Post by Driftpimp on Jul 11, 2008 9:37:52 GMT 10
Peak oil: petrol to reach $8 a litre
Phillip Coorey Chief Political Correspondent
July 11, 2008
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PETROL could hit $8 a litre within a decade as oil production begins to dwindle and demand continues to soar, a CSIRO study to be released today says.
The study, Fuel For Thought, warns this would add up to $220 a week to the cost of running a medium-sized passenger vehicle by 2018, resulting in severe social and economic consequences.
The only way to ward off such a scenario was for "fuel and vehicle manufacturers to quickly ramp up alternative [fuel] supplies and technologies".
The study was conducted by the Future Fuels Forum, a CSIRO-led conglomerate of state governments, manufacturers, and energy, industry and motoring groups.
It modelled the medium-term impact on transport fuels caused by the oil crisis and the effects of subjecting petrol and other fuels to an emissions trading scheme. Both problems would have to be managed simultaneously, it says.
It finds the oil shock will have a far greater impact on petrol prices than an emissions trading scheme. The CSIRO's John Wright said that within the next 10 years Australia would have to shift towards diesel and gas and hybrid electric vehicles to respond to oil prices and climate change.
Beyond 2020, Australia should aim to be relying more on non-conventional fuels such as hydrogen, synthetic fuels produced from coal and gas using carbon capture and storage, and biofuels that do not reduce food production by requiring valuable arable land to produce.
"Securing access to affordable and sustainable fuel underpins Australia's economy and way of life, and as a nation with relatively high vehicle use we are vulnerable to the economic, environmental and social impacts of rising oil prices and rising temperatures," he said.
The report bases its worst case scenarios on the assumption the world will reach peak oil within the next five years. Peak oil is when oil production hits its maximum annual rate, then starts to decline and is no longer able to match demand.
If the decline in production was abrupt, petrol would hit $8 a litre by 2018, it says.
It also warns technology alone would not be enough to meet the fuel supply gap and "reduced travel across freight and passenger transport will be necessary". If oil supply declined slowly, travel would be reduced by 5 per cent.
"However, if reduction in oil supply is rapid and alternative fuel vehicles are slow to become available, then passenger and freight travel may be reduced by up to 40 per cent," it says.
This would have "significant social and economic impacts" and reduce the nation's economy by at least 3 per cent. "Transport-intensive activities such as tourism and mining are expected to be the most vulnerable," it says.
Labor is set to introduce an emissions trading scheme in 2010, which the report estimates will cost between 10 cents and 25 cents extra for a litre of petrol.
This is assuming a carbon price ranging from $40 to $100 a tonne. However, Labor is likely to start a scheme with a price less than that, meaning the impact on a litre of petrol will be less than 10 cents and Labor is looking at ways to offset any net increase in the petrol price.
Phillip Coorey Chief Political Correspondent
July 11, 2008
Advertisement
PETROL could hit $8 a litre within a decade as oil production begins to dwindle and demand continues to soar, a CSIRO study to be released today says.
The study, Fuel For Thought, warns this would add up to $220 a week to the cost of running a medium-sized passenger vehicle by 2018, resulting in severe social and economic consequences.
The only way to ward off such a scenario was for "fuel and vehicle manufacturers to quickly ramp up alternative [fuel] supplies and technologies".
The study was conducted by the Future Fuels Forum, a CSIRO-led conglomerate of state governments, manufacturers, and energy, industry and motoring groups.
It modelled the medium-term impact on transport fuels caused by the oil crisis and the effects of subjecting petrol and other fuels to an emissions trading scheme. Both problems would have to be managed simultaneously, it says.
It finds the oil shock will have a far greater impact on petrol prices than an emissions trading scheme. The CSIRO's John Wright said that within the next 10 years Australia would have to shift towards diesel and gas and hybrid electric vehicles to respond to oil prices and climate change.
Beyond 2020, Australia should aim to be relying more on non-conventional fuels such as hydrogen, synthetic fuels produced from coal and gas using carbon capture and storage, and biofuels that do not reduce food production by requiring valuable arable land to produce.
"Securing access to affordable and sustainable fuel underpins Australia's economy and way of life, and as a nation with relatively high vehicle use we are vulnerable to the economic, environmental and social impacts of rising oil prices and rising temperatures," he said.
The report bases its worst case scenarios on the assumption the world will reach peak oil within the next five years. Peak oil is when oil production hits its maximum annual rate, then starts to decline and is no longer able to match demand.
If the decline in production was abrupt, petrol would hit $8 a litre by 2018, it says.
It also warns technology alone would not be enough to meet the fuel supply gap and "reduced travel across freight and passenger transport will be necessary". If oil supply declined slowly, travel would be reduced by 5 per cent.
"However, if reduction in oil supply is rapid and alternative fuel vehicles are slow to become available, then passenger and freight travel may be reduced by up to 40 per cent," it says.
This would have "significant social and economic impacts" and reduce the nation's economy by at least 3 per cent. "Transport-intensive activities such as tourism and mining are expected to be the most vulnerable," it says.
Labor is set to introduce an emissions trading scheme in 2010, which the report estimates will cost between 10 cents and 25 cents extra for a litre of petrol.
This is assuming a carbon price ranging from $40 to $100 a tonne. However, Labor is likely to start a scheme with a price less than that, meaning the impact on a litre of petrol will be less than 10 cents and Labor is looking at ways to offset any net increase in the petrol price.
