Oil Dependence and Geological Decline

NSW is recognised as having an economy that is heavily based on the availability of cheap and abundant oil. Oil dependence is something that continues to be discussed in low tones, in the hopes that 'something/anything' might happen to change the situation.

Despite this knowledge, the only certain change is the price of this material as we come to the end of the largest oil fields'productive life.

Behind the steep rise in petroleum prices now hitting motorists and consumers is a phenomena little-discussed by the mainstream media and for which the state government has done nothing to prepare: peak oil.

Peak oil is a well-established geological characteristic of oil production. Output from any oil- or natural gas field at first increases, reaches a peak, and then declines. The peak typically occurs when 50 per cent of the field’s oil or gas is produced. Adding up all known fields and probable future discoveries, industry experts have shown that global output will peak at some time in the next decade before declining by at least 2 per cent a year. At the same time, world demand is steadily increasing, bringing ruthless international competition for dwindling supplies.

This crisis will affect every aspect of social life and the economy. There will be no easy solutions because state and federal governments have so far refused to acknowledge the reality of peak oil or take any serious steps to prepare for it. Much-hyped substitutes for oil, such as hydrogen, ethanol or shale oil are inherently expensive and require infrastructure that would take decades to build.

Peak oil makes the provision of public transport infrastructure (especially rail and modern light rail) to all parts of our city an absolute priority. The age of abundant and cheap petroleum is drawing to a close.