[from Adelaide Advertiser]Australian Petroleum Production and Exploration Association chief executive Belinda Robinson said the number of wells drilled last year was 25 per cent down on the previous year, with Australian companies spending larger portions of their exploration funds overseas...

[FromThe Herald Sun]The Australian Petroleum Production and Exploration Association (APPEA) and consultants Wood Mackenzie found local oil production had already fallen from about 80 per cent of domestic demand to about 60 per cent in the past decade.
But that could plummet to as low as 20 per cent by 2015 without major new oil discoveries.

I have been aware for sometime that Europe was close to a decline in natural gas production. The events over the new year regarding Russian exports to Europe via Ukraine through this into sharp focus. A number of articles in the UK Petroleum Review and Petroleum Economist in February and March contained very informative articles.

Attached is a 15 p. paper I have written outlining the situation.

Will your Super be risked in the Tunnel?

Ever-increasing oil prices will mean serious risk for investments in the Brisbane North-South Bypass Tunnel.

There are two conflicting views about the future availability and price of oil.  Many in the petroleum industry now forecast that Peak Oil, the beginning of the decline of global oil production, will be upon us by the end of this decade.  Fuel shortages or price rises may well dramatically reduce tunnel usage below past forecasts. 

By contrast, many economists, including ABARE, predict that oil prices will have fallen by then.  But ABARE forecast just a year ago that oil would be $35 this year and $30/bbl in 2010.  Lots of people, including New York oil futures traders, are betting seriously against them.

Already production is falling in many of the world's great oilfields; the North Sea, Mexico's Cantarell, Kuwait's Burgan.  Bass Strait is just a trickle now compared to its peak in 1985.  When Saudi's Ghawar starts its decline, it will be certain Peak Oil is with us.

Clearly one can quote, as ABARE does, from the International Energy Agency.  However, its independence and competence are seriously questioned.  What will happen if the IEA forecasts are seriously optimistic, as many believe?

The Senate Inquiry into Australia's future oil supply is revealing a great deal of concern that ABARE's "business-as-usual" scenarios will prove dangerously wrong.There is a good chance of Peak Oil hitting us before the Tunnel is opened and a very high probability that oil shortages will be commonplace long before investors hope to break even.

The recent Griffith University Oil Vulnerability Index map of Brisbane shows how individual areas may be affected by rising fuel prices.  Investors need an Oil Vulnerability Index list of superannuation funds, to show those that are including oil price risks in their investment decisions

Superannuation fund managers who do not closely assess the risks that Peak Oil will bring will have more than retirees' incomes at stake.  ASPO-Australia will be approaching regulatory authorities to increase the level of oversight of high-risk investment options like the Brisbane tunnel. 

Bruce Robinson

Convenor, Australian Association for the Study of Peak Oil & Gas

www.ASPO-Australia.org.au

The world is mistakenly focusing on oil reserves when the problem is capacity to produce oil, M de Margerie said in an interview with The Times. Forecasters, such as the International Energy Agency (IEA), have failed to consider the speed at which new resources can be brought into production, he believes.

“Numbers like 120 million barrels per day will never be reached, never,” he said

"People are failing to deal with the reality of the price, which has nothing to do with speculators or even any lack of reserves, which are ample. "It is a problem of capacities and of timing," de Margerie says. "This is the real problem of peak oil."