There’s plenty of oil just refining constraints so no need to worry. He’s right (for now). Or….

“Late in November, all Pacific commands, including both the Navy and Army in Hawaii, were separately and explicitly warned war with Japan was expected in the very near future, probably with attacks in the Far East: the Philippines, IndoChina, Thailand, or Russia. The warnings were not specific to any area, noting only war with Japan was expected in the immediate short term and all commands should act accordingly. Had any of these warnings produced an active alert status in Hawaii, the attack might have been resisted more effectively, and perhaps resulted in less death and damage. …….”
http://en.wikipedia.org/wiki/Attack_on_Pearl_Harbor

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Here’s a reply to a letter I sent to Hon David Parker
Minister of Energy>>>>>>>>>>>>>>>>>>>>>>>>>>>

Thank you for your email of 24 July 2007 regarding the Medium Term Oil Market Report of
the International Energy Agency (IEA).
I would like to assure you that the Government takes the issue of oil security seriously and
consequently is committed to preparing for a sustainable future now, to lessen our
dependence on imported oil.
In its report the IEA indicates that it does not forecast oil prices, and notes that one of the
components of the current high oil prices is tightness in the refining sector. The report states
that the issue is not one of reserves but of investment in production capacity (i.e. it is not
about the need for new discoveries). Rather, the report should be considered as a wake up
call saying that things will not get any better without more investment in upstream supply
capacity and more rapid progress on energy efficiency.
Also, as markets will respond to forecast supply constraints this report will encourage more
oil exploration and production, and will provide further incentives to find alternatives to fossil
fuels. You may be aware that the Government recently announced a major programme of
exploration in the Great South Basin, and the Tui and Maari oil fields are now coming on
stream.
There are a number of initiatives in place designed to move New Zealand towards a more
sustainable energy future with a reduced reliance on non-renewable fuels. You may be
aware that the Government is currently developing a New Zealand Energy Strategy (NZES)
that will explore the choices and policy options available to New Zealand in order to prepare
for a transition to alternative sources of oil and energy. It will consider the longer term
security issues posed by dramatic price increases, constraints on fuel supplies and the future
impacts of climate change.
The NZES builds on the sustainable development energy goals developed by the
Government in 2004 after wide consultation with stakeholders. It therefore takes as its starting point the thinking that has already been done on the key challenges for New
Zealand’s energy future.
The New Zealand Transport Strategy sets out a direction for New Zealand’s transport
system. Its objectives for environmental sustainability include reducing fuel consumption and
increasing the use of low energy transport options, this strategy can be viewed at
http://www.beehive.govt.nz/nzts/.
I am aware that work is underway within the wider government transport sector to look at
ways to better integrate our land-use and transport planning which could help to reduce the
use of road transport and hence fuel. This work was flagged in the Transport Sector
Strategic Directions document that I released when Minister of Transport, in December 2005.
There is also some work that has started to look at longer-term issues that might impact on
transport, which, no doubt, will need to consider the questions of fuel availability and pricing.
The Government has announced a preferred policy for encouraging the uptake of biofuels
through the introduction of mandatory sales targets. Work on the design and implementation
of this approach is currently underway. Voluntary standards for bio-diesel have already been
developed. More information on biofuels can be found at http://www.eeca.govt.nz/renewable-
energv/biofuels/ and httpJ//www.transport.govt.nz/biofuels-440.
In the Speech from the Throne on 8 November 2005, and through the Green Party Co-
operation agreement, the Government committed to take a more aggressive approach with
respect to energy efficiency and renewable energy. This includes increased support for solar
water heating, improved building standards, and other mechanisms to achieve a sustainable
path forward. These measures will be implemented over the term of this Government.
The Government is already addressing energy efficiency and conservation in New Zealand in
a number of ways. A significant recent development is the review of the New Zealand Energy
Efficiency and Conservation Strategy (NZEECS). This review is a timely opportunity for the
Government to implement new policies to move New Zealand towards a more sustainable
energy future with reduced reliance on non-renewable fuels. The Energy Efficiency and
Conservation Authority (EECA) is responsible for implementing the Government’s objectives
relating to energy efficiency and renewables. Further information on the process and
framework for developing a replacement NZEECS can be found at
http://www.eeca.govt.nz.Together with the NZES, the NZEECS will form a critical part of the
climate change work. Together they make up the climate change.
Thank you for your correspondence.
Yours sincerely

Hon David Parker
Minister of Energy

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Kevyn,

I dont think I made the point very clearly, with infil or high density developments in existing suburbs the infastructure to handle the sewerage, water, roads,etc. is already established and may not be able to cope with the increased demands placed upon it. While in new suburbs this infastructure will be newly installed and simply joined up to main feeders.

It is not the main feeders I’m concerned about (although raw sewarage overflows on North SHore beaches is common during heavy rain periods), more the last mile into infil suburbs.

Another issue with infil housing that the councils have to consider is stormwater runoff. One of my rental properies has enough room for another dwelling but I cant get council approval because the back section is actually designated as a storm water run off from the neighbouring higher placed properties. This then flows into the local creek and into the Manukau.

So that is yet another issue to be confronted.

While infil and high density housing looks pretty good on paper and in theory, there are other considerations that councils have to take into account.

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jh, Here is the correct link for the extrapolated price of crude in 2012 ($US250 per barrel).
http://www.petroltax.org.nz/images/WhalePeakOilPrediction.jpg

The extrapolated crude oil production in 2012 is the same as the actual production exactly half a century earlier (1962).

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Gerrit said “before you can permit more infill housing you need to ensure that the … infastructure can handle the doubling of people living and working closer to home.”

Two aspects of the roading network should set your mind somewhat at rest on the concerns you raised:
1) generally a traffic lane will become congested when carrying more than 2,000 cars an hour.
2) the road network has three types of road: local, arterial and feeders (or collector/distributor) which connect local with arterial.

Typically a local road will have a peak load of a few tens of cars per hour, feeders can be as high as a few hundreds. Hence the only real cause for concern is the impact on arterials. This is different from the impact of ex-urban traffic only in the precise spatial distribution of new traffic and that the increased load from infill occurs on a smaller portion of the artery.

In the case of water, wastewater and stormwater the impact on mains and treatment plants will be similar irrespective of whether population growth is accommodated with infill or exurban developments.

The situation is likely to be different for cable infrastucture where the wires used in the local lines will have been more closely spec’d to demand than is possible with roads or pipes.

Public transport reveals the major advantage of accommodating increased population with infill rather than exurban developments. The extra population is accommodated within the existing route length giving more paying customers per hour of driver’s wages, litre of diesel and km of RUCs. Exurban developments require increasing all of these to service the growing population.

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jh, Well, there is an explanation of polynomials at wikipedia, reading it is an effective cure for insomnia.

Here is a real short explanation:
poly = many
nomial = numbers
trend = long-term movement (in the numbers)

A slightly longer one:
“A mathematical expression of one or more algebraic terms each of which consists of a constant multiplied by one or more variables raised to a nonnegative integral power (as a + bx + cx2).

A polynomial curve can be created through the entire known data or just near the end. The resulting curve can then be extended beyond the end of the known data. Polynomial extrapolation is typically done by means of Lagrange interpolation or using Newton’s method of finite differences to create a Newton series that fits the data. The resulting polynomial may be used to extrapolate the data.”

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The biggest hurdle facing councils with infill housing (and high density housing projects) is the reticulation of essential services. Just taking sewerage alone, doubling the number of houses in a location would suggest that already overloaded sewerage systems would neeed at least a 75% upgrade in capacity.

Now before you can permit more infill housing you need to ensure that the water in&out, electricity, roading, etc. infastructure can handle the doubling of people living and working closer to home.

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What is a polynomial trend? Explain it again thanks.

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PS, Some of the dramatic changes are explained by these simple facts. USA was at war with Britain 1812-1815 and with itself 1861-1865. Pennsylvania Crude production began in 1861 but the price didn’t fall below $40 barrel (2006 dollars) till 1870.

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Found this interesting study of a previous peak oil crisis.

PRICE TRENDS OVER A COMPLETE HUBBERT CYCLE: THE CASE OF
THE AMERICAN WHALING INDUSTRY IN 19th CENTURY. by Ugo Bardi from the Dipartimento di Chimica – Università di Firenze.

http://www.oilcrisis.com/history/whaleOil20040913.pdf

On the basis that a picture is worth a thousand words here is the price and production data from the report in a line graph titled U.S. Whale Oil 1804-1876 Versus World Crude Oil 1940-2007:
http://www.petroltax.org.nz/images/WhalePeakOil.jpg

To the best of my knowledge the continuation of the polynomial trend line isn’t actually a prediction but, just in case it is, here is the frightening big picture of the future:
http://www.petroltax.org.nz/images/WhalePeakOil.jpg

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jh,

I meant that the most important thing we can do to prepare for peak oil is to reverse the urban sprawl that governments and councils have been promoting for the past 100 years. This can only be done by allowing infill housing and apartments amongst the existing sprawl of quarter acre sections. Most council plans still don’t allow this to happen. It is vital that the average distance between people and amenities is reduced before peak oil while there is still enough capital and investor confidence to make it happen.

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This IEA thing could have been a big opportunity for the Greens, unfortunately people groan at the mention of Green Party, thanks to you know who and you know what…
jh

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My cousin made a comment about Riccarton (between Riccarton and Blenhiem Roads) that: “the people should be moved out and then the houses bowled and the whole area rebuilt”… The question is why not?….
jh

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“it is politicians thwarting a free market which have produced the current problems” Right! And not just high prices and high interest rates but by severely restricting where infill housing and apartments can be built they are preventing the most vital preparations for peak oil from happening.
………….
I’m not sure what you mean by the last bit Kevin.
jh

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“What the market can do is sift competing technologies as they emerge – in the face of problems and opportunities as they too emerge – and throw up the best set of solutions in an impossibly complex world.”

Does that explain the success of Windows, VHS, SUVs, Intel, fan heaters or halogen uplights? All of these are either second best or the almost the very worst way of doing things. The SUV had its popularity assisted by cunning manipulation of a sensible law. Most of the others are straight forward examples of clever licensing or marketing strategies.

For the market to work perfectly there have to be certain perfect preconditions, especially information and competition.

The medical profession provides the best example of how the lack of these preconditions gaurantees failure not just of the market but also of non-market approaches. Why doesn’t increased funding result in more operatons? Why has productivity decreased in hospitals over recent decades? Why are there so few surgeons employed in our hospitals. Answer – because most surgeons are employed as consultants, on contracts, just like management. Most of those highly paid “managers” in our hospitals, especially the ones who’ve doubled their incomes in the last ten years, are actually consulting surgeons. The very same people insisting that our hospitals have to many overpaid managers.

It also explains why so many food importers don’t want CoOL labels. In the free market information is power, since whoever has the information has the power it follows logically that informing consumers is the same as empowering consumers, and that is a marketing strategy best reserved for niche consumers.

“it is politicians thwarting a free market which have produced the current problems” Right! And not just high prices and high interest rates but by severely restricting where infill housing and apartments can be built they are preventing the most vital preparations for peak oil from happening.

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sleepytreehugger,

- “The “market”? as you quaintly put it has shown a marked propensity to punish itself for its own inefficiencies and shown little evidence of steering resources to where they’re most needed.’

You’re half right. The market does indeed punish inefficiencies. That’s why it’s so beneficial to society as a whole. Inefficient producers and those making stuff people don’t want to buy are soon put out of business. The result is that us consumers get the best products at the best prices.
Contrast that with the public sector which doesn’t operate in such an environment. Failures are not punished. Inefficient departments face no pressure to improve and to deliver what the customer wants because they have a monopoly. In fact, perversely, the worst departments receive *more* money in futile attempts to improve their performance. State departments are run for the benefit of state employees and not for us poor taxpayers who are forced to use their services. Contrast that with the private sector where we can choose who to deal with.

But you are certainly wrong when you say there is little evidence of the market steering resources to where they’re most needed. Try opening a business producing stuff that is not wanted or that passes on inefficiences in the form of higher prices for consumers (i.e. try running your company like a government department). You’ll soon find yourself out of business and all the resources you were wasting – from staff through to fixed assets and energy inputs – used instead by companies that are felixible enough to respond to continual change.

But you continue…

- “If what you contend is true then there would be no such thing as a “boom”? and “bust”? business cycle, recessions, or depressions. We wouldn’t be suffering our current high fuel prices. Our Reserve Bank wouldn’t be needing to continually hike up interest rates. Ad infinitum”"

Well, in a boom and bust cycle it is the bust that is the market punishing over-investment. So it is quite wrong to imagine that such things can’t happen in a market environment. It is in fact an example of the market in action.
The problem is that these cycles and their painful but necessary shakeouts are made far worse by political decisions, including those surrounding the fiat currency. Arguably the cycles would be far less severe in a genuinely free market.

As for high fuel prices, you will find that the oil companies would very much like to do much more exploration and drilling in all sorts of places, and to build more refining capacity. High oil prices are entirely to do with politics.

And for interest rates, a free market would have responded to the relative housing shortage by developing a lot more land for housing. So, again, it is politicians thwarting a free market which have produced the current problems. They have driven up house prices by their planning restrictions, and they now seek to blame evil speculators for the problem.

jh

- “Surely, the market won’t react to scarce oil supply until it sees the whites of the eyes of the problem, Mouldwarp? As you said “nobody knows”. By then any chance to mitigate for a change in circumstances (eg New Urbanism v sprawl) is wasted.”

The market can’t predict the future, but then again neither can any individual or group of individuals that you care to mention. Such a feat would require complete comprehension of a myriad emerging technologies, such as carbon nanotubes and quantum dots to name just two – plus complete knowledge of all so-far undiscovered technologies just over the horizon, as well as an omniscient knowledge of all the priorities and trade-offs that everyone in the country decides according to their own circumstances. It is just impossible.
What the market can do is sift competing technologies as they emerge – in the face of problems and opportunities as they too emerge – and throw up the best set of solutions in an impossibly complex world. That’s the best you can ask for. By contrast, if you expect a handful of people to accurately predict the future and to impose that vision on everyone else you should probably investigate how other “great leaps forward” worked out under similarly centrally-controlled economies.

What you absolutely do not want to do is let politicians get involved. Check out the American corn ethanol scam articale in Rolling Stone magazine.
http://www.rollingstone.com/politics/story/15635751/ethanol_scam_ethanol_hurts_the_environment_and_is_one_of_americas_biggest_political_boondoggles

That is the ugly political reality of the approach you are suggesting.

As for the letter you posted, about developments for the elderly, I think the key phrase from it is “Surely there is a limit to the number of elderly prepared to pay $450,000 for 80sqm, just to live in the area of their choice.” So it would appear that people are buying these places; intelligent people who have weighed-up the pros and cons, looked at the alternatives, and decided that they want to live there. Where is the problem here?

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omg wtf haven’t you heard of tinyurl.com!

Here is a better link for the same listing:
http://www.google.com/search?q=site%3Atv3.co.nz+peak+oil

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Intersting to watch TV Ones coverage of peak oil and latest IEA news (So far=0, they are a brown nosing the rich and famous shallow bunch of good for nothings..)
http://tvnz.co.nz/content/?q=IEA&style=tvnz
TV3
http://www.tv3.co.nz/Home/gSearchResults/tabid/431/Default.aspx?q=peak+oil&sa.x=197&sa.y=20&sa=Search&client=pub-0784612283000026&forid=1&channel=0342145612&ie=ISO-8859-1&oe=ISO-8859-1&flav=0000&sig=AYSG8hrKpflX-1FU&cof=DIV%3A%23ffffff%3BBGC%3A%23ffffff%3BGIMP%3A%230066cc%3BLC%3A%230066cc%3BALC%3A%23ff0000%3BVLC%3A%23003366%3BGALT%3A%23666666%3BT%3A%23333333%3BGFNT%3A%23999999%3BAH%3Acenter%3BLBGC%3A%23191970%3BGL%3A1%3BFORID%3A11%3B&hl=en&domains=tv3.co.nz&sitesearch=tv3.co.nz
jh

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Hmm. Why do we have to depend on overseas credit when we can create our own like the First Labour Government did to stimulate the economy and fund its public works? We wouldn’t even have to the suffer the effects of inflation as they lamentably did as we have tools like the Consumer Price Index and the ‘Exchange Settlement Accounts System’ (ESAS) of the Reserve Bank of New Zealand that they lacked to monitor the amount of money that is in the economy.

“Where will the money come from?â€?; the Government’s answers were never explicit, but in fact a good deal of the money came from State credit created by the Reserve Bank. This institution, by an Act of 1936, had become a fully governmental body; where these expensive programmes could not be financed out of current revenue or overseas funds, the Government simply borrowed from its own bank. Neither the housing programme nor the guaranteed price could have been financed without such credit.”

http://www.teara.govt.nz/1966/H/HistorySettlementAndDevelopment/193549 theLabourRegime/en

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It would be interesting to speculate as to the impact that the Oil Crisis would have had on New Zealand if the economy wasn’t as regulated as it was then and if Muldoon hadn’t engaged in the biggest programme of public works since the Labour Government of Michael Joseph Savage.

http://www.teara.govt.nz/1966/H/HistorySettlementAndDevelopment/193549theLabourRegime/en

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