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Aging car fleet & peak oil

Written By: - Date published: 10:11 am, January 17th, 2011 - 70 comments
Categories: sustainability, transport - Tags:

The few neoliberals who can bring themselves to acknowledge that peak oil is inevitable and upon us argue it’s not really a problem: ‘when prices rise, people will buy alternatives instead, like electric cars’. But peak oil causes recessions and, as new data show, recessions kill car sales. Even if enough electric cars could be made, could we afford to buy them?

This article appeared in the Sunday Star-Times:

The recession has fuelled a sharp rise in the age of the country’s car fleet as Kiwis hold off spending and make their wheels last longer.

Since the end of 2007, when the world economic crisis kicked in, the average age of the cars and vans on the nation’s roads jumped by a year to break the 13-year mark.

It had been creeping up even before the crisis and is now at 13.25 years and rising.

The rapid ageing is a result of the sharp fall in the number of new and used cars imported as drivers chose to eke out the miles in their old cars.

In 2007, a total of 197,836 new and 120,382 used cars were imported and registered, according to New Zealand Transport Authority data. In 2009, that fell to 123,161 and 68,757 respectively…

This makes sense. When a family’s income is cut, the typical response is to cut luxury and capital spending, not every day costs. It’s usually going to be cheaper, in the short-term at least, to keep an older car running and pay its rising fuel bill than fork out for a new, more fuel-efficient car (not that older cars are necessarily less efficient than new ones). Used small cars have actually became more expensive during the recession while the price of new cars has plummeted because those buying cars have been looking to minimise their capital outlay and running costs.

In a cycle of oil price spikes and recessions, when are we going to be able to afford to replace all the gas guzzlers with electric, even if they were available in sufficient numbers? We’re not. We’re going into the peak oil age with the transport infrastructure we have, not the one would ideally want.

… the average age of cars will blow out to 14.5 years because New Zealand cannot import cars fast enough to replace the ageing cars on the road.

“The ageing is just going to keep going,” Kerr says. “There’s a huge hump of 1995, 1996, and 1997 vehicles on the road. They represent about 23% of the whole fleet.”

The government is aware of the issue, Kerr says, and there are big questions to answer about the cost, both in monetary and environmental terms, of keeping more older vehicles on the road.

Competition among buyers seeking to trade up from older to newer used cars will increase as demand outstrips supply.

“The inevitable thing is that the consumer is going to have to pay more,” said Graham Roberts, chief executive of Turners Auctions.

That will hit middle New Zealand in the pocket. Many who trade up relatively frequently will be forced to keep their old cars for longer, reminiscent of the days before the 1990s and early 2000s boom in Japanese imports.

Roberts said a second group would find it increasingly hard to stay on the road – those on lower incomes.

[The Motor Trade Association] planned to talk to the government about whether New Zealand should introduce a “scrappage” scheme, subsidising trade-ups to get environmentally damaging, and increasingly unsafe, older cars off the road.

The MTA, of course, wants more sales and what beter way than by subsidising them? But I’m not sure the government spending millions trying to encourage people to dump old cars and buy new ones is the best idea. A new car is not necessarily more efficient than an older one – paying someone to dump their old Mini and buy a new SUV isn’t a good thing. Nor is generating extra demand for car manufacture the best use of the world’s limited natural resources.

Certainly, when buying a car people should look at the fuel efficiency and heavy users – Police, taxis, and government agencies should have policies of buying hybrid or electric. But the ordinary family can best reduce dramatically their fuel bill by simple life-style changes – commuting by public transport rather than car, for instance – instead of expensive, government-subsidised, purchases of new cars. That taxpayer money would be better spent on buses and trains.

Electric cars aren’t going to come to our rescue – we won’t be able to afford them. To put that another way, peak oil will leave us too energy-poor to devote all the required resources to scrapping our current car fleet and replacing it with electrics. To deal with peak oil, we’re going to have to use the cars we have less and focus on public transport to move beyond the car culture, not attempt to further embed it with subsidies the government can’t afford.

70 comments on “Aging car fleet & peak oil ”

  1. Colonial Viper 1

    A new fuel efficient car still takes a huge amount of energy (and carbon dioxide) to refine the raw materials, fabricate the parts, assemble, test and transport here. Yes, when the car gets here it may be more efficient and reduce energy use on our roads. But its still cost our biosphere far more energy in the short term and the payback from slightly lower fuel consumption might not break even for five or six years of running.

    Of course, what this points to is the end of cheap personal vehicle transport for the masses. At $4/L petrol it will cost $300 to fill up your V8 Holden. Being able to afford a new car and go out for a Sunday drive is once again going to be an activity exclusively for the well heeled.

    The perfect time to build new Holiday Highways.

  2. MikeE 2

    Labour’s restrictions on used car imports practically killed the Japanese car import industry, so no wonder the average age of the fleet is increasing, as the costs of upgrading are significantly higher now. One either has to go new, or purchase a drastically more expensive import.

    End result = more older cars on the road for longer, with less efficient, less environmentally friendly engines….

    • Blighty 2.1

      and, yet, the experts say it’s the recession. Blame it on Labour fails again.

      • MikeE 2.1.1

        recession would have an impact on it as well, but when a car that was $10k goes up to $15k due to import restrictions, its defiantely going to have an impact on when the average person replaces their car. More so when its harder for people to get finance on them with all the sketchy finance companies going out of business.

        (ran into this issue when someone rear ended my car and wrote it off. Paid $12k for a 1997 honda accord wagon 4 years ago, exact same car was $15k 2 years later everywhere I looked)

        • Blighty

          one of the funny things, as mentioned in the post, is that recession has caused second hand car prices to rise quickly. A lot of people have found they couldn’t afford a new car and so went into the second-hand market instead – more buyers equals higher price, especially for fuel-efficient models.

    • Armchair Critic 2.2

      Umm, no, the restrictions just stopped the ongoing import of old cars with less efficient, less environmentally friendly engines.

      • MikeE 2.2.1

        you reduce supply, price increases – basic economics.

        if price increases, people aren’t going to upgrade as much, especially when in a crap economy.

        More people holding onto older cars for longer = less environmentally friendly, for longer.

        • Armchair Critic

          More people holding onto older cars for longer = less environmentally friendly, for longer.
          Instead of importing old, less environmentally friendly cars.
          I’m not disagreeing with you about the economics, I’m suggesting you are wrong blaming the import restrictions.

          • MikeE

            I’d suggest that environmentally (I could be wrong here) its better to have a late 90’s car, than say holding onto the rustbucket from the 80s..

            and its going to affect poorer/younger people the hardest.

            • Lanthanide

              And likewise it is better to have an environmentally friendly late 90’s car than an un-environmentally friendly late 90’s car.

        • SHG

          Older cars are overall more energy-efficient than new cars, because the massive amount of energy that went into manufacturing them is more highly amortized.

  3. Dilbert 3

    Apologies in advance if this is deamed off topic (In which case please move/delete), but I would like to do some more reading around Peak Oil and was wondering if anybody could recommend some good web based resources/blogs on the subject?


    • Blighty 3.1

      theoildrum.com has the best stuff

    • lprent 3.2

      Try this as a starting point for links – the tag in the post heading.

      You could also try the categories. But never fear Robert (and others) will be along to overwhelm you with links.

      Try http://www.theoildrum.com as being my favourite on overviewing the whole energy sector. Just search on it for peak oil http://www.theoildrum.com/search/apachesolr_search/peak%20oil

    • Colonial Viper 3.3

      If you have broadband this is good. Rubin and Nikiforuk talking about peak oil and the exploitation of the Canadian tar sands. It opened my eyes to a simple fact – we are not going to run out of oil in the next 50 years. Just oil that we can afford.


      • Lanthanide 3.3.1

        Yes, it is a very important point that too many people lose sight of. Oil is going to be around for a long time, probably hundreds of years. It’s just not going to be “cheap” any more, and possibly in too small a volume to enable a stable world economy.

        • Draco T Bastard

          It’ll be able to support a stable world economy just not a large and growing world economy.

      • lprent 3.3.2

        I’d suspect that we’re not going to run out of fossil carbon that can be made into the light and heavy oils that we use at present for quite a few centuries (even at the rate of increase of use that we’ve had over the last century). There are the tar sands, oil shales, and coal that can all be cracked into lighter fractions.

        However we are running out of cheap sources, and we have this additional problem that burning any fossil carbon changes our atmosphere with some nasty costs in climate change and the production of food.

    • M 3.4


      To avoid the anti-spam alerts with too many links you may want to try:
      NZ site –


      US sites – these go more into PO as in how to prepare for change


      Mike Ruppert’s site and he has a lot of YT videos too – his best advice ever is: get out of debt


      On YT also is a series of PO vignettes by a crowd called Peak Moment which includes some ASPO people being interviewed.

      A really good documentary and the one that puts it across very well for people new to PO is ‘The End of Suburbia’ with many well-known PO commentators like James Howard Kunstler, Matt Simmons, Colin Campbell, Mike Ruppert and Kenneth Deffeyes, and its sequel ‘Escape from Suburbia’ which features the townsfolk of Willets, CA preparing for PO.

      Speedy recovery for your eyes.

    • Hi Dilbert
      Some free *DVDs are available on request via http://oilcrash.com/contact.htm place DVD in the subject line.
      *Same DVD I sent every politician in March 2008.

  4. Brett 4

    I remember back in 1990, being told peak oil is just around the corner.

    • Lanthanide 4.1

      In the history of civilisation, it is. The oil age is likely to be primarily from 1930 to 2030, just 100 years out of thousands.

      • Brett 4.1.1

        That’s true.
        Interested to see what comes next, will it be zombies or will to be the jetsons.
        I guess we will have to wait and see.

        • Maynard J

          The zombies are already here, they are in our government and our banking system, they deny peak oil is upon us and demand that we wait to see if climate change will happen (“I’m not going to do anything about a 1m sea-level rise unlesss I see it happen”). They demand we lock more people up while fostering the conditions that cause crime. They demand ‘freedom’ while calling for actions that make people less free, in every sense of the word.

          Yes, the zombies are here alright, and they’re trying to take over.

    • Blighty 4.2

      And here we are, just around the corner and in the age of peak oil.

      Annual oil production according to BP: seocnd column is average daily output in 000s of barrels, third column is % annual change.

      1990 65460
      1991 65268 -0.3%
      1992 65774 0.8%
      1993 66028 0.4%
      1994 67104 1.6%
      1995 68102 1.5%
      1996 69897 2.6%
      1997 72185 3.3%
      1998 73538 1.9%
      1999 72325 -1.6%
      2000 74820 3.5%
      2001 74813 0.0%
      2002 74533 -0.4%
      2003 76916 3.2%
      2004 80371 4.5%
      2005 81261 1.1%
      2006 81557 0.4%
      2007 81446 -0.1%
      2008 81995 0.7%
      2009 79948 -2.5%

      As you can see, oil production has been stagnant since 2005, despite the period from 2004 to 2008 being the largest oil shock in history. Why didn’t high prices bring more oil to the market, Brett? Because there is none – oil production couldn’t rise because it was at its peak.

      Right now, the global recession has destroyed some demand, creating a little extra spare capacity but that is already disappearing due to economic recovery increasing demand and production exhuasting resources. This is what is driving the higher oil prices we’re seeing.

      • Lanthanide 4.2.1

        “This is what is driving the higher oil prices we’re seeing.”

        Actually the recent rise in price has been due to cold winter in the northern hemisphere, not a constrained supply. Some example numbers for how these are subtly different (although related, obviously) ideas:

        Supply is 100.
        Normal demand might be 70/100 and give us price X
        High demand due to cold winter is 90/100, and gives us price X+10

        In both cases, supply is still 100 and has not changed. The gap between supply and demand has shrunk, but there is still sufficient supply to go around.

        Now the situation you’re talking about is really where supply is dropping, causing the gap between supply and demand to shrink from the other end:
        Normal demand is 70 and supply is 100, giving us price X
        Demand goes up to 75 naturally due to growth, while supply shrinks to 90 due to decline, giving us price X+8

        We are suffering from the former situation, presently (as in last 4-5 months), not the latter situation.

        • Marty G

          higher oil prices are expected through the year – this isn’t just a cold winter story, it’s being driven by increased demand from India and China.

          Plus, time was when you could have a cold winter and it didn’t send the world oil price through the roof because more supply would be brought online if prices rose. that’s not happening. it would happen if the spare supply was out there.

          • Rusty Shackleford

            The price of all commodity goods is up. Inflationary actions by govts around the world is likely a huge factor here.

    • Colonial Viper 4.3

      Indeed, the oil age is going to be a very short and sharp blip in tens of thousands of years worth of human civilisation. If we last that long.

      And peak global oil production may have already passed us in 2006 or 2008, at roughly 80 mb/d. A recent Kuwait study suggested that peak oil will hit us in 2014. Regardless, most many we are already at or just past the top of the production capacity hump.


      • Lanthanide 4.3.1

        To clarify (for others, not you CV), the second link with the EU energy chief he is talking about globally traded oil, rather than oil production full stop.

        It’s probable that oil production globally will increase, but the amount available for export will stay static or decline, due to increased consumption from within the exporting countries, eg Saudi Arabia might increase production from 10m to 10.5m barrels, but domestic consumption could increase from 1.0m to 1.7m barrels, eating up 0.2m that used to be exported.

        This idea has been around for a while and is called the “Export Land model” in peak oil discussions. Kind of a funny name, but it is based on the idea of there being an Export Land and an Import Land, and in this scenario although oil production increases, Import Land countries (most Western ones) suffer while Export Land countries can power on.

  5. Dave 5

    I still believe that the best way (in my uneducated opinion) to introduce electric vehicles is to recondition old vehicles with electric motors, so that the car still functions like a regular vehicle, but is electric. Would this work?

    • Colonial Viper 5.1

      Tricky because you are not really reconditioning anything, you are pulling the entire guts of the car out, leaving the shell and completely replacing the engine, fuel tank, transmission, dashboard etc.

      Messy, expensive and a custom job on each vehicle.

      • Lanthanide 5.1.1

        And not worth it, given how expensive the batteries are anyway.

        Converting to LPG is much easier, and feasible if your country has large gas supplies (Russia, US).

      • Draco T Bastard 5.1.2

        Well, the engine and fuel tank anyway. The transmission will be removed and not replaced (if you’re talking about the gearbox) and the dash board can be used as is – some functions may not work.

        Messy, expensive and a custom job on each vehicle.

        Cars are mass produced so you produce a kit that fits a particular model (Export Income) which would reduce costs.


        And not worth it, given how expensive the batteries are anyway.

        Batteries are coming down in price although, with PO and other resource constraints, that may not be true for long. The real problem with electric vehicles is the fact that the power grid wouldn’t be able to handle them.

        • Colonial Viper

          I’m betting that the transmission will need to be replaced because the power/torque curves of electric motors are very different to ordinary petrol engines which generate their peak torque at higher revs than electric motors.

          • KJT

            Actually you do not need a transmission as the torque curve of an electric motor can be matched to the load. Unlike an ICE which runs efficiently at a narrow torque and RPM range.

          • KJT

            Electric cars would be best made locally for commuting. It would be silly to duplicate a car that can do 100kmh on an open road when most car use is actually commuting. Electric cars are ideal for short runs. Think 4 passenger mobility scooters rather than cars as we have now. These could be made of renewable composites in NZ. In fact we have the opportunity to be a world leader. Making new steel monsters uses more energy than lower fuel consumption in later cars actually saves.
            Not only does this cut emissions from cities by 65%, but also leaves expensive fossil fuels for heavy machinery and transport where we have no viable alternatives.

            Economically it makes sense now to cut the 700 million plus annual fossil fuel bill.
            I expect long distance travel to be mostly by rail with richer people hiring ICE engine cars for holidays only. Maybe increasing the efficiency of highways is not so dumb, but keeping and extending much more efficient transport such as rail and shipping is essential.

    • M 5.2

      PO man, Matt Simmons posited using golf carts for short distances but costs would vary with the type of batteries used.

    • Rusty Shackleford 5.3

      Stop being silly. The fuel used in electric cars is just as scarce as, and not necessarily any better for the environment than oil.

  6. Deadly_NZ 6

    Yes cars are getting older mine is a case in point I love my 1988 honda acccord its the luxury one with cruise control and all the bits and pieces. I paid 650 for it and 500 for a new cambelt and now it will last me a few more years yet it’s reasonably economical for a 4 door but i cant afford to replace it, and nor do i think i will be able to do so for a while yet. Oh and yes it’s regged and woffed

    • Peter 6.1

      Yep, I struggle along in my 1986 Nissan Bluebird. All 1.6 litres of it. Gets me up ski roads, and into all sorts of interesting places that you’d never take a modern machine. Still a year or two left too 🙂

      Captcha: conventional

  7. tsmithfield 7

    Peak oil might not might not be an issue in the intermediate future, as this article suggests. A key point here is the huge amount of gas reserves the US can utilize as an oil substitute. Given that the US is the largest energy user, then if they start substituting gas for oil then there will be a slower draw down on the oil reserves.

    • Lanthanide 7.1

      But unless the US gets off it’s ass an is pro-active about the problem, rather than being re-active as they are to almost everything, large-scale conversion to gas powered transportation won’t occur there until it’s too late.

      American consumers are legendary for their arrogance and unwillingness to accept anything that mildly inconveniences them or is out of the ordinary: Frito Lays introduced bio-degradable plastic bags for their chips that would compost after 8 weeks, however the bags were very crinkly and noisy. There was a big backlash against the bags – in Canada they advertised on TV that it was good for the environment and to put up with it, in the US they recalled the bags and swapped back the old ones. Then again, they seem willing to put up with asinine security theatre at airports, so maybe the trick is to frame it as a matter of national security (which it is, really, but not as easy to make as terrorists = evil).

      • Brett 7.1.1

        Shouldn’t be too hard,
        Just to get the ball rolling convert all the government and state fleet to cng, similar to what we did back in the 80’s, then provide subsidies for people to convert their vehicles.

        • Deadly_NZ

          CNG???? dont you mean LPG? the C in CNG is for Crap it was the worst thing ever, but on the other hand LPG is great.

          • Brett

            Nothing wrong with CNG.
            I was a mechanic back in the 80’s working for the post office. We converted the whole fleet to CNG and didn’t have any issues with excessive motor wear. The only thing was that you had to keep the car tuned properly otherwise it was gutless.

            • Deadly_NZ

              HAHAHA I also worked for the post office in the 80’s and I DROVE the CNG cars and I hate to tell you but I had a petrol version of my work car at home I HATED the work car as it just had NO guts at all no matter how well tuned it was.

    • Blighty 7.2

      when oil output has failed to respond to high prices and we’re within spitting distance of $100 a barrel again, yes peak oil is an issue for the immediate future. Your source talks about the fact large reserves remain, no-one’s arguing with that, the issue is economically-fisable extraction rate. It’s slightly worrying that you don’t understand that peak oil is abut production rate, not reserves – it’s like how your car is limited by (inter alia) the amount of fuel the engine can get from the the petrol tank at any one time, not the amount that’s in the petrol tank.

      “the huge amount of gas reserves the US can utilize as an oil substitute”. geez, where are you going to get the infrastructure to make natural gas a large scale alternative to oil within the timeframe we’re talking? And, of course, you’ll push natural gas prices through the roof doing it.

      if shale gas is so great how come major shale reserve owners are cutting well numbers and putting money into extreme oil exploration instead? http://www.huffingtonpost.com/jeffrey-rubin/if-shale-gas-is-a-game-ch_b_807329.html

    • Rosy 7.3

      I’ve just started to read about some severe environmental problems with the ‘gas fracking’ in the USA. It appears there are huge problems with water contamination. Currently this method of recoverine natural gas is not subject to EPA regulations (courtesy of Haliburton & Dick Cheney – th ‘haliburton loophole’. See http://www.gaslandthemovie.com/whats-fracking/).


      Does anyone know whether this is an important issue, or just a beat-up?

  8. john 8

    cars will become like the horse,once used as every day transport but now mostly for sport.
    same with the car.We should ban them,unless you have a motorsport licence,so you can use it for rally or race

    • Armchair Critic 8.1

      Horses run on locally sourced bio-fuel.
      The emissions from horses are biodegradable. They do not dump heavy metals such as lead or zinc onto the road.
      Horses can be manufactured locally cheaper than they can be imported.
      At the end of their useful lives, horses are completely recyclable.
      A good horse can get you home from the pub irrespective of how much you’ve had to drink.

      • lprent 8.1.1

        One a complete sidetrack.

        From my vague recollection of the summary offenses act when I last read the whole thing 25 years – you can be charged for being drunk in charge of horse. Mind you that was about the time that they removed offenses like wearing carpet slippers.

        • Armchair Critic

          Maybe I would have been better saying horses are sentient, unlike cars.
          Why was wearing carpet slippers illegal? Grey vinyl zip up shoes I can understand, but carpet slippers….??

          • lprent

            Hangover from the one of the great depressions for clearing away the unemployed sleeping rough and bothering conservative party supporters. When you were without footwear then a handy piece of carpet and a bit of twine made some pretty hard wearing footwear.

  9. Draco T Bastard 9

    But the ordinary family can best reduce dramatically their fuel bill by simple life-style changes – commuting by public transport rather than car, for instance…

    Considering the price of using “public transport” no they can’t. I’m pretty sure you’ll find that a lot of people use cars to go to work because “public transport” is out of their price range. These will, of course, be the lower income people.

    That taxpayer money would be better spent on buses and trains.

    Yep, major subsidies toward public transport to bring down the cost would be good. Will have to get rid of the private owners though – taxpayers should not be subsidising private profits.

    • lprent 9.1

      Costs me about $60 per month for the link to and from work. Trick is not to live too far away from work.

      • Draco T Bastard 9.1.1

        Not everybody has that choice.

        • Rusty Shackleford

          “taxpayers should not be subsidising private profits”


          If the market can provide a good or service cheaper (even after the firm takes a profit), why would you be against that?

  10. Afewknowthetruth 10

    The Hirsch Report of 2005 pointed out in no uncertain terms that a smooth transition to a low oil economy would take 20 years.

    Since peak oil was in 2005/5 and we still have done next to nothing about it (in fact have increased our ovreall oil dependency), we are 25 years behind in our planning and clearly are about to fall off the cliff.

    What is particularly dismal is that politicans have known that peak oil was imminent for a decade, but chose to do nothing about it. That rather suggests a planned die-off strategy for the bulk of the populace.

    • Draco T Bastard 10.1

      Actually, they’ve known about Peak Oil and the time it was predicted (~2000) since the 1950s when Hubbert told them.

      That rather suggests a planned die-off strategy for the bulk of the populace.

      It does suggest something other than the best of intentions and, considering the fact that all the wealth and power have been shifted into the hands of the rich especially over the last 30 years, we really should be thinking just what those intentions were.

  11. jcuknz 11

    You talk as if cars prior to 1995 are to go out the door, but I’m sure my 1994 vehicle is far superior despite its age to any of the cars I have owned previously with the stuff from the Uk not really lasting beyond 100K without being real dungers. If petrol goes up to $2 a litre I am sure I will consider using the pathetic public transport available to me or else get more organised so I don’t do so much milage.
    I agree that it is better to improve public transport with what is needed rather than what operates at a profit which has been the situation for the previous three or four decades as beancounters cut services instead of working out what would work. Then there is my regional council congratulating itself instead of subsidising more services. My ‘bus rate’ was around $7 a year awhile back. I would be happy to pay double that and likely use the bus if there was a sensible service. The alternative for me is to give up my lovely view and move to a house in a squallid area where there is a frequent bus service to town.

    • Colonial Viper 11.1

      If petrol goes up to $2 a litre I am sure I will consider using the pathetic public transport available to me

      “If”? I paid $50 for 24.3L of Premium at a BP last week. That’s already over $2/L. Where do you get your petrol from, I’d like to use them.

      • jcuknz 11.1.1

        YES! that was a slip 🙁 I should have said $4 a litre. I use 91 and currently it is $1.96 around here.
        But I don’t bother about the price, which is always going up and down of late, but rather work on how many Kms to the dollar. It used to be 7k/$ but sadly currently it is about 5k/$ .. thats for around town local driving.

        • DeepRed

          If I’m not much mistaken, cars in Britain rust a lot quicker due to the salting of roads in winter, to improve road grip.

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