The Federal Government's position on Peak Oil|
24th February 2006
To : Kay Elson, Federal Member for Forde
From : Ian McFarlane - Federal Minister for Industry, Tourism and Resources
Thank you for your letter of 9 November 2005 to the Prime Minister on behalf of xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx, canvassing the issue of reduced oil production and Australia's preparedness for a decline in global oil supply.
Liquid fuels are important to the Australian economy, and the Government is pursuing policies to ensure that the economy adapts and benefits from changes in the World energy market. This is articulated in the policy white paper, "Securing Our Energy Future," which introduces initiatives to diversify and expand the nations's energy resource base.
To improve the development of domestic petroleum reserves, the Australian Government has introduced a range of measures, including acreage release and tax benefits designed to encourage additional exploration for oil and gas resources, especially in frontier areas. Australia's extensive reserves of natural gas are particularly important given the adaptability of this fuel in stationary energy markets and as a potential alternative to petroleum in transport application. Similarly our deposits of coal, both black and brown offer great potential for conversion to transport fuels such as diesel and hydrogen.
The Government is also committed to regularly monitoring and evaluating the energy situation; to improve the transparency and efficient operation of energy markets; and to promoting the development and application of a broad range of indigenous energy resources and advanced energy technologies.
One specific policy initiative outlined in the white paper is the biennial review of the national energy security outlook. The review provides the Government with an up to date picture with the resilience of the energy sector, industry's capacity to respond to temporary disruptions that would impact on energy security, and the adequacy of current policy arrangements, including those involving access to international supplies.
In addition, assessments of the longer term outlook for energy, including liquid fuels, are informed by analysis by the Australian Bureau of Agriculture and Resource Economics (ABARE), the Australian Government's Department of the Treasury, and global assessments by the International Energy Agency (IEA).
Through its membership of the IEA and the Asia Pacific Economic Cooperation Energy Working Group (APEC EWG), Australia is involved in collective action to respond to major oil shortages or disruptions and to develop policies to improve the functioning of global energy markets.
Support for renewable energy technologies is also helping to diversify the available energy mix. Following a recent report by the Bio-Fuels Taskforce, for example, the Government reaffirmed the 350 million litres (ML) biofuels target and agreed to facilitate a Biofuels Industry Action Plan. Aggregate projections in the Action Plan show that the ethanol industry expects to exceed to 350 ML target by 2010, underlining stakeholder optimism about the future. With hydrogen having the potential to play a role in Australia's long term energy supply, the Government is engaged both domestically and internationally in hydrogen related R & D programmes. Participation in collaborative arrangements such as the International Partnership on the Hydrogen Economy (IPHE) and the IEA Hydrogen Implementing Agreement enables Australia to have a say in determining the development and adoption of appropriate codes and standards for hydrogen.
The Government is also introducing measures to improve energy efficiency as a means of reducing our overall energy needs through initiatives aimed at lowering demand for oil in the transport sector, including a demand management programme designed to reduce reliance on cars and encourage people to make a more informed choice about other forms of transport.
In conclusion, I am confident that the Government has a broadly based strategy to improve the operation of our energy markets and to diversify our energy mix, so that Australia is well prepared to deal with the changing dynamics of global oil supply.
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