This is not a sensible comparison. Norway produces 313,661 barrels per day per million people, which is higher than all other countries besides Kuwait, Saudi Arabia, and the UAE. Australia produces 12,010 bbl/day/millon-people, i.e., just 3.8% of Norway's per capita production.

https://en.wikipedia.org/wiki/List_of_countries_by_oil_produ...

The extreme amount of mineral wealth that each Norwegian citizen has inherited makes Norway very difficult to compare to non-Arab countries on any issue connected to economics (i.e., basically everything).

Relatedly, the cost of living in Norway is much higher than Australia, despite Australia's extreme remoteness.

https://www.numbeo.com/cost-of-living/rankings_by_country.js...

You should not look at just oil, but natural resources in general (in case of Australia, iron, coal and gold in particular).

Norway still comes out on top, but only by a factor of ~2 (cf https://atlas.media.mit.edu/en/profile/country/nor/ https://atlas.media.mit.edu/en/profile/country/aus/ ).

Statoil makes huge margins on their oil because once the tricky rig was set up, it just comes out like Gold.

Most other natural resources have much thinner margins due to processing, overhead.

'Sweet Crude' i.e. the kind you get in the desert, and 'sweet once it's setup to be' i.e. Statoil ... this is a different thing together from other natural resources.

Norway is like Kuwait, it's almost impossible to compare it to anything else.

They can leave the Oil in the ground for now because they are very rich and have more money than they know what to do with.

As far as I'm aware, profit margins on iron aren't too shabby either, though I'd have to do some digging how this all shapes up in these specific cases (Norwegian oil vs Australian gold, iron and coal).

Australia's top exports are also based on natural resources, namely, Iron Ore, Coal Briquettes, Gold and Petroleum Gas, accounting for 60% of all exports at $144.6B. Assuming a population of 24.6M, this translates to $5.9k per person.

Point is, while Australia isn't quite as well off as Norway, there are resources aplenty to pull off something similar on a somewhat smaller scale.

Metals is an interesting case because on the one hand they are definitely a non-renewable resource. On the other hand, it seems like there's a difference between exporting ore and exporting refined metals, in terms of whether it's "just" resource extraction or not...

Iron ore extraction isn't bad but it's nowhere near as profitable as Norway's oil extraction

You'd have to do that across the entire range of resources and then divide per capita - on that basis I think Norway would blow by 4x Australia just based on off-the-top of my head estimate

They are fortunate that they are one of the few countries with functional government that could handle the oil wealth responsibly.

If you compare it to the United States, we socialize many of the risks associated with oil production, refining and transport, and let the extractors, refiners, and transporters reap the benefits.

Currently private sector and foreign business takes the risk. Then Australia gets a share of the profits through royalties and taxes as well as the labour income through employment of workers.

Australia provided mineral exploration incentives of $31m for 2018/19 at the tax payer’s expense, to mitigate that risk.

https://www.financeminister.gov.au/media-release/2018/06/26/...

Which represents a tiny amount of value compared to the energy stored in the oil.

My bet is Uranium is going to be an important one too in the future.

And, if it comes down to it, we can pull near-unlimited quantities from seawater at $200-1000 per kg (~10x current pricing). The costs of nuclear power generation are almost entirely capital costs and insurance, the fuel costs are practically a rounding error, so this does not substantially change the costs of nuclear power generation.

https://www.newsdeeply.com/oceans/articles/2018/06/28/the-nu...

So, uranium will probably never be super valuable. Strategically important, and nice to have in a conveniently accessible form, but not economically valuable.

Norway exports about $50 billion USD / year. Australia exports about $120 billion USD / year.

This is probably why the Australian is comparing the situation with Norway.

https://www.minister.industry.gov.au/ministers/frydenberg/sp...

https://www.norskpetroleum.no/en/production-and-exports/expo...

Again, I think this works out to a per capita endowment of that is still much, much larger for Norway, but you'd actually have to do a bit of work to check.

IMO you're on a hiding to nothing trying to support your position that the comparison isn't valid. The economic export situation is structurally quite similar between Norway and Australia, and the difference in how they've handled it is vast, far greater than any multiple in population.

https://atlas.media.mit.edu/en/profile/country/aus/

Next time, consider looking the number up yourself and reporting back rather than just asking the question and so forcing me to look up the answer for you (or else look like I'm ignoring the issue).

Where the Norwegians could appreciate what the sovereign fund meant for them, the attempt in Australia was lambasted as another tax, copped serious lobbying by mining giants, etc.

However if they would introduce such a tax now then it might encourage new mining developments and let them be sped through the environmental checks faster than they are now. So there is a danger we would have many more Adani like mines popped up.

Though yet again maybe having a high enough mining tax would possible discourage such endeavours?

Per http://www.worldstopexports.com/coal-exports-country/ in 2017 Australia exported $40.6 billion of coal, for a population of ~25 million. Per http://www.worldstopexports.com/iron-ore-exports-country/ it also exported $49.3 billion of iron ore. Per http://www.worldstopexports.com/gold-exports-country/ it also exported $13.1 billion of gold. Just between those three items that works out to ~$4k per person for the year.

Per http://www.worldstopexports.com/worlds-top-oil-exports-count... Norway exported $26 billion of oil, for a population of ~5 million. So about $5k per person for the year.

Now both countries do other resource-extraction stuff too. Norway's natural gas exports are almost equal to their oil exports, as far as I can tell. Australia's annual exports of natural gas seem to be in the $40-$50 billion range depending on the year you look at (it's grown a lot recently). And Australia is doing a bunch of non-iron-ore and non-gold mining too (gems come to mind).

Overall, per capita resource extraction revenue in Norway is certainly higher than in Australia, but it's not the "25x" higher than the oil numbers alone would indicate. Maybe 2x.

Would be way easier to understand the comparison if the notation would be the same on both numbers. I assume bbl means billions of barrels, this means Australia's number is higher by few orders.

The point is that Norway has managed it's natural advantages to the benefit all of their citizens compared to other countries whose resources primarily enrich individual companies/owners.

I think its the notion that all the provinces are competing against each other, and that under any oil program some provinces will win and other lose that really holds us back. No one can see that we can all win by collectively working together. It doesn't help at all that there are now moneyed corporate interested involved that are not interested in seeing any changes take place.

As someone from Ontario, I wouldn't even care about it being federalized as long as it was better "provincialized":

* https://en.wikipedia.org/wiki/Alberta_Heritage_Savings_Trust...

At the very least only payout dividends on a portion of the returns on investment from the fund:

* https://en.wikipedia.org/wiki/Alaska_Permanent_Fund

Not "Canada", but the province of Alberta. Norway is a 'monolithic' country, but Canada has federalism where the provinces have jurisdiction over certain areas.

And Alberta did/does have a fund, but over the decades various governments (generally Conervative) have decided not to really invest into it:

* https://en.wikipedia.org/wiki/Alberta_Heritage_Savings_Trust...

Because Norway's oil is more profitable, it can be taxed much more heavily. If you were to tax the tarsands at the same rate, it would put the companies out of business.

"While royalty rates in Newfoundland are the highest in Canada, in Alberta they have fallen from a 40 per cent high during the 1970s to less than four per cent, and a complex system of exemptions ensures companies often pay even less."

That's insane.

https://www.theguardian.com/environment/true-north/2017/oct/...

We are literally bending over backwards to subsidize and prop up a rounding error in our economy.

Right now, 33 million people have to suffer, and pay more for energy, because one province is increasing its carbon output.

Edit: I am not a bastard, and I fully think that other provinces need to financially help Alberta disentangle itself from the tar sands. But it needs to be ready to accept this help, first.

You might be surprised. Last election we saw spots of orange and red appear in what was once always blue. Demographic change appears to be moving against the Conservatives and the oil industry.

Is that true? Norway has a 78% tax on profits from the oil companies.

(For instance, there's a 14% employment tax, 25% VAT, car taxes that increase vehicle purchase cost by 100% and fuel cost by 200%, toll roads that are impossible to avoid during daily errands, 0.85% annual net worth tax, 31% capital gains tax, property taxes and municipal taxes, and that's without getting into extra taxes for luxury products or how corporate profits are taxed).

1. Economics predicts that the price of something will be the same as the price of its cheapest substitute. For a long time, fossil fuels were the substitute, keeping the price of renewables & nuclear down to unprofitable levels. However, renewables, storage and electric cars are all rapidly decreasing in cost, depressing their prices and the prices of their substitutes.

2. Carbon taxes or other similar schemes are looking more likely in the future. They shift the demand/supply curve, causing fewer barrels to be sold at higher prices, but the price doesn't go up enough to cover the full increase, leading to depressed prices before the tax.

3. Economics says that the price of a commodity is the same as the marginal cost of production. In other words, the highest cost producer of oil that meets current demand makes $0 in profit, all lower cost producers make >$0 profit. If demand is low, then that marginal cost is $10 Saudi oil. If demand is high, then that marginal cost is $100 Canadian oilsands oil. So if demand drops because of climate change mitigation and/or renewable substitution and/or electric vehicle substitution, there is supply of lower cost oil, meaning prices can drop.

4. We're not running out of oil, we never have been. As mentioned in #3, the price of oil is the marginal cost of production. Anything that costs more than that price isn't counted in reserves because it's uneconomical to extract. So by definition we always have almost no reserves and never will have.

There are trillions of barrels of oil in the Canadian and Venezuelan oil sands alone that aren't counted as reserves for this reason. We're less than 2 price doubling periods away from making this economical, keeping a fairly low ceiling on prices.

And of course technology marches on, continually decreasing the price of extracting that oil...

Consider EROEI (energy returned on energy invested). This is how much energy it takes to extract a barrel of oil from the ground, whether by pumping or by melting in the case of tar sands and shale. In the 1950s, EROEI was about 100 - the energy of a barrel of oil could extract about a hundred barrels. The Canadian tar sands have EROEI of about 3.5. They weren't profitable until oil became expensive enough to make it worthwhile.

Once EROEI dips below 1, price is negative. It becomes impossible to extract the oil profitably. Some of those "trillions of barrels" you talk about are in that camp. They don't count as reserves, because they're useless.

Meanwhile, oil is going to keep getting more and more expensive and difficult to extract. Offshore deep-water drilling, tar sands, stuff like that, it's incredibly hard and often environmentally dangerous/destructive. And renewables get cheaper and cheaper, as there's a lot more room for improvement in technology and manufacturing scale.

Eventually - and I don't think that point is far away - it will be impossible to produce fossil fuels cheaper than the cost of solar/wind.

> Eventually - and I don't think that point is far away - it will be impossible to produce fossil fuels cheaper than the cost of solar/wind.

I hope and believe that you're right. But I don't think it will be because the price of oil is going up, but because the price of alternatives is going down.

> Once EROEI dips below 1, price is negative. It becomes impossible to extract the oil profitably

EROEI is not a constant, it changes with technology too.

And we'll still need oil for plastic, so it's theoretically possible that we'll use alternative energy to heat the tar to extract the oil to use it in plastic.

But woe is us if we ever get to that state. We'll have burnt so much oil that we'll be well past the climate change tipping point.

I agree that for things like aircraft, there's unlikely to ever be an electrical substitute for the energy density of organic fuel. But that could be done entirely from renewables if needed.

This is not strictly true: First, non-fuel use accounts for 5-10% of oil use.

Second: As long as oil offers higher-density (fuel energy, thrust-to-weight, &c.) mobile power generation than alternatives, it can be profitable. Id est: if it's cheaper to extract and refine a barrel of oil (perhaps with renewables) than to produce the equivalent biofuel, the oil could be produced profitably.

Petroleum consumption will, can, and has proceeded well beyond EROEI 1:1 parity within such uses -- see Germany's WW2 Fischer-Tropsch process.

The correct measure here is total economic return.

Fuel synthesis is negative EROEI.

And since anything that's in petroleum can be synthesized from simple molecules like water and CO2, given enough energy...

Actually even 1 or 2 wouldn't make much sense. It was close to what people had in medieval times without oil (1.5 energy or something close, from animals, mills, fire, etc).

How this will happen is not very clear (to me)

[1] https://www.withouthotair.com/download.html

And most of that is lubricants and plastics. I think we can all agree that reducing our use of plastics is generally a good thing overall - we might make the switch back to more easily recyclable materials, e.g. aluminum and glass, which, although energy intensive to recycle, are almost endlessly renewable.

Not sure what good substitutes for oil based lubricants would be.

Oil is refined into many different byproducts. Some of the byproducts are used in manufacturing, and other byproducts are used in energy generation.

I mean, there are various ways to define what that means, but oil is getting increasingly expensive to get, alternatives are getting better, we may soon not have much oil left worth getting.

and of course we can bicker about what soon means.

Agreed. That is obviously a factor increasing oil prices, and may certainly more than balance the 4 factors I listed.

> alternatives are getting better

central to my argument

> we may soon not have much oil left worth getting

Oh I certainly hope so. I'm saying that we can't rely on oil prices going up substantially to ensure this. We need to invest in alternative energy sources and consumers and use carbon taxes to ensure it.

Actually we are consistently running out of oil, it being a finite resource.

You could say it's "enough for another 100 or 200 years" as opposed to those who say it's only enough for less, but you can't make it like we have infinite oil.

We chanced upon a source of relatively cheap energy that was created in geological time and takes millions of years to create. We didn't chance into some infinite tap.

>Anything that costs more than that price isn't counted in reserves because it's uneconomical to extract.

Beyond some point it would be so uneconomical to extract as to be meaningless -- or as to slow down the economy considerable, if it isn't for alternative energy sources (which also have their own problems if attempted at anything compared to oil use scale -- including storage, bad EROEI minus the subsidies, hidden costs, and unpredictable output, despite the solar cheerleading).

Climate change is very real on the North Pole and as a consequence, the US, Norway, Denmark/Greenland, and Russia are gaining access to new oil and gas fields that used to be inaccessible and are now being exploited. Particularly Russia is pumping out a lot of gas in that region and I'm sure Alaska is also doing well. So, there is indeed plenty of oil. But it matters whether you can sell it at 30$ or 100$ a barrel.

Another thing worth highlighting is that synthesizing carbo hydrates (aka. oil) from air is a feasible but energy intensive process. I.e. once clean energy prices drop far enough, that might actually become more lucrative than getting real oil/gas from the ground. Also a great way to store excess energy and you can do it anywhere. Like e.g. next to the refineries or pumps, thus cutting out transport as a cost factor.

The problem this reveals is that oil will only be valuable in the longrun if some technology is developed that requires just stupefyingly large quantities of oil. Otherwise, the supply is just far too high. And a catch is that even if this new technology is developed, it's difficult to imagine any usage where 12 billion liters of crude oil per day would not have a massive environmental impact, one way or the other. I would not go long on oil, unless you think it will continue to be used as a primary source of energy generation decades from now.

Add to that the unprecedented (truly unprecedented, world wide) growth of the economy (where "growth" is measured only against the things we choose to measure, i.e. GDP) thanks to being a mining colony of China and presto: we're great! A bunch of pollies were along for the ride while Chinese technocrats happened to channel a bunch of cash Australia's way, and decided that they were responsible for "success" they had nothing to do with. Why plan for the future?

I live now in the USA where the problems are really really bad. I still have hope that the lucky country will come to its senses. Australia has so much wealth to work with. Compare it to, say, Russia, also a primarily extractive economy: the two countries have roughly the same size of economy but Russia divides it over 5X the number of people, and has if anything an even less diversified, and far more corrupt economy.

https://electrek.co/2017/11/23/tesla-worlds-largest-li-ion-b...

https://electrek.co/2018/05/11/tesla-giant-battery-australia...

And another one:

https://www.teslarati.com/tesla-virtual-power-plant-south-au...

I'd like to think since the land of Oz has a very thin ozone it is great for solar. As the cost of industrial batteries come down, this seems like much more of a sensible future. In the US, battery + solar/wind is just now becoming cheaper than building new coal / natgas peaker plants. This will only continue as the economies of scale and tech improvements drive the cost further down for renewables.

"The Stone Age didn't end for lack of stone, and the oil age will end long before the world runs out of oil."

  --- Ahmed Zaki Yamani,  former Minister of Oil for Saudi Arabia

The phrase is vague to the point of meaninglessness.

We the people of earth depend on the rainforests of South America. Does that rainforest belong to South Americans? If you think that, please state your reason.

I'm so sick of nationalism. Where are all the globalists?

Who should decide who gets to extract the oil ?

If there's a system to solve those two questions, why is that system better(as you imply it would be) than the current system ?

It appears to me that many larger countries are not going green (in particular the US climate change denial) and part of the problem is that those at the "top" are very detached from those at the bottom.

Why would a single global political entity care more for the median person or the poor person? Care more for a forest, or a global oil company?

Modestly unlikely. The need for negative emissions will probably result in producing hydrocarbons from captured atmospheric CO2, which will be expensive, but not as expensive as paying whatever giant carbon tax will be assessed on geological oil.

I'm confused. (Libertarian here) Are mineral rights nationalized in Australia? How do they 'belong' to everyone there, as opposed to the person who owns the ground that those resources are in?

https://www.austrade.gov.au/land-tenure/Land-tenure/mining-a...

Which seems as complex as you might expect for something based on similar UK laws:

http://www.bgs.ac.uk/mineralsUK/planning/legislation/mineral...

NB I've thought for a while that land 'ownership' is a slightly odd concept - not helped by being in Scotland where land ownership has had over a thousand years to get in a nice mess.

https://www.goodreads.com/book/show/14614429-the-poor-had-no...

This Guardian article gives you a flavour of some of the issues:

https://www.theguardian.com/uk-news/2013/aug/10/scotland-lan...

when you buy property in Australia, that does not include the mineral rights on that property, which are a whole separate thing. Farmers have got rich selling access to mine sites, but only the government can sell the mining rights (for the first sale anyway).

Some argue simply paying taxes. Others say it is a list of things perhaps, called "civic duties". Finally, some more extreme believe you have to do it all: attend the town halls, keep up with the times, understand the various debate points, otherwise you are somehow disqualified from playing. (A side note, it has become impossible to keep up with all the ways government affects your life, and this is one of the exact reasons the founders were for limited government. They argued as the responsibilities and roles of government increase, it becomes impossible for the "commoner" to keep up and stay engaged, thus becoming a form of tyranny in of it's own.)

I think it's definitely a gray area, but the more participation, obviously, the better, while still somehow maintaining the ability to serve those who participate little just as equally. Otherwise you become a government of some people, not of all people.

It’s more healthy than the alternative.