[Peakoil] Peak Oil on PM

[Alex Pollard]

http://www.abc.net.au/pm/content/2010/s2884013.htm

MARK COLVIN: One of the Federal Government's top infrastructure advisers
is warning of an oil crunch which could send the global economy spiralling
back toward recession.

Curtin University's Professor Peter Newman is on the Government's
Infrastructure Australia Council. He says peak oil - when demand outstrips
dwindling supply - has already hit but the global downturn has kept prices
low.

Professor Newman even blames oil for causing the global recession in the
first place. And he's not alone. It's an issue being taken seriously by
some local councils which have drawn up peak oil contingencies.

Jeff Waters reports.

JEFF WATERS: It was a theory which emerged in the 1990s. Proponents of the
peak oil scenario said the cost of oil and therefore petrol would rise
exponentially in the first decade of this century when increasing demand
outstripped finite supply. With oil now hovering at about $US85 a barrel
it doesn't seem to have happened - at least in the original timeframe.

But Curtin University professor, Peter Newman, who's a Federal Government
adviser on the Infrastructure Australia Council says we've already reached
peak oil back in 2008 when it spiked at around $140 a barrel and sent
petrol prices soaring.

PETER NEWMAN: Peak oil did happen I believe in 2008. And it didn't happen
because some oil-exporting country had a revolution or something. It just
happened because you couldn't produce enough to meet the demand.

JEFF WATERS: Professor Newman largely blames the global financial crisis
on oil prices.

PETER NEWMAN: Subprime mortgages were mostly out on the urban fringes
miles away from work. People had to drive. And when the price of fuel
tripled in American cities they couldn't pay their mortgages.

JEFF WATERS: As the global economy has strengthened in recent months so
has the oil price. Professor Newman says it doesn't bode well for
recovery.

PETER NEWMAN: As the demand increases again the supply crunch will happen
and the price will go up.

JEFF WATERS: Professor Kjell Aleklett is the Swedish-based president of
the Association for the Study of Peak Oil and Gas. He's in agreement with
his Australian counterpart.

KJELL ALEKLETT: The fact is that we are producing less oil now than we did
in 2008. So just now we have 2008 as the peak year for peak oil.

JEFF WATERS: Professor Aleklett says he thinks the world will find a way
around the problem simply because it'll grind to a halt if it doesn't.

KJELL ALEKLETT: I'm one of those people that believe that it's not
possible to have a very high price of oil because that will put the end of
globalisation. And the fact is that a price of $200 per barrel there will
not exist an airline industry any longer and we will see problems with
airlines in the future.

JEFF WATERS: On the other side of the debate are academics like the
University of South Australia's Dr Vlado Vivoda.

VLADO VIVODA: What peak oil theorists miss out on is the fact that with
the changes in our, with improvements in our technologies and improvements
in a drop in oil production costs what is considered oil is changing as
well.

I see the definition of what is exploitable oil changes with the changes
in the levels of technological efficiency and with changes in the cost of
exploration and production of oil.

JEFF WATERS: The question is whether we'll adopt new technologies fast
enough. Some Australian municipal councils have already drawn up peak oil
strategies and Professor Peter Newman welcomes big, recent, federal
spending on public transport. But he says he'd like to see a full national
plan.

PETER NEWMAN: We really do need a national peak oil strategy that can take
us through the next two decades of change in our infrastructure
requirements.

MARK COLVIN: Infrastructure Australia Council member Professor Peter
Newman ending that report from Jeff Waters.