Media Release for Immediate Use
25 August 2004, Wellington
Oral questions in the house yesterday:
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”.»
The fact that our Minister of Finance is completely and utterly unaware of the “peak oil” issue is absolutely astounding. By inference one can only conclude that this ignorance clearly demonstrates the current Government’s Energy politics are in total disarray.
It is clear from Cullen’s admission yesterday that the Labour Governments knowledge in regard to the very serious global energy issue of peak oil and all it’s geo-political complexities wouldn’t fill a rice-bubble.
Dr Cullen should resign immediately and the job should go to someone that is acutely aware of the geopolitics of energy – our entire existence as a nation depends on such knowledge.
Our global energy system, a massive complex network of production and distribution designed to meet the needs of the industrial world is failing. Production is only just meeting demand. As the developing world, transition economies like China, India, South Korea and Brazil continue to industrialise at a staggering rate no one, including the oil companies themselves have any idea how energy will be delivered to these countries. As OPEC’s president Purnomo Yusgiantoro commented recently “there is no more supply”. The OPEC nations are producing at peak capacity.
This ever widening gap between global demand for energy and our ability to meet it is beginning to emerge as a serious threat to global stability and will most certainly shape the future. Energy security goes well beyond sabotage and dirty bombs, it is the ability to meet immediate energy demand.
Yet the emerging supply demand imbalance is only the beginning of the peak oil problem. According to the latest BP statistics* the world is already losing a million barrels of oil per day to depletion, twice the rate of two years ago.
For the benefit of Dr Cullen, global peak oil is the point at which maximum global production of oil is reached. The production curve looks like a bell curve, once at the top of the curve we move into downside. On the down side it becomes more expensive and less productive to pump oil out of the ground. Prior experience in the US (peak 1971) the UK (peak 1999), Australia (peak 2000) verifies this trend. The world is currently at the peak of the global production curve.
How the Government can possibly plan an infrastructure, an economy, a future for New Zealand without this knowledge beyond belief. The desire to continue with plans to spend billions of dollars on road systems, including $415 million to improve Wellington roads PowerLess NZ repeats is an economic atrocity, for which those responsible for such gross wastage of public funds should be held fully accountable.
*A summary of the BP Statistical review of World Energy can be found here: http://www.fromthewilderness.com/free/ww3/082304_million_depletion.shtml
25 August 2004