The oil and gas industry employs fewer people than have lost their jobs in manufacturing every 4 months under National. Yet, Joyce devotes all his efforts to doing favours for the foreign oil companies and ignores our local manufacturers. Now, another of the foreign oil companies has packed their bags. It’s a reminder that a resource is not a reserve. Just cause the oil’s there, doesn’t mean there’s money to be made from it.
Let me explain: an oil resource is oil or oil-like stuff that is in the ground. Most of this is too deep, too poor quality, too low pressure, or too difficult to get at to ever be brought to the surface. An oil reserve is stuff that the technology exists to extract. But that doesn’t mean it makes economic sense to do it, there’s a lot of oil that can’t be dug up without expending more energy in the process than you get from burning the oil once you have it. The oil that can economically extracted is a tiny fraction of what there is.
Most oil is simply too expensive to burn (and we’ve burned a good part of the stuff that isn’t too expensive to burn). And you can’t get around that with subsidies and tax cuts or ‘cutting red tape’ – it’s about the physics of hauling stuff up through miles of rock and sea.
There probably are hundreds of millions, if not billions of barrels of oil and oil-like stuff in the undeveloped offshore basins around New Zealand. But the fact that three major foreign oil exploration companies have now come here under National, had a look around and left without even bothering to do any drilling is a sign that bugger all of it is economic to extract.
If you can’t get oil companies interested in even verifying and exploring New Zealand’s oil resources at a time when oil prices are sitting near record levels, then what’s out there simply isn’t worth digging up.
Now, isn’t it time that National turned its focus to industries that a) we have the resources and skills for and b) are actually good for our economy because they employ locals rather than relying on foreign capital and c) aren’t about getting more of the stuff that is destroying our climate? Put down the pipe, Joyce, and focus on the real stuff.