The new study of Australia's petroleum resources, conducted by leading geoscientist Dr Trevor Powell and commissioned by APPEA, found that Australia was facing a multi-billion dollar petroleum liquids trade deficit within the next 10 years.
"Australia's crude oil and condensate production has declined from nearly 100 per cent of Australia's needs in 2000 to just over 60% today, and without major new discoveries [it will be] an anticipated 32% by 2017," APPEA chief executive Belinda Robinson said.
This translates into a decline in the liquid petroleum and petroleum products trade balance from a surplus of $0.9 billion in 2000, to a deficit of $13.7 billion today and a projected deficit of $28 billion in 2017.
Federal Resources MInister Martin Ferguson has acknowledged the size of the problem.
"We've got huge problems on the trade front, but also importantly, a real problem in terms of energy security and our economic future by 2015," he told the ABC's 7.30 Report last night.
"We've got to find another Bass Strait [sized oil province], because if we don't by 2015 we will go from importing about 20 percent of our needs in the 1990s to actually importing 80 percent of our oil and related product needs, effectively contributing to a $27 billion per year trade deficit."
Robinson said Powell's report is a "must read" for national, state and territory energy and economic policymakers, and it provides a compelling case for long-term investment by all governments in pre-competitive geoscientific information.
In contrast with other more mature oil-producing regions, less than a quarter of Australia's 50 hydrocarbon basins have been explored, presenting governments with an opportunity to attract explorers, according to Robinson.
"This leaves a lot of unexplored territory which could produce Australia's next oil and gas province," she said.
"We just don't know what is out there. If we are to rein in our burgeoning trade deficit in petroleum, we need to find more oil and the most promising areas are the high-risk ‘frontier' basins."
But Australia must persuade potential investors to risk money here rather than elsewhere in the world, according to Robinson.
"This requires a two-pronged approach," she said.
"We need to ensure that the fiscal framework takes account of the high costs and high risks involved in exploring these areas and we must ensure the availability of baseline geological information."
However, the Rudd Government says it won't be increasing funding for exploration incentives, although it is considering introducing a Canadian-style flow-through share scheme, under which high exploration costs would be tax deductible for investors.
Ferguson also said the Federal Government also wanted to encourage investment in gas-to-liquids and coal-to-liquids plants that could produce synthetic alternative fuels.
