Natural Fuel (NFL). Floated in late 2006 at $1.50 – now $0.10
Australian Renewable Fuels (ARW). Floated March, 2005 at $1 – now $0.048
Australian Biodiesel Group (ABJ). Floated late 2005 at $1 – now $0.13

The reason is that the energy and feedstock required to produce the fuel outweighs the return. While oil remains cheap – biofuel is, at best, a sleeper.

I can imagine that $2.00 per litre could be reached by the end of 2009, and $5.00 per litre is possible by 2012.

When will it reach $10.00 a litre, perhaps by 2020?

What are our fearless politicians doing about it? Not much; still building freeways and offering diesel fuel rebates to road transport. Nothing in the federal budget for public transport or bicycle paths . . .

It seems we actually have to run out before these snoozers will do something.

No I just think that snark directed to Prof Quiggin is particularly misdirected.

I think ProfQ is big enough and ugly enough to cope with the odd bit of snark from some anonymous nobody blog commenter.

Look, that Club of Rome thread was dying from disinterest while the culture warriors went into battle over Howard’s core/non-core promises (yawn). A bit of snark and some wild exaggeration got it going again.

I’d probably agree with ProfQ and Robert Merkel about 99% of energy and climate change issues, but furious agreement is rather dull. One point of disagreement is the costs of mitigating climate change. ProfQ has often claimed that it will cost 2 or 3% of GDP over 40 years which common sense tells you is b*ll*cks. If it was so cheap and easy, why aren’t we doing it?

Anyway, I think got a bit off track there…

Indeed, wilful. Peak oilers were particularly snarky on that thread.

Snarky, moi?

It comes from no-one taking the problem seriously for a decade. 2008 for peak oilers is like 2006 for climate change in Australia. People are waking up and at least thinking about the issue.

If a bit of snark stirs that up, and sharpens your peak oil ‘debunking’ arguments, I think that’s a good thing.

Oh there’s absolutely no doubt Wong has been installed to stop anything ‘radical’ happening with climate change, like, er, actually doing something about it.

While I think of it, two more reasons why oil the demand-supply situation will continue to tighten in coming years:

1. Petrol and diesel are heavily subsidised in many emerging economies (Malaysia, Indonesia, China) and oil exporting countries (Venezuela 12c/gallon, Iran 40c/gallon, Saudi Arabia 45c/gallon, Libya 50c/gallon – CNN: Where gasoline is cheapest.

So demand will continue to grow strongly in these countries while the subsidies remain in place.

2. Like Australia, oil exporting countries have benefited from a huge surge in national income from oil exports, except the increase has been much greater relative to the size of their economies. Unsurprisingly many of these economies are growing very rapidly (especially Saudi Arabia and the Gulf states) and they are consuming ever increasing amounts of heavily-subsidised oil. The problem is, increased domestic consumption means less oil is available for export, so total amount of oil on global export markets grows more slowly (or shrinks faster) than total global production. This idea is encapsulated by the Export Land Model.

At the moment the oil futures market is predicting that the price of oil will stay approximately the same at least until December 2016. So if oil hits $200 a barrel then investors are dumb…

Not necessarily dumb. The futures price isn’t a prediction, it’s a hedge. That is, it’s supposed to represent a value at where the purchaser of the futures contract can cover his costs. There’s no point in buying a (very expensive) futures contract that represents a much higher price – for starters, you’ve got to find someone to sell you one (and who would?). There’s been a fair bit of talk that the current oil price is driven by speculation – but what the futures market really says is not that the speculators are predicting oil will remain steady to 2016, it says that the producers need $125 a barrel to cover their costs.

There was a guru on Lateline last night (don’t have time to look it up) who said that peak oil is probably now and the price has only one way to go from here.

That was Richard Heinberg who is definitely on the doomerish end of the peak oil spectrum. What was surprising is not what Heinberg said, but the fact he was being taken seriously in the mainstream media. A couple of years ago he was addressing peak oil conferences in Sydney with half a dozen attendees.

Fair enough. I suppose my point is that the level of seriousness about CTL and GTL is somewhat less than you’d expect, assuming that oil prices are going to continue to rise.

Marn seems pretty serious about CTL and GTL and he is the Minister for Resources and Energy after all (horrifying thought as that is).

Have a look at Shell’s Major Projects. There are nine listed. One is in the oil sands, one is Pearl GTL (the largest in the world), a few ultra deep water projects, some LNG and a few big refineries.

No conventional oil.

I’m worried about shale oil in Qld and what the Bligh Govt might approve to avoid compensation payments.

There was a guru on Lateline last night (don’t have time to look it up) who said that peak oil is probably now and the price has only one way to go from here.

And when you say production increasing from “conventional sources”, do you mean on-shore, stick a hole in the ground and it comes gushing out, conventional? I think you’d be hard pressed to find anyone these days who believes conventional oil is going to increase over the next 5-10 years. Ultra-deep offshore yes, oil sands yes, but super cheap conventional oil, no.

Fair enough. I suppose my point is that the level of seriousness about CTL and GTL is somewhat less than you’d expect, assuming that oil prices are going to continue to rise. The costs of exploiting oil sands (ignoring the environmental impact) are also rather lower than current prices, making them very, very profitable right now.

Brian, Estonia is indeed big into oil shale, and they’re already EU members. At some point these two facts are going to collide. Estonia has no other natural resources to speak of, but they’ve done extremely well out of joining the EU – Tallinn is transforming itself into a modern Scandinavian capital virtually overnight. How those two things will play themselves out – your guess is as good as mine.

I’m not sure where this mob are up to, but they are looking further north, I think.

The other day I heard that Estonia has more shale oil than anywhere, but were worried that joining the EU might prevent them from developing it fully.

Also South Africa are big on coal to oil, aren’t they?