Sure it’s wet, windy and a little cool in Sydney this morning, but who cares when you’re filling up your car at 118.9 cents a litre – and that’s on the North Shore. Was it only a couple of weeks ago the doomsday brigade were promising $2 a litre by Christmas and the end of civilisation soon after?

Before setting off all the Peak Oilers again, I can report they don’t have many followers at the Big End of Perth. The people charged with taking care of many billions of dollars of shareholders’ funds aren’t betting on this resources boom lasting forever and do believe commodities will eventually resume their long-term price trend.

I was hired to chair a discussion for UBS in Perth that unfortunately ran under the Chatham House rule, so no names but still the gist: the professionals think there are another few years of resources boom conditions but then reality returns. Supply will indeed come on stream and commodities will start falling in real terms again.

With that scenario, there are warnings that some major resources projects now trying to get off the ground will end very messily. The time taken to get a big mine into production means they could be coming on as prices are coming off and after costs have gone off in a huge way.

When a contractor talks about paying labourers $80 an hour in the north-west and then can’t get seats on a plane to fly them there, when it takes two years to get a house built in Perth, when you simply can’t get tyres for your mining trucks unless you ordered them a couple of years ago, costs are becoming very important indeed.

The big boys are stressing the importance of being in the lowest cost quartile to avoid the pain waiting somewhere down the track, albeit more than a couple of years away. The China story is not doubted, but the supply-side’s ability to respond is respected as well.