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Wednesday, April 20, 2011

New Zealand Joins Peak Oil Club - IEA

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The International Energy Agency has published it's “New Zealand Energy Review 2010" which confirms that New Zealand's oil and gas production has peaked and will enter a period of rapid decline. This was exactly the conclusion I reached in my earlier posts in January 2011 regarding the Venture Taranaki report, and the presentation by Dr Peter Crabtree of the Ministry of Economic Development to the Petroleum Conference in November 2010

Here are some of the quotes from the IEA report relating to New Zealand's oil production --

"Production is expected to decline progressively if no new fields are discovered. This will have a significant impact on the country’s oil security. The fast rate of expected decline owes to the fact that recently commissioned producing fields, for example Tui, are relatively small and have a high rate of depletion."

"As the Maui field has depleted, more diverse sources of oil (and gas) have been found but New Zealand’s domestic production is forecast to decline significantly over the coming decade if new fields are not discovered and developed."

"Domestic crude oil production was almost 54 kb/d in 2009, and is expected to be similar in 2010. No sizeable new fields are forecast to come on line in the coming years, and production will decline rapidly if no new oilfields are discovered."

"New Zealand is self-reliant in natural gas but faces a decline in domestic production as output from the Taranaki Basin falls. The oil industry is similarly affected as production is forecast to decline rapidly."


Looking at consumption the IEA says --
"Oil consumption has grown steadily since the mid-1980s, reaching almost 150 thousand barrels per day (kb/d) in 2009 (including international transport). Although there was notable domestic crude oil production, approximately 54 kb/d in 2009, imports still met around two-thirds of New Zealand’s oil demand."

Policy recommendation

One of the key recommendations in the IEA review is that New Zealand should -

"Finalise and implement the New Zealand Energy Efficiency and Conservation Strategy and give priority to enhancing energy efficiency in the transport, commercial buildings and industry sectors by defining clear objectives for the sector supported by adequate cost-effective measures and long-term investments"

This advice will be ignored by the New Zealand government even though – as was pointed out in a previous post  -- there is a comprehensive blueprint for fuel conservation commissioned by the New Zealand Transport agency, which is just gathering dust.

And to those who say declining domestic production is even more reason to search for oil offshore, or convert Southland coal to lignite, or go electric, the response must be that apart from the obvious environmental and climate change issues - the timing is all wrong --
It will take 10 – 15 years at least to –
• Change even a fraction of the car fleet to electric
• Bring any new offshore or coal to liquid fuel or other unproven “solutions” into production
Meanwhile the oil crisis is upon us now…….

which means the only sensible option is for the government to do what the IEA suggests ..  give priority to enhancing energy efficiency in the transport, commercial buildings and industry sectors.


Blockhill (NZ) said...

Thanks for bringing this to our attention.

One idea I had for fuel conservation while on my Easter road trip was RATIONED EXPONENTIAL CHARGING.

Each successive litre of fuel costs more than the previous with family / business totals reset monthly. Extra money earned from excessive users could be used to subsidise the cost of the first few litres per 'account' per month.

Kevthefarmer said...

Ooh! Blockhill, you bloody Red! Sounds like Communism by other means to me! Far better to force workers to live next to their work in tent villages or they could sleep in their (immobilised) cars. Truck, bus and train drivers could doss on the vehicle. Their wages could be remitted to their families, who could be billetted in camps on the un-needed supermarket car parks. That way the lowlife would not have to squander their ever decreasing wages on unnecessary fuel and there would be plenty for the wealthy and the inevitable police curfew patrols. Now that sounds like a nice neo-liberal solution to me. Must phone Don Brash....

Anonymous said...

Thank you Dennis for the stimulating conversations you had on peak oil this morning on 104.6 radio. We as New Zealand citizens are (in my opinion obviously) more grounded and perhaps more open to rational discussion than our counterparts across the globe (look at the furore in Australia over the introduction of an extremely lenient carbon tax, perhaps its because Murdoch is behind 70% of its press? Thats another discussion entirely!) and I think this presents us with a real opportunity.

We need to have a very real discussion about oil (and fossil fuels in general), but oil in particular as it really is a wonder fuel and one which we will continue to need. The rate at which it is wasted however is what strikes me as abhorent. Seeing as it was a cheap source of fuel in the past it provided the foundations for human civilisation to grow to our nearing 7 billion. However NZ citizens continue to be led to believe by those ruling this country that fossil fuels are still the cheapest way to run our lives and indeed that they will continue to power our future.

I hope that this area of interest will continue to get more coverage as the only barriers to moving towards cleaner modes of energy production are the subsidies received by fossil fuel industries and the fact that their extremely expensive infrastructure has been in place for years and is no longer an important cost. I am a huge advocate for NZ weaning itself off of its 97% reliance on oil imports and be a world in moving towards cleaner technologies. It makes sense for all areas of the economy and would provide a genuine method to future proof NZ. So whereas once upon a time it was only the "greenies" (who receive such scorn from society as a whole it bemuses me) who were advocating a clean green future, it now must become the central topic of discussion for businesses and policy makers alike. You, taking the time to write this blog, and those above who have taken the time to reply have an opportunity to help make this happen by being leaders in the community. I hope that as a nation people will sprout throughout to communicate how we can all create a clean, warm, safe, healthy and sustainable New Zealand for all. Chris Thorpe

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