Iran's oil restrictions 'a warning for Australia'

June 28, 2007

Iran has the world’s second-biggest proven reserves of oil, so its people are now furious that the Government has suddenly brought in petrol rationing.

There have been demonstrations, and at least one petrol station was set on fire.

Iran is limited in refinery capacity, and the decision to ration is seen as the Government’s way of trying to cut consumption, ahead of any UN sanctions on the country over its nuclear program.

Iranians were given two hours notice, at 10:00pm local time on Wednesday night, that petrol rationing would begin at midnight.

Motorists rushed to petrol stations to fill up their cars before the deadline, choking the city’s streets.

Under the new rules, drivers will be restricted to buying 100 litres of petrol a month, or just over three litres a day.

Dr Roger Bezdek is an American petroleum economist currently in Australia to have talks with state and federal government officials.

He is an expert on what is called “peak oil”, the idea that we are already at or may even have passed the peak moment of exploration, and it will get scarcer and more expensive from now on.

Dr Bezdek says the events in Iran provide a warning for Australians.

“Even though they’re probably temporary and are indeed self-induced, they may just be a tiny precursor of what’s in store for the world as we approach peak oil and petrol shortages occur and prices increase and people are not able to get the petrol they require,” he said.

“It doesn’t take much to make people very angry, very quickly.”

Dr Bezdek says we are indirectly dependent on Iran’s oil because of the way the world oil market operates.

“It’s very important, and it doesn’t matter whether it’s Iran, Saudi Arabia, Nigeria or Venezuela, oil is a truly fungible international commodity and there’s only so much out there,” he said.

“When output from one country drops it affects the entire world oil market.

“The problem is we’re so tightly stretched now there’s no slack in the system, so even minor perturbations in the system, such as reduced output from Iran, affects the entire world.”

Nuclear ambitions

Dr Bezdek says he does not necessarily believe the Iranian Government’s claim that it needs nuclear power because its oil is going to run out.

“I’m not sure what to believe from Iran – it could be a clever ploy to allow them to continue to with their nuclear program,” he said.

“Their oil reserves are not in danger of running out for geological reasons right now, it’s more because they’ve mismanaged production and development over the past two or three decades.”

Dr Bezdek says there are ways for Australia to protect itself from the predicted shock when the peak oil crisis hits.

“Australia, I think, should undertake, as soon as possible, aggressive actions on both its supply side and on the demand side,” he said.

“On the demand side, Australians should increase the fuel efficiency drastically over the transportation system, and on the supply side, they have to investigate all feasible options for producing alternative liquid fuels.”

Changing behaviour

Dr Bezdek says Australia’s urban sprawl means a lot of people are very dependent on their cars.

“That’s one thing you should look into changing or altering as soon as possible,” he said.

He says the peak oil point could occur before Australia is prepared for it.

“It’s going to take a long time, in terms of changing development patterns, running rail and light rail systems, mass-transit systems out to the suburbs and that,” he said.

“And we don’t have that amount of time. Peak oil could occur any time within the next decade, and probably sooner rather than later.”

Dr Bezdek says although it will cost billions of dollars to make the necessary changes, it will be worth the investment.

“If you don’t try to take these kind of mitigation options starting immediately, the ultimate cost to Australia will be many billions more than that,” he said.

He says the most serious impediment to change is the public perception that if things are going well now there is no need to make drastic changes.

“People are simply not aware of the problem and before you can address a problem, you have to be aware that you have a problem,” he said.

“I think it’s incumbent upon all levels of government in Australia to educate the public as to the problem that’s out there, coming possibly very soon and to [take] action on both the supply side and the demand side that are required immediately to address it.”

Also at the site:
Audio: Petroleum economist Dr Roger Bezdek talks about peak oil (PM)


Tags: Fossil Fuels, Oil, Transportation