HK’s Third Runway

The Airport Authority Hong Kong (AAHK) has just released a consultation paper on its proposals for a third runway at the airport: 

 http://www.hkairport2030.com/en/index.html

The business world is drooling over the prospect of reclaiming more of those useless waters around HK, and slapping more concrete on top in order to make massive profits for themselves. Estimating a cost of $80 billion Airport Business says, “The aviation industry is united in its call for a third runway, believing it is needed for Hong Kong to maintain its position as a leading aviation hub in the region.” Meanwhile China Daily tells us that “a third runway should be able to satisfy growing demand for air traffic up till 2030, with an estimated total of HK$912 billion in economic results in the 50 years after its opening.” The cost? Above $100 billion. Mmmmm….you can see where this one’s heading. And what on earth are ‘economic results’? Not good English, that’s for sure. Then there’s Business Traveller telling us that “A Hong Kong think tank says that the city’s Hong Kong International Airport (HKIA) is in urgent need of a third runway as it is poised to surpass capacity and may lose its competitive edge among other international hubs.” That word ‘hub’ again. Is that short for ‘hubris’? As for ‘think tank’ that always seems to imply that the best brains are applying themselves to this problem, doesn’t it? So how come there’s not a single mention of Peak Oil, and the section on carbon reduction talks about changing the lightbulbs instead of aircraft emissions?

As it happens, Charles Schlumberger, the Principal Air Transport Specialist for the World Bank, gave a presentation to the ASPO-USA 2010 Peak Oil Conference on the future of the airline industry. You can watch it here, but you’ll have to click on the slides as he’s talking or you’ll miss some useful information:

http://aspo.tv/speakers/schlumberger-charles/the-future-of-air-transportation/

Basically, what he’s saying is that the airline industry believes that it has enough fuel to last another 44 years, and that it plans for a doubling of passengers in the next 20 years. It does not take Peak Oil into consideration. However, the industry also has stated that it can’t cope with oil prices above $80 per barrel. At the moment they are $118 or so. The biggest cost of operating an aircraft is the cost of the oil. There is a great deal of evidence suggesting that we are now at Peak Oil, or will be in the next 3-4 years, and more and more authorities are accepting this. Schlumberger concurs with this view. Consequently, as he puts it, the airline industry is ‘on a collision course with reality’. He insists that the industry will not disappear, but it will be for the very rich only because prices are going to shoot back up to the levels, relatively speaking, of what they were in the early days of air transport. In his conclusion he says that Peak Oil will severely affect air transport, first by recession, and then by escalating costs and reductions in funding. As air transport is the key driver in today’s economy, a serious reduction in services will result in serious economic, social and political impacts.

Now, it seems to me that this deserves some attention from the sages in the HK government. If the world is near the peak of oil production then we will not be able to produce substantially more oil than we are now, no matter what we do. With massive growth taking place in China, India and Brazil, which requires huge amounts of oil, that spells big trouble for the whole world economy, and the mother of all bun fights to grab the last drops of it. But are we really at peak production? Here are just a few quotes from highly reputable sources:

By 2012, surplus oil production could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels a day. (US Dept of Defense 2010)

Peak Oil is now.    (German Energy Watch Group  2008)

The next five years will see us face…. the oil crunch.    (UK Industry Taskforce on Peak Oil and Energy Security   2009)

We are heading towards a global oil supply crunch and price spike (in the next four years)   (Lloyd’s of London)

And the International Energy Agency after years of denying that Peak Oil was imminent, suddenly admitted in 2009 that in fact conventional oil peaked in 2006! However, they did say that unconventional sources would make up for the shortfall until 2020 if massive investments were made – well, that’s not happening. Furthermore, to stay at current levels of production over the next 20 years, we need to find the equivalent of four Saudi Arabia’s worth of oil! Many peer-reviewed assessments of the IEA’s forecasts show them to be in cloud cuckoo land. Discoveries of oil peaked in the sixties and we are now using three times as much oil each year as we are finding. To talk about four more Saudis is utterly delusional. However, The IEA advises the OECD countries on energy, and their annual report is the energy bible of the world’s governments.

So what does this mean for HK’s third runway? I think it is clear that the expectations of ever-flowing oil to fuel the airline industry are at best wild imaginings of the culpably ignorant, or at worst a deliberate attempt to deceive people so that the construction companies can make a killing before the truth becomes too obvious to ignore. From the point of view of Peak Oil alone this project is utterly unjustifiable. Furthermore, it’s quite plain that Peak Oil spells disaster, not just for airport expansion, but for the whole world economy and its obsession with economic growth. We’re on the cusp of a wave that is about to come crashing down on a very hard beach. Hold on to your surfboard.

Don Latter