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Oil prices to fall: research chief

Friday, May 12th 2006 - 21:00 UTC
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THE rise of alternative fuels would force a dramatic drop in oil prices in the next 50 years, the head of a government research body said today

Anyone predicting an average oil price above $US40 a barrel in the next 50 years had not taken into account the rise of alternative options, Australian Bureau of Agricultural and Research Economics (ABARE) executive director Brian Fisher said.

Oil prices are hovering about $US73 a barrel.

Dr Fisher said Australia should be investing in alternative energy but there was no cause for panic.

"If you're looking at the long term, (the) real price of oil over the next 50 years, anybody who calls a price over $US40 does not bring into place the liquefaction of coal," Dr Fisher told a Senate committee into future oil supply.

"We have more of this stuff (energy) than you can poke a stick at, vastly more than we can use over the next several thousand years."

Dr Fisher's comments came after Australian Greens leader Bob Brown accused Treasurer Peter Costello of failing to use Tuesday's Budget to oil-proof Australia against "the coming oil shock".

Dr Fisher defended Australia's decision to be a net energy exporter.

"The best thing Australia can do is export the things we have a comparative advantage in," he said.

The ABARE chief said the liquefaction of coal should be heading the list of alternative fuels.

Coal can be turned into a liquid fuel and costs about $US40 a barrel.

He also suggested Australia should be aiming for a largely electric car fleet by 2050.

"We can generate electricity from a range of fuels and that would give us much more flexibility," Dr Fisher said.

Categories: Mercosur.

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