A linear programming analysis of liquid-fuel production and use options for Australia

Abstract

The linear programming model, MARKAL, was used to analyse minimum discounted cost configurations for the Australian energy system over the period 1980–2020. Particular attention was focussed on options available for augmenting falling local oil production and for maintaining liquid fuel supplies to the transport sector. Two different assumptions for future primary energy prices were analysed: a linear doubling of real prices by 2020, and a constant real price. Under the increasing price scenario, Australia has opportunities to bring brown coal liquefaction, oil shale production and methanol production from natural gas to add to liquid fuel supplies. On the demand side, vehicles fueled by LPG and CNG, and coal-fired ships provide the best methods to curtail oil imports within the framework of the assumptions and data used. On the other hand, if primary energy prices were to remain constant in real terms to 2020, Australia's self-sufficiency in oil products would decline to less than half present levels and with only limited methanol production becoming viable on the supply side. However, even under this assumption, ready opportunities exist to reduce the system cost by switching away from fuels derived from imported oil to indigenous supplies of LPG, CNG, and coal.