Gareth Hughes

Giving the three-fingered salute to oil

by Gareth Hughes

They say the human body is about 60% water. What percentage of New Zealand’s economy would be oil? Oil is the grease that lubricates our modern society. It’s given us tremendous power and freedom but now we’re hooked on it.

One of the most serious yet ignored issues of our age is the end of cheap oil, which was raised in Parliament today by Russel Norman and was the focus of a report released earlier this week by the Parliamentary library.

Do you think oil will ever be cheaper than it is now? Hardly any layman or expert believes cheap oil will last forever, and many believe we are nearing, or have already hit, peak oil – the end of cheap oil. Peak oil isn’t a theory, it is a geological fact. There is only so much oil in the world and at some point we’ll reach its’ halfway point, which means that no matter how much we’d like more (demand), we will never produce more (supply). An additional problem is that worldwide we’ve already got the easiest, cheapest, most accessible half so what’s remaining is the hardest, most expensive to extract and least accessible. We’re going further and deeper in our hunt for oil, sometimes with catastrophic consequences like seen in the Deepwater Horizon accident.

The International Energy Agency estimates the peak lies somewhere between 2013-2037; but add in oil producing countries and their geo-political games, supply disruptions like Hurricanes and climate change, and a global lack of investment and the good money is on oil getting more expensive sooner rather than later.

One of my favourite TV shows is The Wire which is about drug dealing? I learnt that when demand is high and supply low, prices goes through the roof. That’s bad news for New Zealand because we’re p-addicts. We’re petrol addicts who are 98% dependant on oil for transport, so we’re going to have to wear the higher cost of our drug of choice or crash.

Like the metaphorical question, what’s it got to do with the price of fish? Lots. Oil accounts for half of the costs of Kiwi fishers and a massive percentage of the costs of growing food, moving food medicine, the majority of our products, our exports and all those tourists that come here. In short – our whole economy. Oil is pervasive and is in everything from fertilisers, furniture and us. A study by the U.S Center for Disease Control and Prevention tested humans for chemicals and metals, and recorded 212 different compounds – more than 180 of them products that started as natural gas or oil. We’re so dependent on oil that when prices seriously rise or fluctuate widely, as seen in previous oil shocks in 1973, 1979, 1990 and 2008, it damages our economy big-time.

Remember when the price hit $US 100 a barrel temporarily in 2008? Imagine $200 a barrel or higher? Imagine if you couldn’t afford to get to get to work. What would you do? Imagine if you couldn’t afford to fill up your car or you lost your job because tourists couldn’t afford to travel here. Imagine countries converting food-growing land to biofuels production, food prices spiralling and people in developing nations starving. Imagine all the people suffering. You may say that I’m a dreamer, but I’m not the only one.

I learnt in Scouts “Be prepared.” We’re extraordinarily vulnerable in New Zealand and the sooner we get ready the better. Other nations, and interestingly militaries like the Pentagon and the German Bundeswehr, are making plans, yet we seem to have a ‘she’ll be right mate’ attitude and are ignoring it.

In fact, we’re strengthening our addiction. We’re still pouring money into new motorways. Well, more accurately, borrowing globally to fund our $10.7 billion seven Roads of National Party Significance that will just encourage more cars onto congested roads. We’re still planning to close four regional rail lines (even my beloved Gisborne-Napier line) and sprawling our cities ever-outwards over farmland, which means transport costs for those on the city fringes are very high.

We need an urgent inquiry into our vulnerability, what impacts higher oil prices would have on New Zealand and a strategy to reduce dependency – now. We need to make the most of the last of the cheap oil to transition our transport systems, energy supplies and communities towards sustainable alternatives. The earlier we start the better.

We need a plan because the worst thing we could do is focus on alternatives that are even worse for climate change than oil, like growing biofuels on former rainforest land and extracting oil from tar-sands or coal. Unfortunately, the state-owned coal miner Solid Energy, with the Government’s blessing, is starting a lignite-coal-to-diesel plant in Southland – a lignite-coal-to-fertiliser plant that will have huge greenhouse gas emissions. Like jumping out of the frying pan and into the fire.

What would an Oil Transition Plan look like? I think it would set out a pathway to reduce our dependence on oil from getting about (more fuel efficient cars, car-pooling, better public transport choices), moving stuff around (freight off trucks and onto electric rail or coastal shipping), travelling internationally (researching alternative aircraft fuels, fast ships and I kid you not – airships), communicating (super-fast internet), growing food (locally sourced organics), and electricity (wind, wave and geothermal).

The crucial part is finding local solutions. In an oil constrained world everyone will need to adapt to their own local circumstances. Across the nation Transition Towns groups are envisioning a low oil future and preparing solutions but tragically the Government fiddles while Rome burns.

What are we waiting for? I think our politicians are dropping the ball big time by failing to prepare. It’s negligent to ignore so great a looming threat. I’m not surprised though. I believe they’ve been captured by short-term thinking and corporate interests; suffer from a lack of vision; and pander to a media more interested in the latest little scandal than public broadcasting or journalism.

The good news is that many of the solutions are good for their own sake, not just for freedom from oil dependence or climate change. More walkable or cycleable cities and fast, affordable public transport are nice anyway. Car fuels that don’t kill hundreds of Kiwis every year from air pollution are a good idea, as is safe organic food. The even better news is, if we get in quick, we could sell many of the solutions around the world.

We’re a resilient, innovative, ‘can-do’ nation, lets Scout-up, ‘be prepared’ and give the three-fingered salute to oil.

Published in Economy, Work, & Welfare | Environment & Resource Management by Gareth Hughes on Thu, October 14th, 2010   

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