The ethanol (E10) mandate is indefensible as it is in Australia at present.

Per litre, ethanol has about half energy content of petroleum petrol. That means at 10% ethanol the fuel loses 5% of its energy so litres per 100Km will rise by about 5%.

At $1.40 per litre, E10 should be at least 7c per litre cheaper than standard 91 octane ethanol free petroleum.

The US gasolene price keeps increasing since both the quantity and quality of oil substitutes don't measure up. Already some 'tight oil' provinces that were heavily fracked have peaked in production. As mentioned ethanol hardly adds much new energy. Canadian tar sands are polluting and themselves limited in scale. Oil imports from Iraq will also soon peak. Basically liquid fuel supply can't support erstwhile increased demand in the US or anywhere

Almost the most unconvincing article/industry blurb, I ever been exposed to!?
Petrol prices are never ever likely to come down as long as we stupidly, as arranged or permitted by our august "leaders", import 85%+ of our oil requirement, or charge the domestic gas market four times as much as our overseas customers!?
The article seems little more than PRIVATE industry propaganda, and or, patch protection?
Of course the Govt. ought to get involved in the energy market!
All it needs do is emulate private operators and hire the expertise needed.
i.e., one can buy an off the shelf drilling rig for around one billion. Not a lot to find inside an annual four hundred billion dollar budget.
With one oil rig, we could begin to open up the Townsville trough, which may contain up to fifteen billion barrels of sweet light crude.
Traditionally, Australian sweet light crude leaves the ground as a largely sulphur free, virtually ready to use as is, diesel, that only needs a little insitu chill filtering, to remove sand particles, and the soluble wax, to make it engine ready!
Look, just one billion, 150 litre barrels, of naturally occurring superior diesel fuel, (sweet light crude) would repay any outlays a hundred times over.
The elimination of the unnecessary refinery cycle, produces a fuel, that creates four times less carbon, from well head to harvester, than any currently imported, doubly refined fuel!
There is a much larger trough a little further out.
Some industry experts are on the public record postulating, we have hydrocarbon reserves, to our immediate north, to rival or even eclipse the entire middle east.
Continuing to rely on price gouging foreigners or sourcing over 85% of our needs offshore, is simply not an option!
N.B, hydrocarbons include LPG and NG!
Moreover, there is hardly any vehicle plying road or rail, that can't be tuned to run ON CNG.
Furthermore, locally invented ceramic fuel cells, run quite happily on NG (methane) as well, producing a world's best 72% energy coefficient and mostly water vapour in the process!
Rhrosty.

If we would keep and or expand our manufacturing industry, we have no other choice or option, than supply it with low costing NG.
Moreover, even blind Freddy can see, we can't rely on a foreign owned/controlled, price gouging, private, carpet bagging industry, to provide it for us.
Nor is the any valid or real reason,why we can't tap into known and massive reserves ourselves; or, make such supply, a condition of retaining currently mothballed reserves/leases!
Other countries explore and exploit their own reserves in public ownership!
It therefore follows, so can we!
All that prevents such an outcome and vastly cheaper browser prices, I believe, is recalcitrant individual politicians, whose culpable intransigence, serves everybody, except those Australians, (kept in the dark and fed lots of BS, mushrooms) who elect them!?
Rhrosty.

It would be a bad thing for the world if the US price of petrol goes down; they waste far too much of it already and have the second lowest fuel taxes in the OECD.

Eventually they will be forced to have a carbon tax and increase fuel taxes but I agree with the author that it may well be too late to prevent catastrophic global warming.

Overall a a sane and balanced article I think; I agree that government should intervene in the market and also fund more research into alternatives. Thoma didn't mention electric cars though, which are already a available alternative for urban transport and when electricity generation is converted to renewables, will have very low CO2 emissions

Current ethanol production creates an energy debt!
We can produce endless hydrogen with new solar technology, and fuel cells run on hydrogen.
CSIRO, when still ours, invented a solar powered device around the size of a microwave, that cost around $5,000.00?
Which could produce enough FREE hydrogen, to power the family wagon, or the daily commute?
Hydrogen used to be made utilising the older water molecule cracking method, which could be modernised and exclusively rely on solar thermal heat, to produce it safely.
We have no compunction utilising the hydrocarbon cracking method to produce fuel, in facilities quite close to residential centres, using higher heat and producing much more volatile products!
There are now three places in Oz producing/growing oil rich algae in pilot projects.
Some algae are up to 60% oil.
Extracting it as ready to use fuel is child's play.
It can be grown in sea water, and use arid land simply unsuitable for any other agricultural pursuit.
Algae absorb 2.5 times their bodyweight in Co2 emission! And under the same optimised conditions, double that bodyweight, Co2 absorption capacity/oil content, every 24 hours.
Meaning, the 100 tons of recoverable oil you have produced by today, is 200 tomorrow, 400 the day after, and 6400 by the end of the week!
Imagine how much that would be, by the end of a year, as the then possible daily production outcome!
Closed cycle algae production, only requires 1-2% of the water of traditional irrigation!
Water is basically borrowed and returned minus problematic nutrient loads.
The ex crush material left after oil extraction, is suitable as animal fodder; or, for the production of ethanol, with absolutely no energy debt component!
The left over sludge from that production, might even be suitable for digester based methane production?
Rhrosty.

Electric cars Roses1?
How about NG powered water cooled, solid state ceramic fuel cells, which produce on demand electricity, and mostly water vapour as the exhaust!
This would eliminate most of the moving parts of current hybrid vehicles.
Regenerative braking and a solar cell paint job, (more Aussie innovation) would extend the range far beyond the current range of any electric car.
The 72% energy coefficient of the NG powered ceramic cell, would produce a range, acceleration and torque, well beyond any conventional, power to weight ratio, CNG powered internal combustion engine. And a much lower centre of gravity!
With only bushes and brushes in the electric motors needing to be very occasionally replaced, one would imagine maintenance costs could be kept right down or just an annual service. The world would queue to buy it?
The super silent fuel cell might occupy the space of say 2 batteries, but weigh considerably less.
Given they produce on demand electricity, no batteries would be needed.
Economies of scale, would allow the costs to be reduced to below the production costs of conventional engines.
Given rechargeable electric cars need to be recharged, with say, coal fired power.
Rechargeable electric vehicles, may still contribute to emission and smog, whereas, the Gas powered ceramic cell does not!
The water vapour it produces as its exhaust could be condensed and collected, and provide a useful source of pristine drinking water!
Carbon fibre bodies, would allow us, to once again produce large comfortable family cars, utes and wagons.
Moreover, if caravanning was on the menu, extra cell capacity, would allow power to be piped to the vans wheels, which could more or less drive the thing!
Rhrosty.

The question at the start of the article looks for the magic answer as
to when petrol prices will fall.
Note the Oil Price web site is an industry investment site.
The current WTI price is around US$95 and as the cost of "new" oil
from oil shale, is about 5% of US total consumption, you can easily
see that shale oil at a cost of approx US$80 a barrel at the well top
will hold up the $95 price.
Any reduction in WTI oil price to near $80 would lead to a shutdown
of shale oil wells as well as the tar sands oil.
That would cause an immediate rise in oil price.
At present US$95 seems to be the Goldilocks price.

However the largest shale oil field the Bakken is showing signs of
peaking. Another year will confirm that.
We will soon be importing 100% of our petrol & diesel because the 40%
of demand that we produce will have to be exported because the
refineries are being closed, leaving us at the mercy of the
international market, and you know how much they consider others.

Rhosty mentions large oil fields to our North.
These are probably in the "Yet to be Found" classification.
I notice that the major oil companies have less oil to sell every year
so I wonder why they are not out there in our North drilling madly ?

Yes Rhosty I agree pure electric (not hybrid) is ultimately the way to go and gas fired fuel cells may provide a solution to extending the range and the problem that current best practice Li cells are not nearly as energy dense as fuel. But electric cars are viable even now for urban use and are becoming more so. I recommend anyone who has not yet done so to have a ride in one; you will be convinced.

I think it's worth putting more research dollars into improving electric vehicles as this is the future for personal transport.

Also more dollars into decarbonizing our electricity; that can be done with current technologies; see paper I co-authored: http://www.greenswa.net.au/sites/default/files/pdfs/SEN2029study.pdf

Do you think that "big oil" will let any government exploit all those wonderful alternative energy options?
They have tight control of all of the western 1st world countries and will not allow any interference with profits.
So don't hold your breath waiting for the price of petrol and diesel to ever drop again apart from the minor fluctuations that occur as the giants manipulate prices to fine tune their profit margins.

Rhosty said;
With only bushes and brushes in the electric motors needing to be very occasionally replaced,

Actually electric cars use AC motors so they don't even have brush gear
to be serviced.

I had a drive of the Nissan Leaf electric car.
Really, without any exaggeration it was magnificent.
It took of like a rocket, the acceleration was enormous and I had to
learn to be gentle with the accelerator.

It is really unnerving when you switch it on. Only the dial lights
up and nothing else happens, that's it !
No motor noise nothing !
It is ready to go.

If anyone is interested in seeing recent info on shale oil here is
a technical article;
http://www.theoildrum.com/node/9954#mor