Summary of nine Australian Senate hearings
(only 2 of the 9 covered yet, last
updated
Official Committee Hansard
Senate Rural & Regional Affairs & Transport References Committee
http://www.aph.gov.au/hansard/senate/commttee/S9230.pdf
a. projections of oil production and demand in
pricing of transport fuels in
b. potential of new sources of oil and alternative
transport fuels to meet a significant share of
demands, taking into account technological developments and
environmental and economic costs;
c. flow-on economic and social impacts in
potential reductions in oil supply; and
d. options for reducing
BENNETT, Dr David, Founder,
Sustainable Transport Coalition BEVERIDGE, Mr Andrew,
Project Manager, Commercialisation, Office of
Industry and Innovation, University of Western Australia
BOWRAN, Dr David, Grains
Industry Development Director, Department of Agriculture and Food,
FLEAY, Mr Brian Jesse, Private capacity.
HARRIES,
Professor David, Director, Research Institute for Sustainable Energy.
HEAD, Mr
Glen Michael, Director,
Department for Planning and
Infrastructure,
IRESON, Mr
Gary, Director, Gas and Power, Wesfarmers Energy, and
President, LPG Australia
RICE, Mr
David, Principal Network Planning Office, Department for Planning and Infrastructure
ROBINSON, Mr
Bruce, Convenor, ASPO
ROSSER, Mr
Matthew, Chair, Sustainable Energy Association,
WOOLERSON, Mr Tim, Bus Fleet Manager, Public Transport Authority
WORTH, Dr David John, Convenor, Sustainable Transport Coalition
Mr. Robinson - There are
large numbers of solutions as to how we can do things better—taking your second
point about how to do it better. The clearly sensible thing to do is to put up
the fuel tax, which I hope we come to later. The clearly sensible thing to do
as a politician is to avoid mentioning that. The only way we can do that is to
engage the community. We had petrol rationing during the war. If people
understand the situation then, firstly, they will think of a lot of ways that
they can lower their own oil vulnerability. They can do their own risk
assessment. There will be a whole growth industry of consultants who can go
around and help people go through that—and ASPO Australia is hoping to be part
of that, because no-one else is. Also if people understand they can look at
things as people have done in wartime and other times to change the situation.
It starts at a sensible,
professional level—not just saying that $3 a liter is unacceptable, which we
heard a community service organization say. We have to accept the scenario that
these things might happen and we have to have a plan B. We might have something
like the hurricane that hit
Mr Head—I would like to respond to both senators’
questions about market and market failure and then lead into a potential
government response to that. One of the concerns is that there is massive
investment at the moment in the status quo. We have our transport companies
investing in their production plant for 10 to 15 years out and airline
companies investing 20 years out. We know that any societal change to a new
technology has very long lead times. We have discussed natural gas for vehicles,
LNG and CNG, and these lead times are significant and substantial. That means
that the companies and the markets that the economists are relying on to take
the lead are going to play out their existing hand of cards for as long as they
possibly can. I respectfully suggest that they might not want to look at a
different set of cards until retail prices have doubled or tripled.
As a taxpayer, I would like
someone in the political sphere to stand up and say, ‘This is the future that
is coming—whether it is today, whether it is tomorrow, it is coming.’ We can
deal with that when it arises, at the point where we will be paying $1 billion
per year every single year, or we can perhaps invest a few billion dollars up
front and make sure that never happens.
You will only get a rational analysis of that from the taxpayers and the
voters if they are informed.
This brings it back to the
points that have already been raised about oil vulnerability maps and the level
of public engagement we need. We need this like we have never needed it before.
We have to be innovative. We have to not go to people with information but
engage them in an intellectual way and also at an emotional level. People have
to understand the consequences. For all those reasons we cannot rely on the
markets. The government does need to take a strong lead.
Prof. Harries—I liken our
current situation with oil to the situation we were in with electricity going
back many decades. We had monopoly providers and there was very little
planning. We virtually said: ‘What did we do before? Let us build another
coal-fired power station.’ Oil has been a far greater problem because we have
relied on very large monopoly oil producers from overseas and we have felt (a)
that we had very little capacity to anything and (b) there is very little need.
One of the things that have exacerbated that problem is that at the state
government policy level there is actually very little in terms of transport
policy. No-one owns the transport policy agenda in this state, like they do
stationary energy. There is no office for sustainable transport policy.
We are facing massive
uncertainty. I am personally very reluctant to look at crystal balls and guess
what fuel prices are going to be. I think we have to accept that we have got
huge uncertainty. We are behind the eight ball in that we have not had the
planning systems in place to help us deal with that. The sensible strategy—and
I have heard some of them around the table— is to start putting ourselves in a
position where we can start planning. That means not just informing the public
and working with groups. It also means—and this is very dear to my
heart—understanding what we are going to need to have a very flexible approach
to be able to deal with that uncertainty. That is going to go right across the
board. How can we help companies develop the liquefied natural gas
infrastructure they need? What training are we going to need? What skills are
we going to need? What information are we going to need to be able to help us
move when we need to move?
My plea is that we are going
to have to look at our information needs and how we can address them. As
politicians you have a very unenviable task because of that uncertainty and
because of the limited planning capability we have. It is going to be very hard
for you to engage the public—‘Hey, we have a problem; let’s do something.’ I
think we are going to have to take it step by step. We need to look at what we
are missing—what are the gaps. We need to do a real SWOT planning analysis of
what we need to know.
Mr Rice—We are working on
producing oil vulnerability maps for
Mr Fleay—There
is some real landmark guidance as to how to go. The first thing I want to deal
with is how in all of the discussion here people have come up with problems and
things that need to be done. The problem with all of those things is that they
impact on all people and all businesses in different ways and on different time
scales. There is an inherent complexity in them and all sorts of feedback loops
and the like, such that you cannot use a top-down management approach. The very
nature of such systems is that no one person can fully understand them. This is
some of the modern thinking that arises from the so-called chaos theory. That
means that you need a process whereby you can engage all the stakeholders and
the public in this process to deal with those things. It was done successfully
with the
I was also involved in a
similar thing on a smaller scale at Geraldton when
there was a conflict between road trains and residents. At the end of that
meeting, even though there were strong differences, we looked at what it would
be like if we continued the way we were and what it would be like if we went
down a different pathway. At various stages in the process each side had to
argue the other’s case. It reached a point at the end where everybody, all of
the 70 people involved, agreed that we could not carry on as we were and that
we had to change, and there was a perspective on doing so. This is the way
forward. What governments have to do is not manage and come up with solutions
but give leadership of this kind in order to get an informed population and to
unleash the creativity of people to find solutions. We cannot do it any other
way. This is the way forward.
It has to be a continuing
process. The essence of it is, I think, that it combines in one process people
cooperating and competing at the same time. The two are not mutually exclusive;
they are complementary. It is finding that mix that is absolutely essential to
seeing the way forward here. We cannot move forward before that, particularly
if we start bringing the peak oil into it. If we start to say, ‘It looks as
though we’ve got to reduce our use of oil by this amount,’ it puts a
perspective on it that enables us to make the change. You have the potential in
that for everybody to see that everybody is making adjustments and to see it as
just and equitable. That is critical.
In connection with the
question of trade, coming back to the theories of economists and economics the
so-called law of competitive advantage, which dates back to the early 19th
century, is based on the premise that rather than being self-sufficient
countries should specialize on what they can do best and trade, which of course
means increased transport. That is the basis of all free trade and even interstate trade—if you think of each state in this country as
being a bit like a country. Ever since the early 19th century, the cost
of transport has been diminishing. Initially it was coal fired, then oil came in in the early 20th
century. Oil was significantly superior as a transport fuel, especially with
the very cheap oil from the giant oil fields which dominated in that period. My
view is that that period has come to an end, and therefore we have to start
thinking of a focus on being more self-sufficient as a strategy into the 21st
century. The old view is losing its validity. However, that is a very complex
question because of the great deal of interdependence that occurs around the
world. Just to give you an indication,
So a huge period of
readjustment has to take place, but nobody is giving much thought to that at
the moment. I mention in my submission that it is something we need to start
thinking about, and we need to start a dialogue with the economists about the
deficiencies in their theories regarding the way they handle energy. That must
be a part of this. I also mention that it raises the question of the current
dependence of food production and the whole food chain to households on fossil
fuel energy—mainly petroleum. I also throw in that modern industrial
agriculture has been described as a way of using land to convert petroleum into
food. I deal with that in my submission. We need to know important information
about where all the embodied energy in all these steps is so that we can have a
clear picture of which things are the critical ones to tackle first and so we
can create a long-term strategy. My view is that the most important use for the
remaining oil—the first priority—is that food supply and food chain, for
obvious reasons.
Dr. Bennett - I want to move on to alternative fuels.
I take a particular interest in biofuels. We recently
had a conference, at which Senator Milne spoke, on bioenergy
and biofuels. At that conference, the speaker from BP
Australia stated that BP would not touch palm oil. This is one of the moral
hazards of biofuels. The fact is that the increasing
demand for biofuels is now a significant hazard in
the preservation of biodiversity and tropical rainforests around the world.
Similar activities are taking place in relation to tropical rainforests and
sugar cane plantations. It amounts to the fact that the more we make demands on
the plant kingdom of this earth in terms of both food and fuel, the more we are
going to do damage to it. The situation is that one rates human food first,
animal food second and fuel third. It is disturbing to see the diversion of human
and animal food into fuel. It seems to me that one of the actions that
government can take is to make no more concessions and no more subsidies for
the production of biofuels.
CHAIR—Stunned silence.
Mr Rice—We have a problem with
obesity—why not turn that into transport, particularly walking and cycling.
Again, do not overlook those for personal transport. About half of our trips in
If we look at social
changes, it is now commonplace to wear seatbelts and it is not commonplace
anymore for thinking people to smoke. It may be not commonplace in the future
for thinking people to drive V8s unless they absolutely have to. There is an
encouragement thing. There is a health thing. There are a lot of pluses in
this, particularly if you adopt that broader overall sustainability view of
what government is all about. If you do not govern for sustainability, why are
you governing at all?
Senator MILNE—I wanted to
follow up on the issue of
Mr Ireson—In
response to whether it is appropriate to be exporting the LNG that we have: I
think the reality is that, without the export income, these kinds of
investments would not be undertaken in the first place. The scale of investment
that is required to develop these resources is very hard to get your head
around. For a country like
Mr Head—I am going to be a bit controversial, and
Mr Fleay—I dealt with this
question of alternative fuel in one part of my submission. I finished up with a
chart showing the energy-profit ratio on a vertical axis and increasing economic
effectiveness on a horizontal axis. The energy-profit ratio is the energy
content of the fuel divided by the energy used to get it. The
higher that figure, the more useful the fuel. There is a difference in
effectiveness. We are never going to see a coal-fired airplane, for example. It
is that sort of picture. This chart gives a picture on the basis of the
information I have available.
What comes out in that
picture is that the petroleum products that have been taken from giant oil
fields stand out above everything else. Nothing else can match them. It would
be useful to look at that. But we do need a lot more information in this
country. A lot of work needs to be done to find out what the energy-profit
ratios of our various fuels are to update that figure. This is an important
task so that we are able to sort the wheat from the chaff, know what you can
and cannot do and know what can be used for a transition to help us to get to
one point. In this sense, everything that everybody says has some role somewhere
in it, including using natural gas as a bridging fuel for transport while we
make a lot of other changes. This is the essential point.
Hydrogen is not an energy
source—it is an energy carrier. You have to manufacture it. When you look at
that aspect of it—and you obviously cannot in the long term think of using a
fossil fuel to manufacture it—you find that, with the problems of storing it
and the energy needed to compress it and so forth, the prospect of hydrogen
being a successful transport fuel is quite remote. You have to have the right
approach to make the right sort of analysis. This is important to develop.
Mr. Robinson -- There is a
book called The Hype About Hydrogen which echoes
Brian’s point that we need a source for hydrogen, whether we make it from coal
or gas or nuclear power. There is no foreseeable source of hydrogen. So we
cannot talk about the transition to a hydrogen economy. The hardest thing is
not storing the hydrogen but finding it or getting it or making it first. As to
the biofuel thing that we were talking about, for
instance, if we took all of
Dr Bennett—In my personal submission I make the point that, for defense
reasons,
Mr Rosser—I just want to pick up a couple of points on
the previous topic. I was at the Farmers Federation conference two weeks ago.
The conference was entitled ‘Fuelling the future’. The farmers were very keen
to stand up and say that they had no moral obligation to supply foods, that
they would sell to the highest bidder and if the highest bidder was going to be
fuel then so be it, because, when grain hits low record levels, no-one feels a
moral obligation to pay them a fair price for their product. They were as one;
there was unanimous consensus in that room. I suppose it is something you could
only understand by being a primary producer.
Mr Upton—I would like to issue a word of caution about
imposing extra taxes and so on. They are obviously a way of changing responses
but, no matter how much tax you put on something, you cannot make it happen if
the research, the knowledge or the will is not there. I am thinking about what
happened in
Mr Fleay—To
reinforce again what I said about the failure of top-down management processes
in these circumstances: imposing taxes and a lot of things of that kind have
that character about them because they impact on all sorts of people in
different ways. In fact, I agree with Mike Upton. That is why this approach is
the key to going forward: to learn something from the lessons that the
Department of Planning and Infrastructure have applied here, not because they
are perfect but because of their potential if we go down that path. I noticed
Senator Sterle said he has a background with the
Transport Workers Union. I cannot think of one area of workers who are going to
be more seriously impacted in this area. The whole business about mass distance
charging for trucks is a classic example of this. That is why you have to have
this bottom-up approach where all the stakeholders are involved and you reach
just outputs so that they see all the changes that everybody has to make and
all the things they have to give up in order to gain something fair and
equitable. With all the sorts of issues that we have here, that can only happen
by bottom-up participation. Everything that everybody has said has a role to
play in this. There is not anything that is totally wrong or totally right.
Because of this complexity, you can only handle it in this way.
Mr. Head -- [In answer to
what the barriers were to more fuel-efficient cars]/ It is our role to support local
Australian industries and we have local car makers who have committed to a
six-cylinder vehicle platform for the foreseeable future—in other words, eight
to 20 years. They are committed to rolling out models based on that power plant
and that drive train. That leaves us at a point where we politically have to
stick our hands up and say: ‘We’re not going to support local manufacturers.
We’re going to import what we think are the right vehicles. Tough
for you guys.’ So that is one of the barriers.
Mr Fleay—I assume that demand
management in transport is part of the agenda for the topic we are discussing.
I would like to say something here about the TravelSmart
program and its potential. As a preface, I spent my
life working in the water industry here, where we have been battling for 30
years to deal with the question of resource limitations. It is my view, in the
context of what we are talking about, that the Water Corporation here now sets
an example for all corporations insofar as its commercial advertising pleads
with its customers to buy less of its product. For those senators who are not
familiar with the TravelSmart program, which has an
international reputation and has been copied around
This is the small beginning
of transport management in the transport business which needs to reach the
stage that the water industry has reached. However, if the question of future
oil supplies were introduced into this, insofar as people go out, talk to others
about what can and cannot be done and say, ‘Here is what you can do,’ there is
enormous potential for empowering people as a part of this general process of
getting understanding and creating the climate for the right sort of change. I
do not think we should underestimate this. It is an area where the transport
industry is way backward but where the water industry in this country, and
particularly here, has created a change of culture due to the drastic impact of
climate change.
Mr. Robinson -- Andrew mentioned
location specific fuel taxes. This was done in
Mr
Rice—Yes. Leach Highway is an
issue to us—a huge one. First of all, within the time scale that we have been
talking about, and in the time scale of political governments, 100 years or so
is what we are really dealing in, so any guidance or direction we can get is
really useful. For instance, if we are talking about a mixture of personal
transport and freight transport, my logic says the trucks are going to get
bigger because they will be more fuel efficient; the cars are going to get
smaller because they will be more fuel efficient. There is a safety issue—does
that impact on the way we design our roads, for instance? That is a fairly
simple one. A more complex one is how we can save fuel in urban freight
transport. The answer is not to put more on rail. That is a part of the answer
and our government is trying to do that. We have a target of getting from about
three per cent to 30 per cent of our containers coming from the Fremantle inner
harbour from rail in the past to rail in the future.
But that is going to make a small difference.
What they are also doing is
looking at using our roads more sensibly and, implicitly, using our fuel more
sensibly by booking the trucks that come in and out of the Fremantle terminal
relative to the containers, because surveys have found that a lot of trucks are
going in empty to pick up a container and bring it out and they are passing
trucks that are doing exactly the opposite. Obviously, there are some
improvements that can be made. How do you make those improvements? You need
data and you need some level of control. The problems that we are getting with
data relate to some extent to the free market forces where competition is good
and then the data becomes commercial-in-confidence and we cannot get it. So
there is a bigger issue there.
I believe that in an
intelligent future the government as a whole—call it Big Brother if you like—is
going to need to have some influence on the availability of data, whether it is
for personal trips so that we can group more trips together or whether it is
for the clumping of bits of freight so that we move away from lots of small,
just-in-time deliveries to some efficient, medium sized deliveries. This is
going to have an impact on warehousing because the central distribution systems
that are the current rage, and are logistically reasonably efficient because we
have got very cheap fuel, are going to have to change. I believe people are
going to have to do more warehousing in their businesses again, like they used
to. There are a lot of things that we can do but we have got to get the
intelligence about it in order to be able to, and we have got to get some
leadership.
There was a very interesting
survey that I read some years ago about politicians and leadership and how far
in front of the community they were. The thesis was that the politicians were
in front of the community, therefore they modified
their expectations in parliament and cut them back quite a lot. The survey
found that, yes, that was true—but the bite was that the politicians were only
a tiny little bit in front of the community and they thought they were a long
way in front of the community. So I am saying: have courage, but also be
realistic. We can all talk about these things and the greenhouse effect and so
on, but if this inquiry is going to have any impact whatsoever you need to
build upon some synergies to get through.
One of the synergies that
you can build upon is COAG’s interest at the moment
in urban congestion and congestion management. If we can better manage
congestion we can better manage fuel. We did a survey in
Dr Worth—I want to come back
to my hobbyhorse about government involvement. A lot of what we have heard in
the last period on this topic has been about what things government can do and
the need for that. A lot of it comes back to market failure, that there is just
not enough information for markets to operate efficiently. The point I want to
make about why governments need to get involved is around the speed of change.
Markets take a long time to move. It took us 17 years to move the car fleet in
CHAIR—We
will go around the room now with concluding statements. What is the key thing
you would like us to go away from this hearing with today?
Prof. Harries—Underlying everything I have said is the need for us to get
information to do research to be able to manage the uncertainty and, as David
Worth has said, the problems. Markets do not happen overnight. You have got to
actually help the system happen. What we are on about here is trying to make a
smooth transition to alternative markets and alternative ways of doing
things—and to do that we need information.
Mr Rice—Grab some inspiration. Govern for
sustainability. Why else would you govern?
Mr Robinson—It is highly
probable, as people have discussed, that there are lots of things we can do to
adapt, particularly if we start thinking in advance. A lot of them are very
positive for health and the economy. I would like to congratulate the Senate
for starting the process. It is an enormous quantum leap in
Dr Bowran—I
would like to see appropriate sectoral strategies so
that you have actually got a framework to know which parts are going to go
forward with particular types of innovations.
Mr Beveridge—First of all we
need a national strategy—and that is where the government can play a really
crucial part—but one that can be implemented locally, which is key. I see the
government as a catalyst for change. It is clear today that we have got a lot
of passion from the stakeholders, which is fantastic. We all ought to be
congratulated for providing that passion, which is really good. That should be
harnessed. We really need to take decisive action because the clock is ticking.
Mr Fleay—The
central theme of your report should be issues I have been hammering about
engagement of people, providing leadership and participation and avoiding
top-down management approaches. That approach, which has shown some benefit
here locally—but it is more a question of what it can potentially become than
what it has been so far—is the key to pulling together all the points that
people have made and being able to engage with people and to get change. If you
can get it to a certain point, positive feedback will take place and it will
gain its momentum.
Mr Upton—I would say, like others, that it is important
to do get the information and do the research, to determine what is
practical—you have to be pragmatic about these things—and to convince the
public. Work with the credible stakeholders that can help you to convince the
public what the real issues are and how we can all work together to solve
those.
Dr Bennett—I would like to
go back to a point that Brian Fleay made: agriculture
these days is a process of converting oil to food. Some of the modelling activity by the department of agriculture
indicates that in the eastern wheat belt, where there is a significant energy
input, it is very likely that, as oil prices rise and climate change proceeds,
there will be a process of overshoot and collapse, and that might be the case
with a number of other parts of the economy. If you think that, on a world
basis, the fact that the use of oil in agriculture has probably allowed the
increase of the world population to go from two billion to six billion, then
the prospect for the world human population as a consequence of what we are
facing is dire.
Official Committee Hansard
Senate Rural & Regional
Affairs & Transport References Committee
http://www.aph.gov.au/hansard/senate/commttee/S9231.pdf
a. projections of oil production and demand in
pricing of transport fuels in
b. potential of new sources of oil and alternative transport
fuels to meet a significant share of
demands, taking into account technological developments and
environmental and economic costs;
c. flow-on economic and social impacts in
potential reductions in oil supply; and
d. options for reducing
WITNESSES
BENNETT, Dr David, Founder,
Sustainable Transport Coalition
BEVERIDGE, Mr Andrew, Project Manager, Commercialisation,
Office of Industry and Innovation,
CREEMERS, Mr Alexander Henricus Maria,
Private capacity
DeLANDGRAFFT, Mr Trevor Frederick,
President, Western Australian Farmers Federation
FLEAY, Mr
Brian Jesse, Private capacity
GRIFFITHS, Dr Cedric Mills,
Theme Leader, Maintaining Australian Oil Self Sufficiency,
CSIRO Petroleum,
Commonwealth Scientific and Industrial Research Organisation
HARDWICK, Mr Ross, Executive Officer, Western Australian Farmers
Federation
HARRIES,
Professor David, Director, Research Institute for Sustainable Energy,
HEAD, Mr
Glen Michael, Director,
Department for Planning and
Infrastructure,
NEWMAN, Professor Peter
William Geoffrey, Director, Institute for Sustainability and
Technology Policy,
PYTTE, Mr
Anthony Mark,
RICE, Mr
David, Principal Network Planning Officer, Department for Planning and Infrastructure,
ROBINSON, Mr Bruce, Convenor, Australian
Association for the Study of Peak Oil and Gas
RONALDS, Dr Beverley
Frances, Chief, CSIRO Petroleum, Commonwealth Scientific and Industrial
Research Organisation
SAMNAKAY, Mr Iqbal, Policy Officer,
Transport, Department for Planning and Infrastructure,
SCHLAPFER, Dr August,
Lecturer, Energy Studies, School of Science and Engineering,
SELWOOD, Mr
Richard Neil, Chief Executive Officer, Natural Fuels Australia Ltd
WORTH, Dr David John, Convenor, Sustainable Transport Coalition
Robinson - We will not be in
the majority in saying this, but we feel that the fuel price should go up, that
there should be a fuel tax escalator along the lines of Margaret Thatcher’s,
and that a smartcard, a tradeable fuel allocation
system, should be ready in the event of sudden oil shortages. Also, there
should be a sensible, rational allocation. I got here today by catching the
train. I walked 200 or 300 metres across one road,
caught a train here and walked across one or two more roads. Not everyone in
the Australian community can do this. People in the farming community cannot do
this. So the requirement for fuel varies. I refer to people working on
nightshifts in hospitals, and people running farms and businesses. Not everyone
can have all the fuel that they will need in the future, if there are fuel
shortages—and, certainly, that is what we predict.
Fleay - I want to make one comment about biofuels. I am very concerned about some of the
propositions that came up about using some microbiological product to take all
the waste—to virtually strip the land bare of all so-called wastes—and convert
it to ethanol as a way of getting resource. This has a disastrous impact on soil,
because the organic content of the soil is extremely important in providing the
environment for the great mass of invertebrate organisms and other things that
are critical to soil fertility. This process is, in effect, mining the soil. I
have put in a recommendation about having a rigorous approach to assessing
these alternative fuels. This includes finding the energy input and energy
output and, where you are doing it from crops, including the impact of the
process on the soils. We cannot afford to diminish the property of our soils.
One of the problems that wasn’t dealt with yesterday is the process of funding of
transport, federal-state relationships and the whole tax system. The fact that
roads are funded from taxes is, in effect, a sort of subsidy, whereas funding
for rail is through borrowed funds on which there is interest. This is a very
lopsided thing; it is very unbalanced.
Studies done throughout
history have found that over the last 2,000 years cities in general are about
an hour wide—that is to say, people are prepared to spend about an hour each
day traveling to and from work. If people were walking, that determined the
size of the city and so forth.
Mr Robinson—I am concerned that the climate change
people do not mention oil depletion and they have scenarios that are
unrealistic for the amount of oil. I think it would be really useful if climate
change and oil depletion matters for
Left off
on page 31.
From the same session as Dr.
Bachtiari
http://www.aph.gov.au/hansard/senate/commttee/S9515.pdf
Mr Kilsby— My own background is in transport
engineering and urban planning. I would like to highlight
some submissions that the urban planning and transport
group made to you. There are a couple of points on transport and a couple of
points on urban planning that I would particularly like to draw to your
attention. On transport the key points
that we wanted to make are that while the oil position is a national issue it
is in the cities where there are more possibilities of limiting or moderating
the demand for oil than in rural and regional areas. Urban transport
planning is an issue that the Commonwealth government ought to take rather more
interest in it than it has to date, if only to make sure that as much oil as possible
is available in rural and regional areas.
Another key point on
transport, as you have just heard, is that
the most vulnerable transport mode will be aviation because what
alternatives to oil are there for fuel in planes? There is nothing on the horizon
there and, by extension, the parts of
the economy that rely on a thriving aviation sector—particularly the tourism
industry—are also very vulnerable.
Road transport is quite
vulnerable, although perhaps not to the same extent as aviation, because road
vehicles require a portable, energy dense fuel. That is why petrol and diesel
are the fuels of choice. It
would take decades to establish the
infrastructure and the vehicle fleet to take advantage of any
alternatives. And that is decades, as you have heard,
that we have not got and alternatives that we have not really got either.
The other two main modes are rail transport and sea
transport. They are possibly the least vulnerable because a railway locomotive
is essentially a rolling power station on rails and a ship is a floating power
station. In both cases there is a wider choice of energy sources available,
mainly because the power plants are larger than for road vehicles or for
aircraft.
On urban planning there are
two points we want to highlight. One is that there are many people who have no
option but to use their cars to get around. These people tend to live in the
outer areas of our cities. The two gentlemen from
We do not have time on our side, as I think Dr Bakhtiari amply showed.
On the committee’s specific
terms of reference, going to oil availability, I would say that there will be less oil available in future
and it will cost more. ASPO does not claim to have a crystal ball or that
the future will unfold the way we expect it to, but we do say that this is a significant risk to urban
transport and, hence, to the national economy. There are well-established
risk management techniques which we think should be used. The risk of there
being less oil is at least as significant as the risk of terrorist attack, for
instance. There are no alternative fuels in sight that will completely replace
oil for transport. There will be many flow-on economic and social impacts. I
think the greatest community anger will arise from those places where
alternatives to cars could have been provided but were not. Those are basically
the outer areas of our cities.
Options for reducing fuel demand are mainly urban, possibly from technological development, but all
the others—that is, the development of public transport and other policies that
I would call business as usual, such as demand management techniques and
economic measures—even though we would probably have to apply them in a
different way to business as usual outcomes, would have effects in the cities
rather than in the rural and regional areas. But, given that there is only a
finite amount of oil to go around, applying them in the cities would ensure
that there is in the areas where alternatives cannot be provided more oil to go
around than there would otherwise be. I think that is as much as I wanted to
say.
Mr Kilsby—I was living in the
Senator MILNE—Thank you for
your submission. It certainly flows on from a lot of other submissions we have
had from various local governments on the whole issue of a rapid transition to
public transport. One of the big issues for Australian cities is that the most
vulnerable live the greater distance from the centre of the city and that there
has been a lack of planning for that.
My next question relates particularly to the tourism industry and the
agricultural sector, both of which are going to be severely adversely impacted
upon by rising prices and oil depletion. What about the aviation sector? At the
moment air fares do not reflect the real cost of flying anyone anywhere. Have
you done any predictive modeling on the point at which that cannot continue?
Mr Kilsby—No, I have not.
Senator MILNE—Do you have any thoughts about impacts on tourism generally?
Have you modeled that or looked at that around the country?
Mr Kilsby—I am currently
doing some work in
Senator MILNE—Can you spell that out a bit more? What we heard this
morning was that the new generation of huge global aircraft, the A380s, is
unlikely to ever be economic because of the fuel costs. When you say that
people will not arrive in
Mr Kilsby—My
thinking is very much governed by what I am currently doing in
Senator MILNE—Do you know of
any other work, apart from that which you are doing, where tourism hubs that
are more remote and dependent on air travel for their viability are looking at
these projections? It would be good to have some specific examples of regional
economies that are going to be significantly affected in the short term because
of aviation fuel prices and availability.
Mr Kilsby—I am not aware that
the aviation industry is even contemplating a shortage of fuel at the moment.
[A senator states strongly
we need biofuels to mitigate the effects of oil
shortages and it’s one of the few things that can even be used given the
existing combustion engines].
Mr Kilsby—The
growth of corn and so on that you need to produce the ethanol and biodiesel requires energy of its own, and it requires land
as well. I suspect that the conflict between the land and the energy that you
need to supply the additives to petrol and the need for alternative uses of
those lands [i.e. food] and energy will be something that you have to consider.
Senator WEBBER—I want to
pursue what Senator Joyce was talking about. All of our state economies are
very different. I am from
You said in your opening remarks that you felt the
need for more Commonwealth government interest in the development of urban
transport. Has your organisation given any thought to
how you think that can be developed? I know that every time we talk about the
Commonwealth government spending more money on any particular part of our state
economies, there is usually a fight afterwards and then an ad hoc arrangement
over the shared responsibilities of state and federal governments. Obviously we
need an overall plan, so do you have any other views about how we can organize
that?
Mr Kilsby—It seems to me that climate change presents quite a good model for that.
The Australian Greenhouse Office is a national office that tried to collect
expertise in one place, and the fuel crisis that we are heading for is probably
of similar magnitude. So something like an Australian fuel office in central
government would probably be the way to go as far as we can see.
Senator WEBBER—There is another issue that I want to pursue. We have had a
discussion
today about the fact that one of the issues we need to
look at is increased use of public transport
and the incentives we need to ensure people do that.
There has been discussion about the free
public transport network that we have in the CBD of Perth.
There are other discussions about
subsidising public
transport. What do you think we need to do to make it more attractive? We
have discussed this at previous hearings, overdevelopment
and maintaining modern
infrastructure to make sure it is reliable and that sort of stuff.
What do you think? And if it is
about subsidising the use of
public transport, then who should pay, as it is seen as a state
government responsibility?
Mr Kilsby—In terms of making
it more attractive, there are probably three transport sectors. There are
private and public sectors, but they both require motors, and there is also the
unmotorised sector, which, at the moment, would not
make much of a dent in the oil requirement because it only affects the shorter
spectrum of trip making. It seems to me that with good urban planning we could
perhaps do things to shorten the trip length, and then the third element would
become more attractive as well. It is in those outer areas that transport is
most difficult to provide.
Senator STERLE—I refer to
page 4 of your submission and the recommendation that states: ‘7. That taxation and fiscal policy instruments should encourage
sustainable transport.’ Could you explain that?
Mr Kilsby—At
the moment, I think the taxation instruments actually encourage the opposite to
sustainable transport with the FBT arrangements and so on. I know that in
Senator STERLE—I have had a
lot of conversation with the pro-rail lobby. I do not want to talk about
freight on trains because I do not think we will ever get common ground on
that; I want to talk about public transport on trains. I cannot speak for
Mr Kilsby—No, I am not
suggesting that. What I am suggesting is that we concentrate more on local
transport, especially in the outer areas because at the moment we are offering
people the alternative of traveling quite long distances to central areas, which
is where activity tends to be concentrated in our cities, and I think,
certainly in
Senator STERLE—This is where I get confused. Do you mean putting in extra
railway lines to service other suburbs?
Mr Kilsby—That would
certainly help, but it probably takes 10 years to get a new railway line
implemented and I suspect that is time we do not have. There are alternatives
in producing alternatives to cars, and we already have some of these in
Senator STERLE—I am a bit
confused: are you talking about integrating both forms of public transport—rail
and bus?
Mr
Kilsby—Yes.
Senator STERLE—I just had
this vision that we were talking about railway lines and spurs and branching
into the suburbs where the housing is already—that sort of stuff.
Mr Kilsby—No, I do not see
that that would help very much.
Senator STERLE—But is it
realistic?
Mr
Kilsby—No.
Senator JOYCE—You talked about the development of railway lines. Do you
have any comments on the fact that in some places in
Mr Kilsby—That
is mainly a freight problem.
Senator JOYCE—Once people get something on a truck, they keep it on a
truck, and that exacerbates the problem. It is the ability for rail to organize
the collection of produce and things like that that are at the crux of the
issue. Do you have any views on how rail could better organize itself to be an
effective competitor in the transport industry rather than just being there?
Mr Kilsby—I think that would
boil down to the economics of particular cases.
Senator JOYCE—Why is rail so
ineffective in the transport market in
Mr Kilsby—Because
they concentrate on particular markets where they do have a competitive advantage.
One of those is the long-distance containerized market. Certainly in urban
areas there is virtually no freight that moves by rail. It goes from
Senator MILNE—We have a national obesity crisis and a national diabetes
crisis and we have people paying huge amounts of money to go to gyms. We have
the potential to move people by bicycle, but we have very little in the way of
safe bicycle facilities. Everywhere we have been,
people have said to us that safety is a big disincentive to their riding. The
other thing is a bit like gas: you need a transitional fuel from cars to bikes.
One of those is electricity. We have seen huge bureaucratic resistance to
electric bikes and small electric cars, like the Riva and so on. Can you give
any insight into why you think the bureaucracies are so reluctant to license
electric bikes and small electric cars in
Mr Kilsby—I would support the
introduction of a low-energy sector. I think that it is one thing that we in
Senator MILNE—That is true to some extent, although there is an attempt to
have the Riva car registered in
DODSON, Dr Jago, Research Fellow, Urban Research Program,
SIPE, Dr Neil Gavin, Head of
School, School of Environmental Planning,
Dr Dodson—We have made a written submission to
the inquiry, which was effectively a covering letter describing some research
that we at the Urban Research Program at Griffith University in Brisbane have
been undertaking regarding the potential distribution of adverse impacts
arising from the socioeconomic costs of rising fuel prices. This report was
sent to the committee. I do not know whether you have all seen it; perhaps you
have.
CHAIR—Yes,
we have. I must say that a number of people also have been quoting your
research to us. Dr Dodson—Since that came out in
December 2005, we have received quite a lot of media coverage of it, so we
suspect that a few people have read it. We will run very quickly through that.
Since you have all read it, we will not dwell too extensively on it. We have
just recently completed another research paper which examines specifically the
impact of rising fuel prices on households with mortgages, and we will also
report to you today briefly some outcomes of that.
We believe our original
paper Oil vulnerability in the Australian city was the first attempt in
distribution of urban impacts of rising fuel prices. This
research builds to some extent on
research interests that both Dr Sipe
and I have had over many years in terms of the distribution
of socioeconomic opportunity in Australian cities and
the connections between socioeconomic
status and access to transport services. This is a
continuation of research we have had a
longstanding interest in.
The first study we undertook
was an attempt to understand the distribution of the socioeconomic impacts of
rising fuel costs. We became aware that there were very few data sets that were
able to illuminate the issue at a very fine level of spatial detail. Therefore
we decided to create an oil vulnerability index, as we term it, based on ABS
census data. That is not ideal data to use for this kind of research; however,
we feel that as a first cut piece of investigation by academics in
confident that our approach has some validity.
In our index, effectively we
combined what we describe as an indexed indicator of car dependence, which is
the variable within the census of the mode of travel used for the journey to
work, with the proportion of households within a given locality that have two
cars or more. We decided that together those two variables were a good
indicator of the level of car dependence experienced by households. We then
combined that with the ABS socioeconomic index for areas, which is the measure
the ABS uses to describe socioeconomic status. So together we felt that car
dependence and socioeconomic status were useful markers of the likely
vulnerability experienced by localities to rising fuel costs on the basis that,
if you have high levels of car dependence, your fuel costs are going up and you
are of modest or low socioeconomic status, then your capacity to absorb that
rising price relative to your income is probably far reduced.
Moving to the results, our
initial study investigated Brisbane, Sydney and Melbourne. The choice of cities
was largely due to time constraints in our own research schedules. We have
focused solely on the major cities in
In
In our first study, we
attempted to chart the population numbers within these different categories by
oil vulnerability rating: the higher on the scale, the more vulnerable they
are. This slide shows
We have just counted those
in the highest vulnerability categories in numbers of population. These people
are likely to be experiencing the worst socioeconomic impacts of rising fuel
costs. There are, however, a large number in the moderate vulnerability areas
who may also be highly impacted.
In our next study, which came out about a week ago, on mortgage and oil vulnerability in the Australian city, we used a similar method