APPEA said it believes that the nation has a 50 per cent chance it will face an oil shortfall of 380,000 barrels per day by 2010. As a result, Australia will need to get some of its supplies from politically precarious regions such as the Middle East.

Mr Jones, executive director of APPEA said the solution lies in the removal of a taxation system that discriminates against investment in oil and gas production and supply infrastructure, adequate funding for 'pre-competitive' research by Australian institutions as well as sensible access for petroleum resources.

Only ExxonMobil is currently searching for oil in Australian waters. The only deepwater success in the last two years has been achieved by Chevron with five successful gas wells in WA267P.

Seven months after its announcement by the Council of Australian Governments, the states and the Federal Government still continue to bicker over membership of a panel that will look into Australia's energy needs over the coming decades