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Parliament’s Finance and Expenditure Committee has failed to support a Green Party proposal for a select committee inquiry into the impact of an oil price shock on New Zealand.
The inquiry had the support of the Greens, Labour and the Maori Party but was opposed by Act and National.
“This Government has its head in the sand about the end of cheap oil, and this wilful ignorance will prove very damaging for New Zealand,” Green Party Co-leader Dr Russel Norman said.
The International Energy Agency, the US Department of Energy and Lloyd’s of London are all warning of an imminent oil supply crunch and price spike.
The Lloyd’s report says:
“Energy markets will continue to be volatile as traditional mechanisms for balancing supply and price lose their power. International oil prices are likely to rise in the short to mid-term due to the costs of producing additional barrels from difficult environments, such as deep offshore fields and tar sands.
“An oil supply crunch in the medium term is likely to be due to a combination of insufficient investment in upstream oil and efficiency over the last two decades and rebounding demand following the global recession. This would create a price spike prompting drastic national measures to cut oil dependency. uch of the world’s energy infrastructure lies in areas that will be increasingly subject to severe weather events caused by climate change.
“On top of this, extraction is increasingly taking place in more severe environments such as the Arctic and ultra-deep water. For energy investors this means long-term planning based on a changing – rather than a stable climate. For energy users, it means greater likelihood of loss of power for industry and fuel supply disruptions.”
Dr Norman says this makes it very clear that 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.
“The Government can put its head in the sand but that won’t make it go away.
“It is urgent that we have a rational debate on the impact of an oil price shock so that we can make rational decisions on infrastructure spending now.
“Infrastructure such as motorways and public transport will last for decades and will cover the period of the oil price shock, so their relative merits need to be examined.
“The Government must also reconsider the vehicle fuel efficiency standards it scrapped last year and other means of reducing New Zealand’s dependence on oil.
“No matter how many 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 it will all go away,” Dr Norman said.
6 Comments
Yes because we wouldn’t want to know how any potential oil shock which have occured in the past would affect us would we?. How stupid to think about the future and perhaps plan ways to reduce our dependence. How stupid indeed.
Why do we need to waste time and money on an enquiry, can’t we just use these reports from the US and UK? Of course the government would actually have to read and understand them first.
It’s a way of forcing the government to read these reports perhaps, it’s easy to disregard a report from the US/UK but more difficult to ignore one that is coming out of your own government. Besides, Joyce seems to have plenty of money to throw around on investigating roading projects that don’t stack up, why not spend some of that money looking at what building all these roads will have on NZ’s future?
Such a shame that a big imbalance of money is being spent on roads and not other options.
I can imagine the Committee’s meeting minutes now…
RESOLVED:
a) That the Committee reject the Green Party proposal for a select committee inquiry into the impact of an oil price shock on New Zealand.
b) That the Committee members all stick their fingers in their ears and loudly sing LA LA LA LA LA LA.
I vote for inclusion of point C)
c) That all the committee members who hold oil stocks, or benefit from lobby work of the oil industry, commence engaging in thinking of money, sweet money…