Fuel prices drive innovation

There's one point on which conservationists, car-makers and the oil industry seem to agree. Fossil fuels are not going to die quickly.

Whether it's petrol, diesel or LPG, there's plenty of life left in non-renewable energy sources, buried in the ground though they may be. Whilst there are some who say we've already reached peak oil production (more here), the oil industry reckons there are huge reserves of oil yet remaining and oil fields that were previously in the too-hard basket are now viable, because of the increased profits from the higher demand.

Thanks to the impetus from global warming however, what we can expect to see over the next couple of decades is a massive expansion in different means of extracting the most from fossil fuels, ahead of the large-scale implementation of renewable sources, such as biofuels. That means diesels, hybrids and concepts like Daimler AG's Diesotto system, ahead of ethanol-fuelled spark-ignition cars, biodiesel production in commercial quantities and -- further down the track -- such things as hydrogen fuel cells.

Whilst biofuels are a key plank in any future strategy for reducing greenhouse gas emissions, commercialisation of ethanol production from cellulosic biomass is still some way off in the future -- and must also accommodate the food crops for the world.

This is the view of Monica Richter, Sustainable Australia Program Manager for the Australian Conservation Foundation (ACF).

"To me, we are really caught in the next 10 to 15 years of not having a lot of the alternative technologies to roll out on a massive scale," she says of the current situation and the short-term prospects for biofuels.

So, if biofuels are still a virtual pipe-dream, will nothing change? Not at all, says Richter. The massive upsurge in fuel pricing is a force for good, in one sense. The report posits an increase in the weekly family fuel bill from an average of $40 last year to $220 for a mid-size car by 2018.

"We shouldn't dismiss substantial increases in petrol prices," she says, by way of response. "[Demand oustripping supply] will drive innovation."

Buyers shying away from cars that use a lot of fuel will encourage manufacturers to engage in a new round of development, working on cars that are much more fuel-efficient. Already, we see that happening with dedicated LPG Commodores in Holden's near future.

Of course, LPG is a fossil fuel too. According to Phil Hart of ASPO (The Australian Association for the study of Peak Oil and Gas), LPG is far from abundant, if we start consuming domestic reserves at the same rate as we are consuming petrol currently. In other words, a wholesale conversion of the Australian vehicle parc from petrol to LPG will merely exchange one type of fuel in short supply for another.

Richter believes that we can reduce our dependence on fossil fuels by expanding the public transport system -- and it doesn't necessarily need to be an exorbitant cost to government. CNG-fuelled buses (pictured) could service outer suburban areas and link up with an upgraded rail network.

At the end of the day however, the ACF is calling on state governments around Australia to undertake a major upgrade of public transport systems.

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