TRANSPORT ENERGY IN AUSTRALIA - POLICY PROBLEMS, ISSUES AND ALTERNATIVES

The thesis held by the Australian government that the projected shortfall in indigenous crude oil supply can be met by enhanced exploration and/or demand conservation is appraised in the light of current economic incentives for exploration and the motorist's sentiment towards demand conservation. The paper establishes that the thesis is false, and that Australia is faced with a massive transport fuel import bill unless it finds alternative energy forms. The paper identifies potential alternative transport fuels that could be made available from indigenous energy resources. Whatever alternative fuel is to be used, it would need to conform to a variety of economic, social are environmental criteria before it would be accepted. The paper raises a set of general criteria with which to appraise various alternative transport fuels. Given that the use of petroleum products is environmentally degrading, the various alternative transport fuels are primarily assessed on environmental criteria. The paper finds that on environmental criteria only ethanol and natural gas have merit as suitable alternative fuels; however, with the addition of social and economic criteria it is natural gas which could provide a solution to the problem of the projected indigenous crude oil shortfall. Such a solution may, in fact, enhance the quality of life for Australians, especially those living in urban areas with deteriorating air quality.