The outlook for crude oil supply and demand in Australia and its energy policy implications

Australia's oil reserves and production have contributed significantly to national economic prosperity and growth since the first large scale discoveries in Bass Strait in the 1960s. As a finite, non-renewable resource, the reserves ultimately must decline. In 1988 the forecast was that Australia's oil production would begin to decline in the mid 1990s and then rapidly tail off by the late 1990s. With this in mind, AMEC Ministers agreed in 1988 that a Working Group should review the energy policy implications of the forecast decline in the production of petroleum. The Working Group's findings are presented in this booklet. Chapter 2 examines the outlook for demand for petroleum products in Australia until 2005. This Chapter is based on current Australian Bureau of Agricultural and Resource Economics (ABARE) forecasts as well as savings in fuel demand that are potentially available from fuel efficiency and fuel switching measures. Chapter 3, which includes BMR's recently revised petroleum production forecasts, looks at the outlook for crude oil and condensate production, also to 2005. Chapter 4 discusses the range of government initiatives already in place to foster the efficient exploration and production of petroleum in Australia. This Chapter also examines the outlook for Australian alternative liquid fuels. Chapter 5, which is based on analysis by ABARE, broadly examines the possible macroeconomic implications of declining oil production for Australia while Chapter 6 examines the issue of energy security and in particular its relationship with oil self sufficiency. Finally, Chapter 7 identifies some energy policy considerations and recommendations arising out of the Working Group's analysis. 7 tabs, 3 figs