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Wellington, Oct 13 NZPA - Decades of economic turmoil and recessions face the world as oil supplies run low and energy prices surge, says a parliamentary researcher.
Parliamentary Library economics and industry research analyst Clint Smith has set out in his paper, The Next Oil Shock, evidence that the New Zealand economy -- and those of other developed and developing nations -- will be exposed to supply crunches and price spikes.
Though known oil reserves will last another 25 to 32 years, low-cost reserves are being rapidly exhausted, and an oil "supply crunch" could start in 2012 or shortly afterward as demand rises and supplies fail to keep pace.
"World oil production capacity will not grow or fall for the next five years, while demand will continue to rise," said Mr Smith.
"While the world will not run out of oil reserves for decades to come, it cannot indefinitely continue to produce oil at an increasing rate from the remaining reserves.
"There is a risk that the world economy may be at the start of a cycle of supply crunches leading to price spikes and recessions, followed by recoveries leading to supply crunches."
New Zealand was heavily dependent on oil imports and would remain so for the forseeable future, he said.
"Key export-generating industries in the New Zealand economy, including tourism and timber, dairy and meat exports are very vulnerable to oil shocks because of their reliance on affordable international transport."
While there was potential to substantially increase domestic production, this domestic production could not insulate the nation from global oil price shocks, because New Zealanders paid the world price for oil.
The present world demand for oil of 86 million barrels a day was predicted to rise to more than 87 million barrels per day next year and continue to increase.
Conservation organisation WWF today called for the Government to rethink its "do nothing" approach to future oil prices as outlined in its draft energy strategy, published in July. The Government said then: "Ultimately uptake of new energy sources and technologies will depend on the decisions made by consumers as they respond to oil prices."
A climate change campaigner at WWF-New Zealand, Peter Hardstaff, said the Government was redrafting its energy strategy and needed to take heed of the research.
"There is still time to put a plan in place that can help New Zealand transition towards being a more sustainable, less oil-dependent country," he said.
WWF called on the Government to develop a coherent strategy that includes investment in more sustainable transport options and the development of home-grown biofuels.
Opinion polling in August showed the majority of New Zealanders wanted investment in more sustainable transport options such as buses and trains to prepare for oil price increases, Mr Hardstaff said.
Green Party co-leader Russel Norman said the report showed that the Government's $11 billion road-building programme was "shortsighted and irresponsible".
He said the Government should focus on investing in rail, buses, walking and cycling.
NZPA WGT kca mgr
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Comments
Ah the Peak Oil Cultists at
Ah the Peak Oil Cultists at it again trying to forment Panic and Kill the world as they think they are saving it...
Big Yawn.
YEAH RIGHT!
Only a news item in Old Zealand
Hahahaha
This is a blatant lie as
This is a blatant lie as there's enough oil to last for hundred of years yet. This lie is one of millions of lies running round the world to frighten and intimedate people. This is all part of a one world control on our lives. Catharina
you guys are missing the
you guys are missing the point. Yes there is heaps of oil left but its getting more difficult and expensive to extract. at the same time world demand is going through the roof. Its only a matter of time before oil is to expensive to be viable as our dominant fuel source. The world is going to change big time when that happens. We can sit round denying it or get ready and make the most of the enormous opportunities the demise of an oil based economy presents.
And Sly Fox....The points
And Sly Fox....The points you make are exactly the points I took to be presented.
I missed nothing!
The article is very simple as it seems with the unsubstantiated case presented are those who take it seriously as you would have us.
I had to chuckle when they said how much demand was going up; with obvious factors like China's growth etc having and effect.
from drum role...........
Get this
Shock Horror!!!
86 to 87 million barrels a day...
Like SO WHAT!
Hahahahaha! Some very large Economies are going up in size way faster than that 1.1%
We are not all that uninsightful Fox.
We can read the article and didn't miss anything.
It is all much ado about NOTHING!
A market economy will respond to oil prices JUST Fine.
We will innovate on the day that people like you prophesy of. and survive. Aussie has plenty of Uranium to power the earth for many decades in between times if we can't innovate quickly.
Yet, no Oil company on the planet seems to be worried these cries of wolf from foxes at all.
Perhaps because they are in a far better position to see if it is a wolf or a scaremonger being the ones who know what oil is down there rather than armchair Greenies wanting the world to run to a standstill.
They aren't all out buying up futures in other technologies as they are realising(alot better than a green prophet of Doom ever could) that the wells are going dry...
Fox you may be sly but you are not that discerning there.
Green Religious Zeal is not a case to start a nation Shadow Boxing imaginary Ghouls and Monsters that greens want us to imagine are there even though we can't see them.
No need to worry. People who
No need to worry. People who make oil we'll be fine - they collect more when prices rise. Why bother with a research paper, when it's clearly the greenies conspiring against the fossil fuel industry. Wind, solar and geothermal power? Don't make me laugh. We will innovate, by taking Aussies uranium and powering our own Kiwi Chernobyl - we'll move to Oz if things go bad, our environmental record is clear, just take a swim in the Manawatu river. Look at all plastic crap that goes to landfill made from oil - we'll mix it with radioactive waste if Russians won't take it.
erm did you read my comment
erm did you read my comment kiwichick? I think that we are talking about the same thing, adapting to the demise of oil, i have no doubt that we will. why not start thinking about doing it now? We have everything to gain, especially a good capitalist such as yourself .
kiwi chick check this out i
kiwi chick check this out i think you'll like it.Its got lots of graphs and talks about money a lot. www.parliament.nz/en-NZ/ParlSupport/ResearchPapers/4/6/a/00PLEco10041-The-next-oil-shock.htm
Wolf! Wolf! Keep on shouting
Wolf! Wolf!
Keep on shouting it there....No one's Listening ...I hope.
Not after the hundredth time.
Wolf!
WOLF!
You Greenies can't tell between Green and Gray nor Hydrogen Dioxide contamination and Pure Water You defeat true Green causes.
You want us to prepare....?
Why then did you not take up my Super Green suggestion for developing Nuclear Power.
It is the Greenest thing we could do and You guys hate it.
The Holy Cow of Nuclear free you have fought with Vitriol is actually the answer to the Greenist Brightest Future this earth can manage.
The world is prepared and preparing...
-Not by creating starvation and reducing Human wealth as you would have us but by responding to the almost perfectly ever wise market signals.
-Not because Oil is running out but because we have cheaper energy options than Wind and Oil Power.
Obama has announced it, the Former co founder of Green Peace is campaigning for it,
The Lowest Carbon Foot print to GDP nations in the world have it,
and China has a couple hundred new reactors being Built for it
It is the Future....the Nuclear Age of Energy.
Green Green Green but the Greens won't admit it.
Well that is cultists for you. Holy Cows and Obsessions with imaginations. Get a Useful Truth based religion there mate.
wow that is some rant. were
wow that is some rant. were you bullied by hippies or something?
by the way, i agree about
by the way, i agree about the nukes, bring them on, we need them.