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Peak Oil reaches New Zealand's Parliament

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  • kiwipriusowner
    Dear All I cannot attest to the quality of the debate but Peak Oil has arrived in NZ s political consciousness. Parliamentary Question Time 24 August 2004
    Message 1 of 1 , Aug 24, 2004
      Dear All

      I cannot attest to the quality of the debate but Peak Oil has arrived
      in NZ's political consciousness.

      Parliamentary Question Time 24 August 2004

      2. JEANETTE FITZSIMONS (Co-Leader-Green) to the Minister of Finance:
      Has Treasury revised its assumption that crude oil prices will
      ease back to an 'equilibrium' price of US$19 per barrel; if so,
      what are the Government's current assumptions for oil price trends
      between now and 2020?

      Hon Dr MICHAEL CULLEN (Minister of Finance): Treasury is yet
      to begin its revised forecasting round for the December Economic
      and Fiscal Update. When that happens it will specifically identify
      the need to revisit the assumption for oil price trends.

      Jeanette Fitzsimons: What planning, if any, is the Government
      doing to reduce the dependence of the New Zealand economy on
      oil, in light of the fact that the price of light crude today
      is nearly US$48 a barrel?

      Hon Dr MICHAEL CULLEN: My colleague the Minister of Energy is
      working hard on sustainable energy options. It would be helpful
      if some of those options, such as hydropower and wind power,
      were more enthusiastically supported by the Green Party.

      Rodney Hide: Given the concern over high petrol prices, has the
      Minister sought the advice and guidance of Mr Jim Anderton, the
      self-styled 'Minister for Lower Prices'-as he told this House
      on 30 March, 2000-or is Mr Anderton missing in action on this
      one, as well?

      Hon Dr MICHAEL CULLEN: Mr Anderton has certainly expressed concerns
      to me about the impacts of rising oil prices. Perhaps we could
      all hope that the various elements in this House will use their
      best endeavours to ensure, for example, that the Middle Eastern
      situation settles down.

      Jeanette Fitzsimons: What does the Minister understand by the
      term 'peak oil', and when does he expect it to occur?

      Hon Dr MICHAEL CULLEN: I have to confess that, for once, the
      member has floored me; I do not understand what is meant by the
      term 'peak oil'.

      Jeanette Fitzsimons: Does the Minister agree, then, that the
      price of any commodity is likely to rise over time, when demand
      is increasing exponentially while supplies are being restricted
      by physical limits; and does he agree that oil is a commodity
      that has just such characteristics?

      Hon Dr MICHAEL CULLEN: In theoretical terms, yes; in practical
      terms, no. We have yet to reach the point where it is at all
      clear that new discoveries in oil-and I now think I understand
      what the member was getting at before-fall below the level of
      the projected demand for oil. At the present time, the production
      of oil is actually outrunning demand, and stockpiling is occurring.
      Prices are high because of, primarily, the uncertainty in the
      Middle East, plus the growing demand from China, plus the somewhat
      confused situation-to put it kindly-surrounding oil and gas companies
      in Russia.

      Jeanette Fitzsimons: Has the Minister been advised that the current
      oil demand is 81 million barrels a day and the total capacity
      of the world's oilfields to produce oil is 82.5 million barrels
      a day; and does he think that that provides sufficient headroom
      for demand to continue to increase-for example, with China's
      40 percent increase in demand in the last year?

      Hon Dr MICHAEL CULLEN: Clearly, therefore, the member has confirmed
      what I have just said: supply is actually exceeding demand at
      the present time. And, as prices rise, that will encourage both
      new exploration and also new exploitation of known reserves that
      were previously uneconomic to exploit-for example, the extremely
      large Canadian oil shale reserves.

      Jeanette Fitzsimons: Has the Minister been advised that for some
      time now oil discoveries have been running at the rate of one
      barrel for every four that are burned, and how long does he think
      that that can continue; further, has he been advised that Canadian
      shale and tar sands oil will be extremely expensive compared
      with current supplies, as well as a lot dirtier?

      Hon Dr MICHAEL CULLEN: Certainly on the last point, given the
      nature of the area there are severe environmental issues, and
      exploitation would certainly be more expensive. But it does seem
      to me rather odd that a Green Party member would bemoan a rise
      in price for a limited product.

      Cheers Doug
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