Key Government hides from the truth about oil

The Green Party has again called on John Key’s Government to open a formal inquiry into the effects of an imminent oil price shock.  Russel Norman revealed that he has approached the Government both informally and formally and been rebuffed each time. And in June, the National and ACT Party members of the Finance and Expenditure Committee scuttled the Green Party’s proposal for a Select Committee inquiry into the imminent oil crunch.

The International Energy Agency (IEA), the US Department of Energy, and Lloyd’s of London are all warning of an imminent oil supply crunch and price spike. Russel is concerned that all these institutions have made it very clear the world is facing an oil price shock in a few short years and this will have a very significant impact on the world economy.

Says he, “No matter how many new oil wells are drilled, New Zealand’s economy will be hit hard by the coming price shocks. It’s time to face the future rather than stick our heads in the sand in the hope that this problem will all go away”.

Colmar Brunton research commissioned by the World Wildlife Fund (WWF) has shown that 72% of New Zealanders think the Government should prepare now for future oil price rises by investing in alternative fuels and public transport.

It seems Kiwis understand that this is an opportunity to achieve economic resilience in the face of a changing energy landscape. Those countries that adapt by transitioning to a low carbon economy are the ones that will prosper.

Yet National and ACT, supposedly the parties of sound economic management, are so tied to their 20th century approach that they can’t even hear what the rest of the world is saying when it comes to oil. Adding insult to injury, Gerry Brownlee intends to gut the NZ Energy Strategy, a sad response to the changing world energy picture, lacking any kind of a plan to deal with this risk to our energy security.

At least the public see through it. So a reminder to please ensure John and Gerry get the message by making a submission on the draft Energy Strategy by 5pm this Thursday, 2 September.  See our submission guide for help.

78 Comments Posted

  1. I quite like the ideas that DESERTEC are coming up with, namely concentrated solar thermal power with heat storage to give dispatchable electrical power generation and HVDC systems to get that power from North Africa and the Middle East to Europe.

    Thanks for the link rimu.


  2. from the leaked german military report on peak oil

    Investment will decline and debt service will be challenged, leading to a crash in financial markets, accompanied by a loss of trust in currencies and a break-up of value and supply chains – because trade is no longer possible. This would in turn lead to the collapse of economies, mass unemployment, government defaults and infrastructure breakdowns, ultimately followed by famines and total system collapse

  3. Almost 5pm folks!

    Opportunities abound for those who ‘get’ the 21st century
    Press Release by Greenpeace at 3:19 pm, 02 Sep 2010

    As the deadline for submissions on Energy and Resources Minister Gerry Brownlee’s Draft Energy Strategy draws to a close (at 5pm Thursday), Greenpeace is telling the Government that it is not too late to embrace the global Clean Energy revolution – in fact the timing’s perfect.

    “It is clear from Mr Brownlee’s energy strategy, which reads like a love letter to fossil fuels – he even once described coal as ‘sexy – that he has missed the fact that we are about to trigger a state of runaway climate change,” says Greenpeace Senior Climate Campaigner Simon Boxer.

    “In his 19th century-style rush to cash up New Zealand’s mineral reserves, Gerry Brownlee is also risking a Gulf of Mexico-style oil disaster, which would destroy our invaluable clean green reputation.

    “But he’s also in danger of letting New Zealand miss out on an extraordinary opportunity,” says Boxer.

    With global investment in Clean Energy eclipsing fossil fuels for the second year in a row – President Obama has pledged US$69 billion (NZ$98 billion) on Clean Energy initiatives by the end of 2011 – the time’s ripe for New Zealand to harness its abundant renewable energy, smart ideas and scientific know-how to put Kiwi companies at the front of the clean technology race and grow New Zealand’s prosperity in the bargain.

    “Instead of trying to resuscitate the fossil fuel industry, why not give a leg-up to those home grown innovators who will help define the future? What if Richard Pearce – the kiwi aviation pioneer – had been better supported? The world would celebrate his name instead of the Wright Brothers. Many other equally brilliant kiwi innovators will wither on the vine under this Government’s stewardship,” says Boxer.

    “Most importantly, in backing Clean Energy innovation we’ll stand a good chance of making the sort of cuts to our emissions that are essential if the world is to avoid a state of runaway climate change,” Boxer says.

    Some of New Zealand’s Clean Energy companies include Designline International, who are producing revolutionary hybrid turbine buses; Windflow Technology, who are designing some of the world’s most efficient wind turbine technologies; and HTS 110, who are designing world-class, super-efficient systems for transmitting renewable energy. All are examples of the sort of ingenuity for which this country is justifiably famous.

    As of Thursday afternoon, Greenpeace supporters had made in excess of 3388 submissions on the Energy Strategy, calling on the Government to abandon coal and oil in favour of a Clean Energy future.


  4. Ryan. At the time of the UK’s greatest prosperity they were the most protected economy on earth. Same with the States in their turn. They both went to war many times to maintain that protection. Look up the “Boxer rebellion” and the CIA in central America. The idea that protectionism had no part in their prosperity is a neo-liberal myth.

    If you think Singapore is not a State planned economy look up Tamasek for starters. The Government in Singapore has a finger in every industry. “picking winners”.

  5. Rainman,

    you need to state what you think “prudent risk management” in the face of overstated oil reserves is. The thing is we will all have different ideas about what that strategy should be. Then we have to pick which strategy is best, and spent a butt-load of cash on it.

    My previous post was to point out that governments have a very poor record at picking best strategies for their economies in the face of some perceived threat. (what I have called “industrial policies”.) Thinking that this time a government will get it right is nutbarish. In your words sir, that way lies madness.

  6. Kerry Thomas,

    please explain how protectionism turned the US and Britain into economic powerhouses. Although these things are difficult to measure, the period before WWI had more international trade in goods and capital than the period we are currently in. (See, for example, “The History of Money” by Alex Ferguson.) Protectionism is largely thought to have exaggerated the Great Depression. (for example, the Smoot-Hawley tariffs in the US.) So I fail to see the connection between protectionism and economic growth, and I think most economists would share my view.

    Singapore has one of the freeist (i.e. non-planned) economies in the world. Chinese growth is based on supplying cheap credit and employment incentives to entrepreneurs. This is not a planned economy, because the government is not picking winning industries to support and losing industries not to support.

    If you want examples of planned economies, look to pre-1980s China or Soviet Russia.

  7. economic growth economic growth economic growth –

    be interesting to know how many times that mantra has been used – how many times it is used in politician speeches and press releases per year.

  8. @insider, one other thing: isn’t “faith based politics” exactly what we have today, with the Nacts belief in certain failed economic systems?

  9. Insider, I think you are missing my point. Oil prices are only going to be relatively low (say $50-80ish, which was unthinkable just a few years ago) when the economy is in a hole. If demand recovers they will spike. There is no upside to this arrangement.

    Prudent risk management demands that we consider (and plan for, but let’s start with considering, baby steps) a future where things don’t work like they used to with regard to energy, the environment and the economy. Refusing to even think about this is simply juvenile (on the part of individuals) and indefensible (on the part of our supposed “leaders” – although who would follow them I do not know).

    A low-carbon future is, in the medium term, inevitable. Can you really defend the continuation of our carbon-intensive economy for say 20 more years, against either depletion or climate change arguments? That’s a nutbarish, very anti-science position. That way lies madness.

    Sure, there is some potential to get a few things wrong over the next decade or two – after all we’re not very good at this sort of thing, and no-one is perfect – but leaving to the market will definitely not work. Long lag problems are poorly served by market mechanisms alone.

  10. @insider

    Kindly note that the advice about what we should do, the advice the Greens give, really has very very little to do with the peak-oil driven price of oil as it transitions into full decline. It has to do with the gaming of that market, which will push prices in whatever direction the market-makers choose for them to go. There will be price shocks as the gaming continues, as long as we remain dependent on imported oil.

    Greens advice is to reduce that dependency, to remove the lever that others can use to destroy our economy. Even if we are not the principle target. The difference is quite important here.


  11. @insider

    It is currently able to be gamed. It will not be for much longer. People play commodities markets, they don’t invest in them. There is a reason and you only have to look to the incredibly blatant gaming of the silver market to understand it. The big players have ALL the advantages. So if you want to play with the cards provided by the known cheaters feel free, but don’t reckon I am equivocating when I ask you what your investment time horizon is, because if you don’t know the answer to that you have no business investing in second hand snot, much less the stock market, and the commodities trades are pure poison for the amateur.

    So what you advise, that we should “invest” in oil because we know there WILL be a crunch as peak oil bites, is a nonsense. In commodities you gamble, you don’t invest, and the sure thing is that the people controlling the bulk of the remaining oil have a much better chance of making money playing the commodity market in that oil, than any outsider… and as long as they control enough of the supply to manipulate the market, only a fool would rush in.

    There are of course, plenty of fools, but you have noticed that your advice to us to make this mistake has been rejected. We didn’t advise the government to invest in commodities, that being what you are using as a straw man here. We advise that we should prepare for shortages and become independent of those commodities.

    Note the vast difference between that, which gives us our country as we are willing to work for it, and playing some fool bet against a professional cardshark while using his deck.

    Better to invest in ourselves. I note that the folks who invested “green” made better returns than the ones who played. Saw that in the paper today.

    I know that the righties think that greens are financially naive. Your advice however, was rejected, and for good reasons. Calling it equivocating doesn’t alter the truth about what is going to happen. Peak oil is with us now. It is early on the downslope, but the supply is definitely in decline. This has not ever been the same as “no oil” and there is still plenty for people to use to game the market.

    Investing with a 50 year horizon would be more definitive, but one has to ask where the futures for that time period are marketed, and one has to ask what ELSE can happen in 50 years. With the Renminbi supplanting the US $… what will those dollars be worth really? Yes oil values will go up. Cashing in on that trend entails engagement of SOMEONE on the other side of the bet. The counterparty risk is not negligible.

    We think of stuff like that… but it has nothing to do with equivocating. We know the risks of betting against the house.

    We also know the benefits of building our own house. Investing in ourselves makes more sense.


  12. I believe Russel asked the select committee to consider the liklihood of a price spike before 2025. No one knows when it will actually occur and few make exact predictions. His comments above are reporting what those three organisations are saying and given who they are, that should be alarming. We never read reports that the effects of peak oil are being predicted to occur further away – almost every new report says it is closer than we thought.

    You will not get the certainty you want until it is too late. I contend you are gambling with the economy more than those of us who want to see a controlled transition to a low carbon economy start now.

  13. “Think Big nearly bankrupted New Zealand”.

    I think Muldoon borrowing for social welfare for farmers and a level of super which was not funded etc had more of an effect on the amount borrowed. Borrowing for consumption not investment.
    Borrowing for election bribes. Sound familiar anyone?

    Instead of us getting the returns from think big projects like the refinery and the smelter, returns were deliberately masked until they were given to the private sector in the 80’s.
    A lot of our renewable energy from projects like Manapouri/Clyde came from think big also.

  14. @ valis

    The equivocation was in the certainty around timing of price increases. IT was interesting to see some uncertainty expressed by green supporters. The political leaders could learn from that.

    You can plan but executing it can be really costly and really really costly if it is wrong. To be fair it’s easier to do with 20/20 hindsight, but when you are gambling with the whole economic system of a country I expect a bit more certainty.

  15. It follows then that trying to make/justify policies that fundamentally change an economy based on a politician’s view of where prices might go is even trickier and very high risk.

    I don’t think bj was equivocating at all and certainly doesn’t agree with you. He also said:

    In a few years this gaming will have ended, no longer possible to disguise or conceal the facts, and the market will change to something that an economist would recognize, with price and demand and supply all yoked together in the classic manner.

    By facts, he means exactly what Russel is saying above, and that we should plan accordingly.

  16. Think big was the only good idea National ever had

    Kerry, Think Big nearly bankrupted New Zealand. That near bankruptcy meant that the reforms of the 1980s had to be done at twice the speed to ensure that our country was kept afloat – and it was the speed of those reforms, rather than the reforms themselves, that caused the most damage.

  17. @ BJ and rainman

    Thanks for making the point that predicting oil prices is tricky. You’re exactly right. And it’s instructive to see even green supporters equivocating around this issue, because if predictions were easy we’d all be rich.

    It follows then that trying to make/justify policies that fundamentally change an economy based on a politician’s view of where prices might go is even trickier and very high risk.

    I’m not a big fan of faith based politics – NZ almost went broke trying to do that in the past when it was equally certain that oil prices would rise. I think the risks are way too great.

  18. 5078934tdfgj. Forest waste products if fully utilised could save about 22pj annually of imported oil. Our current hydrocarbon use is about 500pj.

    Still worthwhile as 22pj is about 600 million dollars.

    If we use all the wood grown on forestry land we could double that. However as grown timber is worth $2700 million as exported wood products. It would only replace about 1000 million of imported oil. Making using all timber for energy would not be economic.

    Corder, S. (1976). Wood Residue as an Energy Source. . Retrieved May 9, 2009, from USDA Forest Products Laboratory. :
    Electricity Commission. New Zealand. (1997). Retrieved March 13, 2009, from Report on Energy use and Production:
    Energy Efficiency and Conservation Authority. (na). Wind Energy. Retrieved May 9, 2009, from EECA:
    Energy Efficiency and Conservation Authority. (na). Bio mass co-generation Assessment tool. Retrieved May 9, 2009, from BioEnergy Knowledge Centre.:
    Energy Efficiency and Conservation Authority. (na). Woody Bio-mass Energy. Retrieved May 9, 2009, from Improving Energy Choices.:
    Langdon, A. (2009, March 21). Environmental technology 2. Course materials. . Hamilton, Waikato, New Zealand: University of Waikato.
    Ministry Of Economic Development. (2008). Retrieved April 2009, from Energy Brief 2008:
    Ministry of Forestry. (2007). Forestry Exports. Retrieved May 8, 2009, from Income From Forestry Exports.:…/sonzaf/2007/page-13.htm
    Ministry of Forestry. (n.d.). Statistics. Retrieved May 9, 2009, from Forestry Statistics:
    T, A. (2005, Feb 9). Ethanol Research Breakthrough. Retrieved May 9, 2009, from Renewable Energy World. com:

  19. Japan after the war and Singapore did very well with planned economies.
    A planned economy does not seem to be hurting China.

    A high degree of protectionism and planning enabled Britain and the US in their turn to become economic power houses.
    A later over reliance on unregulated capitalism and “free markets” has caused both to became “failed states” along with NZ.

  20. The refinery was such a bad idea, that, when it was given to the oil companies for peanuts, they made back the purchase price in one year.

    Think big was the only good idea National ever had. Investing in infrastructure for the future has been neglected lately. As the great grab to mine NZ and its people to get the last bit of wealth out before it is all gone continues.

    Unfortunately crony management and gifting it to private companies meant the profits went offshore. AGAIN!

  21. Ryan,

    Yes old enough to remember think big.

    While the projects were a requirement (Clyde Dam, Marsden Point refinery expansion, various synthetic petrol projects, Glenbrook Steel rolling mills, Tiwai Alloy Smelter third pot line, Electrification of the NIMT rail line, etc.) to bring New Zealand into the 20th century.

    The fact that the state sponsored private companies to help them develop their operations (and create jobs) without direct linkage to being repaid meant that it looks like pandering to Muldoons private investor mates.

    However if we look at say the Glenbrook steel mill, we have a case where the mill had a huge hole in its operations. Mainly that while it could produce very high quality cast ingots for exports, these where offset by the need to import vast quantities of rolled steel from Japan (you will no doubt remeber the coil trains from Tauranga to Glenbrook) to feed its galvanising, paint lines, and its pipe manufacturing operations.

    What think big did was to plug that gap with rolling mills capable of turning castings made at the steel plant into coil and plate for post processing and export.

    While you may have (and I have too) reservations on how public money was spent in supporting private investment growth, the fact that these projects provided many jobs it had a far greater effect in reducing imports and increasing exports.

    As BJ said planned economies are not the be all but they do help in getting an investment stream up and running that generated jobs, exports, and reduces dependence on imports.

    It has its place, but in moderation.

  22. Planned economies do not work.

    No? Funny how the Aluminium smelter and the dams are still working and producing for us now. Funny thing that on balance they appear to be some of the smartest things we did for ourselves… though yeah, they nearly sent us broke doing ’em. Funny how the Russians managed to build up from a third rate agrarian economy to a country that was able to beat back the German Army through (admittedly brutal) planned changes to its economy… the examples are many. However, the question of what you are planning FOR has to be asked and answered.

    I don’t think that planned economies are in general, a good idea. I do not however, accept the notion that laissez-fair globalization and the resulting destruction of our organic (as in internal) production capacity, is a better one. When we let other people build the things we need and abandon the ability to build them ourselves we are screwing up big time.


  23. @insider

    Right now, this instant, the oil market is so thoroughly gamed as to represent nothing more reliable than a casino. What is the time horizon on the investment? When do we have to draw it down? What happens if, as they are wont to do, the powers that be decide to bring the price down through their various manipulations in the near term? In a few years this gaming will have ended, no longer possible to disguise or conceal the facts, and the market will change to something that an economist would recognize, with price and demand and supply all yoked together in the classic manner. Right now, it is a bit of a crapshoot.

    Which doesn’t mean that plowing investments into it would not work in terms of making “money”…. but it begs the question of what that “money” will be worth if/when the oil value goes up. The QE efforts of the central banks, the damage done to the US $ by its irresponsible masters… none of those things are moving in the direction of us wanting to be caught holding dollars, or anything denominated in them.

    Far better to invest in ourselves.


  24. Is no one here old enough to remember National’s “Think Big” projects? Planned economies do not work. Labeling a government “stupid” because they refuse to plan the economy betrays a glib disrespect for our history.

  25. @insider: although the trend is upward, it’s not as easy as that to predict oil prices. Look what happened in a little while ago: oil price crept up (yes partly assisted by speculation, but not entirely), economy stalled, people lost jobs, recession set in, demand for oil dropped, and so did price. We got down to $40 at the beginning of the recession, remember. Over time fundamentals reasserted and the price drifted up, but is now limited to around $70-80 as beyond that the economy crashes again. So we’ll bump along a plateau until real shortages set in, when the price will go up again (but by then we’ll have bigger problems). The phase we’re in is actually a final chance to do something about our addiction while we can. I’m not betting on it, though.

  26. I don’t think it would be in anyones interest to stop the construction of the lignite to diesel plant. What should be done is a change of input. Instead of using lignite use wood. Planting large scale pine (or other) forests is something this country does well, it would provide an infinite carbon neutral source of fuel. There is no other biofuel which can scale to the same extent and which would not use up valuable farmland. Pine trees can grow on otherwise useless steep hillsides anywhere, corn for corn ethanol takes up good quality farmland.

  27. So that we can invest in more deep sea drilling spills like that in the Gulf of Mexico?

    If oil is getting harder to get, and accidents are more likely as it is in more and more remote and fragile areas.. we should invest in the last drops?

    Sound like the kind of mentality that would ‘invest’ in buying permits to hunt endangered species…

  28. I’d like to read the source documents that this article refers to. Can anyone provide links to the articles by “The International Energy Agency (IEA), the US Department of Energy, and Lloyd’s of London”?

  29. Surely if it is sooo obvious about oil prices and supplies the most sensible thing for us to do is pile all the NZSF super scheme into oil futures, because it is a done deal, no argument, can’t be avoided situation. So use all that cash we’ll make to fund all the alternatives the greens want.

    In fact wouldn’t it make sense for the Green MPs’ super fund to lead the way. Go on put your money where you mouth is instead of trying to spend everyone else’s. You can’t lose if it is so certain. Can you?

  30. Law of economics? Never heard of that one. A theory perhaps.

    The Government is ignoring international warnings of an imminent oil supply crunch and price spike, the Green Party says.

    Co-leader Russel Norman revealed today he had been asking the Government to open a formal inquiry into the impact of these problems but had been rebuffed.

    He said research commissioned by the World Wildlife Fund (WWF) and released today showed 72 per cent of New Zealanders believed the Government should prepare now for future oil price rises by investing in alternative fuels and public transport.

  31. What “law” of economics will save our asses when the oil price spike arrives?

    Valis, the law of economics would suggest that when the price of oil increases, there would be incentives to invest in alternatives and there would also be an incentive to reduce demand for oil. To be honest, I think that five to seven years is enough time to make alternatives somewhat viable.

  32. trees, of course it’s a bad look for an SOE to be one of the highest emitters and of course, Power could do something about it. That’s the point, the Nats have enabled this situation by design because they see lignite as a cash cow and damn the consequences. It’s not that an ETS is to blame, it’s that any system can be gamed by an unsupportive govt. For the same reason, we won’t be seeing any sort of Fee and Dividend system from National either.

  33. The biggest issue with fixing agriculture is that a lot of our assumptions have to change. Go back a while and you’d find quite a few differences to do with food production. For one thing, most households had veggie gardens, and probably a few chooks, maybe even a house cow on bigger homesteads. There were lots of market gardeners, close in to town, so near to where the food was consumed. We still grew things on a bigger scale, and for export, but mostly these were sheep and related products (were we ever a big producer of grains or legumes, the traditional temperate climate cash crops?)

    All of that is largely gone, with most people now living in cities, on subdivided sections and in overpriced and over-fancy houses, with no facilities, time or abilities to be more self-sufficient. Food production has become the domain of industrial agribusiness, which is dependent on lots of imported inputs, and on distant markets. To channel my inner libertarian, we’ve given up our freedom for comfort, and chosen to become dependent on corporations and global trade for our survival, not just our success.

    This, to put it mildly, is stupid.

  34. oh man that article keeps on giving

    at the Copenhagen climate conference in December, 2009, the priorities of the most fuel-dependent nations were clear: carbon emissions should be cut, and fossil fuel dependency reduced, but only if doing so does not threaten economic growth.

    The cruel irony, obvious to my Peak Oil-aware colleagues but apparently not to the delegates at Copenhagen, was that the decades-long era of rapid economic growth based on increased fossil-fueled production and consumption is over anyway. The world’s last chance to collectively, cooperatively negotiate a turn away from the precipice was being squandered for the sake of a goal that was no longer achievable.

  35. I.e. Simon Power could send a directive to Solid Energy not to go ahead with the Lignite Urea and lignite to diesel plants, and the govt can instead invest in low carbon technology – Solid Energy owns New Zealand’s largest biofuel company and Meridian can invest in micro energy, New Zealand can do a lot – the Govt should be investing in clean energy, not be giving subsides to large polluters.

  36. If the lignite Urea plant goes ahead it could get massive subsides despite being the second largest source of emissions after the Huntly coal power station.

    Surely it is a very bad look for an SOE to be linked to the two highest source of emissions in the country, especially when the SOE and Finance ministers can sent a directive against the SOE undermining National climate policy.
    “A new plant with a huge carbon footprint, to make a product that delivers a triple hit on the environment, would be a backwards step,” Mr Terry said in a statement. A more sustainable strategy would be for farmers to reduce their emissions so that their meat and milk are less vulnerable to planned taxes overseas on the carbon content of imported goods.

  37. We’re not nett exporters by a long shot.

    We have one ammonia-urea plant, owned by Ballance, which makes about 260,000 t/yr from natural gas. We import the rest of what we need – although how much that is seems to vary widely. And yes, we do export some.

    Total fertiliser imports vs exports, 2008: $862m vs $11m
    Same for 2009: $467m vs $37m.

    Would be interesting to find those stats by product and tonnage, so I can compare to domestic production, but anyhoo. The issue is not insurmountable and we aren’t all going to starve. This is a risk we can (to some extent) mitigate – but not by ignoring reality, as the Nacts love to do.

  38. we have to create a desirable “new normal” that fits the constraints imposed by depleting natural resources. Maintaining the “old normal” is not an option; if we do not find new goals for ourselves and plan our transition from a growth-based economy to a healthy equilibrium economy, we will by default create a much less desirable “new normal” whose emergence we are already beginning to see in the forms of persistent high unemployment, a widening gap between rich and poor, and ever more frequent and worsening financial and environmental crises—all of which translate to profound distress for individuals, families, and communities.

    more at

  39. Urea could be costly to the taxpayer:

    A lignite-to-urea fertiliser plant which government coal miner Solid Energy is considering for Southland would qualify for millions of dollars a year in taxpayer-subsidies of its carbon debt, according to a Wellington think tank.

    The $1.4 billion plant – being investigated as a potential venture with farmer-owned fertiliser company Ravensdown – could become the nation’s second-biggest emitter of greenhouse gases behind the coal-fired Huntly power station. But it would still qualify for subsidies worth more than $500 million over the first 20 years of the plant’s life

  40. Nitrogen-based fertilizes such as urea and ammonia-derivatives are made here in New Zealand and I believe we actually export some of it. The first step is the synthesis of ammonia from hydrogen and nitrogen – the latter freely available in the air of course. The hydrogen is normally formed by reacting water with methane (natural gas) – hence the petrochemical aspect – but can also be formed by reacting water with carbon (coal). Significantly the hydrogen can be formed directly from water by electrolysis using surplus electricity, giving us an opportunity to cut back on our CO2 emissions by expanding our renewable generation and using the surpluses at off peak times for this.


  41. This stuff should THE core business of the Greenz. I think that what JH is trying to point out is that the “social/racial agenda” side of the politik is carrying far too much weight with the current Green leaders, whereas they should be concentrating on this.

  42. @Trevor, I was partly thinking of farm mechanisation, as you point out, but also urea, ammonia and other substances. I don’t have ready data to prove what percentage of these are petrochemical-derived, but given our top suppliers in 2009 were Saudi Arabia, Canada, USA, and Australia I’m guessing it’s a safe bet there is a lot of petrochem dependence.

    Now we do synthesise some of these ourselves but I wonder what percentage of our usage is imported, and how quickly we could ramp up local production/switch to more organic methods in the event of a supply crunch?

    And of course the biggest issue with oil depletion is economic disruption. An argument can be made that we’re in our current mess partly because of the high price of oil in 2008 (James Hamilton’s view, for example).

    I recommend that all those that think peak oil is crap (particularly righties) watch the Chris Martenson crash course at He’s no hippie dreamer, but sets out a clear case for concern, or better yet, action.

  43. Thank you Valis, got it in one. The underlying assumption of the economists and the right wing is that one of the choices is continuing business as usual. This is not (and it should be apparent to anyone smarter than a retarded rock at this point), possible. Watching the US economy implode from here gives a little schadenfreude and a lot of angst… because we’re not immune. We are in better position to withstand the destruction attending to pig-ignorant greed, but we certainly have no small herd of pigs of our own.

    As we speak, the Chinese are beginning the move that puts the Renminbi ahead of the US $ in making transactions with China. The likely result in the USA is what I think of as “black hole economics”. Sort of like a black swan with a hell of an event horizon.


  44. Entirely agree Valis. Either we own the change now and learn to live with a changed world or we will become Victims of it.

    With intelligent foresight we could be better off as a community.

  45. I doubt that we can prosper in a low carbon economy

    We don’t have a choice. The only question is whether we transition in a more planned manner, or wait for the crash to do it for us.

  46. Trevor. Intensive agriculture relies on petro-chemical products for fertiliser among other things.
    However as we export around 80% of our production anyway do not think lack of Hydro-carbons will affect our ability to feed ourselves and even have a proportion left over for export.

  47. @rainman – which petrochemical products are we heavily dependent on for our agriculture?

    I see the bigger problem for agriculture being the diesel fuel for all the tractors, harvesters and other farm machinery and the petrol for the farm bikes, chain saws, portable generators, etc.


  48. So how should New Zealand prepare for an oil shock?

    Encouraging conversion of cars to run on CNG in the North Island would help. This could be quite easy for the government as government departments actually own a fair number of the new cars in the country.

    Shifting the Whirinaki diesel-fired generators to somewhere like Marsden Point where they can run on natural gas would also help, although investments in renewable electricity generation will hopefully make it unnecessary to actually run these generators.

    Electrification of more of our railways would help as well, although if we are really stuck, we could look at firing up some of the old steam trains 😉

    Switching to electricity and gas will only help if we don’t run out of either, and since a significant portion of our electricity generation is powered by gas, these are related. Therefore building more renewable-powered electricity generation is also required. However since much of this is intermittant, boosting the peak capacity of our hydro generation may also be required, along with some improvements to our transmission grid.

    That’s a start.


  49. :jhisafuckwit: for pointing out that the Green Party is trying to unite the country behind priorites which include: response to peak oil (and climate change), decolonisation and adherence to a treaty signed under circumstances that in no way relates to the current demographics with an unknown outcome and likely to lead to an indigenous minority having a balance of power (?).

  50. The reason I said I doubt we can function in a low carbon economy is that we rely on trade to such a degree and especially things that require quick refrigerated transport. I can imagine a sort of demultiplying effect.

  51. The problem with putting your head in the sand.. someone can rush you from behind & bite your ‘A’..
    Yes, its time to look to alternative, future directions.. bio-fuels & public transport etc.., heading the agenda.. BUT not as long as this right-wing N-ACT Govt. rules the roost !! They seem intend on more roads & anything else that keeps them higher in the polls, regardless of what that is.. Kia-ora

  52. One question: does anyone know where the voting record on this can be found? I’ve looked under the “Other business” section for the F&EC but don’t see anything obvious. Was there a formal piece of business put up to the committee to consider or is that not how it works?

  53. @James, lemme guess: easy oil declines, so price goes up, the price signals tell us to develop alternatives, et voila! No further problems, at least until the next resource runs out. A beguilingly simple narrative, no doubt, and on the fact of it, plausible. Sadly, it’s too simple by half.

    Some things it doesn’t cover:
    – How well has it worked recently? Oil prices over the last few years have risen markedly, providing huge incentive for producers to exploit this, but production has been flat. No real shortage of demand, fundamentally, either.

    – What alternative do you think is promising (to keep delivering not just current BAU, but good growth)? Bio-alternatives have scale problems, electrification (nukes, even solar and wind) have promise but a fully electric vehicle fleet would take $$$ and ages to get in place – and there are other resource limits that affect these anyway (plus the usual waste issues with nukes), coal is not doable because of climate issues (unless you’re an anti-scientific idiot, in which case good day to you) – besides, we did coal already, remember, fusion is still 50 years away, um, I’m running out of options, hydrogen? Puhleeze. Help me out here, what do you have thats even vaguely plausible? Burning the poor?

    – Keeping the cars going is also only one part of the problem. The economy won’t (doesn’t) respond well to broad price increases in materials (not just plastics, just about everything we use has high embedded energy costs). Hilariously, to counteract that you would need wages to go up, otherwise your consumption-based economy goes bye-bye. That’s incompatible with the opposing imperatives of capitalism to enrich the few. Oops, no more trickle-down. Which one would you pick?

    – Food’s also a biggie. Sure we’re an ag-nation, but heavily dependent on petrochemicals for agriculture. Much more expensive food results in real starvation and hardship.

    – Also, have you noticed we’re kinda far away from our markets? Read this:

    “Of even greater concern is the potential for implementation of super-slow steaming on the Asia to Europe leg, which if adopted could effectively end the current trade in chilled lamb,” he told Rural News.

    “The shelf-life of most chilled products would expire before they reach the market.”

    So, c’mon James – let’s have some answers. How do you propose we deal with the risks we face? Deny they exist?

  54. James, wouldn’t your efforts be better spent talking to the IEA’s chief economist? I’m sure he would be pleased to know how markets work.

  55. “I doubt that we can prosper in a low carbon economy”.

    NZ is actually one of the countries best placed to prosper in a low carbon economy.
    Plenty of available sources of renewable energy.
    Self sufficient in food and housing.

    It just takes certain people to stop treating NZ and its population like an extractive industry..

  56. Don’t you have a :smokingdope: emoticon Frog? Why not? A :Flackeyfriar: would be handy too, as would :maoripokeingtounge:.

  57. “It seems Kiwis understand that this is an opportunity to achieve economic resilience in the face of a changing energy landscape. Those countries that adapt by transitioning to a low carbon economy are the ones that will prosper.”
    I doubt that we can prosper in a low carbon economy. Certainly we can reduce but people won’t get out of cars until fuel prices go sky high. A concentrated campaign would help (eg bill boards). Remember though there are other priorities such as “decolonisation”. Perhaps tangata whenua can guide us towards a low carbon future. We all need to get behind our indigenous people to get this done now.

    Time is now.

  58. Oh God not this peak oil crap again.If you had any understanding of economics and the power of price signals you would know this is a non issue.

  59. What can explain this myopia? Is it ideological blindness, corruption by special interests, or do the Nats secretly agree with Hide and Boscawen? All three? Whatever, they seem determined to drive us to ruin.

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