Oil crisis looming: Australian Greens

Spiralling oil prices would force an economic crisis in Australia within 15 years if authorities failed to act now, the Australian Greens said today.

Senate candidate Drew Hutton said if Australia had any chance of weathering the shockwave caused by the ballooning oil prices, it had to stop building bigger road systems, switch to hybrid electric cars and upgrade its woeful public transport systems as soon as possible.

"If we keep going on as we are believing that this stuff (oil) is never going to run out or it's never going to get too expensive for us to use, then we're living in a fool's paradise," he said.

Mr Hutton's warning followed news that the price of oil had risen above $US40 a barrel and would continue to rise.

He said experts predicted the world had now reached its peak oil reserves with all major wells now tapped and nowhere else to look for another substantial find.

"It's not as though oil is going to run out in the immediate future, but oil is going to get more expensive," he said.

Mr Hutton said the economies of most civilized nations were heavily dependent on oil and the countries which would deal with this impending crisis best were those that had set themselves up with a quick and efficient public transport system and allowed for bicycle and pedestrian travel.

A spokesman for Deputy Prime Minister and Transport Minister John Anderson said to link current spiralling prices with oil reserves was ridiculous, given the instability of the oil-rich Middle East.

"The Greens like the idea of catastrophe, it didn't happen in the 1970s (when they first predicted one) and it won't happen now," he said.

The spokesman said the government would announce a new land transport plan on June 7 called AusLink, which would be updated every five years, based on projections 20-years ahead to deal with approaching issues including oil prices.

He said Australia's interstate rail system was also on track for an $872 million upgrade over the next five years to provide a viable alternative to car travel.

The spokesman said the Australian Government, along with the United State government, was already taking the issue of depleting oil stocks very seriously and examining alternatives including ethanol and hydrogen.