Industry sectors

How will oil depletion affect the Tasmanian economy? Which industry sectors would be most exposed? What can be done to build resilience into vulnerable sectors? Are there opportunities for economic growth in a post carbon future?

UTAS taking Peak Oil seriously

Dec 132012

Good News! – Tasmania’s university, UTAS, has moved ahead of state government, having just released its Peak Oil Risk Analysis.

Described as a global first for the tertiary education sector, the UTAS study has investigated the likely impacts of increasing world oil prices on its business operations staff and student population. (Download the study here.)

In so doing UTAS is the first significant non-government institution in Tasmania to incorporate rising oil prices seriously in its business risk assessments, thus providing a leadership model whereby other Tasmanian businesses and institutions can incorporate oil price into their business risks.

UTAS is a major institution and a sizable business operation, having several campus sites and 27,000 students (6,000 international students) representing 80 countries.

What are the risks to UTAS from Peak Oil?
Like other universities, UTAS has lower exposure to high oil prices than some other organisations of a similar size, however significant vulnerabilities exist, including:

The Australian tertiary sector comprises 39 universities, enrolling over one million students and employing over 100,000 staff.

City of Stirling adds its weight
Meanwhile, yet another major local council has conducted a Peak Oil Assessment. Perth’s largest local government precinct the City of Stirling has released its “Oil Risk Strategy”.

Written in clear language, the Strategy assesses “the vulnerability of the City and its communities to the impacts of higher oil prices triggered by global oil depletion (Peak Oil) and the possibility of temporary oil supply disruptions. It provides a ‘roadmap’ to building a more secure and resilient future in the face of growing uncertainty around future global oil availability and pricing.”

Peak oil & Tasmania’s tourism sector

Feb 102011

By Dirk Reiser

How will Peak Oil impact upon Tasmania’s high profile tourism industry and all those stakeholders who depend on tourism for their livelihoods?

The Australian Bureau of Statistics (2010) defines a visitor as ‘a person taking a trip to a destination outside their usual environment for business, leisure or other personal purposes’. From this definition it becomes clear that a visitor has to move away from their home. In the majority of cases, fossil fuels are used to do this.

The aviation industry alone consumes 243 million tomes of fuel/year or 6.3% of world refinery production (Nygren, Aleklett & Hoeoek 2009). Tourism, in particular international tourism, therefore relies heavily on the consumption of oil. Aside from transport, construction for tourism purposes is another high user of fossil fuels.

The relationship between peak oil and tourism, however, is not well-researched despite fossil fuels being vitally important for the very oil intensive tourism industry (Becken 2006; 2010). In the foreseeable future, demand will outstrip the supply of oil or at least cheap oil, therefore creating enormous problems for the globally growing and important tourism industry, destinations and societies.

Within a 60 year period the number of international tourist numbers increased from 25 million in 1950 to 935 million in 2010. It is expected that this number will grow to 1.6 billion by the year 2020 (United Nations World Tourism Organisation 2011). Moreover, IPK International (2011) estimates that humans took 9.8 billion global domestic and outbound trips.

Travelling is still very much a privilege of the rich in the developed world who are already over-using a number of available resources. This will have to change, in particular as there are more and more people from developing countries ‘joining’ in on the pleasure of experiencing a holiday – or economically poorer groups of the global society will be squeezed out of the travel market by rising costs.

Tourists, the tourism industry and destinations will have to change to adjust to the situation where oil becomes more expensive. However, research on the topic is very limited and tourism forecasts rarely consider price hikes or oil shortages as an important factor (Becken 2010).

In summary, the impact of less affordable oil is complex and difficult to assess, but it appears that an interdisciplinary approach to understand the many dimensions of the relationship between oil and tourism is essential in order to be able to manage the associated risk – especially for highly transport dependent long-haul destinations like Australia in general, and Tasmania in particular.

References:
New Zealand researcher Susanne Becken has studied the link between peak oil and tourism at great length. Click the link for a list of her studies.
Fuelling Tourism
Susanne Becken slide presentation
Environment-friendly Tourists: What Do We Really Know About Them?
Tourism and climate change: risks and opportunities

(Dirk Reiser is researcher at the University of Tasmania specialising in recreation and related issues. He is also on the Board of Directors of Sustainable Living Tasmania.)

Peak Oil and Tasmania’s farming sector

Jun 252010

by Robin Krabbe

Oil depletion will impact heavily on Tasmania’s farm sector. Rising prices of inputs will translate to increased food prices and decreased supplies of food through the market, worldwide. The cost of chemicals and fertilisers – a major cost for many farmers – is directly linked to the price of oil.

Fertilisers are the biggest consumers of fossil fuels in agriculture and, if they cannot be produced commercially using renewable energy in amounts sufficient quantities, oil depletion will ultimately have a major impact on the price and availability of virtually all foodstuffs.

Understanding the impacts
A huge amount of information relating to the non-sustainability of large scale monocultural agriculture from a number of aspects can be accessed on the internet , including the impacts of peak oil and climate change.

To help understand the implications of peak oil and climate change on agriculture, it will be helpful for we citizens to discuss these issues with each other and to get involved with local groups – in particular environmental groups who are concerned about these issues. Sustainable Living Tasmania Tasmania in the South, the Launceston Environment Centre in the North and the North-west Environment Centre in the North-West are examples. They are all helping communities understand the impacts of oil depletion.

Building resilience
The good news about addressing peak oil and climate change is that our responses can deliver positive effects for individual and community health and well-being. And for environmental health. Even if peak oil and climate change did not exist, there are many other spin-off benefits to building reliance at the individual and, very importantly, at the community level too.

Producing food communally has many social, environmental and economic benefits.

In the agricultural sector there are two key responses in agriculture to peak oil and climate change. Both involve win-win processes for both human health and environmental health.

2) A focus on local production, to reduce the use of fossil fuels in transporting food and other agricultural products.

Local production (you will start to hear the term relocalisation being used) involves much closer feedback loops – meaning that we have vastly increased knowledge of what inputs are going into our food production, and therefore enhanced control over how our food is grown.

Sustainable agricultural techniques also have the benefit of reducing external inputs. For example, organic, regenerative, low-input, and/or closed loop farming, is typically more labor-intensive, and one way of sourcing the increased labour is from urban areas, necessitating a shift of the workforce from highly populated urban areas – eg from Hobart to less populated rural areas, such as Western and North-Western Tasmania.

In addition, carbon sequestration tends to occur at particularly high levels in organic systems, therefore agriculture is one of the most effective strategies for mitigating greenhouse gas emissions.

Reference:
Threats of Peak Oil to the Global Food Supply by Richard Heinberg. This is an excellent summary of how unsustainable agriculture evolved, and gives some good pointers on restoring sustainability.

(Robin has worked for the CSIRO and the Department of Primary Industries Victoria for 17 years. She is completing a PhD at the University of Tasmania, investigating the impact of community food networks and community currency systems on socio-ecological sustainability.)

Peak oil and the Tasmanian economy

Jan 142010

by Chris Harries

The short answer to all these questions is that we don’t know. Significant modelling studies would have to be undertaken to provide the necessary data to understand all the implications.

What we do know is that our economy is critically oil dependent. We produce no liquid fuels and import all that we use. If oil prices rise there will be a significant cost burden to the entire economy and to individual sectors.

Most exposed will be those sectors that are utterly dependent on oil – that is, those that rely on significant imports and exports of goods, those that have high fossil fuel inputs and those that rely on the movement of people. We could point specifically to agriculture, freight and tourism industries, but all sectors would be implicated in so many ways.

A comprehensive understanding of all such factors is required in order for responsive action to be taken but that should not stop decision makers from taking obvious steps to help build resilience into our state economy.

In the longer term, it will be necessary to foreshadow how the whole world economy will inexorably change in the aftermath of oil decline, because our own economy will be forced to adjust accordingly.

Relocalisation
What does seem certain is that much of the thrust towards a globalised economy will retreat to some extent, as long distance transport costs may become prohibitive, and this may then alter the economics of local production. We may even see some restoration of localised production – especially of agricultural produce and some manufacturing – that has been whittled away during the past three decades.

Building resilience into the economy will have the spin-off effect of building resilience into the Tasmanian community. Being almost totally reliant on a fragile world economy will not be healthy. Goods and services that we rely on for our sustenance and livelihoods should be, as far as practicable, produced locally. There are inspirational efforts already being made in many areas of Tasmania to that end.

The Tasmanian government’s Oil Price Vulnerability Study will help to establish an information base that can answer some of the pertinent questions at the head of this page, but it is in the interest of all citizens and businesses not to sit and wait for government action, there are many steps that can be taken now to build opportunities and minimise risk.

(Chris Harries is a long term advocate for sustainability and social justice policies. He is an active member of the Peak Oil Tasmania working group.)

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