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Urgent action needed to narrow fuel self-sufficiency gap: APPEA

<p>The debate on high oil prices is distracting focus from the real oil supply and transport fuel issues that face Australia, the Australian Petroleum Production and Exploration Association said (APPEA).</p> <p>APPEA executive director Barry Jones said too many political parties and media commentators are being sidetracked on the debate and associated discussion on the Liquid Fuels Emergency Act.</p> <p>There is no oil supply shortage at present but a situation where speculation on potential political risks is driving prices in a market of strong global demand, he said.</p> <p>The parties also needed to be reminded that the Liquid Fuels Emergency Act is not a prevention measure, it is a crisis management vehicle when all else had failed.</p> <p>"The real problem is simply explained," Mr Jones said. "Australia has a gap between demand and supply for transport fuels and industrial oil, and that gap is growing."</p> <p>If nothing is done, Australia will produce only 230,000 barrels a day but the country will be consuming 1,030,000 barrels a day, he said.</p> <p>National self-sufficiency will drop from the present 70% to about 22%, he said.</p> <p>This would leave a daily import bill of $US24m (based on a long-term oil price of US$30) and lost government revenue of $US12m a day, APPEA estimated.</p> <p>"We should be taking action now to minimise both the economic implications of a growing gap, and the social and economic implications of a major sustained supply interruption," Mr Jones said.</p> <p>APPEA has suggested the following five urgent actions:</p> <p>&#8226 Develop a comprehensive national oil exploration policy</p> <p>&#8226 Encourage maximum liquids recovery from existing fields</p> <p>&#8226Develop a long-term alternative fuels strategy and</p> <p>&#8226 Implement numerous demand-side measures and</p> <p>&#8226 Introduce some good political risk management, for example, to ensure that the "arch of instability" to Australia’s north does not threaten transport fuel supplies. </p> <br />