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| A future without oil |
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Tony Carnie September 08 2008 at 06:36AM |
Get IOL on your mobile at m.iol.co.za |
South Africa cannot pin its hope on a miracle to rescue it from the coming global oil crisis, and needs to take urgent and radical steps to avoid an "unprecedented" meltdown in the country's economy and transport network. The warning does not come from a radical environmental group, but from a senior economics lecturer who has advised President Thabo Mbeki on the question of energy sector scenario-planning. Jeremy Wakeford, until recently a senior lecturer at the University of Cape Town's School of Economics and now an independent consultant and research director of the Association for the Study of Peak Oil - South Africa (ASPO-SA), says local policy-makers would be foolish to gamble on a major technological breakthrough in new transport fuels or energy efficiency, and should rather take urgent action to reconfigure the country's economy towards a new era in which oil-based fuels become increasingly scarce and finally run out. Wakeford notes that South Africa is particularly vulnerable to the impending oil supply crisis because 97 percent of the local transport sector depends on petroleum-based energy, with just 3 percent of transport energy coming from electricity. Almost 60 percent of South Africa's liquid fuel is imported, and even if Sasol and Petro-SA were to expand or build new coal-to-liquids refineries, the expansion projects would meet only half the country's present consumption and would come on stream only after a decade. "The inescapable conclusion appears to be that South Africa will have to adjust to a new era of declining transport fuels over the ensuing years and possibly decades...a business-as-usual trajectory for transport in South Africa will not be feasible after global oil production peaks and begins its irreversible decline, which is very likely to be within the next five to 10 years." Wakeford has been warning about the implications of the oil crisis for several years and during the recent South African Transport Conference in Pretoria he gave a detailed presentation on the scale of the problem and some possible solutions. Apart from urging a major freight shift from roads to an electric-powered rail system, better mass public transport systems and even bicycles, Wakeford has also questioned the wisdom of building new airports and other large infrastructure projects which depend on imported oil fuels. Last week Wakeford said he was watching the oil supply negotiations between Mbeki and Venezuelan President Hugo Chavez with great interest, as a new geo-political deal between the two countries could change the oil supply picture quite sharply. However, it was unlikely that Venezuela could continue to sell its oil cheaply for an indefinite period, when its own reserves were starting to decline, he said. In his presentation to the national transport conference in July, Wakeford said the time was ripe for the Department of Transport to design a more sustainable transport system as part of its National Transport Master Plan (Natmap). Like most people around the world, South Africans were overwhelmingly dependent on oil and had become accustomed to cheap and plentiful supplies, apart from the temporary oil shock of the 1970s. Until recently, he said, the conventional wisdom from bodies such as the International Energy Agency suggested that world crude production would maintain its upward trend until at least the 2030s. However, petroleum geologists had been warning since the 1950s that oil would inevitably reach a maximum and then begin an inexorable decline. "Over the past few years there has been an intense debate in the international literature over global oil depletion," said Wakeford. On one side of the debate, the so-called "pessimists" (mainly oil geologists and physicists) had warned of a near-term peak. On the other side, the so-called "optimists" (mainly economists) foresaw no problems ahead for the next 10 to 20 years. Importantly, no one disputed that oil production would peak, plateau and then go into decline. The debate now was over when the decline would come. Wakeford argues that oil discoveries reached a peak in the 1960s and have been on a declining trend since then. Altogether, nearly two thirds of all oil-producing countries have passed their individual peaks. The United States peaked in 1970 and the North Sea in 2001. A report published this year by the US Energy Information Administration showed that crude oil supplies had been flat for three years and many experts were now predicting a peak in all liquid petroleum fuels (including natural gas and oil sands) between 2010 and 2015. "Even the more optimistic of the plausible forecasts are that annual oil output will reach a capacity ceiling by 2020," he said. From a transport-planning perspective, this could only be regarded as "soon". At this point, Wakeford sees no viable short-term alternative energy sources in the form of natural gas, coals-to-liquid, nuclear-based electricity or hydrogen. Even energy efficiency and energy conservation would be insufficient to ward off an oil-supply crunch. The US energy department also concluded recently that as oil supplies peaked, prices would rise dramatically and - without timely intervention - the social, economic and political costs would be "unprecedented". To ward off such a scenario it was essential to initiate coping and mitigation strategies at least 10 years before the peak arrived. South Africa would be particularly vulnerable to fluctuations in the price and availability of oil imports, especially the transport sector, which accounted for more than 75 percent of all liquid fuels. Wakeford noted that Sasol was planning to expand its coal-to-liquid plant at Secunda by 20 percent before 2014, while Petro-SA and Sasol were considering a new coal-to-liquid plant with a capacity of 80 000 barrels per day. But this would take about 10 years to complete and even if both projects came on stream they were unlikely to supply more than 50 percent of the current liquid fuels consumption. The government's industrial biofuels strategy aimed at only 2 percent of liquid road transport fuels by 2013 and if these targets were raised, biofuels were likely to have serious negative consequences for local food security, water supply and environmental sustainability. Wakeford sees considerable scope for South Africa to make a switch from petroleum-powered cars to electrified rail and electric (or hybrid) road vehicles. However, pure electric vehicles were still in the design stage and replacing South Africa's fleet of eight million road vehicles would take decades, he said. There were also huge question marks around Eskom's ability to make a contribution in this area, he said. The inescapable conclusion is that South Africa will have to adjust to a new era of fuel shortages over the next few years and decades - and while it is possible that a major technological solution may be found for alternative transport fuels it would be "imprudent to gamble on this". Wakeford noted that the nation's rail rolling stock was old and in need of replacement - as was the bitumen-based road network. "Many of the country's airports are currently being expanded, but this will be of doubtful use for the future when air travel is likely to be severely constrained internationally and domestically by rising fuel costs "For air transport, authorities should anticipate a contraction of the airline industry - especially short-haul flights which are less energy-efficient. "Therefore, it would be unwise to further expand airports or the stock of aeroplanes. Resources should rather be used for more sustainable transport options...in general, spending on new oil-dependent and energy-intensive infrastructure should be avoided." As things stand now, nearly 80 percent of the country's freight (including a large percentage of mining products like coal and iron ore, farm products and manufactured goods) is carried on the roads, with just 20 percent carried by rail. There is also a need to integrate transport and land-use planning and to consider the possibility of "de-urbanisation" and increased localisation of trade, says Wakeford. Reliance on private, petrol-powered cars should be reduced by providing incentives to buy hybrid or electric vehicles or to shift to public transport or bicycles. "Cities in particular should be made friendlier for cycling (by adding lanes) and walking." The government could also subsidise bicycles to improve mobility for urban and rural travellers when the oil crisis starts to bite. As for sea transport, Wakeford suggests it might also be unwise to expand port infrastructure any further as the demand for exports and imports is likely to contract. In the short term, the government might also need to consider a general consumer-rationing system to cater for sudden fuel shortages. Priority would have to be given to essential government services. Other "draconian" interventions to preserve the social fabric in the event of a sudden fuel crisis might also have to include reducing speed limits on national roads, compulsory car pool lanes, odd-and-even number plate driving bans to reduce the number of cars in city centres or bigger subsidies for public transport. The government would also need to deal with the minibus taxi industry "which has demonstrated considerable potential for violence, including intimidation of commuters who choose to use trains and buses". For more detailed information on Wakeford's proposals, visit www.aspo.org.za
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