Brace for an energy shortage

AUSTRALIA is headed for an energy crunch that will make the oil shocks of the 1970s look insignificant, according to an automotive industry leader.

Former GM Holden advanced engineering chief Laurie Sparke told a gaseous fuels conference in Melbourne this week that Australia might not be able to buy oil at any price.

He forewarned that the crunch could come in four to eight years’ time, and urged Australians to start planning for the conversion of all petrol-engine cars to gas – something this country has in abundance.

Dr Sparke said there were signs that world demand was on the rise to a point where it would exceed the dwindling oil supply around the world as well as raise prices.

“Australia is going to lose access to oil first in the western world,” Dr Sparke said. “We don’t have any long-term oil contracts, and we’re remote and we’re politically and militarily a minnow on the global scene.

“I believe we are going to have a very rapid transition from low-priced fuel like we have now to not having enough fuel.

“So we are going to see the first queues in capital cities at petrol stations.” The ominous prediction was backed up by two recent developments, he said.

First, manufactured goods exports by China and Japan reportedly had started to rise again. “It will be a few years yet before the recession is finished, but already there are signs that world oil consumption is starting to increase,” he said.

The second indicator was the federal government’s National Energy Security Assessment (NESA), which had until now been relatively calm about energy security in Australia.

However, the latest assessment showed a deterioration in the outlook for liquid fuels, although the assessment put the downturn as far out as 2023. “The NESA’s key finding is that Australia’s level of energy security has decreased in the face of mounting challenges,” the assessment said in its report released in March. “These challenges are diverse and include new policy initiatives as well as factors outside the control of governments such as the global economic downturn.” The assessment pointed out that Australia was well endowed with energy resource options and was well placed to address many of the issues, but Dr Sparke said he believed the federal government was too complacent.

“Predicted oil output from current investment tapers very rapidly and, when you get supply falling rapidly and demand rising rapidly, you’ll have an overnight crisis,” Dr Sparke warned.

“The government hasn’t grasped how serious the situation is. In order to respond, we don’t have time to build a new set of cars.

“We have got to convert the existing stock to gas. That is going to be the biggest problem in the short term.

“There are 12 million vehicles out there. The government can’t legislate to scrap them and they can’t let them lie idle because people won’t be able to get to work.

“If we are all going to continue to live out in Keilor Downs and drive into the city to work, we will have to retrofit all cars. If you don’t allow these people to work, you will have a massive unemployment problem.”