Could petrol rationing save our economy if peak oil arrives?
Posted by Nathan on January 10, 2008
When it comes to conservation, we could probably do to learn from the generations that grew up in wartime. The concept of basic supplies like food and fuel being limited just doesn’t register for a lot of us, especially if we’ve had cheap access to both for most of our lives. So would taking a leaf out of the greatest generation’s book and rationing fuel help save us from possible economic disaster?
That’s what the Association for the Study of Peak Oil (ASPO) says. The ASPO’s Australian chapter is calling on the government to consider a return to the practice of petrol allocation, which hasn’t been seen since the Second World War. The rationale for rationing is fairly simple: placing a cap on supply ensures that those with the greatest need for it have it available. The cap also encourages the uptake of alternatives for which no caps exist, such as biofuels or electricity (or perhaps even compressed air). The ASPO likens it to the water restrictions in place in many parts of the nation, borrowing from concepts like carbon trading to allow consumers to buy and sell their petrol allocations.
Unsurprisingly, not everyone has warmed to the idea. Economists such as AMP’s Shane Oliver call the idea “ridiculous”, saying that the market will self-regulate as oil prices rise and artificial measures to regulate supply and demand are unnecessary. Waiting for price hikes to bring the supply and demand curves closer together seems to be the economic status quo currently. Again, allowing the price of oil to rise due to market forces is likely to convince more people to consider petrol alternatives in an attempt to save money.
Petrol rationing certainly has a case for itself. After all, we’re preparing a carbon trading system to alleviate global warming, so why not a petrol trading system to alleviated peak oil? It’s proven effective in wartime situations in generations past. On the other hand, ASPO has (quite unsurprisingly) the threat of an imminent and severe peak oil event in mind, but in the present, petrol allocation may well seem to be an overreaction to a problem that could resolve itself as prices rise, provided there are alternatives for consumers to move to. For my money, petrol prices will need to rise much higher and supplies drop much lower before it becomes a good idea.
(Source: The Age)
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