Peak oil, not traffic congestion
Posted October 19th, 2007 in The Desk, Energy
Interesting piece in Online Opinion.
Australia is on a long list of oil producing countries that have already passed peak oil production. In our case, production peaked in the year 2000. While several new oil projects on the North West Shelf will see modest increases in domestic production for the next few years, by 2015 Australia will likely be importing 80 per cent of its oil. The annual petroleum trade deficit already exceeds $8 billion, two thirds of the entire trade deficit.
Belinda Robinson, Chief Executive of the Australian Petroleum Production and Exploration Association, recently estimated that this annual petroleum trade deficit would increase to $27 billion by 2015 (PDF 830KB), assuming that prices would remain at US$50 a barrel. Given that oil prices are already hovering around US$80 a barrel before world production has begun to decline in earnest, a much more realistic figure lies somewhere in the range of $40-80 billion, equivalent to 5-10 per cent of current GDP, or double to quadruple the current value of our coal exports.
The major implication of peak oil for the average Queensland consumer is that fuel prices, and food prices, could realistically double or triple within the next several years. A petrol subsidy of eight cents a litre will make no difference to somebody who can’t afford to pay $3 a litre, or $180 to fill up the family car. Families in the mortgage belt of the outer suburbs, with little access to adequate public transport, will be particularly vulnerable (PDF 921KB).
While the electorate might today be clamouring for governments to build more tunnels and motorways to address the immediate problem of worsening traffic congestion, in the next few years when faced with the choice between filling up the car or putting food on the table they will begin asking politicians why there are insufficient buses and trains for them to get to work. The correlation between increasing oil prices and patronage on Brisbane’s already inadequate public transport for the last five years (see graph) is a very clear “market signal” if ever there was one.
It’s a race that Peak will win.
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