Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here’s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Oil and the lucky country

By Cameron Leckie - posted Thursday, 30 April 2009


Australia has a reputation as being the “lucky country”. I am a firm believer that “luck” is simply where preparation meets opportunity. In other words, being lucky is no accident. If we are to remain the “lucky country” however, we need to adapt as circumstances change. Nowhere is this more pertinent than in adapting to Australia’s future oil supply.

Before we start considering this issue, it is vitally important to understand why energy is so important to our economy. Energy is important because it allows us to do work. Work is important because it is the basis of all economic activity. So the more energy we have, the more work that can be done and the greater the level of economic activity. If we continue to expand the amount of energy that is available then so too will the level of economic activity, resulting in what we call growth.

Of course, the opposite situation is also true. If the available energy declines, the amount of work that can be done declines as does economic activity. The result is economic contraction or what is commonly called a recession or depression.

Advertisement

Oil just happens to be both Australia’s and the world’s primary energy source. With this in mind, let’s have a look at Australia’s likely future oil supply.

Chart one details ABAREs projection for Australian oil consumption and Geoscience Australia’s predictions of Australian oil production. The chart shows that Australia will become increasingly dependant upon oil imports, potentially reaching a reliance of 85 per cent by 2025.

Chart One: Australia’s projected oil consumption and production. Data sourced from here (PDF 35KB).

Where will this oil come from? There are a number of factors that make it unlikely that Australia will be able to import this quantity of oil. These include:

  • continued growth in demand for oil, particularly from nations such as China and India;
  • the majority of the world’s oil producing nations are past their domestic peak in oil production. This includes the majority of OECD nations which are net oil importers and will have an increasing call on oil imports as their domestic production declines; and
  • many oil exporting nations are also past their peak in oil production. Combined with increased domestic consumption, this results in a rapid decline in oil exports.
Advertisement

The net result is that the quantity of oil available for Australia to import in the future will decline. Chart two, prepared using data from the US Government’s Energy Information Administration (EIA) shows that oil exports from the world’s top five oil exporters are already in decline, as are the exports from those countries that Australia imports the majority of its oil from (table one).

Chart two: oil exports from the world’s top five oil exporters

  1. Pages:
  2. Page 1
  3. 2
  4. 3
  5. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

40 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Cameron Leckie has a Bachelor Science and a Graduate Diploma in Education. Employment experience includes a range of management positions both in Australia and overseas in the telecommunications industry. He is a member of the Australian Association for the Study of Peak Oil and Gas (ASPO Australia). Since finding out about peak oil in 2005, he has written extensively on the topic and in particular, its impact on the aviation industry.

Other articles by this Author

All articles by Cameron Leckie

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 40 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy