Feature — Petrol Prices and Bikes
It's black, sticky, and real expensive. We have become very dependent on oil in our economy. Now that petrol prices have gone up, we are starting to face the consequences: a crushed Aussie dollar, huge import bills, inflation fears, a shaky stock market, and anger on the streets. Unfortunately, things are not going to get any better according to the experts (see references below, or our Oil Watch Project page for the latest).
High petrol prices have a particularly strong impact in Western Sydney due to poor public transport. It is also an area with many people from lower socio-economic backgrounds.
Australian governments should be very concerned. People feel angry and frustrated when they feel caught in a bad situation with no alternatives. This was demonstrated by recent protests in Europe.
Australia Cycling, the national strategy paper, states that 35% of car trips are under 5Km, a distance that takes about 10 minutes to ride. Ironically, it is these short trips that waste a lot of petrol (and create more pollution) since the engine is still cold.
Although it's not a panacea, cycling can play a significant role in making us less dependent on foreign oil and giving people alternatives to the car. When we consider other problems we are facing, such as obesity, heart desease, noise and air pollution, congestion, etc, it makes sense to take bikes seriously.
Since we are not oil experts, we did a bit of research. We include quotes from various sources (our emphasis). Please check them out for yourself. (Please note these are respected, trusted sources such as The Economist, The Financial Review, the ABC, Encyclopedia Britannica, etc). See 'Read More' below for a full list of references.
The Economist, Leader for Cover
story: 'Euroshambles'
France¹s government must take a good part of the
blame for the dramatic spread of fuel-price protests to other
countries, because of the concessions that it promptly and
cravenly offered to the fishermen, farmers and truck drivers
who took to the streets at the end of August.
...the argument for having high taxes on fuel, on both
environmental and energy-policy grounds, is strong.
Indeed, a far more convincing economic case can be made that
America taxes its petrol too lightly than that Europe taxes
it too heavily. The burden on consumers is hardly excessive,
either: even in Britain, which has the highest fuel taxes in
Europe, the real cost of motoring has stayed more or less
unchanged over the past 25 years.
The Economist, Oil¹s
Taxing Times
The most powerful force fuelling oil¹s volatility,
as this week¹s ructions showed, is the black
stuff¹s paramount importance in transport. During
earlier shocks, developed economies were grossly inefficient
in their use of oil; since then, governments have used such
tools as energy taxes to make their economies more efficient
and less reliant on oil. They have largely succeeded, except
in transportƒwhere, despite soaring petrol taxes, oil
remains king because the alternatives are expensive and
impractical. Most of OPEC¹s oil now goes to a sector
that cannot at present live without it.
7:30 Report - 7/09/00: World oil guru says
petrol prices will stay high for years
PROFESSOR MICHAEL ECONOMIDES: I really believe that the
excess capacity of OPEC, which was 20 million barrels a day
just 15 years ago, has essentially evaporated, is now an
issue where there is zero or two million barrels a day, so,
essentially, zero. In Australia in particular I anticipate
the prices will continue to go higher and it's going
to be perhaps not shocking, but certainly significantly
higher than what it is today, actually.
The Coming Global Oil
Crisis
Editorials, opinions, assessments, and debates from experts
on this international topic of concern. Discusses the
background of the issue, and provides details of research
programs and possible alternative solutions.
The Energy Noncrisis Explained
Key Priorities:
A much better alternative to reducing petrol taxes
would be to lock some of these into public transport and
cycling infrastructure.
Integrate bikes with public transport. This is a
great combination since bikes drastically increase the reach
of the train by increasing the 'customer base' around a
station.
We need better bike storage in trains. Unfortunately,
it looks like the new Millenium trains have none in spite of
many requests from cyclists.
We also need more storage lockers at station. These
need to be in a good, well-lit position. More Info.
Cycleways to train stations need to be improved to
allow people to get there safely and quickly.
Accelerate the implementation of BikePlan 2010, so it
is finished by 2005.
After the olympics, public transport and cycling
insfrastructure should get a big share of public works. We
have now seen the benefits of reduced car congestion and
better public transport (See 'Public transport a winner, and
should remain so', SMH, 4/10/2000). Many people have
experienced getting somewhere without their car. We need to
take advantage of this. They will also be inspired to be more
active.
What you can do:
Write to the Minister for Transport, The Hon. Carl Scully, as well as your local MP. Ask them to accelerate the implementation of the BikePlan 2010 so as to finalise it by 2005. Ask them the following:
- In what year or range of years will Australia need to import 90% of its crude oil needs?
- In what year or range of years will the world demand for oil permanently overtake the world's oil supply capacity?
Read More:
- CAMWEST — Riding to Work
- Hubbert Peak — Overview
- The Economist, Leader for Cover story: 'Euroshambles'
- The Economist, Oil¹s Taxing Times
- The Economist, Index of articles re Oil
- Climaxing Oil: How will Transport Adapt? A good overview of the current oil situation by by BJ Fleay (B Eng, M Eng Sc, MIEAust, MAWWA), Associate of the Institute for Sustainability and Technology Policy at Murdoch University, Western Australia.
- Ecotransit's Oil Reports Page. Pointers to papers on oil from an Australian perspective. Ecotransit is a group working for better public transport in Australia, and Sydney in particular.
- 7:30 Report - 7/09/00: World oil guru says petrol prices will stay high for years
- ABC Lateline : The almighty petrol pump. Daniel Yergin, author "The Prize"; Colin Campbell, author of The Coming Oil Crisis and Sheikh Ahmed Zaki Yamani, of the Centre for Global Energy Studies (2/9/1999): “The almighty petrol pump. It fuels our desire for ever greater mobility. But fuel prices are going up. Are we heading for another oil crisis?”
- 7:30 Report - 23/08/00: Oil companies not among petrol price rise villains
- 7:30 Report - 16/02/00: Petrol prices set to rise in the wake of world oil shortage
- 7:30 Report - 7/09/00: World oil guru says petrol prices will stay high for years
- Lateline - 22/08/00: MPs nervous over fuel price backlash
- The World Today - 19/07/00: Union action threatens petrol supplies
- Britannica, The Energy Noncrisis Explained: Considers the disappearance of the United States energy crisis of the 1970s and early 1980s. Comparison of 1981 and 1999 US oil prices; Factors that contributed to the period of high oil prices; Lack of interest in studying the economics of the energy crisis; Suggestion that energy crisis economic lessons could be relevant again.
- The Coming Global Oil Crisis: Editorials, opinions, assessments, and debates from experts on this international topic of concern. Discusses the background of the issue, and provides details of research programs and possible alternative solutions.
- Petroleum Refining and Marketing in Australia-Changes Ahead - Current Issues Brief 11 1999-2000, Parliament of Australia Library
- Oil news: http://www.oil.com, http://www.oilnews.com
- Government Prices Oversight Commission: Information on this autonomous body controlling price policies and practices of government business enterprises in Tasmania, Australia. Provides details of its investigations, petrol price monitoring, competition principles, and legislations. Includes annual reports and press releases.
- International Energy Agency: An authoritative body in the field of energy, it informs governments on what is happening in oil production. It produces a number of statistics which are available on the web site.
- The Decline of the Age of Oil, Petrol Politics: Australia's road ahead by Brian J. Fleay, published by Pluto Press, Locked bag 199, Annandale 2038. ISBN 186403 021 6
- The Coming Oil Crisis, by C.J. Campbell, 1997, published by Multi-Science Publishing Coy, London & Petroconsultants S.A., Geneva.
- Just when you thought it was safe..., by David Fleming, Australian Financial Review, 23/4/1999, Review section, page 11
- Why Are We Still Bulding Roads? A Synopsis of Australia's position in the World petroleum situation by CAMWEST member, Danny Hannan. Also see his letter to Senator Nick Minchin, the Federal Minister for Industry, Science and Resources.
- Index of CAMWEST feature articles
New Links (added 23.11.00)
The International Energy Agency's World Energy Outlook 2000, the authoritative report on world energy trends, has been released for 2000. Have a look at the World Incremental Oil Production chart, which shows how we will depend more and more on Middle East OPEC oil. If you look carefully, you'll also see that production will be less in the future scenario, hinting at a peaking in production. There's an Excecutive Summary (PDF, 154Kb) and a press release which says: "...rich and poor alike will come to depend heavily on a diminishing number of gas and oil suppliers. Middle East OPEC countries, which furnished 26 % of world oil in 1997, will be called upon to produce 32 % in 2010 and 41 % in 2020". Robert Priddle, the IEA Executive Director, says about the document: "It sounds important alerts ð particularly in the areas of oil-supply security and climate change. But, by laying out the facts in rich detail and by proposing a number of alternative cases, WEO 2000 can help us come to grips with reality and make some difficult choices." Transport is one of the areas the report puts forward as an opportunity.
WORLD ENERGY PROSPECTS TO 2020, a paper prepared by the International Energy Agency, for the G8 Energy Ministers' Meeting (Moscow, 31 March - 1 April 1998). Look at the Oil Supply Prospects section in particular, figure 9 shows oil production peaks: 2000 for world excluding OPEC Middle East, 2015 for OPEC Middle East, 2012 for world oil supply.
The Imminent Peak of World Oil Production, by C.J. Campbell, a Presentation to a House of Commons All-Party Committee, on July 7th 1999.
Research by Canadian Imperial Bank of
Commerce:
Canadian Imperial Bank of Commerce (CIBC) is the second
largest bank in Canada and one of the 10 largest in North
America with assets of USA $182 billion and a market
capitalization of USA $10.5 billion. CIBC relies on
Petroconsultants' analysis for its energy research.
Occational Report #28, Feb 2, 2000: "While the world is
not running out of oil, the region outside the Persion Gulf
is fast running through the cheap oil".
Running on Empty, Forecast, Sept 19, 2000: "After rising
for 140 years, world oil production is about to peak."
Cheap oil: enjoy it while it lasts - Howard Banks, Forbes Magazine, 06.15.98
Background Briefing - 3/09/00: The Cars That Ate Our Wallets
Lateline - 17/10/00: High oil prices a taste of things to come
PM - 20/09/00: Oil price threatens Asian economies
The Last Oil Shock - BBC News, The Money Programme, Nov 8, 2000: "Britain faces the prospect of closed filling stations ... There are scientists who believe that the recent problems are just a foretaste of what is to come ... [that] from 2005, the world will face a permanent ... shortage of petrol..."
When Is Global Production Likely to Peak? - World Resources Instititute.
List of papers by Matthew R. Simmons, from Simmons and Company International, a Consultancy
Hubbert's Peak: The Impending World Oil Shortage, by Kenneth S. Deffeyes, Princeton University Press. Read the free sample chapter.
Are We Running Out of Oil? A poster by L. B. Magoon, explaining graphically the oil situation.
Mired in crude: The end of Oil - New Internationalist, issue 335 - June 2001
Your Thoughts
So what do you think? What should governments do with high petrol prices? Let us know by mailing us at cycling (AT) camwest.org.au, and we'll publish your thoughts. Join our mailing lists.
