Oil production in Australia has already peaked and the alternative fuels industry needs to be dramatically ramped up in response, an expert research group says.



After years of a stop-start approach to ethanol production, Australia is fast running out of time to end its love affair with crude oil, much of which is imported, the NRMA Motoring funded Jamison Group says.



"Oil production in Australia has already peaked,'' the group's report, A Roadmap for Alternative Fuels in Australia, warns.



"Meanwhile, Australia's demand for petroleum is increasing at a rate of two per cent a year, from 750,000 barrels per day currently to 800,000 barrels by 2009/10.''



The domestic arrival of peak oil means more and more crude will be imported from the Middle East.



One of the researchers, former CSIRO automotive expert David Lamb, passionately called for change.



"Our cities, our towns, our farming, our food distribution are all very heavily oil dependent,'' Mr Lamb told reporters today. ``It leaves us with a large trade deficit for the oil we import.



"We owe it to ourselves to plan our way out of this situation.''



The Jamison Group has refined its 57-page report to 12 points, some of which deal directly with the biofuels industry.



"The goal to reduce oil dependence should translate into a commitment to develop alternative fuels in Australia as well as to reduce consumption and improve energy efficiency generally,'' the report says.



Mr Lamb warned the nation's security was at risk if action was not taken.



"We were deeply concerned that there may not be enough oil to go around,'' he said.



Having a strong economy would not protect Australia from a global oil shortage.



"It's like having a pocket full of money and going into a shop with empty shelves.



"Our lifestyle is totally dependent on cheap oil.''

AAP