Introduction

An election commitment of the Rudd Labor Government was to develop an assessment of Australia’s future energy security. This resulted in the release of the National Energy Security Assessment (NESA) in March 2009. The liquid fuels section of the NESA was largely based on the findings of ACIL Tasman’s Liquid Fuel Vulnerability Assessment (LFVA).

Given the importance of liquid fuels to both the global and Australian economy, it is reasonable to expect that the Australian Government would provide a realistic appraisal of Australia’s future liquid fuels security. Both the LFVA and the NESA fail to address key questions resulting in a liquid fuels security assessment that is overly optimistic. This post will explore the key weaknesses of the NESA and LFVA and propose an alternate, more realistic assessment of Australia’s liquid fuels security.

Sorry for my increasingly rare presence here of late - I've become overly busy at work (so much for my 4 day week, which didn't last long), and my personal life has had a few complications to manage as well.

Given that solar thermal power is pretty much my favourite form of renewable energy and the one I consider to make the greatest contribution to our energy needs in the long term, I can't let the weekend's announcement by PM Rudd about a plan to build a 1 GW power plant go past unnoticed.

Reuters reports the new solar power plant is part of efforts to achieve the new 20% mandatory renewable energy target - Australia to build world's largest solar energy plant: PM. More at Bloomberg.

Australia plans to build the world's largest solar power station with an output of 1000 megawatts in a A$1.4 billion (US$1.05 billion) investment, Prime Minister Kevin Rudd said on Sunday. The plant would have three times the generating capacity of the current biggest solar-powered electricity plant, which is in California, Rudd said during a tour of a power station.

Tender details will be announced later in the year, and successful bidders will be named in the first half of 2010. Rudd said the project was aimed at exploiting the country's ample sunshine, which he called "Australia's biggest natural resource." It was also aimed at helping the country become a leader in renewable, clean energy, he said. ...

Hansard (pdf) has a transcript of Dr James Buckee's testimony to the Australian Senate inquiry into public transport funding (via Energy Bulletin).

I have had 37 years in the oil industry. I was CEO of a large company for the last 16 years and I have just retired. As Bruce pointed out, that company produced about half a million barrels a day, which is sort of Australia’s consumption. From the 16 years of exploring the world, I would make the following observations: there are virtually no unexplored basins in the world. The ones that there are might be in the Arctic, and that illustrates the point quite neatly because it is obviously really difficult to get that.

The underlying fact here is that the world is consuming 30 billion barrels of oil a year and finding eight. It has been like that since 1980, maybe a little bit earlier, and it is certainly not getting any better. There are two further things. People say, ‘Look at the subsalt discoveries in the Gulf of Mexico and Brazil.’ I would say, those are extremely difficult resources to produce. You will notice, of all the discoveries in the deep water Gulf of Mexico, not one barrel has been produced; not even on the list. It is the same for Brazil: it is subsalt and it is really difficult to produce.

The second point is that—I agree with the gentlemen over there—the black oil has peaked. This is disguised by the NGL production from the big gas fields in Qatar. They are quite rich in liquids and, as the LNG has been boosted from there, so has the associated NGL. So that has enabled the world’s liquids to keep growing, albeit slowly, while the black oil itself has declined, and this is disguised.

Stuart McCarthy and Matt Mushalik have been poring over the detail of Infrastructure Australia's Report to the Council of Australian Goverments (COAG). Stuart made a submission to Infrastructure Australia which we wrote about in November.

Stuart:

Below is an excerpt from the Infrastructure Australia report to COAG. A few quibbles with some of the detail, but nonetheless this is a big step in the right direction. To my knowledge this is the first Federal Government agency to acknowledge peak oil, and not in some vague 2030 timeframe.