Re: SC50

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Govt warns of `peak oil' chaos

QUEENSLAND is heading for an oil shock. And it is not a matter of if, but when.

As crude oil prices hit a record high yesterday, an as-yet unreleased Queensland Government report warns of massive social dislocation, rising food prices and infrastructure headaches because of rising oil costs.

The report on the looming "peak oil" crisis concludes that we will have to re-think the way we live and travel in the next few years as relatively cheap liquid fuels become a thing of the past.

"Peak oil" refers to when global output fails to meet demand, a situation the report estimates will occur in the next few years, although some economists believe we are now on the cusp.

The report, Queensland's Vulnerability to Rising Oil Prices, comes as crude oil prices pushed through $US80 a barrel for the first time in trading on Thursday night – triple the price of five years ago.

The effect already is being felt at the bowser, with petrol in Brisbane yesterday selling for as much as 129.9¢ a litre.

The report was prepared by a taskforce of scientists and industry experts, including Queensland's chief geologist John Draper and the Department of Primary Industry's chief scientist Joe Baker, and chaired by the newly appointed Minister for Sustainability Andrew McNamara.

Of the three scenarios mapped out for world oil prices by the report, Mr McNamara said we were already in the worst case "high oil price" scenario.