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<DIV style="MARGIN: 0px"><FONT class=Apple-style-span face=Verdana>Mr IAN COHEN
[11.12 p.m.]: I wish to speak about Peak Oil. I attended a public forum at
Parliament House tonight where I listened to presentations from Professor Ian
Lowe of Griffith University, who is also the President of the Australian
Conservation Foundation; Brian Fleay, author of the book Decline of the Age of
Oil; and Rowan Tucker-Evans of the Sydney Peak Oil Group. Last week honourable
members would have received an informative package produced by the Sydney Peak
Oil group on this matter. Oil is a critical resource. Oil, natural gas and
petroleum products are central to the functioning of the modern world
economy.</FONT><FONT class=Apple-style-span
face=Verdana> </FONT></DIV></DIV>
<DIV style="MIN-HEIGHT: 17px; MARGIN: 0px; FONT: 14px Verdana"><BR></DIV>
<DIV style="MARGIN: 0px"><FONT class=Apple-style-span face=Verdana>Transport,
agriculture, mining and construction industries are particularly reliant on the
supply of oil. Crude oil provides 90 per cent of the world's transport fuels.
Oil is required not only as a fuel for farm machinery, but also as a raw
material for the production of pesticides and herbicides. Natural gas is used to
synthesise nitrogen fertiliser. Farming implements are constructed and powered
using oil. Food storage systems, such as refrigerators, are manufactured in
oil-powered plants and distributed across oil-powered transportation
networks.</FONT><FONT class=Apple-style-span face=Verdana> </FONT></DIV>
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<DIV style="MARGIN: 0px"><FONT class=Apple-style-span face=Verdana>The yields
that modern farming obtains could not be sustained without oil. The strain on
wheat farmers in America is apparent already. Recently they have had to absorb a
tripling in fuel prices, combined with a doubling in fertiliser costs. Mining
and construction, vital components of the Australian economy, are dependent on
diesel fuel for machinery. Crude oil provides another vital component to any
modern economy: plastic. Petrochemicals provide the feedstock for many products,
from detergents to pharmaceuticals, prosthetics to contact lenses, and garbage
bags to fishing line. The concept of Peak Oil comes from the observation that
output from individual oil fields rises from initial production, reaches a
maximum peak and then begins to decline. The peak of production occurs when
approximately half of the oil has been extracted. With some exceptions, this
holds true for a single well, a whole field, an entire region, and the
world.</FONT><FONT class=Apple-style-span face=Verdana> </FONT></DIV>
<DIV style="MIN-HEIGHT: 17px; MARGIN: 0px; FONT: 14px Verdana"><BR></DIV>
<DIV style="MARGIN: 0px"><FONT class=Apple-style-span face=Verdana>The ascent to
world peak is characterised by the ability of oil producers to match or surpass
world demand. This production growth has fuelled economic prosperity and enabled
us to enjoy the modern world we live in. Oil shocks on this side of the peak
have been caused by supply disruptions, such as the OPEC embargo and the Iranian
revolution. After the world peak of oil is reached and decline sets in, the
price of oil is expected to surge and fluctuate as oil exporters strain, then
fail, to meet demand. Oil shocks on the down side of the peak will be very
different to those experienced in the 1970s and 80s. They could be longer
lasting and more damaging to the world economy. This will not be the end of
oil—it will be the end of cheap, affordable oil. Saudi Arabia, the world's
biggest oil producer, generates 90 per cent of its oil from just five old mature
oil fields. Today we are consuming four to five barrels of oil for every one we
find.</FONT><FONT class=Apple-style-span face=Verdana> </FONT></DIV>
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<DIV style="MARGIN: 0px"><FONT class=Apple-style-span face=Verdana>The
implications of this trend will be immense and far reaching. Higher oil prices
will have an inflationary effect. Interest rates will rise. Transportation costs
will escalate. The price of food will follow. The effects on the economy and on
our standard of living will be profound. There is an urgent need for Federal,
State and local governments to respond to Peak Oil. We will need to rethink many
aspects of our lives—how we travel, and how we source our good and services.
There is an urgent need for transport demand management, with public transport
the main priority. We also need to consider where our food comes from. The
concept of "food miles" is important. In the United States of America, the
average portion of food is transported 1,500 miles before it gets to the plate.
In Canada that figure is 5,000 miles. In Australia we import food at a great
ecological and energy cost. This will not be a viable option when the price of
oil escalates, as it is bound to do. We need to consider food
security.</FONT><FONT class=Apple-style-span face=Verdana> </FONT></DIV>
<DIV style="MIN-HEIGHT: 17px; MARGIN: 0px; FONT: 14px Verdana"><BR></DIV>
<DIV style="MARGIN: 0px"><FONT class=Apple-style-span face=Verdana>I do not
propose any magical solutions to this looming crisis. It certainly will be a
wake-up call to many who take the abundance of our earth's resources for
granted. I strongly urge the Government to seriously consider the potential
impacts of Peak Oil when formulating policy and planning for the future. The
path that our State is going down, with its addiction to more roads and
motorways, will not be sustainable. The retention of farmland local to
population centres is also important for food security. We must not become
dependent on food imports. Myriad other social and economic impacts must be
addressed. I hope our governments at all levels will be responsible and not bury
their heads in the sand. It is interesting to note that if, as I understand it,
we were going to consider timber product for fuel we would need the entire
Australian agricultural production area.</FONT><FONT class=Apple-style-span
face=Verdana> </FONT></DIV>
<DIV style="MIN-HEIGHT: 17px; MARGIN: 0px; FONT: 14px Verdana"><BR></DIV>
<DIV style="MARGIN: 0px"><FONT class=Apple-style-span face=Verdana>Source:
</FONT><A href=""><FONT class=Apple-style-span face=Verdana><FONT
class=Apple-style-span
color=#4e88d9>http://www.parliament.nsw.gov.au/prod/parlment/hanstrans.nsf/v3ByKey/LC20051115</FONT></FONT></A><FONT
class=Apple-style-span face=Verdana> </FONT></DIV><A
href="mailto:jgoldie@snowy.net.au"></A></FONT></DIV></BODY></HTML>