Transport Coalition calls for peak oil inquiry

Members of the Coalition for People’s Transport today called on Premier John Brumby to follow Queensland’s lead and establish an inquiry into “Peak Oil” to determine how rapidly rising oil prices will impact Victoria and how we should adapt.

The call comes from Environment Victoria (EV), the Victorian Council of Social Service (VCOSS), the Melbourne Transport Forum (MTF), the Public Transport Users Association (PTUA), the Institute for Sensible Transport, the Cycling Promotion Fund, Travellers Aid and the Eastern Transport Coalition.

Oil prices have recently hit a record high of US$111 a barrel, despite the US heading towards recession. Petrol prices in Melbourne are now expected to break the $1.50 barrier this week for the first time.

“It is about supply and demand — global demand is going through the roof and supply cannot keep up,” EV Campaigns Director Mark Wakeham said.

“High oil prices are here to stay, and are headed higher. Victoria needs a plan to reduce our oil dependence and support alternatives to oil-thirsty transport.”

The heads of Royal Dutch Shell and General Motors have both recently cited peak oil as a reality that requires significant adjustments. And earlier this month Caltex suggested in an internal newsletter that petrol prices could reach at least $3.34 a litre in the foreseeable future. [refer appendix for quotes and references]

Mr Wakeham said Melbourne’s outer suburbs and regional Victoria would be hardest hit by rising petrol prices due to the lack of public transport, walking and cycling alternatives. Low income households in these areas have three times the rate of multiple car ownership of their inner city counterparts. With the accelerated land release in outer Melbourne, many more people may become vulnerable to rising petrol prices unless they have viable transport alternatives to the car.

“We need to seriously reconsider our infrastructure priorities in light of peak oil and rising petrol prices,” Institute for Sensible Transport Director Elliot Fishman said. “If the government proceeds with a $10 billion east west road tunnel it might open around 2012 with petrol prices of at least $2.60 a litre, and possibly as much as $3.50. How many commuters from the outer suburbs could afford such prices? With climate change and rising petrol prices this tunnel runs the risk of becoming a white elephant.”

VCOSS’s chief executive Cath Smith said Melbourne now needed a comprehensive transport plan that tackles the challenges of climate change and peak oil.

“Meeting our Transport Challenges was a good start, but has been overtaken by recent events,” Ms Smith said. “We are concerned that low income Victorians are forced into using cars through a lack of options. Increased investment in public transport particularly in outer suburbs and growth areas will reduce the impact of continued rising petrol prices”.

About Peak oil

Peak oil refers to the peaking of global oil production, as production declines from the world’s major oil fields, and new supply fails to make up the shortfall. Many countries around the world (including Australia and the United States) have past their peak production levels and analysts predict production worldwide may have already peaked, or will do so within the next 5-15 years.

Every year since 1984, less oil has been discovered than has been consumed. Currently one barrel of oil is discovered for every four consumed [refer appendix].


Queensland’s Vulnerability to Rising Oil Prices, Taskforce Report

“There is no doubt demand for oil is outpacing supply at a rapid pace, and has been for some time now.” Mr Rick Wagoner, Chairman and Chief Executive of General Motors

“Easily accessible supplies of oil and gas probably will no longer keep up with demand.” Jeroen van der Veer, Chief executive of Royal Dutch Shell

Caltex internal newsletter