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by Kevin Moore — August 17th, 2004


NZ University Students Association
P.O.Box 10-191
17 August 2004

Attention:   Andrew Kirton
Fleur Fitzsimons

Dear Co-Presidents

Regarding little-understood issues and how they will impact on university students

I am writing to you as an ex-student to alert your organisation to several extremely serious issues that students in New Zealand are going to be faced with in the next year or two. I suspect that you are either rather unaware of the matters I wish to raise or you have only a superficial understanding of them, yet in a matter of months they will become of crucial importance to every student in the country (indeed every young person, whether they are students or not).

Perhaps I should begin by acquainting you with a few scientific facts with which you may not be familiar, since an understanding of the facts makes discussion of appropriate action much easier.

  1. There is irrefutable evidence that the worldwide supply oil will fail to meet demand very soon. Experienced oil geologist, many of whom have spent their entire lives going over this planet with ‘fine tooth combs’ have become so alarmed by the lack of action by governments and by the proliferation of misinformation regarding peak oil that they have established an organisation to promote the study and understanding of peak oil -ASPO, the Association for the Study of Peak Oil and Gas. This organisation held its first conference in Paris in 2003 and its second conference in Berlin just three months ago. The almost unanimous view of oil geologists is that the world production of oil will peak before 2008, with a very large percentage of oil geologists believing that peak oil will occur this year (2004). Alarm bells are ringing, but few are listening. Indeed, our own Energy Minister, Pete Hodgson, is now coming under increasing fire for believing in what informed analysts refer to as delusional projections, based on totally unfounded expectations that significant additional oil fields will be found, when in practice no significant oil fields have been discovered over the past decade and that fields that supply the bulk of the world’s oil were discovered more than 40 years ago! The more informed analysts in NZ are now pointing out that the Energy Minister’s assertions that ‘supply will be comfortable till 2030’ nothing short of ludicrous.

  2. There is irrefutable evidence that China is purchasing ever-increasing quantities of crude oil on the world markets and this additional consumption is placing severe strain on a supply situation that is at best precarious and at worst about to fall over completely. Concurrent with China increasing its consumption exponentially, most other countries around the world is also using increasing quantities of oil. Even if there were no increase in demand for oil, the numbers would not stack up in the long term, but when increased demand for oil is taken into account, it is very clear that we are about to enter a period of severe crisis very soon. Unfortunately nobody knows exactly how much oil lies within the Earth’s crust, nor what portion of it is extractable, but all the evidence points to all the ‘easy oil’ having been largely used up and the oil that remains becoming increasingly difficult and expensive to extract. This difficulty must inevitably result in further escalation of oil prices.

  3. It is perfectly clear from an analysis of overseas markets that New Zealand would already be facing massive increases in fuel costs, were it not for the increase in the value of the New Zealand dollar, which has appreciated from around US$0.45 to 0.65 over the past two years. How long this cushioning effect will continue is debatable, since the price of Brent Crude has risen from around $36 to around $44 over the last two months, despite pronouncements by oil ministers that production can be increased. There is no reason whatsoever to believe the price will go down by more than a dollar or two in the short term and there is every reason to believe it will continue to rise, probably quite spectacularly, unless there is a massive global recession that reduces demand significantly. Thus many speculators are banking on the price of oil escalating toward the $100 per barrel mark and are investing in that basis.

  4. There is irrefutable evidence that global warming is completely out of control. The carbon dioxide content of the atmosphere increased by a record amount last year (up from 376 to 379ppm a rise of 3ppm, a disastrous trend which is accelerating), which prompted Sir David King, Chief Scientific Advisor to the UK Government to warn earlier this year that, unless current trends are dramatically reversed, Antarctica will be the only inhabitable land mass by the end of this century. At around the same time, Sir Jonathon Porrit of the UK Sustainability Council produced a damning report citing the UK government for failing to address out of control carbon dioxide emissions. As with the issue of peak oil, governments around the world have got it wrong (as have all the other political parties).

  5. Against this background of impending collapse of our entire society due to rapidly escalating energy costs and out-of-control climate change I have already presented seminars to two city councils and am working with the Auckland Transport Authority, pointing out the sheer lunacy of construction of motorways, due for completion at a time when there simply will not be fuel at an affordable price for vehicles -clearly a recipe for economic disaster. The response of local politicians can best be described as deplorable. Thus we can fairly say that individuals cannot look to leadership at either the local or national level for answers, only further exacerbation of the problems.

  6. Contrary to popular myth, it is a well-documented scientific fact that there will no technical fixes to these problems. For example, there will never be a hydrogen-based economy. Although the technology exists for the conversion of hydrogen into other various form of energy, none of the promoters of these ‘gadgets’ have addressed the irrefutable fact that there is no hydrogen available to be used and to make hydrogen requires a lot more energy that is obtained from it. Indeed, the energy equations are nothing short of appalling, with around a 30% loss in energy being quite typical. Irrespective of this matter, hydrogen is notoriously difficult to handle or store and has presented insurmountable problems to those who would wish to promote its use. Neither does nuclear energy offer us any practical solution to our energy needs. Solar and wind do offer some hope, but the infrastructure needed has not been put in place and the crisis is upon us now. It would be quite impossible to increase our wind or solar generation by the 50-fold increase needed to solve our problems. It simply will not happen.

Against this background of collapse of oil supply and collapse of the environment’s ability to process exhaust gases we must ask the question ‘Where does the government stand?’ Unfortunately, the answer is that it currently devotes a large portion of its energy to promoting greater consumption of fuel and greater production of greenhouse gases and to the promotion of ludicrous expectations of ease of travel in the future. It has committed itself politically to greater free trade, more tourism, economic growth and a whole raft of policies that simply cannot possibly be implemented under a declining energy supply scenario. We are being offered an economy of hope, when reality tells us there is none -we hope to find oil; we hope to think of a way use coal without further disrupting the carbon balance of the atmosphere; we hope that peak oil is further away than the evidence suggests. Opposition parties offer variations on the same theme, none of which are achievable.

Whilst the state television and radio networks continue to promote additional consumption, it is perfectly clear to analysts such as myself, that the entire house of cards is about to tumble. The average citizen is completely unaware that the Internet is now ‘alive’ with speculation as to whether the massive worldwide recession that is on it’s way will arrive in November of 2004 or whether the financial system can be propped up until mid-2005.

Yet even as the crash approaches, there are those with maximisation of the short term dollar gain in mind; people who have a vested interest in discouraging consumers from understanding the truth about energy supply and what the consequences of failure of energy supply will mean. Many of the materialistic eco-vandals appear to be prepared to sacrifice their own children’s future in order to achieve short term gain; an insanity has been promoted throughout much of New Zealand society since the ‘reforms’ of 1980s so that we are now in the hands of the irresponsible group who are ‘about to push New Zealand off the cliff’ environmentally, socially and economically.

Quite clearly, if oil supplies are about to become very tight or about start to collapse completely fairly soon [2005], it is the duty of the duty of the NZUSA, to warn members, so that they may make suitable preparations. If global warming is completely out of control, as many analysts now suggest, there is little that anyone can do other than pray, but with regard to the peak oil issue there are many consequences that every citizen of this country need to aware of, and be prepared for.

  1. New Zealand’s transport system is more than 95% dependent on cheap oil.
  2. International trade and tourism are dependent on cheap oil
  3. The production of food and its transport are dependent on cheap oil
  4. The production of a wide variety of products ranging from fertilisers to furniture to clothing are dependent on cheap oil

Clearly the decline or even worse the collapse of cheap energy supplies will bring transport to its knees and bring about fundamental changes to the way that society functions. The financial collapse that must inevitably accompany a shrinking economy hardly bears thinking about, yet it too must be faced. In that respect, North Korea offers our best model.

There are obvious consequences, such as the fact that the tourism industry will go into rapid decline and students studying for qualifications in hotel management or business studies will find themselves unemployable, but there are less obvious consequences that follow on from the peak oil (oilcrash) scenario, such as the fact that most businesses will fail and the food supply chain will no longer function as it has in the past. For these reasons, many analysts are now describing the onset of peak oil as the most devastating event in the history of humanity, since without the fuel required for mechanised agriculture and without mechanised transport systems, quite obviously hundreds of millions of people around the word are going to die of starvation and those who survive are going to find their lives drastically altered. Whether there will still be supermarkets or shopping malls ten years, even five years from now is highly debatable I have been aware of the importance of oil to our society and the inevitability of peak production for several years and wrote an entire chapter about the topic in the book ‘Burn Baby Burn’, which was published three years ago. At that time it appeared that peak oil would occur around 2012. However, revision of supply and demand figures produces the irrefutable bad news that peak oil will occur in the period 2004-2006, after which oil supply will enter a [3% per annum] decline phase and the society we now live in will come to a rather ignominious end. I hate to be the ‘harbinger of death’, yet to not inform the young people of this country how they have been [and are being] mislead would be something I personally could not live with, yet it is clear that many people have no social conscience whatsoever and are, for example, quite happy to import and market grossly over-sized and over-powered vehicles that are not only dangerous but also have no future, as fuel supplies disappear.

I trust the information contained in this letter is self explanatory and self-evident, but should you require any assistance in obtaining or interpreting information, please do not hesitate to contact me. I realise that you take the time to thoroughly digest the information I have provided you will be utterly devastated, since it does actually mean the end of society as we know it: a small number of students are already aware of peak oil and its implication and I am providing on line counselling to them, as they adjust to reality. As Colin Campbell so succinctly put it ‘Reality is what happens. Illusion is what we would like to happen’.

I feel that all students deserve to be forewarned about peak oil, rather than finding out too late. Those students who have got already got up to speed on the issues of peak oil, gas crash, biodiversity crash and abrupt climate change etc. are currently reassessing their life plans as a result.

Sadly, university authorities have not been proactive in distributing the truth about peak oil nor global warming [since they have a vested interest in suppressing the truth and maintaining the status quo] and one or two individuals (such as Professor Chris de Freitas at the University of Auckland) can only be described as thoroughly disreputable in the way they have dealt with these matters thus far.

Clearly now is a time for a massive investment in permaculture, solar design highly efficient compact transport systems (bicycles), yet in a society that practice denial to the extent that our does, little happens and indeed the lunatic fringe (John Banks, Barry Curtis, Michael Cullen, Don Brash etc.) still promote growth, whilst not having a clue where the energy to sustain it will come from. I also wonder what proportion of students is engaged in studies that will actually provide them with skills or income after peak oil: my suspicion is that it is only around 20%. And that 80% of students will find themselves heavily into debt in order to obtain qualifications that will have no relevance in a post-cheap-oil age.

In the meantime, may I suggest that you thoroughly investigate the far more reputable information provided at the website www.oilcrash.com. There are numerous links that explore the New Zealand situation, Auckland Issues etc.

I also recommend the information at the ASPO (Association for the Study of Peak Oil and Gas) website and suggest that you carry out Google searches and find out what Matt Simmons, Colin Campbell, Matt Savinar, From the Wilderness, Running on Empty have to say on the matter.

You will undoubtedly come across references to the recently released documentary “End of Suburbia”, which is well on its way to become a film award winner that will probably exceed the fame of Fahrenheit 9/11. I can supply you with a copy of this outstanding and informative film, should you require one.

I have enclosed a graph of the price of Brent crude oil and draw your attention to the fact that the situation is very different from that which resulted in the oil shock of the 1970s; the population of the world was around half what it is now; the amount of oil in the ground was very much higher than exists now; the quality of the oil that is now being pumped is much lower (and falling); the price rises of the 70s were prompted by turning on and off of supply valves. Most notably, at this point of time, the valves are fully open, but supply is only just managing to meet demand. There is already anecdotal evidence that countries such as South Korea are in oil shock, but the worst is yet to come. Unfortunately, there is therefore every reason to believe that increasing demand will break the system within six months.

As one student put it to me recently “I have been digging furiously on the Internet for reputable information to prove different to the information you have made available to me. The experience has sent shivers down my spine, truth being that this is likely the end of a dream and start of a nightmare… it makes me sick to the stomach… Thank you for bringing this to my attention”.

To repeat: I am sorry to bring this dreadful news to your attention, but I believe the sooner the NZUSA is made aware and starts taking action, the better.

Please do not hesitate to contact me if you require any assistance or further information.


Yours sincerely,
Kevin Moore
Environmental Consultant,
Energy Analyst and Educator