production and consumption and export in Australia are all trending upwards, not down. Please try to keep up with the game.
@eclipsenow, on 22 August 2010 at 16.20
Again, you are parrotting old information from a partisan source.
The current trends are up, not down. I agree, this cannot go on for ever and is not ideal, but it is indisputable that those who state otherwise are incorrect and those who forecast that this could not be so are not only wrong, but are also poorer forecasters than ABARE.
Two jobs for later; reconciling upbeat ABARE with downbeat EIA
http://www.eia.doe.gov/cabs/Australia/Oil.html
and reconciling ABARE with ABARE. Right now I’m going to watch the desal doco on SBS.
How about Geoscience Australia?
This blog by Engineer, Matt Mushalik.
http://www.crudeoilpeak.com/?p=1243
Graphic from Geoscience data.
http://www.crudeoilpeak.com/wp-content/gallery/ozy-graphs/fig_3_43_geoscience_australia.jpg
@John Bennetts, on 22 August 2010 at 16.40 said;
“The current trends are up, not down”;
BP data shows 2000 as the peak production year for oil in Australia, with 2009 being 30% below the peak and the last four years as being below the lowest of the preceding 20 years.
Source;
http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistical_energy_review_2008/STAGING/local_assets/2010_downloads/Statistical_Review_of_World_Energy_2010.xls
@ eclipsenow:
Why do you bother posting two more bits and pieces from single-purpose, biased sites such as “Peak Oil Whatever”? There is nothing to gain from discussing filtered, cherry-picked chunks which are devoid of context.
How about tracking back to the original documents from Geoscience Australia or whatever? This gives at least some assurance that these references are complete and not fiddled with. Maybe we can discuss them.
Excellent piece Peter.
Agree that ABARE remains the best source we have for supply/consumption data, despite valid criticisms over their approach from to to time – it is populated by members of the “dismal science” after all. And anyway, ABARE is in the business of making projections, not predictions.
One only has to look at the American RE guru, Amory Lovins, for how poorly RE advocates routinely get their predictions wrong and badly misjudge the inertia in energy systems. In 1976, Lovins suggested that biofuels would be capable of powering the entire US transport sector (sound familiar) – this would have to be one of the most profoundly misguided positions taken by environmentalists.
He also suggested that solar and wind would make up a substantial proportion of the US energy supply (also sound familiar).
http://www.energytribune.com/articles.cfm?aid=676
Needless to say, he’s still promoting his “soft energy” path to those willing to listen:
http://www.rmi.org/Default.aspx?Id=1048&Cat1=Best+of+Amory+Lovins&Cat2=Best+of+Amory+Lovins&CatType=sharepoint
Sorry, I don’t think in PJ’s but in barrels. Anyone know what ABARE says Australia has in barrels? 19.5 PJ is elusive: I want to know about how we’re going to meet close to 1mbd Aussie demand when this has already happened… (EIA from ABARE and APPEA data).
http://www.eia.doe.gov/cabs/Australia/Full.html
But hey, they didn’t think of including peak oil in their pricing forecasts. Just makes you all warm and fuzzy inside.
Eclipsenow:
Barrels are a unit of volume. Joules relate to energy.
Some barrels contain much less energy than others (eg heavy oils Vs light oils)
Americans measure gas reserves in cubic feet. Interesting, this excludes considerations such as the volume of CO2 bound up in the gas. Again, Aussies tend to report in terms of joules or petejoules.
Go figure. Use Google or Wikipedia or something, but please avoid repeatedly displaying your ignorance on this site. It is getting quite tedious.
Eclipsenow,
The problem is that you are looking at junk sites that have a bias. You are reading junk and swallowing their story.
Regarding comparisons between EIA and ABARE, EIA and IEA get their info from ABARE. Australian Government organisations such as Australian Bureau of Statistics, Treasury, Productivity Commission and the other departments get their projections from ABARE. ABARE is the Australian government organisation that provides these statistics and projections.
You would need to look carefully to see exactly what EIA is showing if it appears on the surface to be different to what ABARE is showing. You would be aware that there is a mass more data in the database and it will be presented in different ways to meet different purposes. So you need to dig down into the data and understand what is being shown and be sure you are comparing apples and apples.
You will alos find that different organisations use different conversion factors. For example the BP energy statistics convert everything to oil equivalent. This gives some really weird results when comparing hydro and electricity generation. So you need to be really careful when comparing data. If you look superficially at charts, any conclusions you draw can be misleading to completely meaningless.
Well, I agree that energy reporting is tricky and that people can convert various products into one neat label that maybe shouldn’t be there. (Hydro into OEE! Are you kidding me? Wow – what where they trying to prove?!)
Anyway, this is what my engineering mate says about ABARE and accuses them of *almost* doing the same thing with the various liquid fuels.
Eclipsenow,
I suggest you start by reading the references I linked in the article.
Here is the link to the BP energy stats: http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622
I am sure you would understand you have to do some homework to find out what is authoritative, what data is being presented, what is included and what is excluded from each catagory, how is the data grouped, etc. If you don’t group correctly and compare like with like, the conclusions you might draw are meaningless.
@ Peter Lang, on 22 August 2010 at 22.38 Said:
Eclipsenow,
I suggest you start by reading the references I linked in the article.
Here is the link to the BP energy stats: http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622;
BP data shows 2000 as the peak production year for oil in Australia, with 2009 being 30% below the peak and the last four years as being below the lowest of the preceding 20 years.
Eclipsenow,
I’ll illustrate my point with an example that should be familiar.
Supposing I ask you how much energy do you use? How would you answer me? Which of the following would you include and how would you group the items onto categories?
electricity used in your house
[separated into off-peak and regular?)
gas
wood
petrol
energy in food
energy embedded in supplying your water
energy embedded in the consumer products you buy
energy embedded in the services you use
energy embedded in the house you live in
energy embedded in the roads you travel
So what does it mean if I ask you how much energy you use?
I’ve provided this to emphasise the point that you do have to do some work to ensure you are comparing like with like.
On checking ABARE’s Energy in Australia 2008 I find it is roughly consistent with domestic energy consumption of 3800 PJ/yr used in the ZCA critique. Allowing for time shifts and comparing with Table 1 above it suggests Australia exports 75% or so of its ‘produced’ energy.
This site http://www.abare.gov.au/interactive/09ac_sept/htm/oil.htm says Australian oil production will decline in 2010. I think the telltale statistic will be the percentage of medium density oil imported in the coming years. As in how to replace it.
@ John Newlands, on 23 August 2010 at 6.35;
Looking at the latest ABARE Mineral Statistics http://abare.gov.au/publications_html/ams/ams_10/ams_june10.pdf it is possible to sum the last 4 quarters of (Production + Imports – Exports) of diesel to show Australia imports 42% of all the diesel consumed,
at a value of $12.5 billion/year.
Ten years previously, at peak production, it was importing only 11.3% of its diesel consumption, at a cost of $4.0 billion/year.
John Newlands,
Yes, and if you actually read the ABARE reports instead of reading one section out of context, you will have a much better understanding of what you are talking about. Likewise with the ACIL-Tasman report I’ve pointed you to read a dozen times, but you still never read.
Mercury,
It might be an appropriate time to point out the effect of government interventions and taxes. The government in the early 1990s imposed the Petroleum Resource Rent Tax (PRRT). This effectively stopped wild cat drilling for oil exploration. So new discoveries slowed. This is part of the reason our oil production is heading for decline.
I make this point to highlight that the actions we ask our governments to impose have unintended consequences.
By the way, I am not argjing about whether the world is close to or has passed “peak oil”. Nor am I arguing that we should not have the PRRT. I am just pointing out that many people argue inconsistent positions. They complain that our indigenous oil production is in decline and at the same time argue for taxes that effectively stop exploration. The same is the case with the new taxes on mining. Those advocating it have next to zero understanding of the consequences. Apart from the direct effect on the mining industry and down stream jobs, and trhe economy, what these new taxes do is provide more funds to support pork barrelling at elections and more support for the ‘nanny state’. At this election, the government was handing out billions of dollars marginal electorates from future mining taxes before the legislation has even been passed.
A corollary of Australia exporting 75% of its fuels is that maybe we don’t need to worry about oil imports since we can pay for it with coal, LNG and yellowcake. However I think that is not a good idea. Firstly we should plan to phase out coal exports to help wean other countries out of emissions dependent energy. See if they can get reliable and suitable coal somewhere else. Secondly some kind of bottleneck could arise so even if we are in energy trade credit the oil can’t get to us in time. A recent expert group Automotive Australia 2020 recommended natural gas and electric vehicles. I think we should prepare now in case high oil prices come out of nowhere as in 2008 but this time stay high.
@Peter I’ve had ACIL Tasman’s new NEM generation costs report downloaded for some time. While domestic coal and gas prices are a commercial secret I think their future fuel costs could be on the low side. If export demand drives up spot prices for coal and LNG by x% then we might expect new contracts for local coal and piped gas to go up x%. Fuel costs need to be reviewed a couple of years from now.
Hi Peter and John,
I think we are talking at cross-purposes here, and it is largely my fault for starting off on the wrong footing. You’re recommending trusting ABARE’s models for energy demand, and also discussing some of their reliability in projecting Australia’s own energy supply. I started off on a bad note questioning their reserve growth figures*. I’m suffering a ‘once-bitten, twice shy’ approach to ABARE from a completely different area to the one you are both presenting.
As I understand it, ABARE are the agency that not only measure and quantify all reports coming in about Australia’s resources, but also present price estimates and recommendations about oil and other global resources. So while they might not compile the global resource base data themselves, they are the ones reading other agencies and meant to be advising government of any impending resource price spikes that might affect our marketplace. So it’s not necessarily ABARE’s fault if that global oil database is corrupt, but it is their fault if they’re not even asking the pertinent questions of the global oil supply chain in the first place!
Forget my “Energy Bulletin” and Matt Mushalik quotes above then. Let’s go straight to video footage of ABARE’s former head being interviewed by the Federal Senate inquiry into peak oil.
http://www.abc.net.au/4corners/content/2006/s1683060.htm
*Back to Australian oil resources. Where do ABARE get their data? Do they compile it and report it from other agencies, like Geoscience Australia and APPEA? If so, what ‘economic games’ have the heads of ABARE played on the data. Is this their estimated oil resource or oil reserves? Did the economists tinker with it on the basis of P5 , P50, or P95 reserves? Without knowing the Probability factors, ‘PJ’ can be just as ambiguous a term as ‘barrels’ in this case. What sectors of the marketplace are these fuels servicing, and how much will it go towards actually decreasing the oil Australia imports? So I completely agree when John writes:
Ultimately, after ABARE’s embarrassing failures in front of the Senate Committee, what is ABARE’s response to an increasing consensus of independent geologists around the world that global peak oil is imminent? I’m sorry Peter, but in this particular regard they’ve completely lost my trust.
1. Re Peak Oil. I agree that Australia’s peak production of oil (as against gas) is past its peak. The stats for this as published by ABARE are probably more consistent and authoritative and available publicly than from other sources, even if there is room for challenge.
2. Re price, ABARE may have a poor predictive record, but so do the commodity markets on which their prices are, at least in part, based. The price of crude is able to be gamed by large producers, for com mercial and/or political reasons, eg the decision a couple of years back by the middle eastern producers to cut back production, which resulted in a rise which is still with us. Your bet is as good as mine, but remember that this is not a perfect market where supply and demand and cost of production and shared knowledge and all those lovely assumptions about the marketplace which are part of Economics 101 apply. This is a cartel marketplace with significant gaming going on at the production level and even more gaming happening in the market via advance and short selling, etc, and that is even before we have governments, refiners, distributors and retailers playing their parts.
Eclipsenow,
You say:
Why do you assume that Australia’s peak authority on these matters is “not even asking the pertinent questions of the global oil supply chain in the first place”?
Don’t you think this statement is a bit naive? Of course they are researching all the available data, weighing it and making informed judgements on the information available. This is what they do year after year. Do you really think Crickey journos, others with an axe to grind are a more reliable source of info.
I have my own beefs with ABARE as I do with all organisations. My beef with ABARE is that it sometimes succumbs to political pressure, as it did with the late changes and late release of the 2020 energy report. There was a clear political influence went into that report, and that is the first time it has happened in 20 years. I am really disappointed by that, but we should blame the government for that not ABARE.
1. Re Peak Oil. I agree that Australia’s peak production of oil (as against gas) is past its peak. The stats for this as published by ABARE are probably more consistent and authoritative and available publicly than from other sources, even if there is room for challenge.
2. Re price, ABARE may have a poor predictive record, but so do the commodity markets on which their prices are, at least in part, based. The price of crude is able to be gamed by large producers, for commercial and/or political reasons, eg the decision a couple of years back by the middle eastern producers to cut back production, which resulted in a rise which is still with us. Your bet is as good as mine, but remember that this is not a perfect market where supply and demand and cost of production and shared knowledge and all those lovely assumptions about the marketplace which are part of Economics 101 apply. This is a cartel marketplace with significant gaming going on at the production level and even more gaming happening in the market via advance and short selling, etc, and that is even before we have governments, refiners, distributors and retailers playing their parts.
Eclipsenow:
You say:
and you say:
I’d suggest you read the reports so you understand where they get their information. To decide you don’t trust them on the basis of the partisan opinions you are reading, and your total lack of understanding of any of the material, is not much better than placing your trust in the opinion of a taxi driver or the guy you met in the pub, instead of the Australian Bureau of Statistics.
Sorry eclipsenow, you have demonstrated your opinion on this is based on nothing more than belief. Making decisions based on strongly held, but unfounded beliefs is exactly what causes us to make so many bad decisions.
Thanks Peter Lang for initiating what is turning out to be another stimulating discussion. Good to see also limited attacks on the other person’s view. Perhaps we are becoming more tolerant. That’s a good thing. Keep it up everyone.On the RE matter, we should note that after spending billions on renewables researc the Americans finally gave up on sun and wind [I think currently at 0.6% of their energy total] and noted that those two were never going to provide more than a small fraction of their energy needs. Something like 240 energy scientists/experts signed off on this. They have been proved right. Yet we persist with spending billions on these and other yet to be commercialized technologies. And we have the Greens making outrageous claims about Australia having 100% solar thermal within 10 years. I repeat, in the time we would appear to have the world must mostly replace the fossil fuel energy generation with the only alternative viz NUCLEAR. I’m about to contact the very important Independents in our next parliament in the hope that they may be able to help get nuclear into the energy debate. How about some of you joining me? Write to Tony Windsor, Bob Katter and Bob? Oakeshot and try them.
Peter Lang, on 23 August 2010 at 8.53 Said:
The government in the early 1990s imposed the Petroleum Resource Rent Tax (PRRT). This effectively stopped wild cat drilling for oil exploration. So new discoveries slowed. This is part of the reason our oil production is heading for decline.
However, you can’t find what is not there and no amount of wildcatting or any other money wasting effort is going to change that. Also, this is ABARE we are talking about (an org. which believes that even roosters will lay eggs, at the right price), that has forecast increases in oil production regularly since 2000, but which have never materialised.
This thread is a mind blowing for me given that my understanding of Australia is limited. Taking the information at face value a number of conclusions occur to me. I will number them so you folks who really understand can set me straight:
1. Australia’s number one primary energy production is black coal (at least up to 2007) and Uranium is #2.
2. In spite of the huge amount of uranium produced, Australia does not have a single commercial Nuclear Power Plant.
3. The energy reserves of Australia are dominated by Uranium and the estimates keep rising, a sure sign that there is plenty more that has not been found yet.
I could go on but are the above statements accurate?
Yes gallopingcamel, all 3 statements are quite correct. I should note that with breeder reactors, point 3 would actually be true of most countries! For Oz, it’s true even with only thermal reactors.
gallopingcamel,
Yes. You’ve got all that correct so far. Spot on. HD. Keep going.
Mercury,
Can you please substantiate your statements so I can see what you are talking about. At the moment you statements look more like data cherry-picking to support a preconceived idea than a balanced critique.
Peter Lang said:
And…
Read the 4 Corners quote again, slowly. Or better yet, watch the whole peak oil report by 4 Corners. The head of ABARE, with his own lips flapping and his own embarrassed grin giving him away, said that he had not considered peak oil when making price forecasts. I saw it with my own eyes, right there, on the TV. The head of ABARE with his pants down in front of the nation. I don’t need complicated resource charts or source documents for this one Peter, that’s disingenuous. There is absolutely no need to say I’m relying on “partisan opinions that I’m reading”. I saw it with my own eyes!
And the fact that he could be so relaxed about this stuff up, and joke around about the different categories of oil, makes me quite nervous about the credibility of their oil reporting.
Mercury’s quote on the ‘even roosters will lay eggs’ comment also come from the 4 Corners link I provided above, which you have obviously declined to read.
If there are any graphs to be studied here, I suggest you go and brush up on global oil reserves. You have the skills to understand this stuff far better than I do. If you spent a few weeks answering the following questions, I’m sure it would add fresh urgency to your nuclear campaign.
1. In which decade did we discover the most oil?
2. How has the discovery of conventional oil been going since then?
Keep in mind that oil is probably only 2nd to the military in terms of the money and technology available to their enterprise. Big oil have BILLIONS at their disposal for the latest discovery technologies.
3. What is the ratio of discovery to consumption? Are we discovering more than we use, or less? How good or ‘bad’ is the ratio?
4. How long has the trend been in this direction?
5. How many oil producing countries have already peaked and are in irreversible decline? What are their decline rates?
6. Which countries are still able increase production and have not reached their all time historical peak??
Is there an ‘international oil cop’ with a giant dipstick that can actually check what is on the books of various oil blocks? Who reports to who? What is the chain of command down which the oil data has to travel in the non-OPEC western world?
How do we know whether OPEC oil reports are legitimate? Who do they report to? Who can audit their books? Does the western world get access to their fields to verify if their books have real barrels on them or just ‘paper barrels’?
9. If domestic consumption of oil exporting nations rises too fast (because of a booming domestic economy), how quickly can domestic consumption outpace their ability to export post peak? (Hint: there are historical precedents — google “Export Land Model”).
10. If those few exporting nations that are left suddenly DO decide to keep the oil for their own economies, how relevant is a global depletion rate of 5% per annum if the OIL MARKET has collapsed because hardly any nations are selling?
Export retention could apply to our yellowcake as well as OPEC oil. If we had say 20 Gen III reactors plus a local enrichment industry we might not export that much. If I recall the Switkowski report said we’d take 50% for ourselves.
Eclipsenow,
You say:
You may take that sort of media hype as gospel truth. I don’t. I have no interest in wasting time on that sort of selective reporting and media beat up. All you need to do is watch anything the ABC reports to see how they have a bias and report selectively to try to convince the public to accept their bias, whether it is based on fact or not. That is the problem we have when people are not sufficiently discerning about what they are being fed by the media.
Instead of me reading that nonsense, I’d suggest you read the ABARE reports, because so far you have displayed next to no understanding of the subject matter and haven’t even read the reports you are criticising as being incompetent, biased and not supporting your beliefs.
@ John Newlands:
I haven’t done the maths, but there are about 1000 nuclear reactors being built or running in the world. Another 20 Type III+ for Australia will not alter the strategic situation at all. Even the existing few breeder type reactors could expand the resource sufficiently to change the topography, let alone the planned additions.
My guess is that Switkowski put this into the report just to turn away silly questions.
John Newlands,
The amount of uranium is effectively unlimited. If we want more, we explore for more.
You advocate “Export retention”? Is there no end to your belief that governments and bureaucrats are best able to make all these miriad decisions about controlling resources and prices and what should and shouldn’t be used to generate power? Is there no end to your belief that the state should contol everything in our lives? Why do you think bureaucrats can make better decisions than individuals can?
Peter Lang, on 23 August 2010 at 13.09 Said:
Mercury,
Can you please substantiate your statements so I can see what you are talking about. At the moment you statements look more like data cherry-picking to support a preconceived idea than a balanced critique.
Please be more specific Peter. Which statements of mine are you referring to?
John Newlands,
You have continually advocated more state inteventions and more state controls to implement what you believe in. You want a price on carbon and you want to cut back coal exports as two examples.
Cutting back on coal exports is a case of Australia telling other countries what they should and should not do. It is consistent with your advocacy of more state control in Australia (more ‘nanny state’). But if we cut off energy exports or raise the price unfairly it has lots of bad effects, both within Australia and also with our international relations. You’d recall the US blocking Japans access to oil was a mjor cause of world war.
There is an alternative to putting a price on carbon. A much better alternative in my opinion. That is to remove all the impediments to low cost clean electricity.
Here are examples of impediments we should remove.
The sort of impediments and regulatory distortions to the market that are blocking nuclear in Australia are:
1. ban on nuclear power
2. high investor risk premium because of the politics
3. Renewable Energy Targets
4. Renewable Energy Certificates
5. Feed in Tariffs for renewables
6. Subsidies and tax advantages for renewable energy
7. Subsidies and tax advantages for fossil fuel electricity generators
8. subsidies for transmission and grid enhancements to support renewable energy
9. massive funding for research into renewable energy
10. massive subsidies for research into carbon capture and sequestration (CCS)
11. Guarantees that the government will carry the risk for any leakage from CCS
12. No equivalent guarantee for management of once used nuclear fuel
13. Massive subsidies and government facilitation for the gas industry, coal seam gas and coal to gas industries (despite the latter putting toxic chemicals into the ground water and the Great Artesian Basin water)
14. Fast tracking of the approvals process for wind power, solar power, gas industry, coal industry while nuclear industry remains band from even fair comparative studies by Treasury, Productivity Commission, ABARE, Department of Climate change and more. We can just imagine what the approvals process would be like for a nuclear power plant!!
Peter,
that’s a ‘fingers in my ears, don’t want to know’ reply if ever I read one. It’s called Denial, or cognitive dissonance. Your faith in the group is shaken by some inconvenient truths.
Until you have answers to the questions I put to you on the world oil supply, I can’t engage you further on this conversation. You’re simply in denial.
If the ABC held a doco on the wonders of GenIV reactors, you’d be all over it, quoting it to everyone. You JUST DON’T WANT TO ACKNOWLEDGE WHAT THE HEAD OF ABARE SAID!
Sorry eclipsenow,
If you want to believe selective, partisan reports and cherry picked data that is your business. I am not interested in wasting time on this sort of nonsense. I think the report above has clearly shown that you are completely wrong with your assertions and are trying to defend your previous statements. There is no point me wading through piles of nonsense that you want to refer me to when you are at the position that you can’t accept that you have made a mistake. You were wrong!
You chose not to read the ABARE reports but just throw mud at them. That is denial. That is the display of cognitive dissonance.
*You were wrong!*
In which regard? Do you even know what I’m criticising? One minute you’re like a High School science teacher asking me to convert wood energy to oil equivalent energy, or something equally irrelevant.
What has that got to do with global peak oil? In which exact area do you think I’m actually criticising ABARE? Please… prove that I’m wrong. Show me the ABARE world peak oil report. I’d love to be wrong!
Please. I’d love to know that the Senate Enquiry just caught Dr Fisher on a bad day, and he simply ‘forgot’ that there was actually an ABARE global peak oil report. Show me where they have spelt out the implications of various peak oil scenarios. I’d love to know that ABARE’s ignorance of peak oil was actually some nightmare of my own paranoia. Please, show me…
Peter,
You’re asking me to dive into an ABARE report and ‘just believe it’ from its own terms of reference when I have larger meta-narrative questions about where ABARE fits in reporting WORLD energy issues, and its failure to do so when reporting to the Australian government on world oil price trends.
Otherwise, I have already said that I respect their projections of Australian energy demand.
But their SUPPLY SUCKS! What are they using… P50’s? Even a cursory investigation into my Top 10 peak oil questions raises issues that the precautionary principle would demand we only use P95’s. As the Senate Committee says of ABARE:
When it comes to liquid fuel resources, I’m sticking with Geoscience Australia and maybe APPEA. ABARE’s had their modelling pickled by the economists!
Oh, and I’m *SURE* this bipartisan, multiparty Senate Enquiry is just a “selective, partisan report”
http://www.aph.gov.au/Senate/committee/rrat_ctte/completed_inquiries/2004-07/oil_supply/report/c02.htm
In the meantime, try APPEA’s take on our oil situation:
Thought I’d check if Gorgon, Australia’s largest resource project (starting 2014) would produce a liquid fuel by-product. That is liquid at standard temperature and pressure. It seems not as they expect only 20,000 barrels of condensate per day along with the 2.6 bn c.f. of natural gas.
http://www.chevron.com/countries/australia/businessportfolio/
I think oil depletion is a more pressing problem near term than climate change and the current modest price of oil is giving a false signal. We’ll know soon enough.
So by that I take it you’re agreeing that ABARE = good on the energy demand projections, but not so good on the oil price projections?
John Bennets, just to get the facts straight, I think you’ll find that there are currently around 440 reactors generating 16% of the world’s electricity and a further 54 under construction worldwide with 24 of those being built in China.
@eclipsenow:
How old are you? I know that this site is not meant to be a conduit for personal attacks, however you have shown no cognitive distinction between polite discussion and a dummy-spitting rant.
Further, either you have not read or do not understand the fairly basic reference documents to which your attention was drawn.
A word of advice is in order. Those who you are attacking are experienced, well-read and serious about the issues of global warming and energy production, especially electrical power production. If you wish to change their opinions, you will need to demonstrate which facts are not in accordance with their world views.
If, however, you come without facts or choose to rely on excerpts from media reports or partisan publications, then what you have to say is incapable of being seriously considered. It will change nobody’s opinion, let alone their world view.
YOUR FUTURE ON THIS SITE
Remember, this is not my site. I am not threatening you with banishment.
However, your “voice” grows weaker each time you repeat unfounded nonsense. Less and less actual communication will be possible.
So, in the expectation that you actually wish to enlighten us about some things and are open to intellectual challenge and to incorporate new facts into your world view, I ask you to please reason and debate from the basis of verifiable facts. Give this discussion thread the respect which you expect, by relying on facts, not biased, unverifiable opinion.
Terry, thanks. Yep, a few facts are useful. Plus or minus 20 generators will still not affect the strategic situation.
John Bennetts obviously doesn’t like Senate Committee reports discussing the difference in focus between various government agencies.
Tactics used: diversion and insults.
(yawns)
Eclipsenow,
you say:
Eclipse now you say you have larger questions. I say, no, that is not what is going on. You have not read the material you are accusing of being rubbish, you don’t understand it, you don’t understand the material you are quoting, and you want me to waste many fruitless hoursd trying to explain it to you. I’ve explained sufficient in previous posts to make it clear to you that you don’t have sufficient understanding of the subject matter to be making assertions about accuracy. You need to go into the detail before you start trying to assert that something is nonsense. I am satisfied that ABARE’s projections are the most reliable we have available. So is Treasury, ABS and the various other organisations that have to make policy decisions based on our energy projections. But you’d rather believe the sorts of nonsense, emotive journalism that have been promoting renewable energy as our saviour for the past 3 decades.
You don’t seem to get what I am saying. I say you need to do the homework to understand what you are talking about before spewing forth that ABARE is nonsense. You need to demonstrate, with a careful comparitive study, who has done better than ABARE – consistently. Otherwise just admit you cannot substantiate your assertions and withdraw them.
This all started because you made statements you’d concluded from junk web sites you’d been reading. I have demonstrated your statements were baseless. Now you are trying to find some way to deflect attention from that.
Peter,
did you even read my 2 posts to you?
“But you’d rather believe the sorts of nonsense, emotive journalism that have been promoting renewable energy as our saviour for the past 3 decades.”
“from junk web sites you’d been reading”
If that’s your view of your Federal Senate’s ability to report on the nature of various sub-agencies responsible to the Australian government, then we are in an even worse situation that I first thought.
How you doing on the Top 10 peak oil questions I sent you?
One of the points I made in the article above was how much we knew 20 years ago and how little has changed in that time regarding our CO2 emissions and what we could do to reduce them.
I thought it interesting that 45 years ago we knew the solar system was 4.5 billion years old. I notice it is now understood to be 4.5682 billion years old. Not much change in our understanding of the age of the universe in the past 45 years. Source attributed toNature Geoscience.
Eclipsenow
How are you doing on reading, for the first time, the ABARE material you call crap?
There is no point me reading or discussing your peak oil questions. The discussion would go nowhere. You don’t understand what you are talking about. The article at the top of this thread shows you are wrong. You have demonstrated you can’t admint it. There is no point going onto something else.
Now you’re using the ‘insult and divert’ to back away from the most pertinent questions.
Tell me Peter, which bit of the ABARE report am I reading again? Which particular paragraph covers world peak oil? I’ll get straight to it if you just tell me where…
Again, I’m NOT QUESTIONING THEIR ENERGY DEMAND SCENARIOS!!!! So can you please stop saying you’ve “proved” anything at all about my main criticism when your precious article doesn’t even COVER IT!
Here’s another quote from a “junk article” of some relevance to this discussion. I’m quoting you!
Gee, how interesting, YOUR FEDERAL GOVERNMENT says pretty much the same thing: that ABARE not only gets its data from Geoscience Australia, but it then tarts it up a bit!
FEDERAL GOVERNMENT
2.47 ABARE expects that Australia’s crude oil and condensate production will remain steady at over 1,000 petajoules per year (about 466,000 barrels per day[54]) to 2029-30. This would means Australia’s net self-sufficiency in petroleum products falls to about 50 per cent by 2029-30. This is rather more than Geoscience Australia’s estimate.[55]
This is because ABARE, unlike GA, makes an estimate of prospective production from resources that have not yet been discovered in basins that have not yet been fully explored, based on the resource estimates of USGS 2000. This includes modelling economic variables which are not within GA’s brief.[56]
That sounds like P50 farting around with the data to me!
FAIL!
Take a look at the August 13 2010 issue of Science. The issue contains a Special Section: Scaling Up Alternate Energy which basically assumes that the solution to climate change is “clean renewables”. Nuclear gets a few mentions, but for instance – the lead editorial “Beyond Petroleum”, written by Donald Kennedy, Editor Emeritus of Science, does not contain so much as a single mention of the word “nuclear” or “carbon capture”. Coal and oil are called the “axis of evil”, and renewables are said to be what we need to “end the US national addiction”.
And on, ad nauseum, and on. There is substantial evidence that scientists do not generally support this “clean renewables” line eg. any number of high level statements such as the G8 +5 Academies Joint Statement http://www.nationalacademies.org/includes/G8+5energy-climate09.pdf which calls for a “very rapid worldwide implementation of all currently available low carbon technologies”. Etc.
I put a post on The Energy Collective with more detail. http://theenergycollective.com/david-lewis/41986/science-mag-special-section-bleak-future-without-nukes-and-ccs
Perhaps scientists who subscribe to Science might take a look at that August 13 issue and send in their thoughts to the editor.
Eclipsenow,
You don’t understand what you are talking about. There is no point continuing this.
eclipsenow, you have gone out of your way to be aggressive to each of us who have tried to help you. You are a waste of time and space.
In the interests of CO2 reduction, please cease breathing.
Peter, please note that I normally respect your writing, but resorted to this sarcasm out of frustration with your patronising tone to any source you don’t like, even Federal government sources that seem to me to have a higher status than ABARE.
But honestly guys, that’s just unfair. I’m an easy target, I’ve always admitted that. I’m an activist with background in the Social Sciences and welfare. Sadly that means I’m not very technical. Yet I am genuinely concerned for our energy security. It is out of that sense of *desperation* for our energy security that I became so frustrated above.
(The kids kept us up last night as well, so I’m not quite myself today).
I’m not a troll as I changed my tune on nuclear power didn’t I? We contributed a cool poster. I one day hope to do more.
I’ve been raving about this site all over the net, doing what I can within the limits of my ability.
So I’ll try and calm down. I really feel we’re talking at cross purposes. You’re saying ABARE is good at modelling the Australian scenario. Fine. Ignore the Federal government report.
But can you just help me find their gear on global peak oil? I genuinely can’t find it.
I downloaded Peter’s 13 page PDF which included no references to peak oil.
A week ago I used Google Site Search to find all references to “peak oil” or “oil peak” or just “peak” on ABARE’s site.
http://www.google.com/sitesearch/
I also searched through your reference PDF’s and spreadsheets.
The only ‘peaks’ that seem to come up in ABARE are to do with peak prices, peak demand, and on just a few occasions there was *some* discussion on peak oil and peak gas output from the Gippsland basin. That was it.
The head of ABARE told the Senate he simply didn’t consider it, as ‘no one told him to’.
So rather than telling me to search through all those ABARE documents a 3rd time, it would be really great if you could just point to where ABARE presents global peak oil.
It really grabs my attention when I can’t even find an Executive Summary from ABARE on global peak oil. So you can go ahead and attack my lack of technical expertise, but that’s simply not the issue.
If I have totally embarrassed myself here, and ABARE have covered global peak oil extensively, then I will gladly back down and apologise and grovel.
Can someone just *please* help me find their global peak oil scenarios? Please?
For an example of my passionate, but rather technically limited, attempts to spread the BNC word out across the net, see here where I take on the Inhabitat solar city greenies.
It’s not much, but I’m trying.
http://inhabitat.com/2010/08/16/sonnenschiff-solar-city-produces-4x-the-energy-it-needs/
So ABARE do not cover peak oil in the manner that you demand. So effin’ what? They try to do the job that they are paid for. This continuing sideshow is both tedious and fruitless.
Since your Googled research is now complete, what did you learn?
eclipsenow, perhaps it would help, initially, if you explain to us briefly why you consider ‘peak oil’ to be such a critical issue, since this is the fulcrum that this argument seems to be leveraging on. Could you perhaps outline your case — the core arguments — in < 500 words, as to why you think the peak is imminent and the subsequent ‘shark fin’ (or similar) inevitable? I’m not sold on the urgency of the peak oil issue, so will be interested to engage in a friendly bit of ‘Socratic debate’ on this topic.
Barry we don’t need a shark fin or sudden decline in liquid fuel production (either volume or net energy) merely a non-increase. The current economic system based on debt repayment requires ever increasing amounts of growth via energy input. Minor efficiency gains are swamped by population increase and middle class aspirations of the world’s poor. We have not prepared early enough to switch away from liquid fuels therefore substantial difficulties lie ahead.
Could the current economic stagnation in the US and Europe be attributed to the peaking of oil production? Some economists think so. Some predict the effects will soon flow on to China and India then Australia will export less coal and iron ore. Thus global economic activity will contract unless we find a way around dependence on oil.
The good/bad news about this theory is that it must show itself in the next 5 years or so as we fall off the 2005-2008 oil production plateau. That is to say if the world economy doesn’t contract as oil output declines then it can’t be as dire as we think.
Seeing as you have bullied Dave into submission I will have one go at explaining the fallacy of Peter Lang’s position.
In a nutshell Peter is saying this. ABARE made some correct predictions therefore all their predictions must be correct.
It so happens that the predictions they got right were the quite simple growth models that almost anyone with a spreadsheet would have a good chance of getting correct. Where they have problems is where the growth or decline is outside normal economics and is hard to predict like oil prices.
Just because they got simple ones correct does not necessarily mean that all their predictions are correct. Only someone that has an unhealthy dependence on authority would try to assert that.
I’m the case of energy efficiency, where this started, abare, though quite accurate in other things, may be overly conservative in their estimation of possible energy efficiency gains just as they were inaccurate in predicting oil prices.
That’s it btw that’s all I said to start this rant on the qualities of ABARE. You accused me of not accepting abare’s figures because I don’t like them however is there a possibility that you cling so desperately to them because they tell you what you want to hear? We can both be guilty of such selective hearing. ABARE do have a very comforting message for conservatives.
Hi all,
I apologise for my tone yesterday as I was over-tired and defensive.
I guess the best way to explain where I’m coming from is firstly to try and find any reference to global peak oil by ABARE, then to watch the peak oil episode from 4 Corners here. Grab a coffee and just watch it online. That is much more entertaining than just reading it.
http://www.abc.net.au/4corners/special_eds/20060710/
Then have a crack at my “Peak oil Top 10″ over the next few weeks and see how you go. (Most of these questions are answered in the 4 Corners special, but you will all no doubt want to do more research to confirm their claims. The more technical of you will be able to model this data far more efficiently than I can, and go into much more depth: but hopefully by then the picture will have emerged and we’ll be on some common ground. *IF* people can be objective and honest. If not, I guess there’s nothing I can do about that).
1. In which decade did we discover the most oil?
2. How has the discovery of conventional oil been going since then? Keep in mind that oil is probably only 2nd to the military in terms of the money and technology available to their enterprise. Big oil have BILLIONS at their disposal for the latest discovery and drilling technologies.
3. What is the ratio of discovery to consumption? Are we discovering more than we use, or less? How good or ‘bad’ is the ratio?
4. How long has the trend been in this direction?
5. How many oil producing countries have already peaked and are in irreversible decline? What are their decline rates?
6. Which countries are still able to increase production and have not reached their all time historical peak?
7. Is there an ‘international oil cop’ agency that audits the fields and confirms the books of various oil blocks? Who reports to who? What is the chain of command down which the oil data has to travel in the non-OPEC western world?
8. How do we know whether OPEC reports are legitimate? Who do they report to? Who can audit their books? Does the western world get access to their fields? How do we confirm what they know?
9. If domestic consumption of oil exporting nations rises too fast (because of a booming domestic economy), how quickly can domestic consumption outpace their ability to export oil once they themselves peak? (Hint: there are historical precedents — google “Export Land Model”).
10. If those few exporting nations that are left suddenly DO decide to keep the oil for their own economies, how relevant is a global depletion rate of 5% per annum if the OIL MARKET has collapsed because hardly any nations are selling?
Stephen Gloor,
Where did I make any such statement?
Possibly. On the other hand, perhaps that applies to you not me.
Tell me what organisation has demonstrated consistently better projections than ABARE over a period of decades and I may concede your point.
Also, please explain why Treasury, ABS, Productivity Commission, Department of Climate Change, IEA, EIA, World Bank, OECD, UN etc all rely on the ABARE stats and projections? I would seem to be in good company.
Is it in fact the case that you don’t like ABARE’s predictions because they do not tell you what you want to hear; they demonstrate your beliefs are based on what you want to believe, not on facts?. Are you displaying cognitive dissonance?
3. Do you have any evidence to back your assertion? If so please post it.
Stephen Gloor,
In 1991, the deep Green advocacy groups and their consultants were trying to convince ABARE to make their projections based on the rate of take up of renewable energy and energy efficiency improvements that these groups argued were economic and would happen. At the time, ABARE said give us the figures, with sufficent substantiation that they are feasible and we’ll run the models and projections with thescenarios you suggest. ABARE did so at the time. The projections based on these scenarios turned out to be totally wrong, as ABARE said at the time they would.
We are in the same position again with groups that you support wanting the same sort of idelogically driven projections. Once again you will be totally wrong. If any of our government departments were forced by political pressure to adopt your beliefs as the basis for setting Australian policy, we’d be further up the creek than we are already. The irrational beliefs of the Greens are doing far too much damage already.
For the efficiency gains possible you only need to look at California.
“California has cut annual peak demand by 12 GW — and total demand by about 40,000 GWh — over the past three decades. The cost of efficiency programs has averaged 2-3¢ per kW — which is about one fifth the cost of electricity generated from new nuclear, coal and natural gas-fired plants. And, of course, energy efficiency does not require new power lines and does not generate greenhouse gas emissions or long-lived radioactive waste”
On Climate Progress is a list of the programs that they have put in place and have delivered the sort of energy savings that the BZE plan details.
http://climateprogress.org/2008/07/27/energy-efficiency-part-3-the-only-cheap-power-left/
If you don’t like Joseph Romm then you could wade through this report and find the savings:
http://www.nrdc.org/air/energy/eecal/contents.asp
Peter Lang – unlike Eclipsenow I have no intention of engaging with your bullying tactics. Suffice to say that the energy efficiency reductions in the BZE plan do have precendents and are achievable. We have a model of a heavily industrialised state that held its energy growth flat with an aggressive energy efficiency campaign that worked. We only have to do the same. I am also pretty sure that ABARE given the task of predicting California’s energy use in 1980 would have come up with a much higher figure in line with the rest of the USA’s growth.
Peter Lang:
At no time have I argued against demand management per se, nor RE per se.
I have reservations about the way that both have been portrayed in the recent ZCA report.
When it comes to determining cost-effective energy solutions which recognise the climate imperatives, the ZCA report contains nothing of use to ABAREbecause it is so unsupported by evidence.
If the DM and RE advances of which you speak in California are a guide, then let’s go flat out to repeat them here. They could buy us 12% (4 years) time. Once these are well into the planning and implementation stage, one would expect ABARE to modify their models accordingly.
In parallel with this, I suggest that the climate war effort should advance on all fronts, not Plan A to the exclusion of Plans B, C… Z. THe only constraints are resources, including brainpower and goodwill, both of which are occasionally in short supply.
In the interests of harmony I now cease responding to Eclipsenow on this thread.
Hi Peter,
As you know I’m only questioning their assumptions regarding WORLD oil production going forward, and how that will affect pricing. I’ve been trying to find “ABARE, Additional information, 27 November 2006.” which apparently details the economic modelling they add to the basic Geoscience Data. I’ve seen the USGS do this as well, encoded into phrases that explain oil production will increase due to demand increase and ‘non-technical reasons’. In other words, because we want more God will just whack some more oil in the ground!
So I have failed to find the relevant source documents that the Senate enquiry drew referred to when they said:
I was hoping to share both the economic influences of “ABARE, Additional information, 27 November 2006” and the effect on the actual Geoscience Australia reports that the Senate enquiry investigated when they made the comment above.
Anyway, this quote from their projection to 2029-30 demonstrates my concerns. From December 2006.
http://www.abare.gov.au/interactive/energy_dec06/htm/chptr_4.htm
For the rest of the projected period? What, till 2029? Wow. When are we going to see $40 oil again?
(Probably after the NEXT GFC, the big one, as shown on 4 Corners last night. But that won’t be due to production increases).
Peter wrote:
This is the crux of questions 7 and 8 in my peak oil Top 10. Who actually reports to who? How do we know what is going on in OPEC? You’d be amazed at the reality.
Stephen Gloor,
Your all belief and bluster. You made statements, including mis quoting me, and I asked you to back your your statements. Why don’t you answer the questions I put to you? Do you have any integrity?
If you think ABARE’s projections of energy efficiency improvements have been wrong, and others have done better consistently, then please post your evidence.
John Bennetts,
Did you mean to address your comment to me? If so, I am not sure what it is relating to.
I do not deny that we must do all we can, that makes sense, to improve energy efficiency. What I am arguing is that the Green extremists continually over estimate what can be achieved, and they overestimate by orders of magnitude. ABARE already includes their projections of increasing energy efficiency in its demand projections. And ABARE has tended to over estimate rather than underestimate the rate by which the energy efficency improvements, DSM, etc. can be implemented. My point is that the magic pudding projections, advocated by Amory Lovins, Mark Diesendorf, Mark Jocobson. Greenpeace, WWF, FoE, ACF and the consultants that are being funded to provide supporting studies, are unrealistic and have been demonstrated to be wrong for the pst 20 years at least. So, I’d prefer to rely on ABARE’s projections, which have continually been closer to the mark, than the ideologically driven projections of the Green advocates.
John Bennetts,
Further to my previous comment, and just to clarify, what I am saying is that energy efficiency improvements, demand side management etc, will make little additional difference at best compared with what ABARE already has included in its projections. And Renewable Energy will make even less difference. History to day would suggest ABARE has overestimated both. Therefore, we should not be focusing on renewable energy nor on energy efficiency. Both will be small bit players. What we should be focusing 80% to 90% of our attention on is what we can do to bring low cost nuclear energy to Australia as quickly as possible. That is where our main focus should be. That is the point I am attempting to get a cross.
As DV82XL pointed out before he left, there is a determined effort by RE advocates (such as Stephen Gloor, Neil Howes) to divert attention from realistic solutions to RE and other issues that are ‘down in the weeds’ as far as being able to make any significant contribution to cutting GHG emissions.
Peter wrote:
That’s a bit rich Peter, given the blind eye you’ve turned to all my questions and sources from 4 Corners through to the Australian Federal Senate. Please answer my Top 10 if you’re going to take this tone with Ender. You have the skills to do it far better than I can, but will you? Or do your political presumptions prevent it?
Eclipsenow,
I’ve attempted to deal with your assertions. I prepared the document at the top to address your assertions. You’ve now headed off on a different track. But there is no point in discussing that with you here because you have not been prepared to do the homework. You have no understanding about what you are talking. You are continually trying to compare apples and oranges, which is totally pointless. I tried to point this out up thread, but you either ignored me or didn’t understand. I asked you questions up thread to try to clarify issues, but you did not answer them. So I see not point in trying to continue. If you want to continue, please go back and answer the questions I asked you. Don”t try to divert onto something else like projections of oil prices (answered by me and others) and peak oil. peak oil is a highly complex issue, and cannot be tackled on a discussion thread like this.
My main question to you was provide evidence of an organisation that has done better projections than ABARE, over decades, on the parameters it is required to provide projections for. If you can’t do so then you should apologise.
And. if Stephen Gloor cannot provide such evidence he should apologise too.
Peter, sorry about the confusion. The comment was intended to be for the thread.
Peter is absolutely correct, so far as I am concerned, in his estimation of the RE and DM options. IF, and a very big if it is, demand management and renewables have been shown to be worth x% reduction in power consumption in California (Reference, please!), then I am all for achieving the same here.
I agree that 90% seems to be about the correct amount of effort that should be diverted to nuclear in Australia, with the ideal starting point being about 40 years ago.
I came to this conclusion somewhat reluctantly after a period of optimism about RE, especially solar thermal and PV. Wind never appeared to me to be other than La-la Land due to capital cost, inability to scale up and environmental footprint.
Tidal power inevitable brings with it stuffed estuaries, which is too high a price for the biosphere to pay for mankind’s toys.
Surely the combined brainpower of our citizenry, our politicians and our professionals can unite to achieve this one greatest objective of our lifetime – low impact energy sources!
Even the hydrogen fuels currently are derivatives of fossil fuels. The only ethical world-wide options for land transport fuels seem to me to include large slices of (1) nuclear power sourced hydrogen for cells and/or direct injection into conventional engines and (2) nuclear power sourced batteries for personal conveyance over short distances.
Many thanks to this site and to others like it for providing a window onto the data and the technologies. My mind has been changed and I am not going back any time soon.
This is dishonest. My contention with ABARE has always been with their GLOBAL oil supply modelling, which should be apparent from the 4 Corners quotes I provided you that led to this article in the first place! I have *occasionally* made reference to how this affects my trust of their Australian supply modelling, but I am gaining new respect for the work put in by GeoScience Australia as a result of my browsing through ABARE’s summary data.
The Federal quotes I have repeatedly offered lead me to continue to suspect some of ABARE’s future Australian oil production modelling. I have seen such ‘econometrics’ stuff up other oil supply modelling in other organisations as well, such as the USA DOE’s EIA. But that is not my main concern.
Right from the beginning I have questioned their estimates for GLOBAL PEAK OIL!
You asked me to convert wood into OEE! Sorry, but that’s just whacky, completely irrelevant. You’re just sprouting utter nonsense now to divert and distract.
As Kim Beazley would say: “Let me be perfectly clear”.
Given that my initial problems with ABARE were mainly to do with global peak oil, your entire article above us UTTERLY IRRELEVANT to my concerns. If you can’t see that, I don’t know what to make of your powers of comprehension, or personal integrity.
Eclipsenow,
The discussion is pointless because you want to change the subject. You’re being all emotional. You waon’t address the questions I put to you, which if you did might help you to understand the problem.
you say:
Sorry that is nonsense on many counts.
First I said no such thing. Yoiu made that up. You asked what are PJ because you don’t understand them. I, and ohters explained why we have to use energy units (ie PJ). You ignored, or didn’t understand.
Second, you haven’t answered the qurestions I asked you. You’ve ignored them. But you are trying to make out that this is the question you didn’t answer. That is being deceiptful. I’d suggest you look through and answer all the questiosn I posed to you.
The most important is:
John Newlands,
If Australia decides to build NPPs there will be no need for “Enrichment” based on gas centrifuges or lasers. Nor will there be any need for wet reprocessing (e.g. PUREX). These are very expensive technologies that make no sense if the goal is to generate electricity. There has been far too much enrichment and wet reprocessing already leading to large inventories of bomb grade fissile materials across the world.
Arriving into nuclear power 60 years late, Australia has the advantage of hindsight that will enable you to choose processes that will consume bomb grade materials and the higher Actinides produced by Gen I & II NPPs that are currently destined for geologic storage.
This website is a great place to exchange ideas on nuclear power and spread a positive message to the public at large. We can show the public how investments in “Renewables” compare with investments in NPPs. The main criteria should be $/MVA for plant construction and $/MVAh for electricity delivered absent of subsidies.
Usually I disagree with “eclipsenow” but some recent criticism has been a little harsh. He admits that his technical understanding is limited as is the case for 99% of the population. We need to hone our arguments to the point that they make sense to that wider audience.
Eclipsenow is providing us an opportunity to see our arguments from a less technical perspective. If we can’t communicate with him, we are going to end up speaking exclusively to a small “‘In” group.
Agreed totally, gc! Although eclipsenow can get a little too emotive (by his own admission), he does provide a good sounding board for what most members of the public are like — at least the ones with the open minds. He changed his views on nuclear, and I think a little more of the ‘gentle art of persuasion’ rather than dismissive deflection might not go astray here, either.
gallopingcammel,
I accept your point. However ….
in this case, I’ve tried, and tried, and tried, and I’ve given up. Eclipse now is not taking any notice of what I and others write to him. He wants to change topics to now talk about peak oil. But that is a really big topic and cannot be addressed on a thread like this. Barry suggested Eclipse now write a 500 word article outlining the topic he wants to discuss, presenting his case and supporting it with evidence. But that is not the topic here. I know it cannot be covered here and I know that nothing we say will satisfy Eclipsenow, because he has made up his mind on the basis of the web sites he has been reading. Some of his beliefs are so entrenched, but so seriously flawed, that there is simply no point in trying to address it. Eclipsenow’s assertion on a previous thread was that ABARE’s projections are biased towards fossil fuel interests, and a stack of other unsupported assertions. So I did some work to test the assertion and summarised the results in the lead article. Any balanced assessment, not only of this article, but also the fact that ABARE is the undisputed authority, shows that their projections are widely accepted as the best available.
That needs to be acknowledged as a first step. Otherwise, EW should show that another organisation is doing better, on an ongoing basis. Clearly that is not the case or ABARE would have the responsibility taken from them and given to another organisation, or they would be restructured or something.
Silly, hair-shirt arguments such as they didn’t even consider peak oil are just ridiculous.
Believing that an upward trend will suddenly change to a downward trend in the year of the projections is silly.
Believing that no new reserves will be found, from this year on, is silly.
Some of what EW is falling for is mixing production from existing wells with the overall production we get from basins as we continue to develop them and as we find more deposits. EW is confusing that, and many other issues.
These matters cannot be explained to him because he is fixated on what he now believes. He has a religious-like belief and is stuck with it until someone can get through to him.
And just to repeat, I am not disagreeing that peak oil is an important issue.
Barry, I accept this too. But I have to back off for a while and let others have a go at answering Eclipsenow.
I have repeatedly tried to point out that we have been talking at cross purposes. This all started back in the ZCA critique thread when I initially said:
From 17 August 2010: 19:15
You could easily have misunderstood my argument with ABARE to be something to do with projected energy efficiency gains. I could have been interpreted as contributing to something Ender was contesting about using ABARE energy demand projections to back either an RE or nuclear position.
If you read my post again, you’ll see it was none of the above!
I don’t think the ZCA thread is an excuse to forget that oil is a global commodity traded on a global marketplace and subject to global supply and demand issues.
So your request that I…
…would fail a Year 10 English essay because you are not answering the ACTUAL QUESTION!
In my mind you’ve made an OK case that ABARE are ‘pretty good’ at estimating energy demand growth under business as usual assumptions.
But what happens when peak oil hits is another thing entirely. It could throw those BAU assumptions right out! I expect petrol rationing within 5 to 10 years, and then a civilisation-wide rush to New Urbanism, public transport, and nuclear power.
I quoted their 2006 guesses at the oil price, and we are still double their estimates from now until 2030. They’re already 100% off track!
If ABARE are the agency informing the Australian government about world oil price issues, we are in trouble, pure and simple. But fortunately I think some members of the Senate have revealed some of ABARE’s econometric assumptions about oil increases. More devastating was the Senate committee on peak oil interrogating the goose in charge of ABARE. Somehow he thinks he can model oil prices without considering global peak oil! Nice one! 😉
My only concern is how many Senators from that committee still have their jobs, and still even remember the incident… or the subject for that matter. Maybe it will come back to them when we hit $200 a barrel!
gc I take you are saying Australia either use forms of NP that don’t need enrichment or if needed buy in enriched fuel. Ironic since I understand the laser SILEX process was invented here. In Australia the Greens Party will control the Senate from July 2011. Some of their hardline members would prohibit import of medical isotopes. I’m not sure of their view on material produced by the big cyclotron in Victoria.
FWIW I agree with most of what eclipsenow has to say. Oil depletion is going to hit us like a ton of bricks and soon. Where I disagree is that the price is a good indicator. Consider that the oil price was $147 in July 2008 and $72 in August 2010 yet crude production is declining, partially offset by other liquid fuels (e.g. ethanol, tar sands) with less net energy. I predict between now and 2015 Peak Oil will change everything. If I’m wrong I’ll admit it but the PO community is enormous with the Oil Drum website getting 30,000 hits a day I believe. Some people who post in the safe refuge here should take them on.
I’ll leave off for now with this reminder:
The article was intended to address the assertion that ABARE’s projections are crap!
I believe the assertion is demonstrably false. If someone feels they can demonstrate the assertion is true they need to provide evidence of an organisation that has consistently provided better projections than ABARE, over decades, on the parameters ABARE is required to provide projections for.
EN, that is just one of your statements about ABARE projections being crap!. Selected again to suit your point.
EN,
You keep making the point about prices. But I and others said up thread that prices of anything are extremely hard to predict and I’ve never viewed it as a priority area of ABARE’s projections anyway. Saying that ABARE was out by 100% is totally irrelevant as far as I am concerned. I don’t care if their prediction are out by orders of magnitude (as we can be with measuring permeability). Unless you can show that some other organisation has done consistently better than ABARE, then your points about being out by 100% are totally meaningless. Sorry, I am fed up with your nonsense assertions and not being prepared to take any notice of what I’ve said repeatedly.
And yes to all those saying back off on EN. I understand. I’ll take a break.
Can you please show where I’ve said this? I think you’re actually having a meltdown and confusing me with Ender.
Not if I saw the head of ABARE say it himself. But please, show me where they discuss global peak oil and I’ll recant!
Um, what? What are you straw-manning me for now?
Now I know you for a straw-manning fool.
Who is “Eclipse W”… I’m EN or Eclipse or Eclipse Now. EW could be mistaken for someone else. But otherwise now you’re just ranting. If you can answer my Top 10 questions I’ll be interested, but right now you’ve just failed Year 10 English and, well, I don’t care what you think. You’ll soon find out your right-wing preconceptions about the wonders of the marketplace can easily be undercut by that same marketplace’s lack of respect for the inevitable laws of physics gently ebbing away at our daily oil production.
EN, you’re doing it again. Statements like “You’ve just failed Year 10 English”, and being silly about Peter typing “EW” instead of “EN” are no more helpful that Peter saying your points are “totally meaningless”. This gets us nowhere, on both fronts, and lowers the tone of BNC. Please cease and desist, and try and rebuild a constructive conversation on this thread and others.
Hi John,
Good comments. I didn’t know The Oil Drum were that popular, but aren’t they getting a bit doomer over there? I’ve read about shonky editorial decisions and pro-nuclear comments being deleted without reason. EngineerPoet has a few pieces on it.
http://ergosphere.blogspot.com/2010/05/enforcement-of-orthodoxy-at-oil-drum_09.html
On price: I agree that price is not a good indicator of long term oil security. The boom and bust in prices over the last few years have probably been due to speculation and then the GFC more than any immediate peak oil concerns. But the upwards trend is interesting as geological supply issues seem unable to keep up with the roaring demand from China and India.
My main focus on price was that this is how the Senate Committee highlighted ABARE’s failure to even consider global peak oil — straight from the horses mouth! The Senators were all quite unimpressed with Dr Fisher as he said this. It really stood out as a moment of national embarrassment that we were so uninformed about such a potentially catastrophic worldwide challenge.
(Peter Lang will no doubt again spank me for not analysing the wonders of ABARE’s demonstrated history of successes over the past 20 years in predicting *domestic* consumption and production trends. But I can’t help that.
Peter apparently has a strong case of Aspergers, and only feels comfortable within the confines of the Australian domestic resources and the wondrous charts that demonstrate ABARE’s wondrous “woundrous-ness”. I can see him rocking on his chair like Rain-man, “Must analyse domestic resource trends, must analyse domestic resource trends” — “need 12 cheetos at lunchtime…”. It’s sad, but maybe one day he’ll realise this time he is the one that needs to learn to actually answer the REAL question and issues for once!)
Barry, I give up. I didn’t read your email until I had just posted the above, but if Peter Is going to behave like such a pig and completely ignore the ACTUAL issues I’m talking about, there is absolutely no point in my being here. Peter’s last posts just straw-manned my position again.
EG:
Barry, have I or have I not conceded some ground in this thread about ABARE being reliable in some areas? Did my last post define where I might respect ABARE, and where I have issues with them? Yet Peter refuses to hear the distinctions! He refuses to address the issues, and I can only take it that he is unwilling to admit that all of this started because he failed to understand my actual concerns with ABARE in the first place.
Peter, be a man. Admit that your article actually defends ABARE from charges I never made against it! If I did happen to curtly reply “Projecting demand, good, projecting supply, SUCKS!” somewhere above, that was about their global projection issues.
Just try being honest this once.
My interest at the moment is in discussing these assertions.
I say ABARE is competent at what it does and is not biased. I say ABARE provides the best projections available in its area of responsibility.
I say if someone disagrees with that, substantiate your claim. That is, show what organisations have produced better projections on an ongoing basis.
World Peak Oil is a separate debate for another time. It is an enormous and controversial discussion all of its own and a diversion from the central topic of this thread.
Peter,
On the ZCA thread I said:
You replied:
So right at the beginning you seemed to understand that I was discussing peak oil, which is a global discussion about world prices super-spiking and world oil markets rationing.
As to which authority I feel is more authoritative than ABARE? Well, right now as ABARE don’t seem to bother with discussing global peak oil, how about ME?
EN,
This discussion is absolutely hopeless. You are insisting on talking about Peak Oil even though I’ve said about 10 times that is not what this thread is about. Write your own article for another thread and then those who want to discuss it with you can.
You say:
Go back before that and look at the preceding discussions, not just with you. You are not the only person on the planet.
And, just to be clear, I do not accept that Australia has beeen subjected to misinformation about Peak Oil from government agencies nor do I accept that ABARE has distributed misinformation.
And that really proves the point. You cannot produce anything to support your assertion. You have been making unfounded assertions. You are dead wrong. Please retract your assertions about my honesty.
Then get back to the topic of this thread (and note: it is not about World Peak Oil!)
PS: Just joking about ME. 😉
Maybe misinformation is the wrong word. How about non-information?
As I have said all along, repeatedly, and with NO EFFECT, all you have to do is show me their global peak oil report and I’ll shut up. Unless maybe there is another way? Can you think of another energy agency that should have been reporting this to Canberra? 😉
No, of course not, ABARE is the authoritative super-fantastic-happy-hour agency that reports all things energy and minerals to our Federal government. So where is it on global peak oil?
EN,
Let’s try to put this World Peak Oil argument to bed. You believe ABARE has been incompetent, or misleading or something like that. I don’t. But to me any discussion about World Peak Oil is a separate issue. I have no interest in trying to get to the bottom of what you are talking about with regard to what ABARE has done on World Peak Oil. Someone else might, but I am just not interested. I do know ABARE is fully cognisant of what the other agencies (like IEA, EIA, DOE, OECD, World Bank, etc) are doing, they all collaborate and share information. So I do not accept that ABARE didn’t know or didn’t take Peak Oil information into account – no matter how it came across in Senate Hearings.
This is your issue. You run with it. I am not interested. It is a tangent as far as I am concerned.
Can we let it rest at this?
The issue I am interested in relates to what is the best way to cut CO2 emissions: renewable energy and energy efficiency or nuclear energy, hence my analysis of this assertion (made by persons unnamed):
Peter,
this thread most definitely is about peak oil. Back on the other thread, where all this started, you promised you were writing a piece on ABARE that would put my concerns to rest. Where is it?
I noticed. And yet how many times did I tell you we were speaking at cross-purposes? How many times did I tell you your article had not addressed my concerns?
All along I was operating under the premise that this article was going to prove what an authority ABARE was on all matters to do with energy. Did you or did you not write the following?
So I definitely had grounds to think you were going to prove ABARE was THE authoritative source on peak oil. This whole time I have been asking you to back up your promise, and nothing you have said has been relevant!
Everyone can see what happened here. I can’t be bothered to count them, but there were maybe 15 or 20 patronising posts by you where you just repeated your mantra: “You don’t know what you’re talking about! Go back! Do this assignment for me! Blah blah blah”.
You kept tearing into me as a moron and your friend John Bennett said I should drop dead. Good one. How to make friends and influence people! How to be an activist and win people to your cause!
Yet all along you were just plain off topic! If you were going to live up to your promise to me, you wrote the wrong article! I’ve absolutely had it with your patronising gibberish, demanding that I model irrelevant little Aussie scenarios about the pathetic little drop that is Aussie oil. You can spend your life counting those few drops if you wish, and ignore the geyser that is quietly dying outside your blinkered view.
Go on, run away like a coward, there’s a good boy.
My apologies, EN. I did not rest your concerns.
This thread is not about World Peak Oil. Read the lead article and see if it is mentioned anywhere. If you want to write an article on Peak Oil, go do it. Barry invited you to do so. So go and do your research yourself, don’t ask me to do it for you.
EN, a fundamental problem with pursuing this argument is that ABARE is currently correct about peak oil — at least in the sense that it hasn’t yet happened, just like they predicted (or at least if it has, its ramifications to date on oil prices and availability have been minimal). As such, their predictions which ignore peak oil are, on the bald face of it, justified. Peak oil HAS happened in limited jurisdictions, but has always, to date, been compensated for by imports, or gas substitutes, other technological improvements etc., such that no nation has so far gone from being an high oil consumer to a low oil consumer on the back of peak oil.
Now I’m not making the argument here that peak oil is an invalid concept — at least regionally — and I’m not even arguing that it’s not a potentially serious future issue for which we ought to be preparing to counter now. But as far as ABARE have been concerned, they currently have nothing to hang their heads in shame over in that regard. They’ve got it right. If they are right by luck, and misfortune is about to strike Australia and other industrial nations any time soon, then it will not just be ABARE that have egg on their face — it will also be the IEA, EIA and so on. If that happens, we may well curse their lack of foresight. But that’s a big IF, and there are many eminent people, including Prof Richard Hillis at my own University, who argue that by the time rising oil prices is a really serious issue, alternatives and substitutes will have been found, as they always have before.
I’d still be happy to receive your expression of the peak oil problem as a guest post, so that we could at least stay on target in any such discussion, rather than derailing a more general thread like this exercise has become.
I would like to re-iterate Barry’s comments. My introduction to peak oil was around 1980-81 at secondary school when we had a special lecture from someone using the data (I think) from the “Alternative Energy Strategies” series which forecasted a peak somewhere between 1985 and definitely before 2000. I can vividly remember the graphs with the bell curve, and the evidence appeared compelling. I’m not even sure whether the term “peak oil” had been applied then. The link is the best I could find without subscription:
http://books.google.com.au/books?id=DwsAAAAAMBAJ&pg=PA58&lpg=PA58&dq=workshop+on+alternative+energy+strategies&source=bl&ots=a_UksRZk71&sig=qs2sxuklfiP-S1NEpTbsEnASmIw&hl=en&ei=l0RyTOTkEobfca2-9IMN&sa=X&oi=book_result&ct=result&resnum=4&ved=0CCQQ6AEwAw#v=onepage&q=workshop%20on%20alternative%20energy%20strategies&f=false
The moral is: regardless of the authenticity of peak oil or eventual outcome of oil supply, and whether by luck or good fortune, ABARE’s assumption of the continuation of historical trends has given us 30 years of better projections than if we used the worst-case scenarios. Despite this, I believe government policy ought to be more cognisant of possible oil supply constraints and at least consider it in policy development, particularly in relation to urban sprawl where we have created two-car dependant families.
Thank you Peter. That means a lot to me.
@ Barry,
Who knows whether the world has peaked or not? Oil may have already ‘pretty much’ geologically peaked, but the price could be dampened by the GFC, which killed demand. As John Newland said, price is not the best guide. Anyway, it’s not the peak that is of any importance but it is the vision of the long, inevitable decline the other side of peak. When the marketplace learns of that, there’s going to be all sorts of trouble.
Peter rightly asked if ABARE isn’t the authority on peak oil, who is?
I started to write a reply last night for a guest post, but something happened and WordPress did not save it. I just don’t have the time to do the latest research worthy of the name ‘guest post’… I’m in the middle of a career change. So I will email Barry an ‘extended comment’ I was writing to post here, which got a bit long anyway. As long as everyone realises it is a lay person’s guide to the issues, I’m happy. I’m not putting on airs about myself, but just discussing the state of the debate as I see it, as an activist.
Peak Oil has major implications for stationary energy
– prioritising gas as a transport fuel
– intermittent generation and EV charging.
With both gas and battery assist transport there is clearly some reluctance to adopt early. We love our fuel guzzling behemoths too much… SUVs, combine harvesters, semitrailers and jumbo jets. The problem now is that fuel prices are stable even as crude oil output declines. What if a sudden panic sets in and fuel prices double? I fear we will be caught flat footed.
EN,
I did not say this nor did I imply it in any way:
“Peter rightly asked if ABARE isn’t the authority on peak oil, who is?”
You are still twisting what I say and giving false interpretations to what I say.
What I continually said is ABARE provides the best projections available. If you think another organisations does better, then make your case. That is the point. You want to twist the discussion to being about your obsession. I never was intending to get into a discussion about Peak Oil. NEVER! Do you understand.
I now realise it is your obsession and it is what underpinned your originally flippant remarks that ABARE is no good at what it does. The lead article was intended as a response to the general statement by you and others (note: not just you). I did not realise then that your remark referred to only your obsession, a topic I have no interest in trying to discuss with you at this time!. If you can’t demonstrate that another organisation has been making better energy projections for Australia than ABARE, why don’t just admit that you are wrong?
Are you kidding me?
Barry, what do you make of this?
All Peter has to do is point to a paper, any paper, by ABARE on peak oil and I’ll leave it.
John Newlands,
My hope (probably wishful thinking) is that Australia will jump right into Gen IV technologies which breed fissile materials (IFR, LFTR etc.). Australia stayed out of the game while earlier technologies created bomb grade materials as they were intended to do.
A Gen I reactor consumes about ~0.6% of the original uranium fuel and the rest ends up as waste. The French reprocess this waste at La Hague, enabling them to reuse the fuel and thereby increase the amount of fuel “burnt”.
However, if you want to to burn 99% of the original fuel while consuming bomb grade materials and the “Yucca Mountain” waste, you need the advanced reactor designs that are available today. More likely, Australia will plump for a design such as CANDU that is well proven even though it may lack some of the advantages of LFTRs (for example). I think Barry just put up a new post that may be relevant.
I agree with you and eclipsenow when you point out that the cost of fossil fuels will rise as the reserves run down. However, it is a huge debate (well beyond my pay grade) when one tries to quantify global reserves. I don’t want to get side tracked into whether the reserves are higher or lower than projections by ABARE and others. Your general argument makes sense but is hard to convince people that there are no more huge reserves waiting to be discovered.
My point is ABARE haven’t done a projection on the global supply issues, they’re relying on the marketplace for that.
They think price is the ultimate guide! It shows how the economists have taken over there.
gc I think if the hardline greens suddenly relented on NP the best option would be something with a small footprint and fast construction time. If it could also desalinate seawater cheaply that would be a bonus. I thought the makers of CANDU were effectively broke.
Recent modest oil prices seem to defy the ‘laws’ of supply and demand. Could be low national incomes are creating negative feedback. The danger is that a weak price signal leads to under-investment in oil alternatives. That could allow flows to decline to a critical threshold with no replacement technology. I’d liken it to someone with hypothermia not feeling the cold until it is too late.
On the size of oil reserves remember future extraction will be more costly than in the past, to wit recent deepwater oil rig disasters.
Exactly John! But I think Barry would prefer if this thread remained on the topic of Peter Lang’s article covering ABARE’s reliability in matters of projecting Australian domestic matters. There may be ample opportunity to ‘dig deep’ into global oil supply issues in the coming week/s. Stay tuned!
Cheers.
John Newlands,
You said:
“….the best option would be something with a small footprint and fast construction time.”
That sums it up pretty well.
LFTRs can be economic in small sizes. Small LFTRs do not need to be constructed “on-site”. They can be built in factories and shipped to site on a couple of trucks. This is how Henry Ford would have built NPPs.
While CANDU is an interesting design, the world has indeed moved on. Take a look at Barry’s post on the PBMR. The original “Pebble Bed Reactor” was gas cooled and now UC Berkeley is using molten salts for cooling. This results in a very compact reactor core operating at low pressures.
Hi Peter. Great thread.
I have question on this:
I think they were misled by certain Middle Eastern countries that oil supply was guaranteed for decades to come.
Why would think they would mislead as I’m trying to understand the rational. I would have thought understating their reserves would offer better prices conditions than the reverse.
Thanks
That may be true, but the two 700-MW reactors that India began construction on in the last few days were PHWRs, like the CANDU.
For “is using molten salts” read “is studying the use of molten salts”. For “results in a very compact core” read “can reasonably be expected to result in a very compact core”.
We must be very cautious in moving these designs from screen to paper, lest the sharp edges of the paper cut us. Meanwhile, this computer is powered by CANDUs.
(How fire can be domesticated)
Hi JC,
Got 12 minutes? That’s all answered in ABC’s Catalyst.
http://www.abc.net.au/catalyst/stories/s1515141.htm
Got half an hour? Try 4 Corners.
http://www.abc.net.au/4corners/special_eds/20060710/
Basically, we had the world’s best geologists in Saudi Arabia scouting the country for 30 years before we were kicked out in 1970 when the Saud’s nationalised. We KNOW how much is there!
The rationale from their point of view is simple: they don’t want the Western world weaning off oil before they’ve sold us every last drop possible! It’s their main export. What else are they going to do for money, grow banana’s in their lush rainforests? 😉 So for S.A. selling oil is it. It’s not just like a major company that needs protection, like America’s banks or car industries that are just “too big to fail”, but more like a matter of national security!
They DON’T let international oil organisations in to verify their ‘discoveries’ since 1970, discoveries that have mysteriously exactly matched their depletion rate for the last 40 years. They just promise us “no, it’s good mate, trust us!” And so the USGS does, and from there a chain of misinformation spreads around the world.
GC and John Newlands. Hitachi/GE are marketing midsized reactors, I think in the range 400-600 and possibly to 900MW and the build time is 34 months. A couple of those to get Australia going, one at Olympic Dam [Roxby Downs] or Ceduna for Power and water desal and the other to replace the coal burning station at PortAugusta would be sensible build starts. But like you GC, I hope that when we finally wake up and grow up and understand why the rest of the world is developing nuclear that we also get into Generation IV technologies. There’s enough uranium at Olympic Dam alone to power the planet for probably millions of years, certainly tens of thousands of years. As James Lovelock said here in SA three years ago “It doesn’t make sense that Australia hasn’t already gone nuclear” We should be a/the leader in future world energy supply and use. I’ve been saying that and telling people that for the past 12 years. And Barry has been saying it in recent times as well.
TK the desal planned for Whyalla is not a good location though the distance to Roxby Downs is under 300km as opposed to 350 km from say Ceduna. Precious river water now goes to Pt Augusta, Woomera and mid Eyre Peninsula where the aquifers are drying up. Therefore I suggest turning off the river pipe (60-100 ML/d) and combining with the desal for Roxby (187 ML/d) call it 300 a day. I think that could draw 75 MW for reverse osmosis plus the overland pumping effort.
BHP reckon they wanted 690 MW for the OD expansion which I presume included the 45 MW for the controversial Whyalla desal. Let’s think big
1) retire the 2 coal stations at Pt Augusta together about 650 MW I think
2) build a big desal that helps a huge region
3) supply power to OD, Prominent Hill, maybe Ambrosia zircon mine
4) think about a start on a SA-WA high voltage connector.
Therefore you could be talking about 1300 MW and HVDC cables. I also like Ceduna since it is low on NIMBYs, has ocean currents (unlike Pt Augusta) and already knows about radioactivity from Maralinga bomb tests and zircon. Even ZCA seem keen on that area for wind and solar.
Both BHP and the Federal govt have the readies, think the takeover bid for Potash Corp. and the NBN, both over $40bn.
Yes John NewlandsI agree with all of your vision and it’s very much like what I suggested to the SA Chamber of Mines and Energy and the CEO of Business SA in a piece I prepared for the former last year. I think I posted it on one of Barry’s earlier blogs. I’m pretty sure it will be printed in the September issue of Adelaide Review. Amanda Pepe from AR has told me it’s a goer, so here’s hoping. I agree also that we need to THINK BIG. And Whyalla is NOT the right place for a desal plant and very definitely we need to stop pumpimg Murray water to Whyalla EP etc. And while we’re about it, we need to ensure that the Murray/Darling Basin Authority is successful in getting a significant irrigation effort reduction throughout the basin. That means ALL states need to forget about themselves and try to see the needs of the whole basin. That will be a big ask but I live in hope. Cheers John
John Newlands
I have some questions for you about your proposed Ceduna location. Leaving asdide for now the NIMBY issues, my questions are about engineering and cost issues:
1. How many units would you envisage the Ceduna NPP would ahve when complete?
2. Until Ceduna has say 4 units or so (of whatever size), how do you supply the power to meet demand when a unit is being refuelled?
3. No matter how many units, how will the units at Ceduna (800 km from Adelaide) follow the very large demand changes that occur when supplying Olympic Dam Mine as your main demand centre?
4. I recognise that nuclear can follow demand changes if designed to do so, but they are more expensive, and will be even harder to finance than NPP’s that are designed for baseload only. So how do you see us financing NPPs that will have to follow major load changes and will not be able to operate as baseload plants?
5. Regarding the piped water, does it make any difference whether the water flows east or west in the pipes? In otherwords, from the perspective of piping the water, does it matter if the desalination plant is at Ceduna or nearer to the population centres (Port Augusta and Adelaide?
6. I recognise the benefit of the cool ocean currents at Ceduna, the temperature difference and the issue with dispering the salt from the desalination plants, but wonder whether these are insurmountable problems or simply issues that need to be engineered, albeit at higher cost. So can you provide any comments on the cost/benefit tradeoff between the options of citing a 4 unit NPP near Ceduna or nearer to Adelaide.
Comparing Canada to Australia, Canada is one of the world’s largest producers and exporters of energy. The largest source of energy consumption in Canada was oil, followed by hydroelectricity and on the third place was natural gas. On the contrary the coal or nuclear energy consumption have just smaller share of the country’s overall energy mix.
I guess gallopingcamel got the point; Australia should have to jump right into Gen IV technologies to support rising energy consumption in the country.
@Peter Lang:
I speak as a 30+ years power station engineer with Australia’s largest power generator.
1. How about something like 4 x 400MW, if this size of unit is commercially available? These would not be too large to fit easily into the existing SA grid and would nicely accommodate the loads envisaged with 2 units at close to full load or 3 at lower load, allowing for retirement of a significant capacity of the existing capacity.
2. Provided that all units are constructed without too large a gap between them, there will be no need to refuel the first till after the fourth is available. Consider staggered starts and allow say 4 years construction time per unit. This is a lazy program and could easily be closed to 12 months between units or even closer. Commence in 2012, commission 2016, 2018, 2020 and 2022.
3. Transmission interconnection with other load centres such as Port Augusta and Adelaide will smooth the load swings and provide system stability. This will be needed to permit retirement of coal fired units. GT’s as exist at present would stay available for backup, as well as to assist with stability when planned and existing solar and wind capacity fluctuates.
4. Units operating as proposed are still baseload. There is no reason why they could not each follow load up and down at, say, 10 or even 20 MW/minute per unit. They should easily peak at say 90% of nameplate rating and follow loads down to 30% of nameplate during the off peak. Combine this with the flexibility of GT’s as above and the existing interconnectors with Vic and NSW and there is plenty to work with.
5. There is little reason for the water desal plant to be snug up against the power station. Desal has lower water requirements than condenser cooling. The generation plant requires a flow of water in order to avoid a heat island. Hence the value of ocean currents. The desal plant will have somewhat reduced needs in this regard, but could either make use of ocean currents or vertical stratification, because the water with elevated salinity will tend to sink as the salinityh disperses. The experts could easily balance these matters with transmission line costs and pipeline costs during the feasibility and options studies.
6. Re Adelaide, my knowledge of the coast in those parts is elementary, but the NIMBY issues and the costs of site acquisition may well be large capex items. Again, this will take options studies, as also transmission line proposals. All four major components of the project will tend to optimise towards different locations. It will be a very interesting task for whoever gets to look at generation/transmission/pipeline/desal capex and operating costs.
7. Do not underestimate the value of suitable labour close by for construction, maintenance and operation. The ideal location may turn out to be closer to the steel works at Whyalla, for example.
I wonder if load switching between mine power demand and coastal desalination could smooth output. When the mine is just ticking over the unused power could desalinate more water which could be pumped up to tanks in the hills, albeit low elevation. Thus the electric RO desal could operate in counter cyclical mode. The water is for the whole region not just the mine. I previously thought Roxby Downs was on diesel generators but I now understand there is transmission from Pt Augusta so perhaps I double counted. Link
If power was generated at Ceduna for Roxby Downs then the RD to Pt Augusta line could send some surplus to the eastern grid. Perhaps the mine, mill and town has a predictable cycle of power demand which would be explained in whatever document came up with the 690 MW. I know some Roxby residents think only NP can meet their future power needs.
The problem with the SA coastline is that the gulfs between Eyre Pensinsula and Adelaide are fringed with mangroves and saltmarsh. They have poor circulation and elevated salinity in places though they are nurseries for young fish. That makes both thermal plant cooling and desalination more difficult. South of Adelaide (Fleurieu Pensinsula) is good but NIMBY central.
Thus instead of power and water flowing from Adelaide and the River Murray in the east to the west it would reverse some flows. A Ceduna based power plant and desal would supply water and power to western regions and send surplus power on to Adelaide. Note that Adelaide’s 1280 MW Torrens Island closed cycle baseload plant is Australia’s largest gas user but depends on two fast depleting gas fields.
John Bennetts,
Thank you for all those excellent points. I agree, the options study will be essential. I hope the engineering and cost factors will not be swamped by the NIMBY factors, but the way politics in this country is now I expect NIMBYism will be the main deciding factor.
I think some may not appreciate how much the demand at the mine will change – and how suddenly. This will be more easily accommodated if the NPP’s are closer to Adelaide (rather than 800 km away) and feeding into the main, relatively stable (compared with the mine) load centre; i.e. so that the mine is a small component of the overall load.
Here are some costs that I see favouring a site nearer to Adelaide
1. The cost of an 800km transmission line to carry 1600MW would be about $1-$1.5 billion (more if you want to allow for feeder lines from wind and solar power stations).
2. Cost of pumped hydro storage or water storage (suggestd by John Newlands) – huge cost and totally uneconomic. Forget it.
3. Located 800 km from a major source of labour, and services – Additional construction cost and operating cost throughout the life of the plant. At a rough guess I’d expect this would add at least 10% to the capital cost of the plant, some addition to the operating cost for the life of the plant and say 10% to the cost of electricity.
4. If located at Ceduna, the units would need to be small, as you propose, at about 400MW each. This would increase cost compared with larger units. I’d expect a 20% higher cost for 400 MW units compared with the larger units that are being rolled out elsewhere.
5. So the salinity and NIMBY problems associated with placing the NPPs nearer to Adelaide will have to be very high cost to offest these cost benefits.
As you say, a proper options analysis will be essential, and would be done before we progress, even given the current blocks to rational decision making.
To my surprise the pipeline from the Murray already has 127 holding tanks and 475m elevation
http://www.flickr.com/photos/imagegallery/3634401969/
John,
You need to calculate the volume of the tanks, the amount of storage you’d need to make use of most of 1600MW when Olympic Dam is shut down, and the cost, and put it all together. Without even crunching the numbers it will be totally uneconomic. Apply some engineering jusdgement or otherweise your posts are damaging by misleading people who are not able to do these sorts of calculations. Writing silly stuff here doesn’t help anyone.
Correction:
I overestimated the cost of the tranmission line from Ceduna. M$500 – M$1,000 would be a better figure.
@ Peter Lang:
1. Transmission costs, including losses, become enormous over an 800km route. There is so much to be gained by shortening the route that the remote option will quite probably not survive. Don’t get hung up about location at this stage.
NIMBYism is manageable by either building popular recognition of the positives and/or brute political force. Either way, it is a political decision.
Trying to allow for “wind and solar” adds costs to this project which belong elsewhere. Forget them.
2. Pumped hydro, if not absolutely necessary to stabilise the grid for this project, is also external to the proposal. Forget it.
3. “Located 800 km from a major source of labour and services.” The Ceduna site will increase both capital and ongoing costs by more than 10%. For example, Hunter Valley building and labour costs are at least 20% over Sydney costs. This is for sites 30km from town and 3 hours drive from the capital. I have verified this via cost estimation and tender prices received over a 20+ year period.
4. “If located at Ceduna, the units would need to be small, as you propose, at about 400MW each.” The closer to Adelaide or other large loads the better for system stability, system security and so forth. Perhaps dry cooling is the way to go, with the plant being located north of Pt Augusta. At a rough guess, this would decrease overall water demand at the plant from (say) 35Gl/year to about 8Gl/year, subject to options study. I toss these figures in as an indication of the consumption which should be envisaged.
6. (new point).
Desal plant. Engineering solutions are available for mangroves, etc. E.g. long outfall pipe for saline discharge, so that the saline plums will not have an impact on areas to be protected. Overland pipework and pumping costs are horrendous, so it is imperative that these be minimised where possible. E.g. a recent project I was involved on cost about $15M just to purchase and lay 7km of pipeline of 1.4metre diameter in difficult country. As a (very) rough first approximation, expect something like $3M per km of twin 1.4 metre pipeline, including maintenance road but not pump stations or power supplies. I won’t go into desal further here, because it is off topic for this site.
Don’t get hung up about what will happen when the demand at the dam swings. Interconnectedness with the national grid and the availability of the existing gas-powered GT at the dam as emergency back-up will come close to handling that seamlessly.
All transmission lines must be twin circuit to enable maintenance.
John Bennetts,
Excellent. Thank you for all that information.
What did you mean by
Are you referring to the need for an additional line for redundancy?
For rough calculation I am using $500/MW.km for estimating capital cost of transmission lines. I notice SKM also used this (roughly) for their estimating the transmission line costs for the nominated power station locations and power outputs in the ZCA Plan (see Figure A6.1 – Costs of HVAC and HVDC)
Peter I’m not talking about energy recovery a la pumped hydro. What I’m saying is if the power plant has low realtime demand it can switch to desalinating seawater and pumping it uphill to holding tanks. That will create pressure for users in the next valley. Thus it is a kind of ‘off peak’ instalment or prepayment on pumping at busy times. I can actually see a hilltop farm tank out the window here in SW Tas.
Worked example; let’s say the power plant has 100 MWe unused capacity for 4 hours or 400 Mwh. It could use 300 Mwh to desalinate 100 ML or 100, 000 kL X 3 kwh/kL of seawater. The other 100 Mwh could elevate about 184 ML of fresh water 200 metres in frictionless pipes. Check my calcs in case I’ve lost some zeros. The point being that a power plant has plenty to do creating or moving fresh water when other power demand is low.
Peter Lang:
The twin circuits offer flexibility for routine maintenance and breakdown maintenance.
In conjunction with the existing GT’s at the mine, which can run up very quickly, they need not be 2 x 100%. Perhaps 2 x 75% is closer to it. The actual need can only be determined from examination of the complex relationship between fault settings on existing systems and proposed arrangements, loss of load tolerance and the like. The starting point is the answer to the question “How much power is required to still be delivered following a fault if unacceptable cascading throughout the wider system is to be avoided?”.
I have no confidence at all in the ZCA/SKM report. It is too full of internal conflicts and policy-driven BS.
John Newlands,
I know what you are suggesting. I am trying to get you to do the calculations with sensible numbers so you realise just how wacky your suggestion is. The suggestion is not feasible by a factor of between 2 and 10. You should be able to see that foryourself without having to do deep analysis. You need to consider the size of the storage you would need, where you would place it, the cost of the storage, etc.
Where is this valley that you will dam to store the water you will produce when the plant is producing excess power?
What is the size of the active capacity of the reservoir?
How many hours of the plant’s full generating capacity will the dam be able to store?
Have you considered how much of the time Olympic Dam will be requireing the full generating capacity of the NPP and how much it will run at low demand?
What do you plan to do with all the excess power the plant could generate? (crunch the numbers)
If you plan to run the plant at less than full capacity, what will be the cost of power to pay for the plant?
John, you should be able to see that the cost of an NPP for baseload is pushing what is feasible without adding an 800 km transmission line, the need for load following capability and the need for desal and large water storage capacity, both of which will be run only intermittently. Just put your thinking cap on for a few minutes and think about what you are proposing.
John Bennets,
Thank you. I accept all that.
Peter substantially beefed up transmission to OD and fat water pipes have to be built regardless of where the power is generated and the water is desalinated. Currently Roxby gets by on local groundwater and a power line from Pt Augusta. From memory a similar looking branch line in the area was 132 kva. The stagnant warm brine near the Playford and Northern coal stations in Pt Augusta had something like 45 grams of salt per litre. Not a good spot for new desals or thermal plant. They were worried about the shrimp or something.
On the size of new transmission I seem to recall even Barry said Eyre Peninsula could take more windpower, presumably for export and having firm capacity credit. I also vaguely recall Martin Nicholson saying the SA-WA connector was inevitable.
John Newlands:
You said 132 kVa. Sure that it was not 132kV?
John,
You are not addressing the questions I put to you. You’ve gone onto other things, irrelevancies. All this is just muddying the waters. If you focus on the questions I asked you, you will be able to work out for yourself why an NPP at Ceduna cannot be viable.
The RE advocates invariably resort to muddying the waters to try to convince people if we throw enough mud into the mix anything is possible, with mafic. I hope you are not resorting to that tactic too, are you?.
John Newlands,
Do you understand that electric energy cannot be stored (economically)?
If you do, then you need to think about throwing into the mix, wind power, intermitten desal and water storage to try to make an NPP economic. Our fists NPPs will only be economic if they are baseload plants. Surely you must be able to see how ridiculous your suggetion is.
If we can make NPP’s economic near the main demand centres in SA, then I guess SA will wait until after Sydney and Melbourne have been building them for a while and they are well established. Perhaps they will beef up the transmission lines from Victoria so Adelaide can get power from NPP’s near Melbourne. In reality, I expect this is what will happen. Even if SA got close to building one first, at the last minute, NSW and Vic would vie to get the first Australian NPP for their state.
Peter Lang:
I’m not sure which John you were referring to at 16:35. Hopefully, not me. However, any place of expanding demand is a good place to consider for an NPP. Perhaps SA (not just one group of mines and/or a water plant) will offer such an opportunity in the future, especially if NSW and Victoria sit on their hands.
SA is a net importer of power at present, so it could be considered to be some way towards need for more capacity already – or, perhaps, substantial augmentation of existing links with Vic’s dirty brown coal generation.
John Bennetts,
Sorry for that confusion. My last post was directed to John Newlands.
The point I am trying to make to JN, is that is is pretty easy to see that an NPP out at Ceduna is simply not going to fly. They will have to be feeding into an large demand so they can run as baseload plants until nuclear is well established in Australia. The idea we can make our first fleet of NPP’s economical by running them part time, or by building desal plants that run only when there is spare capacity, or by having huge water storage facilities so the NPP can run at full capacity and the desal plant can run at high capacity just doesn’t make sense.
NSW is getting shorty of baseload capacity, Victoria needs to power its desal plants and decommission its brown coal power stations. They are much larger demand than SA, so I expect they woill probably build NPPs first, unless SA has a really economically viable proposition. I don’t think John Newlands attachment to a specific site is going to help the cause. It would be better to forget about site selection for now.
John Bennett, you would not be aware that John Newlands has been pushing the case for Ceduna for a year or so. I was trying to encourage him to work it out for himself. Alas, JN’s last post avoided the questions I put and went on to introducing wind power, capacity credits and back to salinity. JN it is difficult to get you to focus on the topic. Similar happened when we tried to discuss hydro and you kept coming back to we could install variable speed pump turbines in the spare slot at the power station near you and pump from the spillway pond at the base of the power station. I tried to get you to work out the storage you’d need at the bottom, but you continually avoided it.
So on the Ceduna NPP proposal, with desal and water storage can I ask you to focus on the quantities and costs of those three components and not blur the situation by adding a whole lot of other side issues.
Sorry JB, the last paragraph was direct to JN.
John Newlands,
Advantages of Ceduna:
1. cooler water
2. no issue with saline water release
3. NIMBYism is less of a problem
Disadvantages:
1. 800 km from labour and service industries
2. 800 km transmission line to Adelaide as well as the transmission lint to Olympic Dam
3. Water pipes to Adelade and Olympic Dam. Water pipe flow to Adelaide must be reversed from what it was designed for (this is not trivial)
4. large water storage required for the way JN proposes to run the NPP and desal plant
5. NPP has to support a highly variable load at Olympic Dam (10% to 100%), very variable and very rapid load changes.
6. Need multiple units to allow for scheduled and unscheduled shutdowns of the NPPs. So we’d need to build say 4 units 800 km from Adelaide.
7. The NPPs would have to run at only part of full capacity for most of the time, so power will be more costly than if they run as baseload plants,
8. The desal plant will have to run at part capacity and the power it can draw will be very variable so that will increase the cost of the plant, the operating cost and the cost of water.
9. Who would finance a plant with a 60 year life to support a mine that may have a short life? No one!
It is clear to me the concept of an NPP at Ceduna makes no sense at all.
Thanks John Newlands, John Bennets and Peter Lang. It’s been good sitting on the edge of your three way discussion and especially good for this economic, scientific ignoramus. Lots of things to think about in costings, size of reactors, diameters of pipes, distances which power needs to be transmitted etc. All of that notwithstanding, I reckon that my 25-30 year vision statement for SA development,[check it out on one of Barry’s earlier posts] based on Olympic Dam uranium, is the way to go. When the governments wake up to just how big this can be for Australia’s future energy and water supplies,not to mention national wealth, jobs, infrastructure etc growth they will find the money to do it, somehow. We’ve got to encourage them to show a bit of imagination and vision instead of only covering their arses for fear of losing the next election. I wonder if the Independents have any such vision.
Terry,
I wasn’t arguing against your vision. i am jst saying that getting too committed to individual sites, like Ceduna for an NPP, does not do us any good.
John Bennets, you remarked above,
I’m not a power engineer. Could you describe exactly what the consequences of load loss in a transmission system are? What goes down, how? Whats required to bring it back up? Is there risk to the equipment? Or is the adverse consequence just the loss of service to the consumer?
As a South Australian, I’d prefer to see our firsts NPPs built nearer to our only real population centre – Adelaide. The reasons Peter Lang and John Bennetts have given are a large part of the reason, and it also makes sense to place them nearer to populations so people get over the irrational paranoia that exists around them in Australia.
As far as desal in the Upper Spencer Gulf goes, I’m 100% against it. Physical oceanographer Professor Jochen Kaempf (and others) have done the modelling on brine discharge for the Upper Spencer, and it’s clear that it’s not just a bad place to put a desalination plant, it’s the WORST place you could possibly put one in South Australia. The ecological risk is far too high. It’s not like BHP Billiton don’t have the money to extend a pipeline another few hundred kms to the open ocean of the Eyre Peninsula.
http://www.deswater.com/articoli/264.pdf
http://www.flinders.edu.au/flinders/people/misc/kaem0003_Final_Report_BHP.pdf
Another handy Flickr image shows the problems
http://www.flickr.com/photos/7898475@N02/4253282645/
That is the view from the newer coal station to the older power plant at the top of Spencer Gulf near Pt Augusta. Note clean looking exhaust despite poor quality coal. If I have my bearings right that could be the spot for BHP’s preferred Whyalla desal in the far distance. Replacing one or both of the coal stations with air cooled gas plant there would probably need an extra pipeline from the mature Moomba fields to Qld coal seam gas. Also a hefty electricity price rise.
That kind of shallow saltmarsh extends the next 250km back towards Adelaide except for the narrow Yorke Peninsula. Not ideal for either desal or large seawater cooled thermal plant. I think upthread that was 132 kv for the line Pt Augusta to Pt Lincoln. All the lines from there would have to be beefed up to carry an extra say 50-100 MW for an RO desal on the open coast and 600MW+ for Olympic Dam.
BHP just offered $40bn for Canada’s Potash Corp so they have cash. They must pay for the desal and if it was co-located with a thermal plant it would have to be some kind of deal involving the State electricity firm ETSA and any private generator.
John Newlands,
I sense you are obfuscating. I asked you some questions. You didn’t answer the important questions and fiverted attention to trivial issues. That is what the RE advocates do. I am surprised you would do the same.
Can I expect an answer to those questions, or is obuscation the way of the times?
The key questions relate to the cost of an NPP (and other related infrastructure), cost of electricity and financing of an NPP located at Ceduna versus closer to Adelaide, but I get the impression you’d rather avoid the questions and divert to emotive issues. Have I misinterpreted what you are doing?
Just because BHP has cash to spend on another major project doesn’t mean they’d waste it on an uneconomic or high risk venture. If the Olympic Dam Mine is not as good an investment as an overseas alternative, BHP will invest overseas instead, or prioritise their funds towards the better investment. If governments in Austraia make the risk of investing here too high companies will invest elsewhere instead.
Recently the sovereign risk in Australia, relative to elsewhere, has jumped up due to rash, poorly thought out policy decisions like the Minerals Resource Rent Tax fiasco and the Nationalised Broadband Network (Government monopoly on communications). We also have bans on nuclear power and many government incentives for uneconomic renewable energy and a host of other irrational government imposed policies to make energy more costly.
We can expect matters to get much worse with the Greens having the balance of power in the Senate.
If we really want mines, water, and the tax revenue needed to pay for all the socialist policies the population demands, then we really do need to recognise that BHP and others compete in a world market and Australia is just a very small part of that.
If we want ever increasing expenditures on Health, Education, welfare, infrastructure, environmental management/restoration, then we must make an environment that allows business to do well in Australia. We must be prepared to compete for scarce capital. We must be prepared to compete internationally.
We could start by stopping our push for a price on carbon. We could ask for the bans on nuclear to be removed. We could ask to fix the existing regulatory and investment environment that, as it is now, would make it impossible for nuclear to have any chance of getting started in Australia. That is the situation we have now. And its going to get worse (Greens in control of the Senate). We can help to turn this around, but not if we keep on pushing for irrational policies.
This link provides an insight into the problem of financing NPPs in the western democracies.
https://www.citigroupgeo.com/pdf/SEU27102.pdf
Peter I’m trying to highlight the problems of locating NP near Adelaide. That is to say there are a bunch of problems siting NP way out of Adelaide and another bunch of problems by not siting them out near major power users. I’d really have to wade through the Olympic Dam expansion proposal to see how they constructed their estimates for mine power demand and fluctuations.
I tend to agree there may be an unsolvable problem with carbon pricing, namely that everybody wants to game it to the point of fraud. Perhaps a portfolio CO2 standard without explicit prices might overcome those problems but who knows. My view is that the carbon economy is going to get the wobbles in the next decade and people are going to demand NP regardless.
John Newlands,
You do not need to have access to the OD expansion plan to realise:
– an NPP at Ceduna will be far higher cost, with or without desal than if located near Adelade.
– the demand will rise and fall between about 10% and 100% of maximum demand.
– There is the extra cost of an 80 km Transmission line for about 1600 MW peak capacity
– there is the extra cost of supplying services and supplying and retaining labour at a remote site; this applies throughout tyhe life of the plant and John Bennetts said up thread that the additional cost of labour in 20% in the Hunter Valley. I expect it is over 100% in the Pilbara and so pewrhaps 50% at Ceduna.
– The idea of large storage reservoirs so that desal can run when electricity demand is low, would be far more expensive at Ceduna than near Adelaide – far more storage would be required because the power fluctuations will be much greater at Ceduna than if the NPP is closs to the larger demand centre of Adelaide and regional centres.
– the mangrove swamps are a manageable problem as John Bennetts pointed out.
All in all, my gut feeling is the cost of power from a Ceduna NPP would be around twice the cost of power from an NPP located nearer Adelaide.
Can I suggest, instead of wading through the OD expansion plan (a wrong approach) you’d do better to read this:
https://www.citigroupgeo.com/pdf/SEU27102.pdf
to get an idea of the financing problems of NPPs. I believe the points I made in my previous post @09:15 should not be dismissed. I believe those points are the absolute crux on the problems we need to address. If we are not prepared to address these problems, we’ll just keep on going as we are for another 20 years – all spin and no substance.
Peter, I didn’t take your comment as a criticism of my vision. My original vision for nuclear in SA had the old refinery site as the site for our first NPP. Of course, they could power the currently being built desal plant with nuclear and so create a cogeneration power/desal plant. That makes sense to me. The Greens are a hell of a worry now that they have so much power. We need to keep pressing them to consider what the champion Greens on the planet, Lovelock, Moore, Comby etc have been saying for years that the world needs an urgent uprate of nuclear if we’re going to reduce the emissions problem. If Abbott becomes PM, we need to remind him that he’s on the record as saying he’d be happy for a nuclear debate to proceed. I’ve got a signed letter from him stating that fact. I shall remind him of that whether or not he’s PM.
John Newlands:
I see the gaming of carbon pricing to the point of fraud as one but not the main problem. The main problem I have is raising the cost of electricity. If we want clean electricity to replace dirty energy (note: I said dirty energy not just dirty electricity), then we need to make electricity as cheap as possible.
We can do that. It is with low cost nuclear. We can do that, but not if we continually argue about wanting ridiculous levels of safety.
If we want the develoiping world to move directly to clean electricity, instead of going through the fossil fule stage, we must make clean electricity cheaper than dirty energy. We must do that in teh developed countries.
If I am correct, as I believe I am, then we have been following exactly the wrong path for 40+ years with trying to make nuclear excessively safe (and very expensive). And who is to blame for this? You guessed it – the environmental activists and the so called “Greens”.
That is my major reason for opposition to a price on carbon, at least until we have completely levelled the playing field for electricity generators, inluding off-setting the imposts built in by 40+ years of excessive and unbalanced penalties on nuclear. It would also be unwise for Australia to proceed with a proice on carbon until there is an international agreement about how to price carbon and manage it. And this just isn’t going to happen any time soon.
I am attracted to the ‘portfolio standard’ idea (progressively tightening emissions limits). This is consistent with the limits we place on almost all other emissions (drinking water standards, air standards, etc). But most importantly, if we allow nuclear to be cheaper than coal, at no less safe, and better path forward, nuclear would replace coal. We can provide carrot and stick to make the transition take place faster. But the key is cheap clean electricity, not raising the cost of clean electricity!!
There are fourgroups that have their heart set on a carbon price:
1. Renewable energy industry (including the researchers)
2. Gas industry
3. Banks and traders
4. Greens and other Left wing groups who want to mandate rules and regulations so they have more control over everyone. They want to mandate as many rules and regulations as they possible can. Just look at the Greens wish list of taxes to get an understanding of the real agenda of these groups (I’ll post it below).
I agree with you on this point. But it is very unfortunate that we have a hung parliament in Australia. I feel this is going to slow progress badly for three years.
http://www.ipa.org.au/library/greenpolicies.pdf
MORE TAXES FOR ALL p.15
The Australian Greens’ Taxations Policy
New Taxes or tax increases ( Policy section reference)
1. Increased income tax rates ( 3.3.2)
2. New Consumption tax with multiple rates (3.3.8)
3. Increase capital gain tax (3.3.9,3.3.10)
4. Higher Fringe Benefit tax (3.3.3)
5. Eliminate salary sacrificing (3.3.3)
6. Introduce estate duties [including family home] (3.3.11)
7. Introduce gift Tax (3.3.12)
8. Higher Medicare levy with progressive rates (3.3.15, 3.3.16)
9. Eliminate Private Health Insurance rebate (3.3.18)
10. Increased taxations of superannuation(3.3.19, 3.3.20)
11. Tax family trusts (3.3.14)
12. Increased company tax to 33% (3.3.21)
13. Tax on franked dividends (3.3.22)
14. Carbon levy (3.3.24)
15. Increased timber royalties (17.1.8)
16. Tax equivalent on non recycled paper (17.1.8)
17. Tax bottles and containers (17.1.7)
18. plastic bag levy (17.1.7)
19. private transport user tax (2.4,2.5)
20. Tax on batteries (7.1.12)
21. Increased tax on rental property (3.3.28)
22. Mining environmental levy (15.1.6)
23. Nutrient pollution tax (3.3.25)
24. Tax on fossil fuel usage (3.3.25)
25. Tax on water pollution (3.3.25)
26. Tax on soil pollution (3.3.25)
27. Tax on air pollution (3.3.25)
28. Tax on timber use (3.3.25)
29. Tax on use of ocean (3.3.25)
30. Tax on use of freshwater (3.3.25)
31. Tax on mineral use (3.3.25)
32. Tax on land sites according to land value (3.3.25)
33. Tax on electromagnetic spectrum assets (3.3.25)
34. Tax on petroleum (3.3.25)
35. Higher taxes on ecologically damaging industries 3.3.27)
36. Currency transaction tax (3.3.36)
37. 33 % tax surcharge on high corporate salaries (3.3.31)
38. Pay-roll tax to fund employee entitlements (4.3.25)
39. Landfill taxes (16.2.3)
40. Increased environmental charges and fines (16.2.3, 16.2.8)
Tax elimination or reductions ( Policy section reference)
1. GST ( Replaced with consumption tax ) (3.3.8)
2. Cut tax on bartering or black market (3.3.29)
3. Increase tax-free threshold (3.3.31)
4. Tax cut for non-frequent flyers (3.16)
5. Eliminate Higher Educations charge (2.18)
—————————————————-
2010
http://greens.org.au/sites/greens.org.au/files/Consolidated+policies+March+2010.pdf
Peter Lang, three points
1. An appropriate sized cogeneration power/desal plant at Ceduna for water and power for EP and water for Olympic Dam. This enables us to switch off the Murray pipeline currently servicing much of the north and EP. 2. A bank of 5 or 6 PBMR’s at Olympic Dam for its own power and some for the grid. That negates a 300+Km 275KV gas fired power line from Port Augusta.
3 OD is at least a 100 year mine according to my reading.
Terry,
Good point about reminding Abbot of committment to facilitate a debate on nuclear. Just rolling out more factual reports of what it would take to get up in Australia, like the Howard government’s “Uranium Mining, Processing and Nuclear Power” Task force report would be an excellent start.
But importantly, if Abbott does become PM in a minority government, we’ll have to find a way to get the Greens and Labor to agree to a constructive debate rather than use it as an opportunity to run a scare campaign. Do you have any suggestions as to how we can do that?
If Labor and the Greens decide to use it – the Coalition’s attempt to open a debate on nuclear – for political advantage, then the Coalition will crawl back into their protective clothing as they’ve been forced to do at every election for the past 20+ years.
Terry Krieg,
I think you may have missed some of the earlier discussion where all your latest points were discussed. Your points are all correct, but you need to put them all together and assess them in perspective. If we will have to spend $10 to save $1 then the only people who think that is a good idea are the RE advocates. Many of the suggestions about an NPP at Ceduna are like RE advocates’ suggestions – just not viable. Have a look up thread where I addressed these issues and John Bennetts mad some excellent points.
The Greens want a $23 tax per tonne of CO2 which you’d think would kill off Hazelwood if implemented. A House of Reps alliance might legislate that way to buy peace from the Greens in the Senate. However the bill might also allow generous carbon credits for sustainable basket weaving so I wouldn’t expect much.
Other developments include a feed-in tariff to replace RECs for commercial wind and solar. I think everybody who talks green from now on will also get loan guarantees. Thus unreliable power gets at least 4 bites at the cherry
1) targets or quotas
2) per Mwh subsidies
3) carbon taxes on the opposition
4) loan guarantees, development grants etc.
But a quarter of the adult population may have partially voted that way so we have to go with it for a few years. However the policy could either backfire or be changed mid term.
Peter Lang,
“the mangrove swamps are a manageable problem as John Bennetts pointed out.”
That’s not very sound reasoning to me, especially in the Spencer Gulf. A long outfall pipe for saline discharge will have little effect if the desalination plant is built at Whyalla. Please take a look at this paper to understand the problem: http://www.deswater.com/articoli/264.pdf
Tom Keen,
mangrove swamps are one issue. They are not the only one. In engineering you need to balance up all the issues and find the least cost solution. Picking on one NIMBY or eco issue doesn’t help much.
Ig Ceduna is too expensive to be viable (as I am convinced it would be) and Spencers Gulf is not allowed to have a desal plant, then are we at teh point we have an irrestible force against an immoveable object. If so, in this case, the result will be no decision. No Olympic Dam Mine expansion, no desal for Adelaide, less revenue for SA coffers so less government funds available for all the services people demand of their governments etc.
Or perhaps there are other options. Or perhaps, most likely I believe, we”’ find a viable engineering solution for an NPP and desal plant not too far from the main demand centres, but not necessarily co-located.
@ John Morgan, on 27 August 2010 at 19.09:
Re fault levels, the issue is keeping generating plant on line during overloads.
If the system is nicely balanced at ten units of power, including one unit spinning reserve, then the loss of one unit due to a fault can be pretty easily caught by the reserve of the other units, perhaps including a little short term load shedding and running up of quick start capacity such as GT’s and hydro to rebalance the system and to restore the spinning reserve.
This is a gross oversimplification, but I guess that you will get the drift.
If the other remaining supply cannot handle the load, then the system frequency starts to slow and synchronisation of the alternating current generated at various points can be lost. To protect the electrical and mechanical safety of the generating unit which is overloaded/slow, it will automatically shut down. This throws load onto the remaining units, which may then cascade into a total loss of power until the system goes black or sufficient load is shed to enable the remaining units to be stabilised, after which reserve capacity (if available) is slowly brought on line and the system is re-started to the extent possible.
BTW, I am not a power engineer, I am a civil engineer with 30+ years’ experience in power stations. Power engineering is a branch of electrical engineering which, sadly, is not offered at all universities.
OOPS. Barry, if you can, please remove the last 2 paras of my last note. They were cut and pasted from John Morgan’s cmment.
Tom Keene and Peter Lang:
I have read the two excellent referenced documents. It seems to me that both Ceduna and the uppper end of the Spencer’s Gulf have fatal flaws – one due to remoteness, the other due to the environmental aspects. This leaves Port Stanvac or similar, plus a mighty upgrading of the transmission system to Port Augusta and beyond.
Or not South Australia at all.
Or whatever.
Options studies are the way to deal with this type of thing – not BHP style, where the only options studied are all a stone’s throw from Port Augusta, but something much wider.
One thing I am convinced of is that, whatever the selected option and whether nuclear or whatever, the most effective solution will involve strong interconnection with existing power grids to ensure stability and to avoid the unnecessary duplication of backup capacity, etc.
Similarly, whatever option is best will need strong political and commercial support, because it will be examined in detail from all directions. The next 2MW power plant to be constructed in Australia will certainly have extraordinary hurdles to jump because of precisely the debate which keeps this site’s traffic flowing.
John Bennetts & Peter Lang,
I think we need to decouple the desal and nuclear, and look at them as separate projects/issues. There is a desal plant being built in Gulf of St Vincent now. Adelaide will have its desal regardless of whether we have nuclear or the Olympic Dam expansion.
The Spencer Gulf desal proposal is tied up as one with the OD expansion proposal, which is going through the government assessment process at the moment. If this goes ahead it will also be regardless of whether we have nuclear or not.
Now I agree that the Eyre Peninsula isn’t a good spot for SA’s first nuclear plant(s). But would locating a desal there really blow the costs out to the point of the OD expansion project becoming inviable? It’s a 100-200 year mine, the world’s largest known uranium deposit, 4th largest copper deposit, and significant source of silver. There are already transmission lines going across to the Eyre Peninsula. I’d hazard a guess it wouldn’t even come close to making it inviable.
Locating a desal in the Spencer Gulf isn’t just a concern to the Mangroves, but to entire benthic communities and other marine ecosystems, and also to the fishing industry. I want to see nuclear power in Australia and more throughout the rest of the world, but not at the cost of incredibly important continental shelf marine ecosystems. We’ve been making the mistake of driving biodiversity loss for the sake of economic growth for too long.
Tom Keen:
Decoupling the two issues would be easier if BHP, as proponent had not linked them, which I take to be the case.
I see no essential linkage, provided that the new power plant is connected adequately to the grid, as common sense suggests.
In that case, I suggest that nuclear power may very well be appropriate and attractive on a site to the south of Adelaide (for example) where salt water flows are sufficient to flush the waste heat without environment detriment.
If dry cooling towers are used, expect a 10% reduction in energy sent out, due to operation of the necessary pumps and fans.
If conventional wet cooling towers are selected, they will consume in the order of 30GL of fresh water annually for a 200MW station – again, a significant cost.
Cooling is seen to be a very powerful driver of site selection, suggesting access to salt water and thus a coastal location.
Did I just mention the coast? Of course I did… that’s a requirement for a desal plant as well. Who knows? Such a plant may even have a use for waste heat in the form of heated cooling water at blood heat, or even bled steam.
Did not BHP also link these issues with construction of a deep water port in the Gulf? The links are endless. Perhaps the truth is that there is a price attached by NOT examining linkages where these are foreseen.
Tom Keen,
That is marketing spin. The financiers do not look at it the way the marketeers spin it for public consumption.
The life expectancy of a mine depends on the market price of the metal(s) and the cost of production.
The price of the metal fluctuates wildly for all sorts of reasons. For example, if the world adopts Gen IV, the price of uranium would drop. We may find cheaper ways to extract uranium from sea water or by in situ leaching of other ore bodies. Richer ore bodies that are easier and cheaper to mine may be found. A BHP nickel mine in WA closed down recently after an enormous investment that turned out to be a miscalculation. Any number of possibilities can cause the price to drop so that the mine closes down prematurely. It might start up again, but that has not saved the NPP which would go broke because there was no customer for its power.
The cost of production also changes. For example, if the Greens got into power and legislated their policies, the mine would be shut by government legislation, the costs of labour and energy would go through the roof and many mines and industries would be shut down. We’d go broke like Spain and the other PIIGS. That would be the end of Olympic Dam Mine.
The financiers for the potential NPP know all this so do you think they would invest in a NPP dependent largely on Olympic Dam Mine operating continuously for 60 years? No way!
Peter Lang, in his last post, displayed his abhorrence of the Greens’ policies. I do not share his view, though I am far from agreeing with the Greens on much at all.
As a new-ish party, the Greens have operated for a couple of generations without the need to deliver the goods. It is now time for them to grow up and to learn to play with the big boys or risk losing their credibility.
So, I am optimistic that even the Greens can be convinced to assess again their position re clean power options, economic growth, the need to be realistic about costs and community impact of policies, etc.
However, Peter is also locked in to the concept of a single purpose NPP serving only one customer, which itself may grow or decline as time passes. I am convinced that simple economics will drive the new power source for Olympic Dam to be integrated into the SE Australian grid. The benefits are manifold; the costs trivial.
A short list:
Stability of supply (frequency control, etc)
Black start capacity
Load flexibility – above and below nameplate rating
Option to purchase power from the grid when prices are favourable
Option to sell to the grid when prices are favourable
Reduced overall size of installation (backup power can be provided via contract arrangements) – perhaps 30% reduction in installed capacity.
And so on.
There is almost no possibility that this PP will be constructed as an island, unless hard-headed stupidity drives the decision. The only direction I can envision this coming from is the extreme grey socialist tail of the Greens, whose minds were made up in the 1970′s and have been closed for the past 40 years.
The experience of office for a while will soon mellow some of the radical posturing, so forget your list posted half a dozen posts up, and be optimistic.
John Nennetts,
What do you mean by this:
Was this intended to be addressed to me?
And what is this about?
Again, did you mean to address that to me?
An NPP at or near Pt Stanvac or even further south of Adelaide would sit well in the mix. Ideally it should produce enough to quickly retire the ageing Pt Augusta coal stations then later the gas fired baseload plant. My guess is that the Cooper Basin gas field has only a few good years left hence the backup pipe to Victoria, til it goes. Adelaide’s current peaking capacity is evidently not enough during the inevitable heat waves. Perhaps peaking gas would be freed up without the Torrens Island baseload plant.
The Pt Augusta – Roxby Downs link would have to be upgraded, presumably fourfold. I note some fisher folk have lobbied for Elliston to be the site of the big west coast desal. Another line upgrade.
Strangely I think many people would support an NPP south of Adelaide but I’d expect them to be shouted down or ignored by the ruling political clique.
Woops, John Bennetts, sorry for the spelling mistake.
Peter Lang, on 28 August 2010 at 16.50:
I was referring to your words, as expressed at
(1) The final 2 paragraphs of Peter Lang, on 28 August 2010 at 15.02: If reasonably sited and correctly integrated into SA’s grid, the NPP or alternative power station supplying OD would not be orphaned if OD reduced its load or even stopped production altogether; and
(2) Peter Lang, on 28 August 2010 at 10.39 (One large anti-Green list. There is nothing to gain on this thread by playing politics.)
I am not Green. I couldn’t care how others vote. Let’s sort out the facts first and let others worry about personalities and parties. Even a casual review of my comments on this thread will reveal that I am pretty open minded about proposals. I try to share my meagre knowledge and experience when there appears to be merit in doing so.
If I have misrepresented your position, I do not see how or where. I’m happy to discuss this further if it leads to a net increase in understanding of the issues which drive this site – those surrounding NPP. John Bennetts, the person, is of no consequence.
Peter Lang 28th August 10.10 :
Thank you for posting the Citigroup Global Markets link. The authors made the point that, though the UK Government had given the green light to further NPP construction and made an attempt to accelerate the planning process, it was unlikely that many new plants would be constructed because of unacceptably high investor risks. Not least of these was the uncertainty of future power prices.
If you accept the reasoning by these authors, I am puzzled by your constantly expressed faith in the solution you propound. I applaud your attempts to argue for a more level playing field vis a vis renewables and to drive down nuclear costs. However, as you, yourself, are fond of saying, you could still be thumping this tub in 20 years with no nuclear power to show for it.
Suppose there was no non-hydro renewable energy – and there would be scarcely any without subsidies- it still wouldn’t make nuclear power investment attractive to private investors if price is driven by coal or gas. Furthermore, driving down nuclear costs depends not only upon improved new designs, yet to prove themselves sufficiently to convince investors, but on sensible regulation, which is not in the hands of the NPP constructors and will thus remain risky.
It seems to me, therefore, that to argue for a free market solution while avoiding a carbon levy of some sort or subsidy is to demand the economically impossible. If you want to follow your own suggestions, I think a nationalised approach would be essential. Governments can (they usually don’t) plan for the long term good of their citizens even at the expense of short term disadvantage. If one looks at those nations that are leading the way on NPP development, it is those whose governments see the long term necessity of so doing. As it happens, energy security is probably the major driver rather than AGW. This appeared to be the case for France, always quoted as an exemplar when it comes to nuclear development. It should be noted that the French nuclear industry is, to all intents and purposes, state owned. Is this coincidental?
PS: I do accept that your alternative to a carbon tax is through loading emission control costs on fossil fuel generators and phasing out the plants at the end of their planned lives, while refusing permission for life extensions or new builds. This will clearly increase power prices in the same way as a tax, but wouldn’t necessarily encourage more electrification in the transport sector. However, regardless of the pros and cons, it would still require strong action by a fully committed government.
John Bennetts,
You said:
I agree entirely with this statement. But I still don’t know what you meant by this:
I still don’t understand what you meant with this comment:
The point I’ve been making is that the NPP should NOT be cited so its primary consumer is Olympic Dam Mine. I’ve been saying it should be sited near the main demand centres for a number of reasons. It should feed into the mai grid so that Olympic Dam is just one of man customers. I think we are saying the same thing I’ve been trying to point out to John Newlands that we should not get locked into Ceduna as the location for an NPP. John Newlands brings this up fairly often over the past 12 months or so, so I was trying to take it through to the point where we could let it go. It keeps getting brough up, never resolved, and then brought up again.
The other comments you object to, about anti business policies, was part of pointing out that mines do not have 100 or 200 year life. they have an uncertain life. So no investor is going to invest in a multi unit nuclear power station (as it would have to be) if it is dependent on a mine as its primary customer. That is why the nulcear power station would not be located at Ceduna. Any NPP would be located to feed into the main grid – as you so correcxtly point out. That was the point I was trying to make.
On the politcs, I agree with you; however there is a really long history of green activist politics and a lack of understanding of the financial impacts of such politics. Many have wanted to argue about safety as the issue preventing progress on nuclear in Australia. Over time, I think I have managed to convince most/many who contribute here that it is cost and financing that will be the key issue, and what we need to do about it. I don’t want to go into that again on this thread, but if you’d like some background, you could look at this comment and the next four plus the last comment on the thread:
http://bravenewclimate.com/2010/01/31/alternative-to-cprs/#comment-51433
Likewise, DW.
I have no issue with a carbon tax, ideally determined on a cradle to grave mine gate tax including allowance for fugitive emissions of CO, CO2 and CH4. It is rational to use such a tax to achieve two purposes: (1) to provide funds for research into possible cleanup and/or funds for amelioration of the worst of the effects of GHG; and (2) to tip the scales slightly in favour of non-GHG producing energy sources.
As to banning life extensions for existing coal fired power stations, or refusing development of same, if the NPP proponents were to adopt that strategy, they would invite similar approaches to nuclear power, on less than fully rational grounds. I say, get the costs where they belong and coal will find the need to (for example) use its own money to develop CCS or other forms of carbon capture which would reduce their costs.
Let the coal and gas proponents make the decision to cease GHG production and the Commonwealth will not be exposed to litigation based on the Federal Constitution’s requirement for compensation for property acquisition by the Government, as no doubt the FF industry will claim to be the case.
John Bennets,
Did you look at the comments and the lead article on the link I posted above? I don’t want to have to repeat it all here.
Long ago I showed why it is important for the developed countries to make clean electricity cheaper than coal if we want the developing world to skip the step of using fossil fuels. For that reason, we need to focus on getting the cost of clean electricity down below coal, not raising the cost of coal – yet!
A price on carbon carbon in Australia before we have removed the impediments to clean electricity will simply paper over the problems and allow governments to avoid the problems indefinitely. Instead of addressing the real issue they will for ever push up the price of carbon and keep subsidising renewables prodded by that anti-nuclear groups. I’ve seen this for 35 years, so I am convinced that this is what will happen if we do not tackle the underlying issue. All the arguments the appeasers are making are not new. They have always failed and will fail again now. Just look at the nonsense the Greens, Bob Brown, Senator Milne, ACF, Greenpeace, FoE, WWF etc continually sprout. There is no way we’ll get around that if we go down the carbon price route before we tackle this issue.
By the way, play with this for a while to see the importance of low cost electricity for the world:
http://www.gapminder.org/
[select electricity per capita on the horizontal axis and select log scale. Select various UN HDI indexes on the vertical axis such as life expectancy, literacy, infant mortality, etc. Click play to see the changes over time]
Electricity is by far the most important thing we need to deliver. It needs to be low cost to allow it to be delivered as fast as possible. We can and should deliver clean, low-cost electricity, but low-cost is the most important factor (despite what some here will argue). Therefore, it is up to all developed nations to bring down the cost of clean electricity. We will not do that by raising the cost of electricity.
Peter Lang,
Be careful. If I find you to be slippery and tending to change the topic (eg to Gapfinder, a link which did not lead where you expected, but I will persist), then I will not be the only one.
Just why you choose to continue subsidy of the FF industry in order to advance the claims of the nuclear power industry I do not know.
Yes, I have read every word on this threadf but I cannot read your mind and it means nothing to me if sometime, somewhere else, you once said something at variance with that which comes across to me in your recent postings.
If you persist in arguing all sidease, you will end up defending so many side issues that the reason you are here will soon be long forgotten.
Sorry I must speak this way, but the reason for BNC is not snappyindividual arguments to support the coal industry with which I am so familiar. There are many sites available to us all to perform that service.
When you have determined what you want to say and why, please let me know, because on current performance you have outsmarted yourself… presuming, of course, that you are actually supporting the nuclear power cause.
Low cost electricity is another thing altogether – we can produce that the same way that many Asian countries hold the price of kerosene down. It’s called subsidy, the same thing that the FF industry receives by NOT paying for the damage it causes.
Perhaps we should focus on getting the State EPA licence fees to reflect the actual cost to the planet of the various causes of pollution and then letting the Federal government sort out the consequences. That is a great way to confuse things totally.
Tha’s it for me.
Sorry I tried to help. I didn’t expect to be rebuffed in such a foolish manner.
Perhaps you should take a short break and read “Why Vs Why – Nuclear Power” again, especially Barry Brook’s side of the volume.
I just completed reading the January reference. It is thin on real argument in favour of not permitting energy prices to rise. It comes to an almost unfounded, opinion only conclusion that energy costs to the consumers should not rise.
It is, basically, not worth much further consideration in the Australian context.
The only real argument I accept is that energy price levels in Australia may work against our export industries. So, what’s so difficult about providing a refund at the border for the carbon tax on the embodied Fossil Fuel energy?
QED
John Bennetts,
I don’t know what you are on about:
You say:
Be careful yourself. You clearly didn’t go to the links I gave you. Instead of making your own smart an presumptious comments, perhaps you should explain what you are on about. In your few recent comments I haven’t been able to understand what you are referring to because you don’t quote. I don’t know which wrong links you went to. I gave you two: one was to comments on the “Alternative to a CPRS” thread. The other was to the Gapminder charting program on UNHDI stats. I thought I’d given you sufficient information. Try a bit harder. If you cant follow, ask, dont be a smart …
This seems a bit arrogant, since you have only recently started reading BNC and haven’t caught up on the background. I tried to fill you in on some background as to why I’ve been arguing for no price on carbon yet. I can’t post all that here. Perhaps you’d be courteous enough to read those past comments on the “Alternative to a CPRS” thread before giving me an arrogant serve.
You also made comments in a previous post about what I should and should not say and do, and now you are doing exactly what you told me not to do. Please put your manners back in!
John Bennetts,
My lst post was written before I saw your last post. But All I really have to say now is that I’ve been through it all before, you have a few simplistic ideas swallowing and promoting the government and Green line, I understand where you are coming from, so I’ll leave you to it.
QED.
Don’t bother trying to understand me. Perhaps a reading impediment or the advancing years. What is it, Peter?
Yes, I followed every link in your messages. I don’t lie.
Now, what’s the problem you have about my saying the obvious? You changed the subject not once but several times. You make no sense, yet proclaim your own invincibility.
Try a little humility and a little less aggro and perhaps this site will prosper.
I like the site, by the way, but perhaps you and I need a bit of distance for a while.
I have not swallowed the government’s line, whatever that might be.
I have no truck with the Greens.
You are indeed very happy to cast stones when you run out of words. The Greens are not entirely beyond hope but are seriously sick – they have much to learn and perhaps will feel a lot of pain in the process.
All I seek is a bit of rational response, less hubris and less personal stuff. You are very quick off the mark with name calling, so do not be surprised at my response. It is NOT all about you. It should be much more rational than that.
Your mention of the link to UNHDI stats is interesting… where on the page that may be I don’t know. I spent a couple of minutes looking around and didn’t see what you had on your mind. It is a busy page, so perhaps it has been moved, but bear in mind that you gave me no indication as to why that particular link appealed to you. You sent me to a page with no obvious link to whatever was in your mind. Hence the comment about mindreading.
Everything I have written here is entirely supported by the facts.
As for your purported argument supporting cheap energy because we live in a third world country or some such silliness… I have answered that fully, several posts back. In a nutshell, why are you so careful to protect coal? I have already suggested as an alternative to a federal carbon tax a load based licence fee calculated on the CO2-e atmospheric load. NSW (and other?) power stations already pay such a fee. Why not get COAG together and make it national? Then it is not a tax, it’s a licence fee.
Perhaps geologists are, indeed rock-heads… just wondering.
[…] by Barry Brook Given the flurry of heated discussion on the topic of ‘peak oil‘ on another BNC post, I invited one of the protagonists, Dave Lankshear (a.k.a. “Eclipse Now” — see […]
John Bennetts,
About as rational as the rest of your comments.
I could respond that anyone whos has spent his life working in the NSW government owned, union controlled, NSW Electricity Commission (or whatever it is restructured and renamed this week, to avoid efficiency improvements) … you can work out the rest.
I’ve now read your rude and bad tempered post above. My suggestion to you would be, instead of telling me off and telling me how to behave, you should do yourself what you are telling me to do. Just put your manners back i and if you have nothing constructive to say, keep it to yourself. If you want to give me more personal advice save it for your family – or yourself. I am not interested in anyone’s advice about personality stuff.
Part of the problem why you don’t understand the context or the background of some of what I posted is because you are relatively new to the site, have not read the background that others have, and I am not willing to try to fill in all the background to every statement I make in every post.
If you want to catch up you could read through the articles on the “Renewable Limits” and “Sustainable Nuclear” threads. If you want to catch up on the background to what I say, you can read my articles, preferably in the order I posted them as they build on each other.
Regarding “Gapminder” I gave you more credit that I should have to be able to click on the Gapminder chart, select the axes I told you, press play, and then try other axes on UNHDI stats versus electricity per capita.
The point you will get out of this, if your brain isn’t clogged with coal dust, is that provision of adequate, reliable, cheap electricity supply to all peoples on the planet is the very best thing we can do for humanity. We will succeed in doing this fastest by always striving to make electricity as low cost as possible. Therefore, we want to make clean electricity low cost. We do not want to raise the bar on electricity cost. Doing so will do great harm to the peoples of the planet.
By the way, in case you still don’t get how this relates to your post, it was in reply to your childishly simplistic statements about carbon prices. I clearly gave you too much credit for being able to make the connection. I should have spelt it out in simple sentences.
Quite honestly, I don’t care if you don’t understand this, most people cannot get their head around it, and ‘coal brains’ are no different whether they have a civil engineering degree or not.
While I am at it, I might as well drop this one as well.
The same sorts of ideologically driven “chattering classes” as formed the anti nuclear protesters from the 1960′s on are now pushing for carbon taxes and ETS.
They screwed us up badly from the 1960′s till no, ands still continue to do so, by forcing government s to intervene to make nuclear far more expensive that it should and could be.
And now they want to put a price on carbon rather than unwind all the impediments that are preventing nuclear from being cheaper than coal.
Their underlying reason is ideological belief. These people in the :”chattering class” think they know better and it is their job to direct governments to impost their nutty beliefs on everyone. The classic symbol of this is the Greenpeace Love Hate picture. (I presume you’ve seen it: the pages is divided in two vertically. Wind farm on the right with “Love” written over it and nuclear power plant on the left with “hate” written over it.)
No one should be in any doubt. The anti-nuclear movement has put us (the western democracies) where we are now. The anti nuclear movement has been the darling of the socialists/progressives/Greens/Left wing of politics. they are the bright sparks. In Australia it has been Labor and the Greens that have blocked nuclear power continually.
If you don’t understand that you have an indoctrinated, ideologically blind mind.
Some who blog here even argue to stop the world, stop globalisation (at least for their small special island), raise tariff barriers, let the Lefties decide because they know what is best for all of us.
If you decide it might be advoiseable to give me more advice about what I should and shouldn’t say … tell someone who cares!
Sorry, I got my left and right mixed up. The sentence should read:
Wind farm on the left with “Love” written over it and nuclear power plant on the right with “hate” written over it.)
Also, I apologise for the many typos. Most will be able to understand.
This is a good description of what I mean by the chattering classes:
http://www.theaustralian.com.au/national-affairs/my-party-was-trashed-by-the-middle-class/story-fn59niix-1225910722814
Peter Lang:
How do your last four entries aid your presumed mission of winning over others to your viewpoint? “Shooting oneself in the foot” springs to mind.
I think this website needs something like a “Why vs Why” (thinking of Barry’s latest book) on having a carbon price in Australia. A shortened, blog version of course.
I think Australia’s main goal to mitigate our impact on the climate should be to establish a nuclear industry – that’s where we stand to make the largest GHG emissions reductions. That said, there are other sources of emissions which can’t be easily fixed with clean energy (e.g. agriculture and forestry). A price on carbon could drive down emissions from these sectors.
Also, since the EU introduced their ETS, there has been a reduction of emissions of about 2-3% per annum. I’m unaware if it has drastically affected their economies (I don’t think it has – please tell me if I am wrong).
I’m still not 100% sold on having a carbon price, or how one should be introduced (tax, ETS, etc.), but I am not fundamentally opposed to one. What I am certain of is that Australia needs to bring its emissions to a peak very soon.
Tom Keen, here’s my highly simplistic analysis:
To decarbonize our electricity supply, and change modes of some energy demand from non-electric to electric, a rollout of nuclear power is necessary, and sufficient. A carbon price should not be necessary if we can take a rationale approach to developing nuclear power economically.
To decarbonize electricity, a carbon price (in whatever form) is neither necessary nor sufficient. In the absence of nuclear power, I’m not sure its very useful, because the only available consumer response to the price signal is to use less energy, and I suspect energy demand will prove to be quite inelastic.
However, if nuclear is available as an option, and a carbon price in effect, I would expect this would accelerate the rollout of nuclear generation, because consumer response would have somewhere to go.
To address climate change, decarbonization of electricity is necessary, but not sufficient. We also need to address a number of other sectors – eg. agriculture and forestry. To address these land use and livestock sectors, I’m not aware of a single magic bullet, like there is for energy. So it seems we need to create one, or try to solve a thousand small emission problems in specific ways by direct interventions. That probably won’t work, so a carbon price seems necessary. Whether its sufficient then turns on atmospheric physics rather than economics and human activity.
So for energy, a transition to nuclear is necessary. A carbon price, while not necessary, could help this. For other sectors a carbon price seems necessary, but its sufficiency is not guaranteed.
Peter,
I’ve read through your report and I have a couple of questions about what you say. Forgive me for coming to it fairly late after all the previous discussion.
My questions have nothing to do with what ABARE reports instead its that you make assertions in the report that I can’t seem to find backed up in the ABARE reports you use as references. In particular you makes assertions about the failure of energy efficiency and influence on ABARE by certain groups in the period up to 1991.
Taking energy efficiency, my first question is are you saying in what you have written that the report; ABARE (1991) Projections of Energy Demand and Supply; Australia 1990-91 to 2004-05, of which you provide 8 pages (and thats all I’ve got to go on), that the targets for energy efficiency were part of Australia’s policy-political and policy-busines and policy-community landscape through to 2004/2005 i.e. actually attempted? If I have undertsood you to be saying that then my reading of the 8 pages you provided plus the subsequent reports shows no such thing so I don’t see how you can assert energy efficiency has been a failure.
For example the 1991 report says on page 2:
“The central assumption is that the most energy-efficient technologies currently reported to be applicable and cost-effective are universally adopted in Australia. In contrast, the business-as-usual scenario is based on survey participants’ stated plans and expectations and on econometric models estimated using historical data.”
Was that assumption borne out, did Australia make that attempt and if so where can I find the reporting of that and its analysis?
Futhermore on page 2 and 3 the report makes clear that its only making parametric assumptions or estimates:
e.g. “Judgments have been made as to the extent to which efficiency gains claimed in some studies could be achieved in the time frame to 2004-05. Only those measures which appear to be cost-effective from a new purchaser’s viewpoint without tax or regulatory changes are included”
and
“The business-as-usual scenario for the year 2004-05 was used as the starting point for the analysis. Estimates were made of the energy conservation or energy efficiency improvements which are feasible on a cost-effective basis in the residential, commercial services, manufacturing and transport sectors, in addition to those improvements already implicit in the business-as-usual scenario”.
Indeed this 1991 report sets out that the policy etc landscape in Australia was working against the adoption of energy efficiency with this comment:
“It is not clear why efficiency measures which are said to be both available and cost- effective are not currently being implemented. It may be that there is some form of energy market failure, so that either consumers are not aware of the potential benefits from adopting more energy-efficient technologies and practices, or that they do not know the full costs of continuing to use inefficient technologies and practices. On the other hand, it may be that not all of the measures referred to in the literature as cost- effective in fact are. This would appear to be an important area for further research.”
In the conclusion on pages 8 the important point is made:
“It is not clear whether such gains can be achieved without government action, as they represent a substantial change from historical experience and previous expectations regarding the relationship of energy consumption to population and income. Achieving the target would seem to require major changes to the structure of the Australian energy sector and economy, involving large scale fuel substitution or considerable changes to energy markets and pricing regimes. ”
In other words, if energy efficiency efforts of the amounts that the 1991 report makes or estimates were attempted in Australia then there should be readily identifiable signals of such work available for analysis. Yet your report doesn’t give any information on that.
So I just don’t see how you can assert that energy efficiency has failed using the references for your report?
The next question is about influence on ABARE. You say in your conclusion:
“I believe the consistently optimistic pressure from green advocacy groups, pushing for projections that align with their beliefs of what governments should do, influenced ABARE to underestimate energy demand, underestimate fossil fuel demand, overestimate renewable energy contribution and over-estimate how much energy efficiency improvement can be achieved over the projection period”.
Again, what evidence do you have for this assertion because if its true, it contradicts one of your main points that ABARE’s reporting is generally reliable because if those nasty smelly deep green groups can worm their way into Canberra and affect ABARE’s work then other much more socially acceptable groups should also be able to game ABARE’s work.
Finally, just more thing, why did you suddenly throw in ‘smart grids’?
John Morgan,
I agree with you in principle but I have a problem with your argument. It is the order and the timing that is important because human behaviour is involved. Allow me to walk though my line of argument.
Firstly, let us remember that 70% of our emissions are from energy use and 30% from other, so we must put our priority in cutting emissions from energy use. If by trying to deal with everything, we slow the rate we can cut emissions from energy, then we have taken the wrong approach.
We also need to be aware that what we do in Australia is insignificant if it is not going to help the world to cut emissions faster. The world will cut emissions fastest if it rolls out clean electricity. To do that we must reduce the cost of clean electricity to below that of fossil fuel generated electricity. We won’t do that by artificially raising the bar for fossil fuels to make it easier for renewables and nuclear to compete. We must focus on bringing the cost of nuclear down substantially.
The order we tackle the problem is important. If we place a price on carbon in Australia, the impediments to nuclear will remain in place. Sure there may be some movement to remove some impediments but the arguments about wanting ridiculous levels of safety will remain. We really do need to tackle all these arguments head on and remove all the impediments. I realise it will take some to do so, but it is really important we get the order right. I argue we should not tackle putting a price on carbon until we have removed the impediments to nuclear and also until the world has agreed a mechanism to manage it.
A note to those who want to complain I am being repetitive: apart from the obvious …. I’d remind you that those arguing for a price on carbon are being extremely repetitive:
A price on carbon in Australia will change the world’s climate
A price on carbon in Australia will change the world’s climate
A price on carbon in Australia will change the world’s climate
A price on carbon in Australia will change the world’s climate
A price on carbon in Australia will change the world’s climate
A price on carbon in Australia will change the world’s climate
Jeremy C
Excellent points and questions. I’ll have to get back to you with a response. It may not be today.
Interesting points John and Peter.
It seems to me that it boils down to what is likely to get us building clean energy the quickest and most efficiently. On the one hand, a carbon price will have little effect on the energy sector’s (electricity and transport) overall emissions without nuclear power. On the other hand, it may provide an incentive to roll out nuclear more quickly, and will bring down emissions from other sectors (which contribute ~30% if what Peter says is correct).
A fundamental question here is what these scenarios will cost us, in terms of the economy now and the long term environmental impacts. The more we delay building nuclear power and reducing emissions from other sectors, the more it is costing us. But if we introduce a carbon price now, it will also have a cost.
Peter, you said (mockingly) “A price on carbon in Australia will change the world’s climate” and (seriously) “we should not tackle putting a price on carbon…until the world has agreed a mechanism to manage it.”
These two sentences are related, as we are more likely to form some sort of global agreement or mechanism if more countries are moving in the direction of reducing emissions in the first place. Australia is under a particular obligation to show that we’re doing something, as we are one of the worst (or the worst) carbon polluters in the world, the largest coal exporter in the world, and we are the only OECD nation which still hasn’t either already got nuclear energy or are implementing it now. We have done absolutely NOTHING.
My take would be “A price on carbon in Australia might contribute to a global process which could stabilise the world’s climate.”
Tom Keen,
I hear you, but I don’t buy the argument.
Your argument is based on two premises:
1. Australia can set an example and the world will follow. Sorry, but that is unbelievably naïve. It is not the real world. IMHO
2. If we appease the Greens and eco warriors by agreeing to put a price on carbon first than they will back off an stop their opposition to nuclear power. Sorry, that won’t happen either. It never has and never will. We have 40 years of strident opposition to nuclear by these groups to prove it. They are not interested in cutting emissions. They are only interested in propagating their beliefs and socialist ideologies. Show me any solid evidence to support your assumption here and we can start a discussion.
If we do not remove the blocks to nuclear first, it wont happen. We will raise the cost of electricity and make little progress on cutting emissions in Australia. And we will be supporting higher cost electricity in the western democracies that will slow the uptake of clean electricity in the developing nations. Bad move.
Furthermore, if we act without it being an international agreement we will disadvantages ourselves, for no real gain, and make us less able to do as well as we could and should in the future.
There has become a religious like belief that a carbon tax means we fix Australia’s climate. Just think how ridiculous that belief is. It is stunt, another useless symbol for no gain, and real costs to Australia.
JeremeC,
This is a quick answer for now, in case I don’t get back to you. It will take me a lot of effort to dig out the material in the ABARE 1991 report and address all your points.
I understand you have two main criticisms:
1. I’ve made a number of unsupported statements, and
2. The government didn’t implement the maximum proposed energy efficiency improvements, so we can’t say that ABARE’s projections were good.
I agree I have made a number of unsupported statements. Many of them are based on my experience from what was happening at the time. Certainly, at the time there was enormous pressure on ABARE to reduce their projections of energy demand, to increase their projected savings from efficiency improvements and to forecast more renewable energy would be taken up. The same sorts of pressures are being applied now.
We can say that ABARE’s projections were good because they projected close the actual outcome, including for the energy efficiency improvements.
They reason their projections are good is because they, rightly, recognise that most of the proposed energy efficiency improvements that would be mandated by government are not economically viable. They do not look at the individual proposals. They look at the overall trends in the economy and can project the effects of policies.
The government of the day spent a lot of money and effort trying to encourage and force industries, businesses and property owners to implement energy efficiency improvements. People were willing to try, just like now. The Energy Research and Development Corporation facilitated and incentivised many programs. Department of Primary Industries and Energy funded many programs to implement energy efficiency improvements. Most were totally uneconomic, achieved little and demonstrated it is nowhere near as easy or as economic as the idealists would have us believe.
The recent ‘Pink Bats’ home insulation fiasco is a case in point. The Department of Climate Change believed they were on a winner with the Pink Bats home insulation program. They thought this was the lowest of the low hanging fruit. The least cost way to reduce emissions. The department exaggerated the benefits. In promoting the scheme, they claimed the savings would be double what even the proponents (insulation industry and advocacy groups) were claiming. The avoidance cost for the program, if it had not run off the rails, would have been $200/tonne CO2 avoided – about ten times the cost of avoidance by implementing nuclear power. In fact, the program became a complete fiasco of government mismanagement, massive waste, house fires and four deaths.
ABARE was correct. Their projections were good.
JeremeC,
I haven’t answered your questions very well. It was a quick response. I will get back to your questions with a more careful response, but not today.
Peter,
There were two premises you stated were underlying my argument: –
1 – “Australia can set an example and the world will follow”.
That’s not what I said. I said that the more nations that take action on climate change, the more other nations are likely to follow. We can’t all sit around a wait for others to act, or nothing will ever happen.
2 – “If we appease the Greens and eco warriors by agreeing to put a price on carbon first than they will back off an stop their opposition to nuclear power”
Also not what I said. I’m unsure where you got that from.
Two questions. You said if we adopt a carbon price “we will be supporting higher cost electricity in the western democracies that will slow the uptake of clean electricity in the developing nations”.
What do you mean by this?
Also, how do you recommend we go about reducing emissions from agriculture and forestry, given that addressing the energy sector alone is insufficient to cut emissions to the extent they need to be cut?
Thanks Peter,
I’m with you when you say ABARE’s reporting is good though i do have a problem when you say that ABARE’s work has been influenced by green groups because that does seem to contradict the idea that ABARE’s output is reliablly neutral – hence my last comment which perhaps wasn’t expressed very clearly.
The energy efficiency stuff needs more work, thats not a criticism of what you have written its just such a complex area. ABARE’s macro recording of it amongst energy stats in the reports you reference shows us that energy efficiency of some sort is happening in the economy but no detail as to barriers etc and doesn’t divide it out into whether efficiency gains in a particular process or technology might happen or that process of technology is superseeded by something that has advantages not related to energy use.
Peter, I agree with everything you said in your reply to me above, up to this point:
This I don’t follow.
I take it the impediments you refer to are a crippling regulatory regime, a risk premium to be carried by the nuclear industry far beyond what we require of other generators and industries, and of course the present legislative injunction.
If so, I do not see why a carbon price should entrench these impediments. We need to repeal the antinuclear legislation – a carbon price could apply pressure in the right direction. A regulatory framework would need to be constructed – again, I don’t see how the presence or absence of a carbon price plays into the design of the regulatory framework. I don’t see why it would act in the direction of stricter legislation.
I also don’t see the connection between a carbon price and any decision we might make about the risk premium the industry might need to cover.
If I recall the argument you were making to Ewen Laver around Easter, another concern you had was a carbon price could lead to Australia being viewed as a poor sovereign risk, putting the frighteners on the investors needed for the capital to build the plants.
I think the idea here is that the risk arises from unpredictable changes in regulation that affect the value of investments, and that if we can devalue our coal plants on a whim be enacting a carbon price, we might equally choose to tighten the regulatory screws on nuclear operators.
If so, I don’t find that idea compelling. Many industries are regulated. The regulations change. What matters is the process – is it rational, is it transparent, is it evidence based, is the information used by the regulator available to the industry, are the factors driving regulation visible and forseeable to the industry, is there a working dialogue between the industry and the regulator, etc. The fact of changing regulations that may prejudice existing investment does not necessarily indicate sovereign risk. An unpredictable and high handed approach does.
Does enacting a carbon price indicate sovereign risk to an investor in an unrelated industry? It need not, provided its implementation is based in rational decision making. If done responsibly, it could equally demonstrate low sovereign risk, if it demonstrates the ‘sovereign’ is a rational actor responding to publicly available information.
So I don’t understand why a carbon price need reinforce the existing impediments to nuclear power.
To reiterate, without nuclear power I don’t think a carbon price can do much to help, and I don’t believe we’d vote for a burdensome carbon price anyway. But I don’t see a carbon price inhibiting our adoption of nuclear power either, and it would shift the economics in the right direction.
Tom Keen,
Yes, I paraphrased your two premises to feed them back to you in the way I interpreted them from what you had written. You didn’t actually state specific premises so I had to extract them. I still think you are saying the same thing, even if the words are different. I hope you are not saying that carbon tax and climate change are synonymous. Many people seem to think that, but they are not. Price on Carbon is one of many possible policy interventions to attempt to reduce GHG emissions. It may or may not work and may or may not have the desired economic and environmental effects. So carbon tax and climate change should not be used as synonymous.
You asked two questions:
I’ve written more on this elsewhere, but here is a short answer.
Getting electricity to all peoples is one of the best things we can do for humanity.
The cheaper electricity is the faster it will be rolled out to all peoples.
If clean electricity is cheaper than dirty electricity, clean electricity will be rolled out instead of dirty electricity.
The developing countries are going to roll out electricity to all peoples just as China, India, Brazil, South Africa etc are doing now.
These and other developing countries will roll out dirty electricity if it is cheaper than clean electricity.
If they roll out dirty electricity their emissions will swamp anything we do to try to reduce emission in Australia.
So all developed nations, including us, should be cutting the cost of clean electricity.
Raising the cost of dirty electricity (with carbon prices) does not address the fundamental problem that we need to make clean electricity cheaper than dirty electricity. We can do it, but we have to first confront what is blocking it. Otherwise, we avoid the problem. The result of doing that is we raise the cost of electricity in the developed countries, and it will take longer to roll out clean electricity to the world.
The world will build more dirty electricity generation plants in the meantime.
We could roll out small nuclear power plants like Hyperion and PRISM. http://www.nrc.gov/reactors/advanced/4s.html
We could roll them off the production lines like tanks or cars. The cost would reduce. We could do it here in Australia, in Africa, in Thailand and Indonesia and Malaysia, etc.
There is another string to this argument. If clean electricity is cheap, electricity will more quickly displace fossil fuels for heating (gas) and for road transport (oil). So low cost, clean electricity will more quickly reduce emissions from heating and land transport.
Every way I look at it I am convinced that we should not raise the cost of electricity (yet!). I say yet, because I do agree that we should and will raise put a price on carbon when there is international agreement to do so and once we have removed the impediments to clean electricity (nuclear).
Lastly on this question, appeasement with the Greens and Labor on nuclear has never worked and wont work now. Just listen to what Bob Brown and Senator Milne are saying and what Kevin Rudd was saying. That is unchanged since Bob Hawke and Paul Keating. I realise many of the contributors on BNC don’t like hearing this, and I am a lone voice, but I do believe it needs to be recognised and not avoided.
Your second question was:
My answer to this question is:
1. The highest priority is energy because it is 70% of the problem. We should put most of our resources into tackling energy first and ensure we can tackle it in an effective way, rather than risk all by trying to take on too much. I am not saying we mustn’t also tackle the other sources, but we can do that without an overarching carbon price that might have the wrong effect on electricity.
2. I don’t agree that energy sector is not sufficient as a really good start. We can potentially cut Australia’s emissions by 50% by making electricity emissions-free and by largely displacing the fossil fuels used in heat and transport by clean electricity. This will happen faster if electricity is cheap. We keep coming back to that!
3. We can move on to implementing a price on carbon, if that is thought to be the best way forward, after we’ve addressed getting clean, cheap electricity.
If the Federal and state major political parties and environmental NGO’s were to say, with one voice, “all new baseload and intermediate electricity generation shall emit less than 50kgCO2-e/MWh”*, I would strongly support a price on carbon. It is the order of raising the cost of electricity before we tackle the problem of the anti nuclear policies that I want to see fixed. I do not believe, for one minute, this problem will gfo away if we don’t confront it. And I believe the contributors here are making a mistake by trying to avoid it. Because of the political allegiances of the contributors here I feel they do not want to confront the real problem. They want to argue the party line.
* of course there are many caveats associated with this. We need to replace existing power stations, we’ll need to keep building gas power stations until nuclear can be built fast enough, etc. I can’t cover it all here but a lot is covered on the “Emission Cuts Realities” thread and the “Alternative to the CPRS” thread.
JeremyC
I agree that my statement is contradictory, unsupported, and accept the criticism.
My statement was based on my experience in the meetings with ABARE and others at the time. At the meetings in ABARE, who were modeliing the energy and CO2 emissions and with numerous other government departments involved in preparing the “Ecologicall Sustainable Development – Energy Production” reports, the renewable energy and energy efficiency advocates were by far the loudest and most vociferous in advocating their postions. It seemed like the meetings were overrun by these people. Mark Diesendorf was one of them as were Greene, Wilkenfeld and others. Conversely, the people who were trying to provide the ‘real world’ information to ABARE were much quieter. Luckily, ABARE knew what they were about. But it was clear to me that ABARE did bend slightly to the political and advocacy pressure at the time.
I agree it is an enormoulsy complex area. I don’t want to try to get into the detail of this and I am not a specialist anyway. ABARE explained in one of the meetings at the time that the energy efficiency advocates can see the technology at the time and see how we could replace it with better, more efficient technology. That would provide savings. What the advocates do not take into account is that other new demands keep arising that are unforseen. ABARE’s macro approach says we can’t forsee the new demands for energy that will appear in the sytem, so instead they use trends of historically how it all balances out. Now if the government imposes some policy interventions, ABATRE can project the effect. That is how they approached it. They ran many scenarios. Their best guess was not the one the RE and efficiency advocates wanted ABARE to adopt for the central projection. ABARE made their own decision and history shows they did well, but over estimated a little, the energy efficency improvements that could be achieved.
By the way, quite a lot was being attempted at the time. I could go through lots of it, but not on a comment site here. One area I was involved in was trying to improve the energy efficency of existing commercial buildings. It proved to be much more costly than originally thought. Most of what had been proposed turned out to be not economic.
John Morgan,
It could, but history strongly suggests it won’t. Just look at the rhetoric coming out of Bob Brown, Senator Milne, ACF, Greenpeace, WWF, FoE, Kevin Rudd and all the other people that should be advocating cheap clean electricity. The strong anti-nuclear advocacy and the advocacy of RE and energy efficiency as the solution is unchanged in 20 years. We are not progressing as long as we keep trying to appease the anti-nuclear people.
The probability is that if we muck around with a carbon price the impediments to nuclear will remain (at least many of them: see list here: http://bravenewclimate.com/2010/01/31/alternative-to-cprs/#comment-86256 ). For the next few years we’d be focused on RE and energy efficiency (like the Pink Bats home insulation program and the ZCA2020 plan or similar advocacy). The RE industry has enormous support across the country. It has been supported and built up by 20+ years of government funding and advocacy brainwashing by everyone including the national broadcaster (the ABC).
No, that is a misunderstanding of what I was saying. The carbon price has nothing to do with the sovereign risk. The sovereign risk is higher than it should be because of what has happened with the mining tax, Telstra, NBN, and governments reneging on private public partnership deals such as the Sydney Tunnel. These are the sorts of government interventions that scare investors. Many BNC contributors advocated that the government should shut down Hazelwood and other power stations without compensating the investors. They argued this was fair because the investors should have seen it coming and they are just “Robber Barons” anyway. Who will invest in a nuclear power plant with a 60 year life with this sort of attitude rife in the community and fanned by the environmental NGO’s and two of the three major political parties? To overcome this we need a clear, unequivocal retraction of all anti-nuclear policies by the main political parties and the environmental NGOs. And there is more. We’d need to entrench in legislation the changed policies. And we’d need to entrench in legislation that if any future government reneges on agreements, the investors would be compensated fairly. There is no point mucking around with carbon price signals (signals for RE and gas industry) until we’ve addressed these fundamental issues.
You might not, but I do. The fact that nuclear in the USA and EU is at least twice the cost of similar plants in Korea and China (and local labour cost account for only a small component of the difference) is compelling evidence that the regulatory regime you seem to be advocating will still be a very high cost one – like USA and EU or perhaps even higher.
But what you describe is not the case. And industry knows it. Just look at the decisions that the government is making about renewable energy. Can you seriously argue that those decisions are rational and fact based?
As I mentioned above, I am not arguing that adding a carbon price adds to sovereign risk. The other points you summarised very well are, IMHO. But I do not agree with your comment that sovereign risk in one industry does not imply sovereign risk on another. Sovereign risk relates to the country not the industry. Sovereign risk for Australia was ramped up when the government announced the mining tax without effective consultation. That scared of international investors. It is a signal that Australia’s governments are not immune to such actions. (also NBN, Telstra, Sydney Tunnel, Tasmanian Pulp Mill, and many more). This is far more significant for an investment in a plant that has a 60 year life expectancy that for one with a 20 or 30 year life expectancy.
Once we vote for any carbon price, it will be ratcheted up from then on in just about every budget. And surely you don’t believe that governments, of all persuasions, won’t use it as a milch cow from than on. Just look at how the government committed (pork-barrelled) during the recent election campaign billions of dollars of the projected future revenue from the mining tax that hasn’t even been legislated yet! I am sure you do not believe that once implemented, the tax would not be ratcheted up in each budget from then on. ACIL-Tasman assumed the carbon price would grow from $23.38 in 2011 to $55.26 in 2030 (based on Treasury forecasts, for a 5% abatement scenario, which used highly optimistic assumptions).
I do. It will divert attention from addressing the real problem. It will mask the real problem. It will not shift the economics in the right drection because it will allow the impediments to remain. We need to focus on removing the impediments – all of them – not just some of them.
John Morgan,
I wonder when the vast majority of the contributors on BNC say they want a carbon tax to cut CO2 emissions, yet they vote for the political parties that are anti-nuclear.
What sort of message does that send?
The message it sends to me is that they are not really genuine. It makes the whole argument seem as if it has more to do with ideology than anything else. I expect many people out in the community get the same impression.
Peter Lang, you should take a Bex and a cup of tea, have a good lie down and then re-read your comments of the past several days.
You have consistently shown yourself to be an irrational, aggressive, posturing, anti-democratic nincompoop, a single talent person, chanting a single undemonstrated theme.
In short, you are an embarrassment to yourself and to this site.
Barry Brook, if you value this site and read this, I suggest that you take the time to communicate privately with this dolt before he explodes in your face.
As I have explained elsewhere, the repetitive bleatings of this single contributor stand unsupported by any other contributor. There is a significant risk that real damage can and will be done.
John Bennetts
Despite Peter Lang’s “take no prisoners” approach, he offers many educational, thoughtful, and thought provoking posts. One can argue with Peter’s politics (go ahead) but it’s hard to argue with the sheer logic of many of his posts, even though he regularly risks offending.
To quote Thomas Paine “He who dares not offend cannot be honest.”
Graham,
I welcome your comment, although I stand by my submission. I argue not so much with Peter’s politics, as his assumptions regarding the politics of those who disagree with him. From the “knowledge” thus obtained, he regularly smears and derides me and others, when in fact he knows far less of my (our) politics than he shows of his own.
All this when, in fact, politics per se are not at issue – the future of the world may well be.
Peter has yet to actually demonstrate logically that his Holy Grail, the absolute abandonment of all else except pushing the cause of NPP right now, is sufficient or adequate for the task. I happen to disagree and, with others, have argued that the FF industry should quite reasonably and fairly be required to contribute financially towards the cost of cleaning up after themselves. Peter will have none of this and has offered only political argument as justification.
I do argue with the lack of logic of his posts – you state that I cannot. Why is this?
I do argue with his abuse of others on this site. This is not “take no prisoners”. In a workplace this type of tosh would be actionable due to the strength of the personal abuse and clear and arrogant discrimination against other contributors on the basis of political belief – belief which he, Peter, has assumed and about which he perhaps is terribly incorrect.
This is not the acceptable rough and tumble of a positive, yet fiesty, contributor. It is a display of repeated, unacceptably brutish and brutal prejudice-driven public denigration and attempted humiliation of an aggressive repeat offender with a single agenda.
Even that single agenda has not been rationally defended – only asserted.
Were this my site, I would actively seek to moderate such behaviour. However this is not my site, so that option is closed to me. I am currently reconsidering my previous attachment to BNC, as no doubt many others also are due to the actions of this single issue, lone campaigner.
I do argue with his abuse mistreatment of this site for his own hobbyhorse antics.
Peter has yet to actually demonstrate logically that his Holy Grail, the absolute abandonment of all else except pushing the cause of NPP right now, is sufficient or adequate for the task. I happen to disagree and, with others, have argued that the FF industry should quite reasonably and fairly be required to contribute financially towards the cost of cleaning up after themselves. Peter will have none of this and has offered only political argument as justification.
Oh, I don’t know about that. I think his economic argument concerning investor risk has virtue, and shouldn’t be lightly set aside.
OK, Finrod, there are several views about investor risk. I pwersonally shy away from presentations of investor risk which contend that recent Australian events have increased “sovereign risk”, when this is clearly not true. It is my experience that those who have chosen to sling this term around have ignored its meaning and have adopted it as a slogan.
As has Peter Lang.
I will perhaps review his views of investor risk again, but do not see this as an urgent necessity. What follows is sufficiently close to a commentary on the economic reality for the time being.
Here is a bit of a mash-up of quotes taken from a 2009 report from the Australian Academy of Technology, Science and Engineering (AATSE). The above link will yield a full copy of the report.
THE HIDDEN COSTS OF ELECTRICITY:
Externalities of Power Generation in Australia
2009
http://www.baseloadtechnology.com/downloads/ATSEHiddenCostsElecreport.pdf
”Combining greenhouse and health damage costs for Australia gives representative total external costs of $A19/MWh for natural gas, $A42/MWh for black coal and $A52/MWh for brown coal.“
“Nuclear power stations emit no greenhouse gases. However when the life-cycle costs of the associated mining, construction and decommissioning processes are counted, the external costs of nuclear generation amount to around $A7/MWh.“
“RECOMMENDATION 4: Establish broadly based public communication. The Australian community is entitled to reliable and factual information on the social and environmental externalities of its electricity generation technology options, especially in regard to climate change, health and safety. A comprehensive public communication plan should be developed and implemented.“
These quotes are from this 103 page report which is available from various sites on the Web, for example via the link at the head of these quotes.
At the very least, I believe that this report eloquently and authoritatively provides strong argument for a price on carbon. Peter disagrees with me, but at least there is evidence available to support my side of the debate.
I still believe that a strong case can be made for an environmental tax on coal fired generation, in the indicative range $20+ per MWH. This would add 2+ cents per kWh to the cost of electricity from these sources at current retail rates, which is much less than the current annual increases due to other causes, and that these environmental taxes be permanent and subject to review in the same manner as other taxes.
I further believe that, if the Federal government does not take this step, the State Governments should levy an environmental licence fee equal to the above, for the same purpose but by another name.
I also disagree with the present loading of the cost of subsidies for the solar PV industry being charged against Consolidated Revenue (Federal) or loaded onto other users via a levy or price loading (State) as at present.
If my position differs from Peter Lang’s, then that does not justify the type of aggressive nonsense which I and others have suffered at his hand. Polite and rational discourse will suffice.
Thanks Peter,
An interesting post and a reminder of the difficult job that government agencies have in dealing with competing demands from the community on their remit and scope of activity.
John Bennets:
Don’t go. Your comments are appreciated. We temporarily lost DV8etc, a very valuable commentator, due in part to list serv dynamics. (we all look forward to his return)
Peter Lang does actually on occasion accept criticism with some grace (as long as it doesn’t involve the topics of “the free market,” “government intervention,” and
“green agendas”).
Jereme C,
I agree.
Greg Meyerson,
I am open to be persuaded that the “free market” is not the best way to deliver essential services like electricity and water. There are strong arguments both ways. Over two decades the western democracies have moved to open up the electricity and other essential service industries to competition and privatisation. But they retained a lot of command and control. Now we are in a half way house which is the worst of all options. We need either one of the other as this article made so clear:
http://www.chathamhouse.org.uk/files/16899_0610pp_grimston.pdf
For Australia to go back to government owned and operated electricity industry would take at least a decade and the tax payer would have to buy the industry from the investors at a cost over $120 billion. Then we’d need to set up the government bureaucracies to run the system and try to do so in such a way it doesn’t get hamstrung by the unions – as is the case in the government owned NSW electricity industry. How could we do that? How could we ensure it will be run by engineers, instead of lawyers and spin merchants, and remain that way for the next 60 odd years? How could we avoid it being run by politically driven organisations like the AWEA and the guys with arts degrees who write well but can’t add up and don’t understand energy units.
Peter Lang, thanks for the Chatham House reference. It is a very good read, from a respected source. It is also written in language which is accessible to the lay person.
The Chatham House study distinguishes carefully between the natural monopolies within an electricity system, ie the transmission and distribution systems; and those elements which are able to be liberalised, such as retailing and generation.
It also clarifies and defines the need for a regulator to ensure that the market operates successfully in a social environment.
I have been involved in both construction and operation of power stations for over three decades, mainly in NSW.
During this time, the former Electricity Commission of NSW has shrunk from 12,000 employees to now consist of four State-Owned Corporations responsible for generation (3 of) and transmission (1 of). TransGrid operates, as recommended by Chatham House, as a regulated monopoly. Who owns TransGrid, State or private, is somewhat beside the point.
The three generators are competing in the market covering Qld, NSW, Vic, SA and Tas. They compete against all comers on equal terms, bound by the transmission constraints of the network and the rules of the marketplace.
The total workforce of all 4 NSW state owned corporations is now about one third of the former ECNSW and I know from personal experience that the primary drivers of the generators are pretty much the same as those of privately owned generators or Qld’s remaining state-owned generators, etc.
In other words, I am convinced that the transition from a state monopoly to a liberated market for non-monopoly services is virtually complete.
This is on the way to becoming further achieved by the sale of the NSW retailers, including EnergyAustralia and Country Energy. These have been packaged with the wholesale capacity of the three state owned generators, thus limiting the exposure of the NSW taxpayers to market forces whilst opening to the marketplace those aspects of the industry which can, within political bounds, be so treated.
I have spent this long on this subject to indicate, especially to those who are not familiar with the NSW power system, that the government no longer actively controls a vertically integrated power industry within NSW – it is subject to the same rules and conditions as any other region within the East Australian market.
Further, concern that NSW (or any other) power generation segment is controlled by the power of unions is unsupportable. These generators have reduced their workforce, over time, by at least 50% and in places, by 75% in order to remain competitive in the marketplace. Labour is the main variable available to improve efficiency and this input has been reduced very substantially. I may be wrong, but my feeling is that only minor further reductions in workforce will be productive, beyond which there would remain insufficient plant knowledge and operational skill to be able to maintain reliability.
To lay my cards on the table:
(1) I am not in favour of any return to state owned vertically integrated electricity systems in Eastern Australia.
(2) I am happy to note that there is no significant effort to move in this direction, either in NSW or elsewhere.
(3) Future construction of power stations within NSW, as elsewhere, should be left to market forces.
(4) For the market to work satisfactorily for society and for the corporations which supply and distribute and market electricity in eastern Australia, a strong regulator, as currently exists, is necessary.
(5) MOST SIGNIFICANTLY, for all of the above are now givens, The electricity marketplace must be orderly and predictable in order for capital to be attracted to it. That means long term government policy settings and minimal bureaucratic or ministerial interference. We need a boringly predictable marketplace.
(6) Those who agree with me that tackling GHG induced climate change is important must work towards removing all types of bars to entry to the competing energy options, eg non-nuclear policies and subsidies. Further, market distortions must also be removed, such as policies which avoid charging generators the true costs of their operations, including environmental and social costs associated with renewables and coal. If this leads to, at the hands of the politicians, a CO2 or carbon levy, then so be it. Something is much better than nothing. If, until the dust settles, we must put up with coal, at least let it pay its way.
Incidentally, I am not implacably oipposed to new coal fired generation, because If I argue that coal is ruled out then this adds to the strength of arguments that NPP’s may also be ruled out on philosophical grounds. Coal will probably die at its own hands, once it faces its physical, medical and environmental costs in full.
I get your argument Peter: only competitive markets insure you get the best people for the job, or insure against fraud.
I don’t think that’s true but this, I have learned, is not the place for that argument.
It is the important question though: what institutional set ups are most conducive to the sharing/spread of best practices?
Greg Meyerson,
I agree this is probably not the place to discuss this issue, but I can’t let pass that you seem to have missed my main points.
1. It would take a decade or more to turn around the direction we are heading (opening up the industry to competition and priviatisation, which was started by Hawke-Keating);
2. the taxpayer would have to pay for a buy back of the industry at a cost greater than $120 billion; and
3. which alternative provides the lowest cost over the long term (and is best able to respond to the ever changing needs/requirements).
You said:
I think that is putting the ‘cart before the horse’. We can’t share or spread best practices until they are developed. It is competition that causes innovation and drives development of best practice. That is human nature. On the other hand, government run bureaucracies are controlled by the idelogical beliefs of the government in power. They suffer from group think and innovation is stifled, not encouraged.
I tend to think that all large organisations suffer from group-think and stifling of iniative, not just government-owned ones.
Think: BHP, Exxon, James Hardie, Post-privatisation Telstra.
Compare with: Pre-privatisation Commonwealth Serum Laboratories, now CSL; CSIRO; even the Commonwealth Electoral Office, which is hailed as a world leader despite its current difficulties due to a close result.
It is too simplistic to say Public=Bad; Private=Good.
The trick may well be corporate focus Vs corporate drift.
Having said that, where true and fair competition can exist in an industry, that is the way to go, every time.
Back to topic, remember that state-owned electricity generators are competing fairly with private generators and under the same rules of the market, including (in NSW at least) the same accounting rules. They are not going to exist in their same form for much longer and really are not causing structural deformities. Part of me even wishes that NSW or Vic bit the bullet 40 years back and went nuclear. If they had, then we would have some local knowledge and less unfounded fear campaigns.
Hi, I’m new here, have read a fair bit of the site, but not yet enough to know if there are posts here covering the following.
I’m convinced that cheap clean electricity is needed, that renewables are a diversion from that, and that a carbon tax will not magically produce cheap clean electricity.
Not convinced that the problem is as urgent as portrayed by “climate alarmists”. Would agree that switch to nuclear would be urgent, despite being more expensive than coal, if I thought temperatures rising by a fraction of a degree per decade was urgent, but see climate change as a problem to be addressed over the next century or so, with the technology available then rather than the technology available now.
Can anyone point me to a case here (or elsewhere) against Bjorn Lomborg’s proposition that funds should go into research and development to achieve cheaper clean electricity than coal for at least a couple of decades and not into any actual deployment replacing existing cheap dirty coal. If accelerated R&D results in cheaper nuclear fission than dirty coal, fine. If it results in some types of renewables that are cheaper than coal, fine. If it results in nuclear fusion cheaper than coal, fine. But don’t try to replace dirty coal with anything (including nuclear) until you can actually do it cheaper or at least at very close to coal costs, which may still be decades away.
Implicit in above is that (massive) R&D costs may have to be paid by government programs in developed countries that can afford it with no certain prospect of “returns” on this as an “investment” since selling the technological improvements developed for royalties added on to costs could inhibit deployment and public domain “fundamental” R&D without commercial secrecy could deliver faster.
Also implicit is that as a precaution some R&D work should be done to reduce the difficulties of emergency geoengineering in the event that things suddenly (ie over a decade or two) become more alarming re “tipping points” than at present.
A more accurate and detailed account of those propositions can be found at http://www.fixtheclimate.com
Any links here specifically responding to that position?
@Arthur,
You misunderstand the nature of the climate problem. There are a couple of critical issues to keep in mind
1. Excess atmospheric CO2 is a cumulative “poison”. Natural processes will require decades to millenia draw down excess CO2. It follows that there are huge gains in mitigating CO2 emissions at the earliest opportunity even if done with less than perfect technology.
2. The current rate of temperature increase, which will in all likelihood accelerate, is but part of the story. What really matters most is the ultimate equilibrium rise in temperature. Even if we hit zero emissions tomorrow, further increase is almost certain for decades. From the best estimates of climate sensitivity to CO2 we are already committed to ~1.5C. Even if emissions stay constant we will hit a 2C commitment in the 2020s and 3C by around 2050. By then things are starting to get really scary.
3. There is a very real risk that matters may be worse than these projections if for example, the oceans lose their ability to sequester carbon faster than expected, methane starts venting from the sea floors at a high rate or more CO2 is released by melting permafrost or ……
Lomberg’s stuff is just more do nothing nonsense. It’s the equivalent of never buying a computer because next years model will be cheaper and faster. I’m all for every R&D cent that can be had for clean energy research, land use research etc for mitigating emissions. But I am dead against technological cargo cults praying for salvation and treating science as magic.
Geoengineering to reduce solar irradience is a very risky business
1. It is very unlikely that there will be sufficient confidence in climate models to be certain of the outcome. What is certain is that a world with a large excess of atmospheric CO2 AND a large excess of for example SO2 will not be the same as a world with natural CO2 levels.
2. If unintended consequences of geoengineering proved to be unacceptable, stopping it would cause a catastrophic rapid rise in temperatures.
3. There are HUGE barriers to establishing international agreement to any such program.
4. It does not solve the ocean acidification problem.
Thanks quokka. None of that changes the fact that coal will continue to be used until something cheaper is available.
Nor have far more extravagant expressions of alarm about a committed temperature rise of 3C in 4 decades resulted in most of those professing to be most greatly alarmed about it accepting nuclear instead of continuing to push for a less industrialized society (sometimes expressed as faith in renewables).
Lomborg proposes a modest $100 billion per year for global R&D. Say 4 trillion by 2050. That isn’t “more do nothing nonsense”.
Nor is it “the equivalent of never buying a computer because next years model will be cheaper and faster.”
Nor is it” technological cargo cults praying for salvation and treating science as magic.”
Those responses seem to express a basic hostility to fundamental R&D and lack of recognition that it is the ultimate source of modern technology and productivity growth. Most of the benefits can’t be captured as profits on investment so there isn’t much of a vested interest promoting it and it has tended to be accelerated only by world wars and the Cold War. Changing that underinvestment in R&D seems difficult but possible.
If you are more alarmed about the consequences of not having technology cheaper than coal than Lomborg is, then it would be logical to go for more than $100 billion per year.
It is not logical to continue pushing for greater alarm instead, We already know that hasn’t worked.
Given that the developing world will continue industrializing with coal until something cheaper is available and that the committed temperature rise will continue to increase until something cheaper is available, you are effectively proposing to get more alarmed rather than to actually do anything that could work.
Re geoengineering, its difficulties are all the more reason for urgent R&D to reduce those difficulties in case we have to resort to it as a result of things getting worse faster.
BTW there will be a debate in Melbourne this Thursday 9 September which readers here might find worth attending.
http://themonthlyargument.wordpress.com
I would still welcome any links on these issues.
@Arthur
Your selection of adjectives belies your true position. Science is not “extravagant”.
Utter rubbish. My response is about leopards of the Lomborg sub-species not changing their spots. I could wave around figures of $200 billion per year and become “twice” as concerned as Lomborg and equally irrelevant.
And given the fact that the IEA in it’s 2010 report on costs of electricity generation finds that with a $30 per tonne carbon price, existing Gen III+ light water reactors are price competitive in all regions and significantly cheaper than anything else in Asia, I would suggest that you do not have a clue about the current realities of nuclear power. China is building these for a cost of around $1.5 to $1.7 billion per GWe. By far the best thing that could be done to mitigate carbon emissions in the energy sector is to start deploying these things ASAP.
Development of Gen IV reactors deserves any amount of research funding, but even an extreme optimist would have trouble with commencement of build on a large scale by 2020 with 2030 being more realistic, though probably still optimistic. What’s going to happen to CO2 emissions in the interim? The window of opportunity to avoid dangerous climate change is right now and over the next two decades. Anybody that has nothing to say other than spend more on R&D (gee why didn’t I think of that!) is not worth the time of day.
Arthur,
Welcome and thank you for your contribution. You said:
I am with you on that. I totally agree.
This video was sent to me today. http://www.youtube.com/watch?v=VgKfS74hVvQ&feature=channel
The first 16 minutes make the case why we need to offer a clean electricity solution that is cheaper than coal, not raise the cost of coal fired electricity – yet!. I say “yet” because I mean until we have removed the impediments to nuclear and until there is international agreement as to how a carbon price will work internationally. There is no point chucking away our wealth for no real gain. If we continually chuck away our wealth on =symbolic gestures, we defeat the purpose because we are then less able to implement the solutions that could make a real difference. I am against wasting the country’s wealth.
So thank you for your comment. I agree.
Where is that $40 a barrel ABARE used to predict we’d see about now?