NSW budget 2011_12 does not increase oil use productivity

The NSW government went into a deficit of $718 m for the budget year 2011/12 while at the same time wasting billions on highway duplication projects conceived 10 years ago, without checking that the global and Australian oil supply situation have completely changed since then. Not a single kilometre of rail line are being duplicated on the single track sections of the main rail line along the East Coast, namely Maitland to Brisbane, Goulburn to Canberra and Albury to Junee. Not to mention that these lines have yet to be electrified.

Treasury still has not understood that the only way out of the convergence of peak oil and accumulated debt is to dramatically increase the productivity in the use of oil in the economy – something which can only be done by rail. The time is running out as both the oil and debt crisis are getting worse every year. The worst fears of peak oilers appear to come true that in the end – when the world falls off the current oil production plateau – all budgets will be permanently in deficit, leaving no funds for those rail projects.

RTA on the top of the list with 6 pages full of road projects, summarized in this table:

Yes, this is the main rail line along Australia’s East Coast, North of Kempsey, single tracked, not electrified, embankment and alignment on steam age level.

Beautiful picture. Dedicated construction team working on the Pacific Highway duplication which makes Australia more oil dependent. How many of the engineers know about peak oil? Have they been informed by the government? The media? How many have calculated where the primary energy will come from for road vehicles in 5, 10 years time?


Let’s have a look at 2 examples:

(1)   Kempsey Bypass (Federally funded)

Initial consideration for this project started in 2001, one year after Australian oil production peaked. The planning process does not contain a single step in which oil and energy supplies are checked, a fatal flaw in this diagram:

In 2006, eternal traffic growth is assumed in the EA documents


In the same year, Geoscience Australia submits to a Senate Hearing on oil supplies the above graph which shows a growing gap between oil consumption and Australian oil production. It is ignored and the project is approved in July 2008,


just 5 months after Resource Minister Martin Ferguson warned:

Supply fears as oil surges


MARTIN FERGUSON, RESOURCES MINISTER: Australia’s got a huge challenge. We’ve got ….., a real problem in terms of energy security and our economic future by 2015.


Construction started in June 2010, three months after the Federal Government’s Energy Resource Assessment published this graph with declining Australian crude oil production, also ignored.


In November 2010, the IEA confirms its WEO 2008 crude production profiles which show practically flat production over the next 10 years.

Let’s superimpose these production  profiles with the RTA traffic projection on the Pacific Highway.

The graph clearly shows RTA’s totally unrealistic traffic projection. Note that Australian refineries cannot process condensate (red columns) and that it is exported into the bottomless pit of global oil markets. Whether Australia can get crude oil in exchange for it, is another question.

A total of $ 1.015 bn is spent on the Pacific Highway.  Some of it may be removal of black spots but most of it will be plain duplication and bypasses.


(2)   Hunter Freeway (State and Federally funded)

A detailed analysis of the Hunter Freeway can be found in an earlier post:

1/3/2010   Hunter Expressway: yet another peak oil ignorant project

The usual picture: declining or flat oil production and growing traffic.

 Of the total RTA capital budget of $ 3.1 bn there are “minor” works of $714 m which we may assume are necessary repair and maintenance work.

 Sydney’s budget contains $ 30 million for bus lanes on strategic corridors, also a useful item. So in total maybe $ 1bn is justified. How many km of rail duplication and electrification could have been done with the remaining $ 2bn?

 Err, sorry, they are waiting and dreaming of the final solution: very fast trains.