End oil imports

One of the consequences of the pandemic has been the realization that reliance on the ready availability of imported goods may be a problem in a crisis. This isn’t new, particularly in relation to oil, which plays an outsized role in geopolitics. The supposed need to protect sea lanes, and particularly oil supplies against disruption has been a major part of the rationale for naval defence spending. And we have repeatedly been criticised for failing to maintain stocks of refined petrol.

I’ve been underwhelmed by some of these arguments, but it seems as if it’s time to take them seriously, particularly in relation to oil. If we are to decarbonize the economy, we need to reduce our consumption of oil, ultimately to zero. The obvious place to start is by reducing imports of oil, with a medium-term goal of self-sufficiency.

Australia currently produces about 40 per cent of the oil we consume. Under business as usual, that’s likely to decrease, due to a combination of increasing consumption and decreasing domestic production. To reverse this trend, we need a rapid shift to electric vehicles along with requirements for greatly increased fuel efficiency for new internal combustion engine vehicles.

As with the decarbonization of electricity supply, the technology is all there. Replacing the existing car fleet will take a long time, so its unlikely that we could achieve oil self-sufficiency before 2030, or a completely decarbonized transport system before 2040. But that’s not a reason for delaying action, quite the opposite

The ‘range anxiety’ problem for electric vehicles is anachronistic. Ranges in excess of 400km are commonplace and the network of charging stations on major highways is expanding fast. As for internal combustion engine vehicles, Australia currently has the worst fuel efficiency in the world, so there is plenty of room for improvement.

We don’t have a domestic car industry any more, so there is no immediate problem with an employment transition. Electric vehicles generally require less maintenance than those with internal combustion engines, so there will be a slow decline in work for car mechanics. But it seems hard to make the case that we should keep servicing costs high in order to create make-work.

Among the obstacles to a rapid reduction in our reliance on imported oil are the entrenched attitudes of car dealers, who are comfortable with their existing business model, and the fact that our existing refineries produce dirty high sulphur fuels which wreck fuel-efficient cars.

The biggest problem, however, is the position of culture warriors in the government and media, reflexively opposed to any action to mitigate climate change. Their positions are increasingly self-contradictory. Most favor an aggressive foreign policy based on perceptions of a dangerous global and regional environment. But, as with increasing reliance on Chinese finance for the coal industry, maintaining a carbon-based economy implies a reduction in national security, putting it in the hands of dictators like the current ruler of Saudi Arabia, and vulnerable to random disruption by shocks like the pandemic.

Self-sufficiency in oil would be good for our security and good for the global environment.

23 thoughts on “End oil imports

  1. If you don’t count natural gas condensate as oil then Australia produces oil equal to something like 13% its total consumption. (It was about 10% in 2018/19.) Whether or not you want to count condensate as oil is, I guess, a matter of personal preference. It’s liquid and it burns. But we can’t use it and have to export most of it.

    Our lack of usable oil production means if overseas oil was cut off we couldn’t even run heavy and emergency vehicles. One person with say, one million dollars US, could cripple Australia’s economy. No one in power seems to care. Look what happened when Labor said they’d introduce fuels efficiency standards. They were taking away our weekend. But hey, no overseas oil and a lot of us will get to enjoy 7 day weekends for who knows how long. How great is that?

  2. The electric transition can go much faster in commercial vehicles, since their working life is half that of cars (10-12 years as opposed to 20). The current market is split between buses, where electrics are fully competitive today in towns on a TCO basis (BNEF); light vans and utility vehicles like garbage trucks, available but still more expensive; and heavier trucks, coming soon but not there yet.

    Start with buses. No new diesel buses should be bought by urban operators. And don’t forget the health costs of diesel anything.

  3. I agree with the post. I would also like to point out (probably in the spirit of self-justification) that I have been banging on for some time on this blog about the need for autarky or at least semi-autarky for Australia. Now, suddenly, people might have begun to understand what I meant and why I was saying it. Part of that was also talking about the need for the globe to be less connected, not more connected, for the purposes of regional and global resilience to the transmission of shocks.

    Energy autarky is completely realizable for Australia without using dirty coal:

    (1) Transition to electric vehicles.
    (2) Transition to natural gas vehicles too until all vehicles can be electric.
    (3) Transition diesel for heavy transport to electric and natural gas.
    (4) Replace coal for electricity with gas (in the transition) and wind and solar.
    (5) Improve mass transit (after COVID-19 is defeated admittedly).

    It’s crazy that we import oil based fuels and export so much of our natural gas. That is completely stupid. Switch to gas where necessary and stop importing oil based fuels! Australia’s oil is very light. It lacks the heavy fractions. So we would have to keep important diesel (until diesel engines are phased out) and importing lubricating oils and greases: a much smaller issue in the scheme of things.

  4. Barry,

    Looking at that site and the graph “Australia Fuel Consumption 2010 – Feb 2020”, our increasing reliance on diesel is very disturbing. Australia does not produce any diesel fractions domestically. Our oil is too light for that.

    At the same time, a very considerable part of our diesel consumption is probably recreational with diesel cars and diesel 4WDs. That can all be foregone and we would still survive. Recreational driving and holidaying are non-essential. In the world that is coming all non-essential consumption will have to be foregone.

  5. Akarog,
    The link says that renewables were 40% of electrical production, fossil fuels 34%. That leaves 26% left over. I imagine most of that is nuclear. But what else, if anything does that 26% include?

  6. I would happily switch to an electric vehicle, but I suspect it would be quite difficult to find a suitable vehicle for our remote outback location, where high-clearance 4WD is essential, and undoubtedly very expensive if a suitable vehicle could be found. I guess this situation would improve with time. In the meantime, limited availability of diesel fuel would presumably continue, but at what cost. I fear that being able to drive around our property and travelling to and from town will become an unaffordable luxury.

  7. For the vast majority, who don’t want or need to haul huge loads over long distances in remote locations and under extreme conditions, the transition to using EV is going to be relatively easy.

  8. Matt Trezise,

    Probably what is needed is a gas-electric hybrid 4WD design but I don’t think anyone makes one yet. I doubt that an all-electric 4WD will work for remote and bush work. You need power and range. Electric is super good for torque of course but that takes real sustained “juice” from batteries just as from liquid fossil fuels. Gas (natural gas) should remain available in Australia. After all, we are shipping ridiculously huge amounts to China while Chevron takes the super-profits and ordinary Aussies get next to nothing from our gas reserves.

  9. akarog,

    In the near future most people and the environment will not be able to afford large numbers of any type of cars, even EVs. It will be shank’s pony, bicycles and mass transit for the 99%: those that aren’t already dead from COVID-19, war and climate change with ecological collapse. And that’s an optimistic assessment.

  10. There has been a long literature on the case for a tariff on imported oil to reflect the possibility of supply disruptions. This sends out the right signals to all – local producers and consumers.

  11. John, while obviously I approve of any plan to reduce fossil fuel use in Australia, I have to ask, is there any evidence that the pandemic has led to unstable imports or shown that reliance on imports is bad? Here in Japan I cannot identify a single imported product I use that has suffered even minimal supply disruptions, even products from Italy or the USA that should presumably be at risk. It’s true that some of my role-playing games were delayed coming from Sweden due to disruption in UK warehouses, but as far as I can tell the delay was minimal and there were workarounds. I guess Australia is further away and has less global influence than Japan but what is the evidence that this emergency has disrupted supply to (or indeed exports from) Australia? I can still buy Aussie cheese in my local supermarket here in suburban Tokyo. What’s the story over there?

  12. So, waddabout nuclear I hear them say?

    It turns out that nuclear power need constant titivating so that it doesn’t go awry. A bit like airports, all the staff are there ready to service the odd plane that flies. And airlines have empty planes in the air so that their pilots, and the trainees, can keep up the hours.

    From the EMBER report;

    “France was in its own nuclear world: nuclear output suffered due to COVID-19, and fell 1.5 times more than electricity demand did, which was compensated for by more wind generation and better hydro conditions. EDF’s nuclear output suffered because staff shortages meant that some plants had to shut down, and those on maintenance took longer to complete the maintenance.“

    Click to access 2020-Europe-Half-Year-report.pdf

  13. https://www.aumanufacturing.com.au/canberra-to-take-the-low-road-on-electric-vehicles
    Canberra to take the low road on electric vehicles

    The federal government appears likely to make no effort to support the establishment of electric vehicle manufacturing in Australia following the release of a new report.

    The report, funded by the Australian Renewable Energy Agency’s Advancing Renewables Programme, looked at the very low level of EV sales in Australia and decided it was mainly due to difficulties of supply…

    The stark lack of federal government policy encouraging EVs is not acknowledged in the report as a reason for the mere 8,000 EVs sold in Australia annually…

    The importation of transport equipment is the biggest component of Australia’s $100 billion balance of trade deficit in manufactures.

    That, quite apart from the need to de-carbonise transport as well as electricity generation, should be enough for Canberra to encourage local EV manufacturing supply chains.

    We already have SEA Electric producing electric van and truck drive chains in Melbourne, and recently hydrogen fuel cell vehicle developer H2X announced manufacture in Port Kembla.

    Cheap EV importation is policy madness that just makes it all the more difficult for them to succeed.”

  14. Matt Tresize, just last week the ABC ran a piece on the use of drones for mustering by CQ farmers. I am sure there are safer alternatives than quad bikes out there already. If you’re worried about public roads, I am sure State Governments could find suitable road workers, given the right encouragement!

  15. Svante: don’t forget bikes. There’s a whole range from entirely legal electric scooters and electric-assist bicycles through a bunch of overpowered variants of both then up into electric motorbikes. I am amused sometimes that motorbike fans say electric bikes are too expensive then go back to discussing far more expensive fossil bikes. eBicycles are becoming ever more popular in the cities because these days they just work{tm}. Ask your local food delivery “driver” what they think.

    A bit like my boss with his Audi A8 (“from $160,000”) who couldn’t buy a Tesla because of range anxiety. Even the most expensive Tesla would be cheaper for him on day one… and ~800km range. Sigh.

  16. On July 3, climatologist Professor Will Steffen presented expert advice to the Independent Planning Commission NSW (IPCN) at Day 2 of public hearings concerning the proposed SSD-7482 Vickery Mine Extension Project, with statements that included (on transcript page 27, lines 8–34):

    “… To cut this – cut right to the quick here, 1.5 degrees Celsius is now impossible. We’re not – we don’t have a chance of making that, and that’s because of since 2015, the five years since then, we would have had to get emissions capped and heading downward. They have actually risen since 2015.

    Second of all, we do not have yet in place the policies required either here in Australia or most countries around the world to hit the deep emission cuts we need for 1.5 The upper Paris target of well below two, which I take as around 1.8, is barely possible but only if we make immediate and deep emission cuts aiming to cut our emissions in half by 2030 – that’s a 50 per cent reduction – and eliminate them by 2040. Net zero by 2050 is too late. And, obviously, missing the Paris targets will lead to far worse impacts even than the bushfires we’ve just experienced and the bleaching of the reef and so on. So that’s the dilemma we face, is that if we do want to meet the Paris targets, we have to get emissions down extremely rapidly and extremely quickly.

    When you crunch through the budget, as I just mentioned – and we can give you numbers for what those emission reductions need to be – we come to the conclusion that, already, on the books, we have far more reserves of fossil fuels that are under development or being used now, coal, oil and gas, than the budget allows, so that means, obviously, we have to get existing fossil fuel facilities phased out ASAP. The obvious conclusion from that is you cannot open up any new facilities or extensions of existing facilities. They will put the nail in the coffin for the upper Paris target really fast. So if we want to give our children and grandchildren even just a chance to have a planet they can live on, we have to get emissions down really fast by 50 per cent by 2030. …”
    See: https://www.ipcn.nsw.gov.au/resources/pac/media/files/pac/transcripts-and-material/2020/vickery/200703-vickery-extension-project–public-hearing-day-2-transcript.pdf

    See also “Trajectories of the Earth System in the Anthropocene”, 6 Aug 2018, http://www.pnas.org/cgi/doi/10.1073/pnas.1810141115

    Rapidly reducing dependencies on all fossil fuels and eliminating human-induced GHG emissions would be good for our security and good for the global environment.

    And if humanity cannot adequately reduce GHG emissions in a timely manner, Steffen outlined some of the projected impacts on Australia of a 3°C temperature rise (both for the environment and more generally) on pages 3–4 in a Supplementary Advice document (published by the IPCN on July 14), concluding with:

    “… the point is that the high-probability impacts are severe, presenting very large challenges to our health, well-being, economy, livelihoods, and natural ecosystems. Australia at a 3°C temperature rise would be largely unrecognizable compared to 20th century Australia, and would be one of the toughest continents on the planet for humans to thrive upon.”
    See: https://www.ipcn.nsw.gov.au/resources/pac/media/files/pac/projects/2020/03/vickery-extension-project/comments/expert-submissions-provided-on-behalf-of-edo-nsw/200714-w-steffen-supplementary-expert-advice.pdf

    An ongoing reliance on a carbon economy means likely civilisation collapse within this century.

    I see finding affordable, rapidly deployable, effective low/zero GHG emissions solutions to replace/displace petroleum will be a great challenge, particularly for long-haul, large load aviation and seaborne transport sectors.

  17. James, because we keep attempting to pass through solid objects with them, the average lifespan of a car in Australia is a little under 11 years. Commercial vehicles vary but can be considerably less depending on how many kilometers are put on them. Taxis do a lot of kilometers and will switch to electric as soon as it it clear it is more cost effective. As soon as two car families get an electric vehicle they are going to do most of their kilometers on the EV. One reason is because it is cheaper, the other is people will prefer the performance of the electric vehicle. So we can be a bit more optimistic about the rate at which the portion of kilometers driven that are electric will improve.

  18. Per an ABS Media Release (dated May 29):

    “”While electric vehicles are still small in number, less than 0.1 per cent of the fleet, the 14,253 electric vehicles registered in 2020 is almost double the previous year,” said Sarah Kiely, Director of ABS Transport Statistics.

    There were 19.8 million registered vehicles in Australia on the 31st of January 2020, an increase of 1.5 per cent from 2019. Diesel registrations grew again in 2020, with diesel powered vehicles now comprising 25.6 per cent of the national fleet. Petrol powered vehicles in 2020 account for 72.7 per cent of the fleet, down from 73.6 per cent in 2019.”
    See: https://www.abs.gov.au/ausstats/abs@.nsf/mediareleasesbytitle/28861A19CCDB9441CA25753D001B59DA?OpenDocument#:~:text=There%20were%2019.8%20million%20registered,cent%20of%20the%20national%20fleet.

    For the full calendar year 2019, a total of 1,062,867 new vehicles were recorded as sold, a 7.8 per cent decrease on full year 2018. The 2019 figure of 1,062,867 is the lowest annual sales result reported in VFACTS since 2011.
    See: http://www.fcai.com.au/sales

    I’d suggest EV sales in Australia have a very long way to go to make a significant difference for reducing Australia’s petroleum dependency. Then there are other transport sectors including boats/ships, trains and aviation.

    Meanwhile, the US oil and gas rig count, an early indicator of future output, fell by two to an all-time low of 251 in the week to July 24. That was 695 rigs, or 73%, below this time last year.
    See: https://www.reuters.com/article/us-usa-rigs-baker-hughes/u-s-oil-rig-count-rises-for-first-week-since-march-baker-hughes-idUSKCN24P29H

    In 2019, the US was the world’s largest oil producer at 17.9% global share, yet had an estimated proved Reserves-to-Production (R/P) of only 11.1 years; and also was the world’s largest gas producer at 23.1% global share, yet had an estimated proved R/P of only 14.0 years. By comparison, Australia was a relatively insignificant oil producer at 0.5% global share, with an estimated proved R/P of only 13.4 years; and was the world’s seventh largest gas producer at 3.8% global share, with an estimated proved R/P of only 15.6 years.
    See: https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html

    On June 18, petroleum geologist Art Berman posted an analysis headlined “U.S. Energy Dominance is Over”, concluding:

    “There are good reasons to expect that much lower U.S. oil production will eventually lead to higher oil prices. That may result in renewed drilling and another cycle of over-supply and lower oil prices. That is how things have developed in the past.

    But a new phase of economic reality and oil pricing is unfolding and no one knows where it will lead. Lower demand may mean that reduced U.S. oil output is appropriate. The only thing that seems certain is that the U.S. will not be the oil super power it was before 2020.”
    See: https://www.artberman.com/2020/06/18/u-s-energy-dominance-is-over/

    Was November 2018 the all-time peak of global oil production? We will only know in hindsight. But I’d suggest humanity needs to leave oil before oil leaves us. And similarly, humanity needs to leave gas before gas leaves us.

  19. Sure thing Moz in Oz, I’m all for electric two-wheelers. While there are personal tin boxes and commercial behemoths on the roads many people won’t be joining them on two-wheels. Many are attached/habituated to the environment inside their personal tin box. We need large changes in ground transport olicy, laws, regulations, infrastructure, and marketing to massively boost two-wheel use for the benefit of human and planetary health. I don’t see that happening any time soon enough though.

    This article today shows a project in line with that report above to Au Gov saying the (only) solution was to import second hand (and clunker?) ev cars:

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