[Peakoil] feel free to reply!

[Jenny Goldie]

from today's letters pages in the CT:

Oil pessimists 

Jenny Goldie worries the world is almost out of oil, fearing it'll get really expensive soon. Antony Barry is concerned Australia won't be able to import crude and that Canberra will be among the hardest hit (Letters, June 28). They're pessimists. 

There are reasons why the oil price could fall significantly. And anyway, high crude prices won't stop car use. 

In addition to sustained, strong global (especially Chinese/Indian) demand, oil's high price includes premiums for confrontation with Iran, chaos in Iraq and instability in several other supply countries. Any of that could change tomorrow. 

For example, sharemarkets are jittery right now about a possible US/global slowdown. Oil demand would follow. But it's on the supply side that the big responses can be predicted. 

Until fairly recently, oil was expected to keep on averaging around $US25-a-barrel ($A34). We are yet to see the impact of sustained $US50-plus-a-barrel ($A68) prices on global production. 

In addition to rendering viable tar sands, shale, gas/coal-to-liquids, etc options, high prices have seen rapid application of technological advances in exploration and well recovery, every drilling rig in the world working and every Russian, Central Asian, deeper-water, smaller-field option being diligently investigated. Supply will rise substantially. 

Simultaneously, with increasing confidence that $50-oil is here to stay and reduced fuel security comes accelerated fuel substitution. 

Canberra's new cars will be much more fuel efficient. Increasing numbers will use electricity and hydrogen/fuel cells. All manufacturers have them ready now. 

Jenny, Antony and others will buy them. Canberra needs to plan the infrastructure for them. 

Tom Waring, Ainslie 



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