Govts urged to get ready for ‘peak oil’

ELEANOR HALL: Theories abound about why the price of oil has been skyrocketing. The head of OPEC says the weak US dollar and continuing tensions about Iran’s nuclear program are to blame. Economists say speculators are playing a role, as is soaring demand from India and China.

But those who subscribe to the theory of peak oil say the price is high because the resource is running out. The convenor of the Australian Society for the Study of Peak Oil and Gas, Bruce Robinson, has told Ashley Hall that it’s time for governments to stop denying the inevitable.



BRUCE ROBINSON: The real reason that oil prices have been going up is probably geological. We’re probably coming close to peak oil, that’s the time when global oil production will start declining. When, regardless of the economic factors, the geology just won’t be able to keep up.

ASHLEY HALL: So this explanation that speculators have been driving the price or it’s soaring demand from developing nations like China and India don’t really make a difference if we’re approaching that peak spot?

BRUCE ROBINSON: Well the soaring demand, you know, increases the pressure on the supply that we’re getting at the moment. But yes, so there’s the speculators and things. Everyone is trying to think of a reason so they can avoid mentioning the real problem of resource depletion.

ASHLEY HALL: There are also calls for those nations which subsidise petrol in their countries to withdraw those subsidies to even out the market if you like, and that, it’s said, would bring down the price as now everyone competes on a level playing field. How much difference do you think it will make to the price of oil if those countries that are subsidising withdraw them?

BRUCE ROBINSON: Not a great amount, but I mean, there’s a whole lot of people in Australia calling for subsidies. The Opposition and the NRMA suggesting we should drop the excises, effectively subsidising petrol users now. Queensland already subsidises petrol to eight cents a litre.

ABC