Report of the Select Committee on the Impact of Peak Oil on South Australia

During the time this committee was in operation, the price of petrol in Adelaide increased to more than $1.70 per litre, and is now trending downwards with predictions of it reaching $1.00 per litre by the end of the year.

While there is general relief in the community at this lowered price, it is a false dawn. The reality is that peak oil impacts will be felt just as hard. In the light of evidence taken by the Committee it might even result in those impacts occurring earlier and harder. We learnt that higher prices result in oil companies being willing to undertake new, more costly and more difficult exploration and extraction of oil while a lowering of the price removes any incentive for that to happen.


The Committee also received advice from a number of witnesses that actions taken to adapt to
climate change will be beneficial in dealing with the impacts of peak oil. In early September,
Professor Ross Garnaut recommended a 10% cut by 2020 in greenhouse gas emissions for
Australia, but in his final report to the Federal Government at the end of September he
suggested that a 25% cut should be considered. However, some polluting industries have
reacted angrily to the suggestions, and if their arguments are upheld and a lower figure is
agreed to by government the side-benefits of mitigation of peak oil impacts will also be
reduced.

The Committee is of the view that, because of the potential for extremely negative impacts
from peak oil, decision-making about this issue needs to come from the top, and hence our
recommendation that a body be set up within the Department of Premier and Cabinet to deal
with the ramifications.

It is clear that knowledge about peak oil is still in its early stages in our society, and without the
lead action that government can take we could find ourselves facing a crisis in very short time.

Parliament of South Australia (PDF)