The latest global oil production data from the Energy Information Agency (USEIA 2004) includes a significant revision for Australian production. The EIA now estimates that in 2003 Australian oil production fell by 18%, and that in the first four months of this year it is down by 15% in comparison to the same period last year.

This is bad news in anyone’s book, worse than older Geoscience Australia and Australian Bureau of Agricultural & Resource Economics estimates. Geoscience Australia estimated that, “Australian stocks of crude oil (in the ground) will be exhausted in 8 (now 5) years if the current rate of production is maintained and there is no discovery of new reserves” (GA 2001a). There have been no significant discoveries in Australia since that time.

The ABARE study, conducted by Woodside Energy p/l Managing Director John Akehurst, said: “Projections by Australian Government forecasting agencies indicate that Australia is facing a rapid decline in liquid petroleum production over the next decade. Liquids self-sufficiency is expected to decline from an average of 80-90% over the past decade to less than 40% by 2010.” (Akehurst 2002)

Before reflexive Pollyanna’s leap to defend the ‘limitless bounty as our birthright’ fantasy, I’ll quote J.Williams, CEO of Geosciences Australia, testifying to House of Reps commitee last year: “Turning now to petroleum, just to add to our submission, the situation with production to reserves ratio, which was around 11 in the submission, has now deteriorated considerably down to five, which means that our indigenous supplies of liquid crude oil resources are certainly deteriorating. That raises questions of petroleum security and the like” (HoR SCIR 2003).

John Howards 150% tax rebate/subsidy for oil exploration wont do anything apart from boost bonus’s and provide ex-ministers with board seats. As (foreign explorer) Japan Australia LNG (MMI) stated in their submission to the House of Reps (HoR SCIR 2003), “there are few impediments to oil exploration in Australia that rival the generally very low chance of success for finding crude oil.”

Thanks to Little Johnnies foresight, corporations now don’t even have to find anything to make a profit! How long will taxpayers subsidise industry to look for what isn’t there, while ignoring the major changes required to avert a forced power down?

References
Akehurst J (2002) 'World oil markets and the challenges for Australia.' ABARE, Canberra.
www.woodside.com.au/NR/Woodside/investorpack/SG3682_3_ABARE.pdf

HoR SCIR (2003) Chapter 2 - Inventory, Draw-down and Replenishment. In 'Inquiry into resources exploration impediments'. Parliament House, Canberra. (Hansard)
www.aph.gov.au/hansard/reps/commttee/R6228.pdf

Geoscience Australia (2001) 2000 Oil and Gas Resources of Australia. Quoted by the ABS at www.abs.gov.au/Ausstats/abs@.nsf/0/ce28d7fbe5faa308ca256cae0015da32?OpenDocument

USEIA (2004) Global Oil Production Data. US Energy Information Agency. Available at: www.eia.doe.gov/emeu/ipsr/supply.html