21 September: Crude oil rallies through $US84 a barrel for the first time in New York; Traders – and Iran – expect $US100 a barrel oil

Crude oil rallied through $US84 a barrel for the first time in New York on Thursday night when the October futures contract expired.

World is not about to run out of oil, according to Queensland’s new Minister for Sustainability Andrew McNamara

The world is not about to run out of oil, according to Queensland’s new Minister for Sustainability Andrew McNamara, reported The Courier Mail (15/9/2007, p.17).

Financial domino effect: He said the report commissioned by the Government on the looming peak oil crisis warns that rising oil prices will continue to fuel inflation and interest rates, placing further pressure on so-called “mortgage belt” families in out­lying suburbs. Not only will their cost of transport rise dramatically but so will mortgage repay­ments and the cost of food due to rising transport charges. McNamara said key State Govern­ment departments such as Primary In­dustries, Transport and Treasury are now undertaking more detailed modelling of the oil problem.

The Courier Mail, 15/9/2007, p. 17

Qld arm of Australian Association for the Study of Peak Oil and Gas questions fuel subsidy; warns of ‘serious economic’ hit as oil and food markets compete

Australian Association for the Study of Peak Oil and Gas Brisbane spokes­man Stuart McCarthy warned of “tough (and expensive) decisions” to avoid a serious economic hit. “What we’d like to see come out of the McNamara report (by new Queensland Minister for Sustainability Andrew McNamara) is a big re-po­sitioning of funding for public trans­port,” McCarthy said, reported The Courier Mail (15/9/2007, p.16). He also warns that bio-fuels such as ethanol and bio-diesel, while useful, were no substitute for oil.

Food versus fuel: “As fuel costs rise, so does the price of feedstock for basic foodstuffs, as bio­fuel producers compete with food companies for raw materials. As McCarthy puts it: “The energy and food markets are merging as the bio­fuel industry competes for food.” He also questioned the viability of State Government schemes such as the fuel subsidy, arguing that such artificial price mechanisms ultimately contribute to the problem, “and perhaps we have to rethink that paradigm”.

The Courier Mail, 15/9/2007, p. 16