Breaking oil's grip  

Matthew Wright from Beyond Zero Emissions (authors of the 'Zero Carbon Australia' Plan) has an article in The Climate Spectator talking about the importance of eliminating Australia's dependency on oil (especially in the context of Richard Branson's recent prediction of $200 per barrel oil) - Breaking oil's grip.

A $US200 per barrel oil price by mid-decade is consistent with Beyond Zero Emissions’ internal analysis and will have massive economic consequences for Australia. The issue presents us with an opportunity to achieve multiple outcomes: reduce our impact on the climate, while increasing our economic competitiveness and energy security. We can sandbag our economy from punishing oil prices, but only by equipping our automotive sector for the 21st century and utilising modern electric rail in upgraded national transport and freight networks.

The Australian economy will be importing 80 per cent of its oil by 2015, which means we will be forking out as much as $66 billion for imported oil per year from 2015 (based on Australian Petroleum Production and Exploration Association figures combined with BZE and Branson oil price predictions for 2015). Although this huge figure is equivalent to a quarter of the Australian federal budget, federal and state energy ministers refuse to acknowledge it, despite several years of trying to bring these facts to their attention. It is a significant economic vulnerability that will only grow in the decade ahead.

The increased cost of imported oil on the horizon is akin to a 'great big tax' on Australian families and already stressed industries. But unlike government taxes that pay for new schools, hospitals, train lines and other critical infrastructure and services, this multi-billion dollar price hike will solely benefit oil-rich nations. Instead of driving the Australian economy into a $66 billion brick wall, we need to get on the front foot and retool the economy for the safety and security of Australian families and industry.

Our government must push domestic car factories to retool for pure electric and plug-in hybrid vehicles. This is the case for leading US car maker GM. The company has successfully retooled its Michigan factories to mass-produce the Chevy Volt at the affordable $41,000 per car (in line with what average cars cost in Australia). There is no reason why Australia can’t do what Michigan-based automakers have done.

Given the rapidly rising demand for electric vehicles, reorienting the automotive industry is a strategic economic move. GE just announced it will aim for 25,000 electronic vehicles (EVs) in its global fleet by 2015. Anticipating increased demand, the European car-giant Renault will aim to produce 500,000 pure EVs per year by 2013. Even with ramped-up production though, EVs are expected to be in short supply globally over the next three to five years.

So what can the Gillard government do to encourage the automotive sector restructuring? There are several options.

The government can leverage existing subsidies to manufacturers to build Australia’s capacity as a green car powerhouse. Fringe benefits tax arrangements combined with government procurement now drives around half of the one million car purchases in Australia each year. This tax could be amended easily to incentivise the purchase of EVs which, given short global supply, are best sources from retooled Australian plants.

The government sector can use its position as the country’s largest car purchaser to ensure demand and help the EV market mature. Investments in R&D can help Australia keep up with the quickening pace of EV innovation. And it can assist the roll-out of critically important recharge stations – the infrastructure that will allow Australian families to meet their travel needs with confidence. These measures will revitalise the domestic car-manufacturing sector and significantly lift sales.

Automobiles are only half of the story, though. Improved renewable electricity powered public transport and freight networks will also reduce the demand for oil-dependent vehicles.

Each Australian car driver travels around 15,000 kilometres per year. To seriously address the coming oil shock we must target 50-80 per cent of all passenger kilometres to be modally switched to electric rail within 10 years. We need to start mobilising the industry today to do this, ahead of the shock.

Australia needs to convert the bulk of these kilometres to public transport. Fast trains between Australia’s largest cities, new metropolitan train lines (like the French and Spanish metros) and adapted freeways and arterials for trains and trams would all see massive upswings in public transport patronage.

Moving increased quantities of freight by train is also part of the solution. Dedicated freight corridors would benefit regional Australia particularly. Moving freight vast distances on trucks will become increasingly costly, so people living in the bush will face increased costs of living if our government fails to plan and respond effectively to the threat of inflated oil prices.

Of course, as with any major infrastructure project, we must account for its climate impacts. A renewable energy electricity system, like the one outlined in the Zero Carbon Australia Stationary Energy report, can power this transport system with no adverse impacts on the climate.

A dollar saved is a dollar earned. With automotive industry restructuring and smart transport policies, Australia can avoid sending up to $66 billion offshore each year. This saving can offset the cost of funding a transport revolution while strengthening our economy at the same time.

Australia’s transport system is currently oil dependent. But it doesn’t have to be. In 2011, Beyond Zero Emissions will release a fully costed plan for a zero carbon transport system. The report will spark debate and inform policymakers about the type of transport Australians need – one that is good for our climate and good for our economy.

THE businessman Graeme Wood has condemned Australia's failure to act on climate change, criticising ''scared'' politicians for a lack of leadership.

Mr Wood, one of Australia's most successful entrepreneurs whose wealth the BRW Rich List estimates at more than $372 million, is a co-founder of Wotif.com.

He said the former prime minister Kevin Rudd was right when he called climate change ''the greatest moral, economic and environmental challenge of our generation''.
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''I see climate change as exactly what Kevin Rudd said it was, and see nothing happening about it. The system is in gridlock.''

Privately, Mr Wood was the biggest donor to the advocacy group Beyond Zero Emissions, which has published a costed plan to shift Australia to a 100 per cent renewable energy supply within a decade.

''It's the only clear plan that's been put out as an alternative to fossil fuels, which challenges all the accepted wisdom about the rate at which we could go to renewables,'' Mr Wood said.

A well-known philanthropist, Mr Wood has committed another $300,000 to follow up work by Beyond Zero, including plans on land-use change and transport, and hopes to obtain more donations.