These suggestions are just tinkering that will be overwhelmed by oil's relentless supply decline. What is needed is revolutionary change away from oil. These include reducing the need for so much commuter travel, for non-oil based transport such as electric, higher mileage vehicles and public transport. Such is the pace of change that the PM's subsidy for the Camry hybrid will be too little too late. One interim measure that could make rapid inroads is a switch to compressed natural gas (CNG) initially for trucks and buses that fuel at a depot then perhaps for cars. This assumes of course that vulnerable infrastructure can be improved such as we now see in Perth and that governments will offer suitable incentives. Since oil based petrol and diesel will be reduced to a minor role in the next 20 years we may be doing ourselves a favour letting the price escalate.

Tinkering indeed! The governments in Australia are pandering to the hip pocket nerve and ignoring the inevitable rise in oil prices. The Howard government even gave GMH $50 million to make a new V8 engine. Look at what's on the road, and you get the message, fuel is still too cheap when one tonne of steel, glass and rubber is being used to move one person. Look at all those gleaming 4WDs on the bitumen.

A case could be made for increasing the excise, not lowering it. While there would obviously be outcries before the short term hurt is absorbed (like the GST) the economic cost would be small if at all. Our moribund vehicle industry (and lets be clear on that, it is) could be encouraged to become smart and Rudd's support for hydrid engines could yield fruit.

Leave the market and refining industry alone - manipulations fail time and time again. Focus instead on a vision of efficient engines and public transport when $3 per litre will be seen as cheap.

Absolutely right, Taswegian.

Nothing should be done to prevent natural increase in fuel prices.

Attention needs to be devoted to allaying taxes for in lower income brackets and marginal business who are affected by increasing energy costs, but trying to stop energy costs rising is like trying to stop over-ripe fruit from falling off trees.

The best medicine for all of us is to let energy prices soar to a level where we start innovating in every direction - to reduce fuel use, to use it more efficiently, to change our behavioural patterns, to invest in new, elegant technology, to learn to live comfortably with less. We'' be the richer for it.

At $1.70 litre petrol is not expensive, and it is subsidised. Include all the hidden costs and petrol should be $4 per litre.

Bernie, You're as out of touch as the government you criticise in terms of the real measures that must be taken to handle the developing fuel crisis. You simply don't understand the depth and seriousness of the situation.

The pollution tax, rather than carbon tax, seems to be the only reasonable long term measure. The revenue can be as credits distributed to pollution reducing businesses. This may also lead towards dramatic improvements in our public transportation. Our farmers could also benefit since their farms do absorb atmospheric carbon dioxide more than their machinery releases.

Initially small, the pollution tax can be increased annually over twenty years. This would offer incentives to businesses and individuals to switch towards less polluting practices.

I must note, however, that we are still imprisoned within the box. We actually do have solutions ready to be put in place. Only one acre of barren land can provide enough algal oils to run a small farm. I have outlined this here:

http://www.sciencealert.com.au/opinions/20083004-17248.html

Kind regards,

No Michael, Bernie is NOT out of touch, I suggest he is part of the hip pocket nerved voters. As long as the community remains tied to expediency, Australia will continue to under perform tied to its removalist (resource) industries.

Australia could become a world leader in environmental management and as Europe shows, live with $3 fuel with perhaps no overall cost to the economy (again, like the GST that was absorbed).

Lay out a vision for what Australia could be like in 2020, sell it to the community (and Bernie) and we may even have a motor vehicle industry not dependent on our subsidies (tariffs) and a clean, efficient transport system.

But I am whistling in the wind again - aren't I?

As the inevitable fuel price-rises bear down on us like a freight train, I am surprised that some people think its sensible to sit in the middle of the tracks, discussing whether 10c here or there will save us from from the impact.

Spend 10c/litre on reducing the price now... 20c next month, $1 next year, whatever. We can choose how much our country can afford to spend on subsidies but whatever we choose, the oil price will eventually exceed it.

The pollies should be leaders, spending our tax dollars on innovation and alternatives, rather than on measures that pander to inertia and mislead us into thinking that its OK to remain on the tracks, and that the train will somehow miss us.

Toot toot! :-)

This enthusiasm for making 10 cent tax adjustments to the price of fuel while it is varying by 50% in a few months is bizarre. 10 cents is like a ripple on heavy seas - hardly noticeable.

It also assumes the price is the problem. This is rather like assuming a smokers cough is the problem - cure the cough and the problem will go away. Hopefully this speculative bubble in oil prices will burst soon, but the falling price won't mean the problem has gone away.

And the Fuel Watch being anti competitive meme seems to of taken on a life of its own. Its not anti competitive - if anything the reverse, in fact. Without Fuel Watch we customers don't know what the going price for petrol is. In order to find out a customer has spend time and money (fuel for driving around). This means the petrol station can charge slightly more than the real going rate for fuel - the difference being the amount of money the customer has to spend to find the market price. Charge too much of course and the customer will drive around, so the harder they make finding the current price the more they can charge, and by varying the prices hourly they can and do make it real hard. This is the underlying reason petrol prices change like they do.

Fuel Watch gives customers price information for free, so the petrol stations no longer get to pocket the price of finding it out. In effect Fuel Watch is moving petrol closer to that economists ideal - the "perfect market". In a perfect market all buyers and sellers know all available information, and thus can make informed decisions. In all other situations someone is being done over. In the case of petrol, the oil companies work very hard to ensure it is the customers who are done over.

If every retailer was forced to publish their prices publicly like this we would all be better off. Its unlikely it will happen - retailers would kick and scream. But I can dream.

What we're looking at is the age old competition between vested interests a bit like arguing over who get the most comfy deck chair on the Titanic.
We’ve missed the good ship “Bountiful Oil” that ship has sailed. While we’re busy worrying about petrol we’re miss seeing the Icebergs (plural) looming on the horizon.
If we make it cheaper we’ll:
• Encourage usage of petrol.
• Increase Global Climate Change.
• AND THE REAL BIGGY: Deplete our source of petroleum AND ALL ASSOCIATED PRODUCTS!
All conversations I’ve seen are focused on Petrol what about plastics, colouring, paints, flavoring, disinfectants, cosmetics, pharmaceuticals, fabrics and Sources for energy (Kerosene etc) the list goes on an on. Simply look around you and then consider the man made products surrounding you odds are they are made of or require petroleum products in their manufacture.
The problem is WAY bigger than fueling the family car it existance is in doubt regardless of the fuel. As for replacements for all those products? We haven’t got a clue!!
We are facing and it’s not an over statement life without petroleum is at the moment the end of our current civilization as we know it. Sure it’s a while off yet but protecting our personal interests is in the long run is a bit like the optimistic base jumper with a failed ‘chute heard saying as he hurtled past each floor towards the ground “Where’s the problem? So far so good”.
On a more immediate sense the most suffering the most are the low/fixed income, unemployed as it is they who have the least choices. They need their cars but can least afford the fuel. Neither can they afford a new low emission car.
Governments should act now with a comprehensive, coherent plan to address the real problems facing humanity.
Maybe the Arab prophecy is right after all, “my grandfather rode a camel, my father drove a Rolls, I fly a jet, my grand son will ride a camel….That’s progress?”.

Dropping the excise won't work the fuel companies will just absorb the difference because they know people will pay whatever they have to pay. A better idea would be for the government to work with independent service station owners to set fuel prices at whatever the government feels is a fair market price. The government could then reimburse the independents the difference between the set price and whatever the major fuel companies are charging, probably a few cents per litre. They should only have to subsidise the price for a little while before the major fuel companies drop into line. Dropping the excise will achieve absolutely nothing, we need to stimulate competition.

No This is a waste of everybody's time.

We need to do what we should have done after the oil problem in the 70's.

Change fuel. It's that simple. That removes the threat of no supply or being held to ransom.

We have the perfect country for so many alternate energies but people like the last X Prime Ministers simply cow tow to business and let us pay the price for their negligence.

Fuelwatch is useful for those who want to use it but who really wants to travel Y kilometres to save a cent a litre. You'll just spend it getting there.

Nelson's 5 cents a litre too is a waste of time.

Change energy and do it now. We need to do that anyway for the future of the planet. Do you think perhaps, maybe the greedy people who have the money now can see that? They sure can and spend billions trying to snow everyone.

Our governments are brilliant. Their solutions to problems like traffic congestion is an fine example. Tax people off the roads. Excellent idea if you are rich. Otherwise get a bicycle is their attitude. OK as long as they start riding bicycles everywhere they go. Hope they enjoy the Sydney Perth trip.

http://www.teslamotors.com/index.php

There is your answer, that is what is possible today.

Take that kind of technology, make it affordable,
(not everyone needs a Lotus type sportscar)

Power generators already produce surplus power all
night, perfect for charging the batteries.

The Prius isn't going to solve anything, other then
reduce fuel consumption a bit in traffic.

Govts have now already peed 70 million $ up against the
wall on old technology.

If they are going to do something, do something new,
not just keep subsidising old technology.

BTW, last weekend's AFR contained some substantial
information about the potential of electrics

the fuelwatch is a great idea. we can look up fuel prices online, and search the cheapest fuel nearby suburbs. and i found another fuel watch website http://www.fuelwatcher.com.au/ - it's great, it's with maps.

Fuel watch is just a data base with the cost of petrol at each service station in the person's region. And Bernie knows it.

Waht we need to do is just walk. Do you remember that? It was invented by man when we climbed up out of the swamp.

One foot in front of the other.

The previous posts defend the fuel price by accepting it and looking at alternatives and criticising others, we can do better than that!

Australia exports 65% of its Crude and the price of crude has gone from $40 to $140 a barrel in the last 5years. That is a 350% increase can someone advice me where has all this profit gone? The suggestion that this money is used to fund searching for oil is naive at the best. Therefore it the price goes up to $160 an barrel where does this windfall go? I suspect that the oil companies are making a larger profit. They are not subsidizing the Oil they buy from Singapore which is used to fuel our countries needs!

At The last budget, May 13th, the Federal Government target the oil industry and slapped on a 2.5 billion bill for condensate Oil. http://business.theage.com.au/25bn-as-condensate-tax-break-disappears-20080513-2dtl.html

Therefore, while the Federal Government says it cannot do anything, in fact it has done something already. This will help the Federal government to return a larger surplus but they will give no relief to the Australian population.

In a fair and just society, one that the population elects there leaders you would think the above would be a fairly tale, not so.

Remco, you aren't whistling into the wind, you are urinating into the breeze.

If we had a government of vision it would solve the problem by installing machinery in Canberra to recycle hot air into crude oil. As this does not seem likely, we will just have to accept the dramatic changes that will shortly impinge on everyone, particularly those in debt.

We also have to realise that many thousands of people are trapped in gated McMansions in outer suburbia which are locked into a high energy lifestyle, and which are worth much less than was paid for them. These people won't keep quiet while they are going down the gurgler.

We all know that Kevin Rudd promised to keep fuel prices low, and will remember that at the next election. Of all the stupid things to say, it even beats Howard's promise to keep interest rates low.

Anybody lamenting the way the community is tied to expediency should remember that our large immigrant intake came here to make a fortune, and are not interested in anything that does not promote that end.

The trouble is that we cannot receive real guidance to guide our actions, as any real outlook would have to accept a dramatically lower standard of living. No politician would suggest this because of the risk that when it eventuates they will get the blame.

Looks like being an interesting century.

Thank heavens we have a sea boundary.

I live n WA and subscribe to fuelwatch. Every afternoon I get an email with the tomorrows fuel prices at 10 petrol stations in my suburb and surrounds. It also gives a warning just before the start of a new price cycle.

It makes it easy to pick out one of the cheaper stations and can save 5-10 cents a litre per fuel stop.

While it takes the sting out of the bizarre "petrol price cycle" it is no silver bullet for sky rocketing petrol prices regardless of whether they are caused by speculation or peak oil.

The lack of interest in this Opinion speaks for itself. Governments, especially the State governments, simply fiddle, doing their utmost to appear to be doing something, but in the end, the marketplace rules. Its former employees like author Bernie now consultant, carries this charade through promoting even the age of the Kwinana refinery. Perhaps the age of politicians should be considered?

Doubling the price of fuel over say a ten year period, as outrageous this might seem, can be absorbed and promote a more resilient economy geared to the inevitable rise of energy prices. Trimming cents off with fiddles achieves only prolonged pain.

Despite record profits oil companies are not reinvesting in their own industry. Most oil rigs out there searching for the last vestige of oil are now at least 25 years old and technically at the end of their economic lives and with little or no investment in new refineries worldwide perhaps the oil companies know something that many if not most people still choose to ignore; the beginning of the end of the age of oil.

High oil prices - get used to them and all the other ramifications of our almost complete dependence on the stuff. All too late we have realised we have used it up without any sense of its true value. Bottled water and fizzy drinks still cost more.

Oil production will soon enter its permanent and inevitable and unstoppable terminal decline within the next few years.

There is only one answer to set up the economic environment and manage the boom & bust economic chaos of the "bumpy plateau"... an international oil sharing agreement.

http://oildepletionprotocol.org/

Decline is going to happen anyway. Wouldn't it be wise to have a plan to manage it?

Many thanks to all who've made comment on my article. I agree that, in many respects, it's tinkering around the edges but I wrote it in response to the tinkering that Rudd and Nelson started arguing about - the 5 cents a litre excise cut proposed by Nelson which was poo-pooed by the media until they found that the public actually think that even a 5 cent reduction is better than no reduction.
I'm not sure what Remco means about the charade of the Kwinana refinery's age - when a five billion dollar plant is new, borrowings can be a significant annual expense against profits. But, after the loans have been repaid, profits are generally at their highest level which, combined with BP being an oil producer, is making that company and its WA refinery VERY profitable.
I could have written articles about the myth of peak oil, what are our alternatives to fossil fuels, what should governments really do to make us energy efficient, and so on. But, as a former state MP, I believe there are times that you need to take the wind out of the sails of governments or oppositions who are sailing up the wrong river: a small excise cut is a waste of time and Fuelwatch is anti-competitive and only of marginal value as it currently operates. So I thought I'd try to get the media here in WA to move on to more serious issues. One can only try!

It seems to me that car companies have already decided what to do
and nearly all major manufacturers are quickly moving towards
electric plug-ins.

The latest Economist contains interesting information about where
its all heading.

New battery technology is going ahead in leaps and bounds,
batteries that can charge and discharge in 10 seconds for instance.

Google are already experimenting with photovoltaic car parks.
Batteries recharge whilst people are at work.

Recharge your batteries from home at 3am, you are using power
that would otherwise be wasted.

Soooo, that is my prediction, electric plug-ins is where its all
going fast, that will help take the pressure off oil as well
as CO2 emmissions. If the Govt is going to throw money around
at car manufacturers, that is where they should be doing it,
as it looks like its the future.

Bernie Masters: "I could have written articles about the myth of peak oil."

Indeed you could have, Bernie. I don't think peak oil is a myth, but nevertheless it should be possible to put together a fairly strong argument saying it is over-hyped. If you did that well, supporting it with a few good links, it would be a first for OLO. Why not give it a go? Certainly it would be more relevant than loudly banging on about a 5c fuel tax.

Also, I notice that no-one else has praised the "Fuel Watch should be a maximum" idea. I don't agree that it is anti-competitive. But nonetheless making it a maximum seems like a good thing to do.

Interesting comments in these posts.

Yabby is right, electric cars, if we still have cars at all will be the
way of the future.

Oil companies have avoided building refineries for years.
Would you if you knew what is likely to happen to your feedstock ?

The politicians are staring at the on coming headlamp and simply do not
know what to do. Whichever party bights the bullet and takes the
people into its confidence and tells them whats what and lays it out
for the people to see will probably be ridiculed for a while until it
sinks in that it is all real.

Then they will get support if the government in the meantime has
planned a rationing system and presses for the adoption of the
Transition Protocol.
There are a number of other steps that must be made also, like
qudrupling and duplicating certain rail lines and stopping interstate
road transport and road expenditure.

Hows that for a policy to lose an election ?

Hybrids are efficient in cities with lots of stop/start traffic, especially Sydney, but don’t forget our C02 emission from vehicles is 9% and 47% from power stations (coal). So, I think the rush to Hybrids will be more based on people trying to reduce there weekly fuel bill and only a modest decrease in C02 emissions.

Its interesting that the Government focus on others but not what they could achieve, for example if we removed traffic calming, which has become traffic stressing, and co-ordinated traffic lights ( I am averaging 7 red lights out of 10 in Sydney) we could improve the average speed of travel which would mean all the “existing cars” would use less fuel and produce less C02. Further road management, where the focus is on not stoping vehicles, would improve this. My car gets 7.2 litres per 100kmh on a trip but in Sydney we are getting 14.1 litres per 100kmh, off course the Government would need to spend money on infrastructure.

Also, Hyundai has produced a Hybrid LPG vehicle, which would require $10 to run for 300kmh. Korea has large supplies of LPG and has the distribution retail network just like Australia. We should be pursuing this type of technology:

http://www.autobloggreen.com/2008/06/10/hyundai-may-build-hybrid-lpg-elantra-in-australia/

Final point, once carbon trading is introduced, we will be competing with countries who do not burden there industries with dirty electricity (coal). eg France (whether you like Nuclear or not, will not have its industries burden by carbon credits like ours will). So we need to sunset our Coal powered Power Stations.

Bernie's going to regret writing "the myth of peak oil". Which bit is the myth Bernie? The 'myth' that most mineral mining follows a bell curve pattern, not just oil? The 'myth' that we mine the easiest resource first, and that the second half of a resource is usually a lot harder to reach and more expensive mining? The 'myth' that discovery of oil peaked in 1965 and has been declining ever since? The 'myth' that we last found as much oil as we burn in 1981? The 'myth' that we now burn it 5 times faster than we find it? The 'myth' that 54 out of 65 oil producing countries have already peaked? The 'myth' that we KNOW all the non-OPEC oil is pretty much at peak or already in decline? The 'myth' that this can be calculated, and that on a number of occasions the 'early peak depletionists' have accurately predicted peak oil in America, the UK North Sea and Mexico's Cantarelle years in advance when big oil were demanding that everything was OK?

The 'myth' that nothing can replace oil at that energy density in those quantities?

Society will get by, but the economic crisis is going to be of unprecedented magnitude and severity, and denying the scientific and geological realities does not help Australia move forward in a rational and informed manner. It's time to get our head out of the sand and stare the end of the oil age in the face.