As the Iran War oil price shock turns into a full-blown global economic crisis, prepare to hear far more of this line of thinking.<\/p>\n
And while the sentiments may be heartfelt and well-meant, here are a few unfortunate facts they’ve overlooked.<\/p>\n
We don’t have much oil left<\/p>\n
Australia is an energy powerhouse.<\/p>\n
For decades, we have been either the biggest or close to the biggest sea-borne coal exporter, in both steaming coal for electricity generation and metallurgical coal for steelmaking.<\/p>\n
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A ship is loaded with coal at the RG Tanner Coal Terminal in Gladstone, Queensland in 2012. (AAP Image: Dave Hunt)<\/p>\n
Then there’s gas, otherwise known as liquefied natural gas (LNG). For the past decade, we’ve jostled for top spot in the global export stakes with Qatar, before the US ramped up gas exports to take pole position.<\/p>\n
But when it comes to oil, our reserves are thin on the ground or rather, under the ground.<\/p>\n
Check out this map of our oil resources from Geoscience Australia.<\/p>\n
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Oil resources in Australia are depleted. (Supplied: Geosciences Australia)<\/p>\n
The grey areas are our petroleum basins, where oil could potentially be found. And the green pies show the amount of oil extracted and remaining in each basin.<\/p>\n
Bass Strait, the biggest, is close to being depleted. That thin sliver of dark green in the pie, is all that’s left.<\/p>\n
The other two big sources, off the north coast of Western Australia, still have some remaining, but nowhere near enough to supply a growing nation for too many years.<\/p>\n
As for the onshore basins, they are tiny.<\/p>\n
“Australia has limited identified conventional oil reserves which are being depleted at a faster rate than they are being replaced by new discoveries,” the latest report, penned late last year, states.<\/p>\n
All up, we have 1.3 billion barrels of proven or probable oil reserves with a further 2.2 billion barrels of what is known as contingent reserves<\/a>; oil that we know is there but isn’t economically viable to extract.<\/p>\n At the current rate, even if we continue to import 80 per cent of our liquid fuels, our proven and probable resources will run dry in just seven years.<\/p>\n But if we could suddenly tap all the known reserves, even the ones currently deemed uneconomic, and stopped importing fuel, we’d have just enough to last a bit over nine years.<\/p>\n How much do you want to pay for fuel?<\/p>\n The reason those resources have been considered uneconomic is that extracting the oil costs a bomb.<\/p>\n Given that oil prices have shifted much higher, it’s possible some of them may now be considered potentially economic.<\/p>\n Why the oil crisis is about to worsen<\/a><\/p>\n The official pledges of the last few days may have placated markets at first, but they have become little more than bargaining chips ahead of this weekend’s negotiations between the US and Iran.<\/p>\n But before any oil company commits to a major new project, it needs to be confident it can turn a buck over the long haul. And that means for decades to come, not just a couple of years.<\/p>\n Most of the players are multinational, so there’s little incentive to produce oil in Australia, which costs $US70 to $US100 a barrel to extract, if they can extract it from the Gulf of Mexico at $US30.<\/p>\n That’s where the profit is, that’s where the investment dollars go.<\/p>\n There’s precious little incentive to invest huge amounts of capital in exploring and developing an oil field that will last less than a decade and operate on thin profit margins.<\/p>\n Unless, of course, Australian motorists are prepared to pay through the nose for the privilege of using homegrown fuel.<\/p>\n Consumers are feeling the pain of the fuel price hike. (ABC News: Chris Taylor)<\/p>\n The alternative is for the federal government to cover the cost, to ensure we have fuel security for a couple more years.<\/p>\n But that means taxpayers will foot the bill instead of motorists. Either way, someone has to pay.<\/p>\n And in any case, oil fields take years, sometimes more than a decade, to develop, to build the infrastructure and pipelines to get it out of the ground and into tanks.<\/p>\n None of which will solve our current problem.<\/p>\n To refine, or to import fuel?<\/p>\n There’s been a great deal of teeth-gnashing over our lack of local refining, and with good reason.<\/p>\n Just two remain in place, the Ampol-owned Lytton refinery in Brisbane and the Viva Energy operation in Geelong, which provide about 20 per cent of our liquid fuels.<\/p>\n Ampol’s Lytton Oil Refinery in Brisbane is one of two remaining in Australia. (AAP Image: Jono Searle)<\/p>\n The handful of others were converted into import terminals or decommissioned.<\/p>\n It’s a legitimate criticism of successive Australian governments that the shutdowns increased our dependency on supplies from geopolitically unstable regions.<\/p>\n It was a lesson we should have learnt from the two oil shocks of the 1970s, both of which centred on the Middle East, with the 1979 crisis resulting from the Iranian Revolution.<\/p>\n But Australia’s aging and relatively small refineries were struggling to compete with much larger and far more modern operations in Asia, especially in Singapore and South Korea.<\/p>\n![\"Close](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/04\/ea808c66eb02bee365e642890a960bfc.jpeg\")
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