Jeff Rubin on oil & the end of globalisation
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4:29 pm, November 14th, 2010 - 29 comments
Categories: Economy -
Tags: jeff rubin, peak oil, sustainability, trade
The transcript of Jeff Rubin speaking at the ASPO-USA conference, supplied by The Oil Drum:
You know, knowing the nature of the disease is usually an essential first step to finding a cure. And so too, it is with a recession. Knowing the true nature of a recession goes a long way in helping us to avoid falling into another one. Particularly when the recession we are just coming out of happens to be the deepest global post-war recession on record.
Conventional wisdom, as espoused by central bankers, finance ministers, and the pundits that you watch on TV would have you believe that the recession that we are still feeling here in America, and, indeed, throughout the world, was all about a financial crisis, whose roots lie in the failed sub-prime mortgage market in the United States. In other words, a whole bunch of boarded up, repossessed unsalable houses and depressed property markets in places like Cleveland, all financed with easy credit and subprime mortgages, hit financial markets like some toxic hydrogen bomb, and then all of a sudden, a property market crash in the United States, somehow morphed into a deep, global recession.
Gee, I never knew that Cleveland was that big. No one has to tell me about the impact of the subprime mortgage market on financial markets. Why do you think I am an author now? But there is a big difference between blowing up the bonus pools of investment banks, and blowing up Wall Street, and what happened.
If you are wondering why risk-averse institutions like the bank that I used to work for had to write down almost $10 billion of assets of things called Collateralized Debt Obligations that were funded by pools of subprime mortgages, the reason is pretty simple: they were rated AAA, which meant that rating agencies assigned the risk of default with the same probability that the US Treasury would default. What the banks lost sight of is how rating agencies get paid. Rating agencies don’t get paid by investors; they get paid by issuers. In Economics, we call this moral hazard problem. In investment banking, we call it, “Shit happens.”
It is easy to see how sub-prime mortgages blew up Wall Street; it is a little more challenging to see it as the author of the global recession. Why were there economies that had no sub-prime mortgages that experienced even deeper recessions than the United States? Why did those economies go into recession even before the US economy went into recession? Maybe, just maybe, there was something more important going on–more important to the global economy than Wall Street or sub-prime mortgages, like $147 barrel oil, for example. If we know anything about watching the global economy in the last 40 years, we know this: feed it cheap oil, and it runs very smoothly. All of the sudden, give it expensive oil, and it stops in its tracks.
Every major recession in the post-war period has oil’s fingerprints all over it. The 1973 first oil shock led to what was then the deepest post-war recession, at the time. The second OPEC oil shock led to no less than two recessions: 1979 and 1982. And then when Saddam Hussein invaded Kuwait, and left half of its oil fields on fire, and oil spiked to the then unheard-of price of $40 barrel, lo and behold, the industrialized world again fell into recession.
Gee, I wonder what happened to oil prices before this recession. It seems to me that oil prices went from about $30 barrel, at the beginning of 2004, to almost $150 barrel by 2008. Even in real terms, that is, inflation-adjusted, that price increase was over double the price increase of either the first or the second OPEC oil shock. If they had led to devastating recessions, why would not the biggest oil shock of them all, be the obvious culprit for what has been the deepest recession to date?
There are many ways in which oil shocks create global recessions. First, the transfer of income. When oil went from $30 barrel, to about $147 barrel, over $1 trillion of income was transferred from the industrialized oil consuming world to OPEC. Now, that was not neutral for the economy, because the savings rates from which money was coming from, like the United States, was virtually 0%, meaning that consumers spent everything they made. And where the money was going to, places like Saudi Arabia, or Kuwait, or the United Arab Emirates, had savings rates of almost as high as 50%, so it certainly was not demand neutral.
High price also create recessions by crowding out non-energy expenditures. Two years ago, when gasoline cost us $4 gallon, low-income Americans were paying more to fill their tanks than they were to fill their stomachs.
But by far, the most important mechanism, the most important path, by which oil prices cause recession is through their impact on inflation, and their impact on interest rates.
There is no shortage of people to blame for the subprime mortgage crisis. We could start with fraudulent mortgage companies that approved mortgages, then quickly sold them to financial institutions. We can blame financial institutions who played Russian roulette with depositors money, and of course we can blame rating agencies who assigned AAA ratings to this. And we can blame regulators, who were asleep at the wheel, like the Securities Exchange Commission, who were either blind or indifferent to Wall Street’s systemic risk to subprime mortgages.
However, the real culprit behind subprime mortgages was the very low cost of capital and 0% interest rates. All the greed in the world could not do what the Fed’s easy money made possible. The subprime mortgage rates were created by interest rates and the subprime mortgage market was pricked by interest rates. Everybody would agree with that. What people don’t seem to ask is, “Just why did interest rates go from 1% to 5.5% from 2004 to 2006?”
Well, any central banker, even Alan Greenspan, will acknowledge that your borrowing cost is a mirror image of your inflation rate. We had 1% federal funds’ rate in 2004, because we had a 1% inflation rate. All of the sudden, in 2006, inflation was over 5.5%, the highest it had been in America, since, coincidentally, 1991, when we just happened to have the last oil shock. All of the sudden, money wasn’t free any more. All of the sudden, you weren’t getting credit cards in the mail any more that you never applied for. And all of the sudden, people who held negative amortization sub-prime mortgage rates had to start paying 7% or 8%.
Well, if interest rates hadn’t risen, that wouldn’t have occurred. Why did inflation move up? Virtually all of the increase in inflation came from one component of the US consumer price index basket–the energy component. By the end of 2006, energy inflation was running at 35%, because of one price: the price of oil. The price of oil went from $30 barrel, which incidentally, every oil analyst at the time said it was going to stay at that level, to over $70 barrel. If oil had stayed at $30 barrel, inflation would never have spiked; neither would have interest rates. All of those good folk in Cleveland would probably still be there, in their homes financed by 0% interest rate sub-prime mortgages. Lehman Brothers and Bear Stearns would probably still exist, and I’d probably still be the chief economist at CIBC.
But that is not what happened. Why did oil prices go up to $147 barrel? Somewhere where virtually every economist said it could not go. Well, there were two reasons that economists said that oil prices could not get into triple digit range, and that was the cherished principles of supply and demand. First, the theory of the upward sloping supply curve–higher oil prices would bring new supply, just like it did after the OPEC oil shocks, where oil gushed from Prudhoe Bay and the North Sea. And not only did that break OPEC’s strangle-hold on the market, but sent oil prices tumbling down.
Unfortunately, as you all know, there are no more Prudhoe Bays or North Seas to come on tap. Yes, there are tar sands, and theres is deep water, and the upward sloping supply curve did bring new sources of supply, but only at prices that we at the end couldn’t afford to burn.
What about the cherished principle of demand? Would not triple digit oil prices quash demand? Well, it did, in certain places. It did in the United States. It did in Canada. It did in Japan. It did in Western Europe. Fifteen years ago, if those economies suddenly cut back their appetite for oil, oil prices would have fallen, because 15 years ago, those countries would have accounted for almost three-quarters of world oil consumption. Today, they account for barely half. Tomorrow, they will account for less than half. It wasn’t the US consumer that drove oil demand to $147 barrel in the last cycle, and it certainly won’t be the American consumer that drives a barrel of oil to $147 and higher in the next cycle. We have already seen peak demand, in this economy, and in the economy of the other industrialized countries.
Where do you think oil demand has been growing the strongest? Many of you will probably be saying China, and indeed it has. It’s grown from around 2 million barrels a day, to about 9 million barrels a day. But I know a place where the demand for oil is growing even faster than in China. And it is the same place your politicians have told you your supply is coming from in the future. Last year, OPEC and two non-cartel producers, Mexico and Russia, consumed 14 million barrels a day. That is almost two Chinas.
What makes OPEC so thirsty for its own fuel? Well, if you ever filled your tank up in Caracas, you would get some sense of it. It is 20 cents a gallon. And if you go to Riad, in Saudi Arabia, it is a little bit more-it’s 40 cents a gallon. And it’s 40 cents a gallon, whether oil costs $20 barrel, or whether oil costs $150 barrel.
If you think drivers have a good deal in OPEC countries, they don’t have anything as good a deal as power users. What’s the coolest thing to do in Dubai? Ski, of course. I love skiing; I’m Canadian. But going skiing in an area where it’s hot enough to fry an egg on the pavement uses up a whole lot of energy. In fact, one day at Ski Dubai uses the equivalent energy that a North American would consume in a month’s worth of driving. So the question isn’t really how much productive capacity that OPEC has. How much export capacity is the real question, and every year that is less and less, because every year, more and more is consumed at home.
Now, it’s their oil and gas, and if they want to consume their oil and gas going skiing in one of the hottest deserts in the world, that is their right. All I’m saying is, chances are, your future oil supply ain’t coming from OPEC, and chances are, it ain’t going to be cheap.
Now sure, oil prices fell to $40 barrel during the recession. And for many folk, that was evidence enough that it never had any business being in triple digit range in the first place. But what a lot of those folk forget is that in the last recession, world oil demand actually fell. It fell for the first time since 1983. Such was the severity that the recession was.
Peak oil is not a problem if the economy that it is powering is shrinking. Peak oil is only a problem if the economy we are in is starting to grow. The first thing you know about an economic recovery is that economies start burning more oil. The next thing you know about an economic recovery is that oil prices start rising. Where is oil trading today? It is trading at over $80 barrel. With the exception of Germany and Canada, every other economy in the G7 is still miles below the level of GDP that they were at before the recession began.
And yet, where oil is trading today, turn the clock back to three years ago, and that would have been a world all-time record high. Now, it is where oil trades in the shadow of the deepest global post-war recession. Where do you think oil prices are going?
I will tell you where I think oil prices are going. Even in this most anemic of economic recoveries, we are going to see triple digit oil prices. We are not going to see triple digit oil prices in 10 to 15 years. And it is certainly not clear to me that the global economy is better able to handle that than in 2008. Now, a lot of people will say, “Jeff, economic history tells us that scarcity is the mother of invention. Give us 10 to 15 years of adjustment, and we will develop alternate technology, so we won’t be carbon-dependent.”
And they are right. Give us 10 to 15 years, and we will solve this on the supply side. But as I say, our rendezvous with triple digit oil prices is not in 10 or 15 years; it is in 10 or 15 months. So instead of trying to turn cow-shit into high octane fuel, we are going to have to learn to get off the road, and that is just what happened. In 2009, there were 4 million fewer cars on the road than there were the year before. In the next ten years, 40 million North Americans will be taking the exit lanes. The question is, “Will there be a bus to get on?” Instead of giving $40 billon to General Motors, what we should have done is spend $40 billion on public transit, so there would be a bus to get on.
In a world of triple digit oil prices, all of the sudden the economy’s speed limit changes. And that is one of the problems that we have here in America, is that we don’t recognize that our economy’s speed limit has changed. What the economy could grow at when oil was $20 to $30 barrel is a whole different speed limit than what the US economy can grow at when oil is $80 to $150 barrel.
And that is something that I don’t think the Administration recognizes. Because what President Obama cannot bring is cheap oil. He can get expensive oil. We can build a pipeline from the Canadian tar sands down to the Gulf refineries, and we can get oil. But in order to get the kind of oil that will be required, that will require the triple digit oil prices that we can’t afford to pay. But trying to pump-prime the economy with fiscal stimulus is not a substitute for cheap oil. It won’t make the economy grow any faster. It will just make the deficit that much bigger.
Worse than that, triple digit oil prices will not only take millions off the road, it will send our economy right back into recession, unless of course, the economy changes. We can’t do a whole lot about triple digit oil prices. That is where the supply curve lies. And if you doubt that, just look at the Canadian tar sands. Like sure, there is 170 billion barrels of it there, and there is 500 billion barrels in the Orinoco heavy oil belt, but that is not the issue. Depletion is not just the geological concept, it is more fundamentally an economic concept. Because if the cost of extracting that oil from the tar is greater than we can afford to burn, it doesn’t matter how many billion barrels of oil there are in the tar sands.
So how do we adapt? How do we grow in an economy of triple digit oil prices? We change the nature of our economy. In a world of triple-digit oil prices, distance costs money. The global economy, where we produce one thing at one end of the world, to be sold at the other end of the world, doesn’t make any economic sense, because in too many cases, what will be penny-wise, will soon become pound-foolish. The wage “arb”, what we save on wages, we will more than squander on bunker fuel.
Take the steel industry, for example. Just before the recent recession, some very curious things were happening in the US market. When oil prices got to be over $100 barrel, all of the sudden, Chinese steel exports to the US fell at double-digit rates. And all of the sudden, US steel production was up. And all of the sudden, US Steel Corp., which was one of the biggest dogs in the market, all of the sudden its share price doubled.
What was going on? I’ll tell you what was going on. For the first time in 20 years, it was cheaper to make steel in the United States than to import it from China. Why? Consider what China has to do to send you steel. First, it has to ship iron ore from Brazil, across the Pacific Ocean, turn it into steel, which is itself a very energy-intensive process, then ship it back, across the Pacific Ocean, to you. At $20 barrel, that works. At $100 barrel, that doesn’t work. It added on $60 to $70 dollars, to the cost of a ton of hot-rolled steel. How much labor time do you think there is in making steel these days? One and a half to two hours. The transit costs all of a sudden exceeded the labor costs. Who would dream that triple digit oil prices would breathe new life into our hollowed-out Rust Belt? But in a world where distance costs money, that is exactly what is going to happen.
Take food. Last year, China exported $6 billion of food to America, everything from apples to frozen chicken wings, bringing a whole new meaning to having your Chinese food delivered. Steel doesn’t have to be refrigerated. Hopefully, frozen chicken wings do. What do you think powers that refrigeration unit? Bunker fuel! The same thing that is powering the boat. The world of triple digit oil prices–it won’t matter that farm labor is cheaper in China than in the United States, because the cost of bringing those frozen chicken wings to us will be too expensive.
it’s not like we are going to stop using steel in America, and it is certainly not like we are going to stop eating. What we are going to have to do is make our own steel. What we are going to have to do is grow more of our own food. Unfortunately, much of our agricultural land has been paved over with suburban sprawl. Just as triple digit oil prices will breathe new life into our hollowed out Rust Belt, triple digit oil prices will turn those far-flung suburbs and exurbs back into the farmland they were, thirty to forty years ago. The very same economic forces that gutted our manufacturing sector, that paved over our farm land, when oil was cheap and abundant, and transport costs were incidental, those same economic forces will do the opposite in a world of triple digit oil prices. And that is not determined by government, and that is not determined by ideological preference, and that is not determined by our willingness or unwillingness to reduce our carbon trail. That is just Economics 100.
Triple digit oil price is going to change cost-curves. And when it changes cost curves, it is going to change economic geography at the same time. I know that the world of triple digit oil prices has been the domain of the apocalypse. For many people, the advent of peak oil and triple digit oil price means the end of our economy. For some, civilization as we know it. I don’t share that pessimism. I don’t share that outlook. I’m an economist. I believe in the power of prices.
Sure, if we continue to want to get our frozen chicken wings from half-way around the world, where labor is cheap, if we want to get our steel from half way around the world, if we want to commute back and forth eighty miles to work in our SUVs, peak oil won’t just be a recession, peak oil will be peak GDP, and that will be apocalyptic. But as I say, I am an economist, and I believe in the power of prices. I believe we are going to change. I believe that we are not going to end up importing food from half-way around the world, or steel from half-way around the world. I don’t think we are committed, irrevocably, to suburban sprawl.
And we might just find that that new smaller world around the corner is a whole lot more livable, and a whole lot more sustainable, than the big “oily” one we are about to leave behind.
Thank you very much.
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The “double shocks” in post Cold War international affairs. The end of the Cold War fundamentally altered the global geostrategic context. In particular, the end of the nuclear “balance of terror” between the USA and USSR, coupled with the relaxation … Continue reading ...5 days ago
- Buried deep
Here's a bike on Manchester St, Feilding. I took this photo on Friday night after a very nice dinner at the very nice Vietnamese restaurant, Saigon, on Manchester Street.I thought to myself, Manchester Street? Bicycle? This could be the very spot.To recap from an earlier edition: on a February night ...5 days ago - Security Politics in Peripheral Democracies, Excerpt Five.
Military politics as a distinct “partial regime.” Notwithstanding their peripheral status, national defense offers the raison d’être of the combat function, which their relative vulnerability makes apparent, so military forces in small peripheral democracies must be very conscious of events … Continue reading ...6 days ago
- Leadership for Dummies
If you’re going somewhere, do you maybe take a bit of an interest in the place? Read up a bit on the history, current events, places to see - that sort of thing? Presumably, if you’re taking a trip somewhere, it’s for a reason. But what if you’re going somewhere ...6 days ago - Home again
6 days ago - Dead even tie for hottest August ever
Long stories short, here’s the top six news items of note in climate news for Aotearoa-NZ this week, and a discussion above between Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer:The month of August was 1.49˚C warmer than pre-industrial levels, tying with 2023 for the warmest August ever, according ...6 days ago
- The Hoon around the week to Sept 7
The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts and talking about the week’s news with:The Kākā’s climate correspondent on the latest climate science on rising temperatures and the debate about how to responde to climate disinformation; and special guest ...6 days ago
- Have We an Infrastructure Deficit?
An Infrastructure New Zealand report says we are keeping up with infrastructure better than we might have thought from the grumbling. But the challenge of providing for the future remains.I was astonished to learn that the quantity of our infrastructure has been keeping up with economic growth. Your paper almost ...7 days ago - Councils reject racism
Last month, National passed a racist law requiring local councils to remove their Māori wards, or hold a referendum on them at the 2025 local body election. The final councils voted today, and the verdict is in: an overwhelming rejection. Only two councils out of 45 supported National's racist agenda ...1 week ago
- Homage to Simeon Brown
1 week ago
- Government of deceit
When National cut health spending and imposed a commissioner on Te Whatu Ora, they claimed that it was necessary because the organisation was bloated and inefficient, with "14 layers of management between the CEO and the patient". But it turns out they were simply lying: Health Minister Shane Reti’s ...1 week ago
- The professionals actually think and act like our Government has no fiscal crisis at all
Treasury staff at work: The demand for a new 12-year Government bond was so strong, Treasury decided to double the amount of bonds it sold. Photo: Lynn GrievesonMōrena. Long stories short; here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Friday, September ...1 week ago - Weekly Roundup 6-September-2024
Welcome to another Friday and another roundup of stories that caught our eye this week. As always, this and every post is brought to you by the Greater Auckland crew. If you like our work and you’d like to see more of it, we invite you to join our regular ...1 week ago
- Security Politics in Peripheral Democracies; Excerpt Four.
Internal versus external security. Regardless of who rules, large countries can afford to separate external and internal security functions (even if internal control functions predominate under authoritarian regimes). In fact, given the logic of power concentration and institutional centralization of … Continue reading ...1 week ago
- A Hole In The River
There's a hole in the river where her memory liesFrom the land of the living to the air and skyShe was coming to see him, but something changed her mindDrove her down to the riverThere is no returnSongwriters: Neil Finn/Eddie RaynerThe king is dead; long live the queen!Yesterday was a ...1 week ago - Bright Blue His Jacket Ain’t But I Love This Fellow: A Review and Analysis of The Rings of Power E...
My conclusion last week was that The Rings of Power season two represented a major improvement in the series. The writing’s just so much better, and honestly, its major problems are less the result of the current episodes and more creatures arising from season one plot-holes. I found episode three ...1 week ago - Who should we thank for the defeat of the Nazis
As a child in the 1950s, I thought the British had won the Second World War because that’s what all our comics said. Later on, the films and comics told me that the Americans won the war. In my late teens, I found out that the Soviet Union ...1 week ago - Skeptical Science New Research for Week #36 2024
Open access notables Diurnal Temperature Range Trends Differ Below and Above the Melting Point, Pithan & Schatt, Geophysical Research Letters: The globally averaged diurnal temperature range (DTR) has shrunk since the mid-20th century, and climate models project further shrinking. Observations indicate a slowdown or reversal of this trend in recent decades. ...1 week ago
- Join us for the weekly Hoon on YouTube Live at 5pm
Photo by Jenny Bess on UnsplashCome and join us for our weekly ‘Hoon’ webinar with paying subscribers to The Kākā for an hour at 5 pm.Jump on this link on YouTube Livestream for our chat about the week’s news with special guests:5.00 pm - 5.10 pm - Bernard and ...1 week ago - Media Link: Discussing the NZSIS Security Threat Report.
I was interviewed by Mike Hosking at NewstalkZB and a few other media outlets about the NZSIS Security Threat Report released recently. I have long advocated for more transparency, accountability and oversight of the NZ Intelligence Community, and although the … Continue reading ...1 week ago
- How do I make this better for people who drive Ford Rangers?
Home, home again to a long warm embrace. Plenty of reasons to be glad to be back.But also, reasons for dejection.You, yes you, Simeon Brown, you odious little oik, you bible thumping petrol-pandering ratfucker weasel. You would be Reason Number One. Well, maybe first among equals with Seymour and Of-Seymour ...1 week ago - A missed opportunity
The government introduced a pretty big piece of constitutional legislation today: the Parliament Bill. But rather than the contentious constitutional change (four year terms) pushed by Labour, this merely consolidates the existing legislation covering Parliament - currently scattered across four different Acts - into one piece of legislation. While I ...1 week ago
- Nicola Willis Seeks New Sidekick To Help Fix NZ’s Economy
Synopsis:Nicola Willis is seeking a new Treasury Boss after Dr Caralee McLiesh’s tenure ends this month. She didn’t listen to McLiesh. Will she listen to the new one?And why is Atlas Network’s Taxpayers Union chiming in?Please consider subscribing or supporting my work. Thanks, Tui.About CaraleeAt the beginning of July, Newsroom ...1 week ago - Inflation alive and kicking in our land of the long white monopolies
The golden days of profit continue for the the Foodstuffs (Pak’n’Save and New World) and Woolworths supermarket duopoly. Photo: Lynn Grieveson / The KākāMōrena. Long stories short; here’s my top six things to note in Aotearoa’s political economy around housing, climate and poverty on Thursday, September 5:The Groceries Commissioner has ...1 week ago - The thermodynamics of electric vs. internal combustion cars
This is a re-post from The Climate Brink by Andrew Dessler I love thermodynamics. Thermodynamics is like your mom: it may not tell you what you can do, but it damn well tells you what you can’t do. I’ve written a few previous posts that include thermodynamics, like one on air capture of ...1 week ago
- Security Politics in Peripheral Democracies: Excerpt Three.
The notion of geopolitical “periphery.” The concept of periphery used here refers strictly to what can be called the geopolitical periphery. Being on the geopolitical periphery is an analytic virtue because it makes for more visible policy reform in response … Continue reading ...1 week ago
- Venus Hum
Fill me up with soundThe world sings with me a million smiles an hourI can see me dancing on my radioI can hear you singing in the blades of grassYellow dandelions on my way to schoolBig Beautiful Sky!Song: Venus Hum.Good morning, all you lovely people, and welcome to the 700th ...1 week ago - I Went to a Creed Concert
Note: The audio attached to this Webworm compliments today’s newsletter. I collected it as I met people attending a Creed concert. Their opinions may differ to mine. Read more ...1 week ago
- Takutai Moana changes another assault on Te Tiriti
The Government must abandon its Marine and Coastal Area (Takutai Moana) Act interventions after the Waitangi Tribunal found it was committing gross breaches of the Treaty. ...2 hours ago - Greens call on Govt to leave Te Reo in schools alone
As Te Wiki o te Reo Māori approaches, the Government is considering deprioritising teaching Te Reo Māori in our schools. ...4 hours ago
- Govt cannot ignore racism
The Government’s directive to the public service to ignore race is nothing more than a dog whistle and distraction from the structural racism we need to address. ...4 hours ago
- Release: Lemauga Lydia Sosene to take medical leave
Labour’s Mangere MP Lemauga Lydia Sosene has been diagnosed with breast cancer and will shortly take medical leave. ...9 hours ago - Potential intelligence sharing with Israel must be investigated
Concerns have been raised that our spy arrangements may mean that intelligence is being shared between Aotearoa and Israel. An urgent inquiry must be launched in response to this. ...1 day ago
- Release: Charter schools undermine our education system
The Government is taking a wrecking ball to our public education system by reinstating charter schools. ...1 day ago
- Youngest MP to travel to Canada to accept Politician of the Year Award
Aotearoa’s Youngest Member of Parliament, and Te Pāti Māori MP, Hana-Rawhiti Maipi-Clarke, will travel to Montreal to accept the One Young World Politician of the Year Award next week. The One Young World Politician of the Year Award was created in 2018 to recognise the most promising young politicians between ...1 day ago
- Greens celebrate huge step forward for ADHD community
The Greens welcome today’s long-coming announcement by Pharmac of consultation to remove the special authority renewal criteria for methylphenidate, dexamfetamine and modafinil and to fund lisdexamfetamine. ...1 day ago
- Release: Millions to be spent dividing NZ for no reason
The National Party is wasting millions of dollars allowing David Seymour’s Treaty Principals Bill to be drafted and go to Select Committee. ...1 day ago
- Release: New Zealanders departing our shores at a record rate
The Migration figures released by Stats NZ today show National is continuing to drive Kiwis away from New Zealand in record numbers. ...1 day ago
- Te Tai Tokerau MP Slams Govt Overreach in Scrapping Māori Wards
Mema Paremata for Te Tai Tokerau, Mariameno Kapa-Kingi, has reflected on the decisions made by the councils of the North amidst the government’s push to remove Māori Wards and weaken mana whenua representation. “Actions taken by the Kaipara District Council to remove Māori Wards are the embodiment of the eradication ...2 days ago
- Govt already seeking advice on Treaty referendum
On one hand, the Prime Minister has assured Aotearoa that his party will not support the Treaty Principles Bill beyond first reading, but on the other, his Government has already sought advice on holding a referendum on our founding document. ...2 days ago
- Release: Aged care will be worse off if redesign rushed
New Zealanders needing aged care support and the people who care for them will be worse off if the Government pushes through a flawed and rushed redesign of dementia and aged care. ...2 days ago
- Release: Govt fails hundreds of workers as mills close
Labour is devastated at news hundreds of workers are set to lose their jobs following the closure of Winstone Pulp mills. ...2 days ago
- Job losses from mill closures consequence of Govt inaction
Hundreds of jobs lost as a result of pulp mill closures in the Ruapehu District are a consequence of government inaction in addressing the shortfalls of our electricity network. ...3 days ago
- Ngarewa-Packer devastated for Ruapehu following WPI closure
Te Pāti Māori Co-Leader and MP for Te Tai Hauāuru is devastated for the Ruapehu community following today’s decision to close two Winstone Pulp mills. “My heart goes out to all the workers, their whānau, and the wider Ruapehu community affected by the closure of Winstone Pulp International,” said Ngarewa-Packer. ...3 days ago
- Release: Cabinet should stop the Treaty Principles Bill
National Party Ministers have a majority in Cabinet and can stop David Seymour’s Treaty Principles Bill, which even the Prime Minister has described as “divisive and unhelpful.” ...4 days ago
- Release: Staff gagged to keep fast track list secret
The National Government is so determined to hide the list of potential projects that will avoid environmental scrutiny it has gagged Ministry for the Environment staff from talking about it. ...4 days ago
- Release: Labour challenges Te Whatu Ora gag orders
Labour has complained to the Te Kawa Mataaho Public Service Commission about the high number of non-disclosure agreements that have effectively gagged staff at Te Whatu Ora Health NZ from talking about anything relating to their work. ...4 days ago
- Greens call on Treaty Principles Bill to be abandoned after letter from Christian leaders
The Green Party is once again urging the Prime Minister to abandon the Treaty Principles Bill as a letter from more than 400 Christian leaders calls for the proposed legislation to be dropped. ...5 days ago
- Sign the petition: Keep military-style firearms off our streets
Help us tell the Government that reintroducing military-style firearms should not be up for debate. ...6 days ago
- Vast majority of councils support Māori wards
Councils across the country have now decided where they stand regarding Māori wards, with a resounding majority in favour of keeping them in what is a significant setback for the Government. ...1 week ago
- Release: Government on the wrong side of Māori wards
The National-led government has been given a clear message from the local government sector, as almost all councils reject the Government’s bid to treat Māori wards different to other wards. ...1 week ago
- Release: Labour congratulates Kuīni Ngā Wai hono i te po Paki
The Labour Party congratulates Kuīni Ngā Wai hono i te po Paki on being crowned as the eighth Te Ariki Nui – head of Te Kiingitanga. ...1 week ago
- Green Party welcomes new Maaori Kuiini
The Green Party welcomes the coronation of the new Maaori Kuiini, Te Arikinui Nga Wai Hono i te Po, today in Turangawaewae. ...1 week ago
- ECE teachers deserve better than this Government
The Green Party is unsurprised but disappointed by today’s announcement from the Government that will see our Early Childhood Centre teachers undermined and pay parity pushed further out of reach. ...1 week ago
- Urgent intervention needed on supermarkets
The Green Party is calling on the Government to intervene in the supermarket duopoly dominating our supply of groceries following today’s report from the Commerce Commission. ...1 week ago
- Release: Rainbow youth neglected in mental health funding
Labour backs the call from The Rainbow Support Collective members for mental health funding specifically earmarked for grassroots and peer led community organisations to be set up in a way that they are able to access. ...1 week ago
- Release: Transport in NZ has to be more than just roads
As expected, the National Land Transport Programme lacks ambition for our cities and our country’s rail network and puts the majority of investment into roads. ...1 week ago
- Speech: Barbara Edmonds Building Nations 2024
Tēnā koutou katoa, Thank you for your warm welcome and for having my colleagues and I here today. Earlier you heard from the Labour Leader, Chris Hipkins, on our vision for the future of infrastructure. I want to build on his comments and provide further detail on some key elements ...1 week ago
- Govt transport plan deepens fossil fuel fix
The Green Party says the Government’s new National Land Transport Programme marks another missed opportunity to take meaningful action to fight the climate crisis. ...2 weeks ago
- Greens call for public to back Wrybill in BOTY and beyond
The Green Party is calling on the public to support the Ngutu Pare Wrybill not just in this year’s Bird of the Year competition but also in pushing back against policies that could lead to the destruction of its habitat and accelerate its extinction. ...2 weeks ago
- Building consents data bad news for construction
News that the annual number of building consents granted for new homes fell by more than 20 percent for the year ended July 2024, is bad news for the construction industry. ...2 weeks ago
- Te Pāti Māori Pay Tribute to Kiingi Tūheitia Pōtatau Te Wherowhero VII
Papā te whatitiri, hikohiko te uira, i kanapu ki te rangi, i whētuki i raro rā, rū ana te whenua e. Uea te pou o tōku whare kia tū tangata he kapua whakairi nāku nā runga o Taupiri. Ko taku kiri ka tōkia ki te anu mātao. E te iwi ...2 weeks ago
- Release: Gaps still to be addressed in callouts response
The Government must guarantee New Zealanders will not be at risk after making changes to the way mental health callouts are handled. ...2 weeks ago
- Poroporoaki: Kiingi Tuheitia passing
Haere e te Kīngi o te kotahitangi Haere ki o nui, ki o rahi I te pō ...2 weeks ago
- Green Party pays respects to Kiingi Tuuheitia
The Green Party is paying tribute to the Māori King, Kiingi Tuuheitia Pootatau Te Wherowhero XVII, after he passed away earlier this morning. ...2 weeks ago
- Potaka Brings Whakaata Māori to its Knees
Today’s Whakaata Māori announcement is yet another colossal failure from Minister Potaka, who has turned his back on te reo Māori, forcing a channel offline, putting whānau out of jobs, and cutting Māori content, says Te Pāti Māori. “A Senior Māori Minister has turned his back on Te Reo Māori. ...2 weeks ago
- Release: National restricts access to disability care homes
With disability communities still reeling from the diminishing of Whaikaha, a leaked document now reveals another blow with National restricting access to residential care homes. ...2 weeks ago
- Release: Govt must help save 230 manufacturing jobs
Labour is calling on the Government and Mercury Energy to find a solution to the proposed Winstone Pulp mill closure and save 230 manufacturing jobs. ...2 weeks ago
- Need and value at forefront of public service delivery
New Cabinet policy directives will ensure public agencies prioritise public services on the basis of need and award Government contracts on the basis of public value, Minister for the Public Service Nicola Willis says. “Cabinet Office has today issued a circular to central government organisations setting out the Government’s expectations ...6 hours ago - Minister to attend Police Ministers Council Meeting
Police Minister Mark Mitchell will join with Australian Police Ministers and Commissioners at the Police Ministers Council meeting (PMC) today in Melbourne. “The council is an opportunity to come together to discuss a range of issues, gain valuable insights on areas of common interest, and different approaches towards law enforcement ...8 hours ago
- New Bill to crack down on youth vaping
The coalition Government has introduced legislation to tackle youth vaping, Associate Health Minister Casey Costello announced today. “The Smokefree Environments and Regulated Products Amendment Bill (No 2) is aimed at preventing youth vaping. “While vaping has contributed to a significant fall in our smoking rates, the rise in youth vaping ...1 day ago
- Interest in agricultural and horticultural products regulatory review welcomed
Regulation Minister David Seymour, Environment Minister Penny Simmonds, and Food Safety Minister Andrew Hoggard have welcomed interest in the agricultural and horticultural products regulatory review. The review by the Ministry for Regulation is looking at how to speed up the process to get farmers and growers access to the safe, ...1 day ago
- Bill to allow online charity lotteries passes first reading
Minister of Internal Affairs Brooke van Velden says the Government is moving at pace to ensure lotteries for charitable purposes are allowed to operate online permanently. Charities fundraising online, such as those run by the Heart Foundation, Coastguard NZ, Auckland Rescue Helicopter Trust and local hospices will continue to do ...1 day ago
- Tax exempt threshold changes to benefit startups
Technology companies are among the startups which will benefit from increases to current thresholds of exempt employee share schemes, Science, Innovation and Technology Minister Judith Collins and Revenue Minister Simon Watts say. Tax exempt thresholds for the schemes are increasing as part of the Taxation (Annual Rates for 2024-25, Emergency ...1 day ago
- Getting the healthcare you need, when you need it
The path to faster cancer treatment, an increase in immunisation rates, shorter stays in emergency departments and quick assessment and treatments when you are sick has been laid out today. Health Minister Dr Shane Reti has revealed details of how the ambitious health targets the Government has set will be ...1 day ago
- Targeted supports to accelerate reading
The coalition Government is delivering targeted and structured literacy supports to accelerate learning for struggling readers. From Term 1 2025, $33 million of funding for Reading Recovery and Early Literacy Support will be reprioritised to interventions which align with structured approaches to teaching. “Structured literacy will change the way children ...1 day ago
- Survivors invited to Abuse in Care national apology
With two months until the national apology to survivors of abuse in care, expressions of interest have opened for survivors wanting to attend. “The Prime Minister will deliver a national apology on Tuesday 12 November in Parliament. It will be a very significant day for survivors, their families, whānau and ...1 day ago
- Rangatahi inspire at Ngā Manu Kōrero final
Ehara taku toa i te toa takitahi, engari he toa takitini kē - My success is not mine alone but is the from the strength of the many. Aotearoa New Zealand’s top young speakers are an inspiration for all New Zealanders to learn more about the depth and beauty conveyed ...1 day ago
- Driving structured literacy in schools
The coalition Government is driving confidence in reading and writing in the first years of schooling. “From the first time children step into the classroom, we’re equipping them and teachers with the tools they need to be brilliant in literacy. “From 1 October, schools and kura with Years 0-3 will receive ...2 days ago
- Labour’s misleading information is disappointing
Labour’s misinformation about firearms law is dangerous and disappointing, Associate Justice Minister Nicole McKee says. “Labour and Ginny Andersen have repeatedly said over the past few days that the previous Labour Government completely banned semi-automatic firearms in 2019 and that the Coalition Government is planning to ‘reintroduce’ them. ...2 days ago
- Govt takes action on mpox response, widens access to vaccine
The Government is taking immediate action on a number of steps around New Zealand’s response to mpox, including improving access to vaccine availability so people who need it can do so more easily, Health Minister Dr Shane Reti and Associate Health Minister David Seymour announced today. “Mpox is obviously a ...2 days ago
- Next steps agreed for Treaty Principles Bill
Associate Justice Minister David Seymour says Cabinet has agreed to the next steps for the Treaty Principles Bill. “The Treaty Principles Bill provides an opportunity for Parliament, rather than the courts, to define the principles of the Treaty, including establishing that every person is equal before the law,” says Mr Seymour. “Parliament ...2 days ago
- Government unlocking potential of AI
Science, Innovation and Technology Minister Judith Collins today announced a programme to drive Artificial Intelligence (AI) uptake among New Zealand businesses. “The AI Activator will unlock the potential of AI for New Zealand businesses through a range of support, including access to AI research experts, technical assistance, AI tools and resources, ...2 days ago
- Government releases Wairoa flood review findings
The independent rapid review into the Wairoa flooding event on 26 June 2024 has been released, Environment Minister Penny Simmonds, Local Government Minister Simeon Brown and Emergency Management and Recovery Minister Mark Mitchell announced today. “We welcome the review’s findings and recommendations to strengthen Wairoa's resilience against future events,” Ms ...2 days ago
- Promoting faster payment times for government
The Government is sending a clear message to central government agencies that they must prioritise paying invoices in a timely manner, Small Business and Manufacturing Minister Andrew Bayly says. Data released today promotes transparency by publishing the payment times of each central government agency. This data will be published quarterly ...2 days ago
- Acknowledgement to Kīngi Tuheitia speech
E te māngai o te Whare Pāremata, kua riro māku te whakaputa i te waka ki waho moana. E te Pirimia tēnā koe.Mr Speaker, it is my privilege to take this adjournment kōrero forward. Prime Minister – thank you for your leadership. Taupiri te maunga Waikato te awa Te Wherowhero ...3 days ago
- Interim fix to GST adjustment rules to support businesses
Inland Revenue can begin processing GST returns for businesses affected by a historic legislative drafting error, Revenue Minister Simon Watts says. “Inland Revenue has become aware of a legislative drafting error in the GST adjustment rules after changes were made in 2023 which were meant to simplify the process. This ...3 days ago
- Strong uptake for cervical screening self-test
More than 80 per cent of New Zealand women being tested have opted for a world-leading self-test for cervical screening since it became available a year ago. Minister of Health Dr Shane Reti and Associate Minister Casey Costello, in her responsibility for Women’s Health, say it’s fantastic to have such ...3 days ago
- Ministry for Regulation’s first Strategic Intentions document sets ambitious direction
Regulation Minister David Seymour welcomes the Ministry for Regulation’s first Strategic Intentions document, which sets out how the Ministry will carry out its work and deliver on its purpose. “I have set up the Ministry for Regulation with three tasks. One, to cut existing red tape with sector reviews. Two, ...3 days ago
- Māori Education Advisory Group established
The Education Minister has established a Māori Education Ministerial Advisory Group made up of experienced practitioners to help improve outcomes for Māori learners. “This group will provide independent advice on all matters related to Māori education in both English medium and Māori medium settings. It will focus on the most impactful ways we can lift ...3 days ago
- Government welcomes findings of NZ Superannuation Fund review
The Government has welcomed the findings of the recent statutory review into the Guardians of New Zealand Superannuation and the New Zealand Superannuation Fund, Minister of Finance Nicola Willis says. The 5-yearly review, conducted on behalf of Treasury and tabled in Parliament today, found the Guardians of New Zealand Superannuation ...3 days ago
- First of five new Hercules aircraft takes flight
Defence Minister Judith Collins today welcomed the first of five new C-130J-30 Hercules to arrive in New Zealand at a ceremony at the Royal New Zealand Air Force’s Base Auckland, Whenuapai. “This is an historic day for our New Zealand Defence Force (NZDF) and our nation. The new Hercules fleet ...3 days ago
- Have your say on suicide prevention
Today, September 10 is World Suicide Prevention Day, a time to reflect on New Zealand’s confronting suicide statistics, Mental Health Minister Matt Doocey says. “Every death by suicide is a tragedy – a tragedy that affects far too many of our families and communities in New Zealand. We must do ...3 days ago
- Action to grow the rural health workforce
Scholarships awarded to 27 health care students is another positive step forward to boost the future rural health workforce, Associate Health Minister Matt Doocey says. “All New Zealanders deserve timely access to quality health care and this Government is committed to improving health outcomes, particularly for the one in five ...4 days ago
- Pharmac delivering more for Kiwis following major funding boost
Associate Health Minister with responsibility for Pharmac David Seymour has welcomed the increased availability of medicines for Kiwis resulting from the Government’s increased investment in Pharmac. “Pharmac operates independently, but it must work within the budget constraints set by the Government,” says Mr Seymour. “When our Government assumed office, New ...4 days ago
- Sport Minister congratulates NZ’s Paralympians
Sport & Recreation Minister Chris Bishop has congratulated New Zealand's Paralympic Team at the conclusion of the Paralympic Games in Paris. “The NZ Paralympic Team's success in Paris included fantastic performances, personal best times, New Zealand records and Oceania records all being smashed - and of course, many Kiwis on ...4 days ago
- Government progresses response to Abuse in Care recommendations
A Crown Response Office is being established within the Public Service Commission to drive the Government’s response to the Royal Commission into Abuse in Care. “The creation of an Office within a central Government agency was a key recommendation by the Royal Commission’s final report. “It will have the mandate ...1 week ago
- Passport wait times back on-track
Minister of Internal Affairs Brooke van Velden says passport processing has returned to normal, and the Department of Internal Affairs [Department] is now advising customers to allow up to two weeks to receive their passport. “I am pleased that passport processing is back at target service levels and the Department ...1 week ago
- New appointments to the FMA board
Commerce and Consumer Affairs Minister has today announced three new appointments and one reappointment to the Financial Markets Authority (FMA) board. Tracey Berry, Nicholas Hegan and Mariette van Ryn have been appointed for a five-year term ending in August 2029, while Chris Swasbrook, who has served as a board member ...1 week ago
- District Court judges appointed
Attorney-General Hon Judith Collins today announced the appointment of two new District Court judges. The appointees, who will take up their roles at the Manukau Court and the Auckland Court in the Accident Compensation Appeal Jurisdiction, are: Jacqui Clark Judge Clark was admitted to the bar in 1988 after graduating ...1 week ago
- Government makes it faster and easier to invest in New Zealand
Associate Minister of Finance David Seymour is encouraged by significant improvements to overseas investment decision timeframes, and the enhanced interest from investors as the Government continues to reform overseas investment. “There were about as many foreign direct investment applications in July and August as there was across the six months ...1 week ago
- New Zealand to join Operation Olympic Defender
New Zealand has accepted an invitation to join US-led multi-national space initiative Operation Olympic Defender, Defence Minister Judith Collins announced today. Operation Olympic Defender is designed to coordinate the space capabilities of member nations, enhance the resilience of space-based systems, deter hostile actions in space and reduce the spread of ...1 week ago
- Government commits to ‘stamping out’ foot and mouth disease
Biosecurity Minister Andrew Hoggard says that a new economic impact analysis report reinforces this government’s commitment to ‘stamp out’ any New Zealand foot and mouth disease incursion. “The new analysis, produced by the New Zealand Institute of Economic Research, shows an incursion of the disease in New Zealand would have ...1 week ago
- Improving access to finance for Kiwis
5 September 2024 The Government is progressing further reforms to financial services to make it easier for Kiwis to access finance when they need it, Commerce and Consumer Affairs Minister Andrew Bayly says. “Financial services are foundational for economic success and are woven throughout our lives. Without access to finance our ...1 week ago
- Prime Minister pays tribute to Kiingi Tuheitia
As Kiingi Tuheitia Pootatau Te Wherowhero VII is laid to rest today, Prime Minister Christopher Luxon has paid tribute to a leader whose commitment to Kotahitanga will have a lasting impact on our country. “Kiingi Tuheitia was a humble leader who served his people with wisdom, mana and an unwavering ...1 week ago
- Resource Management reform to make forestry rules clearer
Forestry Minister Todd McClay today announced proposals to reform the resource management system that will provide greater certainty for the forestry sector and help them meet environmental obligations. “The Government has committed to restoring confidence and certainty across the sector by removing unworkable regulatory burden created by the previous ...1 week ago
- More choice and competition in building products
A major shake-up of building products which will make it easier and more affordable to build is on the way, Building and Construction Minister Chris Penk says. “Today we have introduced legislation that will improve access to a wider variety of quality building products from overseas, giving Kiwis more choice and ...1 week ago
- Joint Statement between the Republic of Korea and New Zealand 4 September 2024, Seoul
On the occasion of the official visit by the Right Honourable Prime Minister Christopher Luxon of New Zealand to the Republic of Korea from 4 to 5 September 2024, a summit meeting was held between His Excellency President Yoon Suk Yeol of the Republic of Korea (hereinafter referred to as ...1 week ago
- The death of printed newspapers has long been predicted – but there are still some pleasing signs ...
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The problem that the economy is having is an economic problem caused by over reliance upon a monetary theory that pretty much ignores the economy while boosting the importance of the financial sector. This causes the economic problem to look like a financial problem.
economic problem = resource constraints
Neo-liberalism, which is the underlying theory of our “economies”, isn’t an economic theory but theory about money. In the world of money, where infinite amounts can be printed, then neo-liberalism and it’s assumption of a non-zero-sum game works but in reality, where there are finite resources and finite competition (because competition costs too much of those finite resources), the whole thing falls down.
The real economy, the one we actually have to live with, is a zero-sum game delimited by the renewable resource base.
Draco, the real issue is not the theory or practice of market economics, it is the end result for those who control the economy. The rich. More importantly the mega rich. These monsters could not really give a f**k about whether the method is laissez faire or totalitarian command, all they care for is that we meakly donate our bodies minds and souls to their enrichment. They and their allies have to be taken out of the loop, their control of the economy leaves us with a facade of democracy that is just that, a facade.
“Rating agencies don’t get paid by investors; they get paid by issuers.”
Oops Marty. Does that mean that NZ ratings are in that category? Seem to Bill English applauding our ratings. Same thing?
The rating agencies have all totally blown any credibility they may have had. Another of the great mysteries is why anyone even uses them any more?
http://www.youtube.com/watch?v=lgBpt9_FSV0&feature=related
Jeff Rubin is a good listen.
.
At the G-20 meeting, one very brief discussion over global warming was scrunched into a meal break. According to Scientific American, this despite pressure coming from EU leaders to raise this issue at the G-20, they were unable to even get it on the formal agenda.
So what is it that so distracts the governments of the G-20?
What is it that is absorbing their attention so much that dangerous global climate change endangering the lives of millions of people, mostly in the third world, is not even considered worthy of being an official topic for discussion?
Currency wars between the major powers each trying to shore up national profit taking at each others expense, have pushed climate talks on the back burner.
In response to the economic recession Central Banksters, and the governments they advise, are trying to increase export trade advantages by slashing the value of their currencies.
As well as consuming the G-20’s full attention and putting global warming off the agenda, Currency Wars have a number of other effects.
1/ The most important effect and the reason for doing all this- It Increases Profits and protects the privilege and power that spring from profit.
2/ In a world awash in unsold goods, and glutted markets, it makes your country’s trade goods cheaper on the world stage.
3/ Theoretically this increases export sales, while cutting imports. (as long as everyone else doesn’t do it as well.)
4/ It slashes the buying power of working people delivering a massive wage cut to the working people of each country that devalues.
5/ It threatens a race to the bottom and a call for trade protectionism to avoid this.
5/ It increases the likelihood of trade wars and heightens the tensions that lead to shooting wars.
At a time of falling profits due to the recession, you can see why the governments of the G-20 would be concerned, as maintaining profit is their main obsession.
In the 20th Century most of these same governments fought wars for profit, violently suppressed unions for profit, stood by while public and private enterprise were allowed to recklessly pollute and damage the environment for profit. So it is no surprise to me that in the 21st Century these same governments are preparing to commit ecocide in the name of profit.
It is like being locked in a burning house that is being looted by gangsters, who are too distracted fighting each other over the loot, to attend to putting out the fire…
Except in this case, there is no other house to go to, and these gangsters are locked in the house with the rest of us.
Oil prices ending so called free trade and globalisation may be the best thing that has happened for a long time. It will force re-investment in local manufacturing and local work forces world wide as well as forcing New Zealand to develop local sustainable energy.
The end of the oil age may signal the first sea change in economic thinking, but it will not result in a change to the modus operandi of the ruling elites. They will find another method of ensuring that they control the worlds resources and economies for their own benefit. It may be totalitarian (why else do you think that in the “land of the free” the apparatus and legislation for a police state is already in place?), it may be false populism, it could be patriotic wars. Oil was always going to run out, on the contrary the will of the elite to take our worth for their benefit will remain. We will have to fight them for our freedom.
Indeed.
Free trade?, maybe not.
(registration required)
If the Tea Party continues to influence the Republican agenda, it may not only spell bad news for the South Korea free trade agreement — it could also mean a fundamental reorientation of our country’s attitude toward trade and globalization.
Interesting link there Joe.
It’s like the 1930’s being replayed. An extreme right wing mass movement springs up in a major world power calling for more domestic repression, alongside a more belligerent foreign policy.
I can’t help wondering if the left can’t work out a better counter response than last time.
Old Photos has a few posts about the Weimar Republic (scroll down) and a devil dodger worries out loud.
“Triple digit oil price is going to change cost-curves. And when it changes cost curves, it is going to change economic geography at the same time. I know that the world of triple digit oil prices has been the domain of the apocalypse. For many people, the advent of peak oil and triple digit oil price means the end of our economy. For some, civilization as we know it. I don’t share that pessimism. I don’t share that outlook. I’m an economist. I believe in the power of prices.”
My understanding of Peak Oil from such websites as Oilcrash.com(Robert Atack’s kiwi contribution), Lifeaftertheoilcrash.net,Postcarbon.org and others is that we are probably on the terminal downslope now of supply and there isn’t any other energy source that can match Oil in scale and ease of use and most especially the EROEI factor which is Energy Return on Energy Invested: For Instance At the start of the Oil Age An Investment of 1 barrel of Oil might return 150 barrels energy equivalent. The Price mechanism isn’t of any use for what is to be one of the biggest transitions Humanity has ever faced! Personally I find it scary, as R.A. says we should have been preparing from 20 years ago,but we humans just are too short term in our thinking,20 years in the future might as well not exist!
The link below gives a 5 minute potted animation of the Industrial Era:
http://www.postcarbon.org/blog-post/176080-the-ultimate-roller-coaster-ride-a
A message for our local governments? Less Motorways much more efficient top class public transport! With triple digit oil prices we are in for another big economic knockdown Worldwide.Eventually triple digit oil will become the norm as supply continues downward.
“And they are right. Give us 10 to 15 years, and we will solve this on the supply side. But as I say, our rendezvous with triple digit oil prices is not in 10 or 15 years; it is in 10 or 15 months. So instead of trying to turn cow-shit into high octane fuel, we are going to have to learn to get off the road, and that is just what happened. In 2009, there were 4 million fewer cars on the road than there were the year before. In the next ten years, 40 million North Americans will be taking the exit lanes. The question is, “Will there be a bus to get on?” Instead of giving $40 billion to General Motors, what we should have done is spend $40 billion on public transit, so there would be a bus to get on.”
Peak Oil has been and gone and we have reached the End of Growth in National economies And The World economy refer this excerpt from Heinberg’s book “The End of Growth” to be published July2011:
http://richardheinberg.com/222-the-end-of-growth
its great to see this post on Jeff Rubin — follow his blog at http://www.jeffrubinssmallerworld.com/
But what is Labour’s response to a looming oil shock.? There was a deafening silence from Labour to the Parliament Report last month “The Next Oil Shock” – http://oilshockhorrorprobe.blogspot.com/2010/10/nz-parliament-report-warns-of-imminent.html
And commentators here and on other left blogs seem reluctant to acknowledge Labour’s weak response so far whenever peak oil is mentioned..
Will Labour continue to pretend like National that “peak oil = peak economy” is not an issue worthy of even acknowledgment let alone a coherent policy response? Or will Labour front foot this issue, take the public into its confidence and in a measured and rational manner, and spell out the very serious implications for our economy and way of life? And then spell out in detail its policies?
Robert Hirsch’s report to the US Dept of Energy said there needed to be world-wide wartime-like crash program of mitigation starting at least 10 years before the peak. We are likely already 10 years too late, but isn’t it time for Labour to show courageous political leadership ?
You could always ask Labour?
I’d start on RedAlert…
I agree. There are some promising signs of life from Labour at the moment, especially from a couple of the younger members.
Yeah man there is some serious fire in the Labour belly at the mo. First we are acting to take Mana, and once that is done and dusted we are going to refocus on…Botany?
“You could always ask Labour?
I’d start on RedAlert…”
searching peak oil or oil shock drew a blank.. seems they are not subjects worthy of an alert – red or otherwise
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Lets ignore all the below statements, the clowns at the MED know better … yeah right.
http://odac-info.org/peak-oil-quotes
Peak Oil Quotes
Statements by key individuals
2010
Fatih Birol, Chief Economist of the International Energy Agency, September 2010 interviewed on BBC One Planet
“It is definitely depressing, more than depressing, I would say alarming, which is what we try to do, to alarm the governments. In many OECD countries….oil consumption came to a peak and it is slowing down, but the growth of the demand is coming from China, the Middle East, India. So demand will grow. The question is, whether or not we will be able to increase the production to meet that demand growth. According to our projections in the World Energy Outlook, even if we were to assume, and this is very important, even if we were to assume the next 20 years global oil demand growth was flat, no growth at all, in order to compensate the decline in the existing fields we have to increase the production about 45m bpd just to stay where we are in 20 years, which means to find and develop 4 new Saudi Arabias, and this is a major challenge.
If we look at the theoretical potential that we have conventional and unconventional oil, then maybe we have a possibility to meet that challenge. But there are tremendous challenges.” View reference
Rebuilding Security – Conservative Energy Policy for and Uncertain World, March 2010 “The last two years have seen extraordinary volatility in the global price of oil. Prices have swung from $147 a barrel in July 2008 to $32 a barrel in December of the same year, and by the end of 2009 prices were back up to between $70 and $80 a barrel – despite the impact of the recession. With most economies now in recovery there are fears of further pressure on prices. As the Industry Taskforce on Peak Oil and Energy Security (consisting of leading companies from the power, engineering and transport sectors) warned this year: “The era of cheap oil is behind us. We must plan for a world in which oil prices are likely to be both higher and more volatile.”” View reference
The US Joint Operating Environment 2010 report, February 2010 “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.” View reference
Chris Barton, Department of Energy and Climate Change (DECC), February 2010 – “We don’t have a firm view on what the future holds for oil supply and demand but we do recognise the risks” View reference
Thierry Desmarest, Chairman of the Board at Total SA, January 28th, 2010 – “The problem of peak oil remains. We have always been relatively prudent in our assessment of a peak oil date in Total between, I would say, the International Energy Agency which was extremely optimistic a few years ago – a bit less today – and some so called experts who were announcing that the peak oil has already taken place. In our opinion it will be very difficult to raise the oil production above 95 million barrels/day, which is something like 10% above today’s level – so its not enormous. Its not that we lack reserves, there are plenty of oil to produced but a lot of it is difficult to be produced. Huge resources like the Athabasca oil sands for instance – when you look to the newsflow of the last 2 or 3 years you have just seen a lot of postponements of projects, not that much because of lack of profitability of projects but also with environmental concerns, as an example among others. So I think we must keep in mind that in a few years from now the market may be in a relatively difficult position in, the energy security concerning oil (because I think for gas we have certainly more time), will be a big problem.”
2009
Andrew Sentance, member of the Bank of England’s Monetary Policy Committee, September 2009 – “On the energy front, I can see substantial upside risks to prices over the coming recovery as demand picks up across the global economy and Asia plays a leading role in the growth of the world economy. Against the background of supply constraints, this creates the potential for continuing price volatility. I do not see supply developments and environmental policy moves changing the energy price environment which became established in the mid-2000s until much later in the next decade.” View reference
Iain Reid, Head of European Oil and Gas research at Macquarie Bank, September 2009 – “This is our view – capacity has pretty much peaked in the sense that declines equal new resources,” View reference
Christophe de Margerie, CEO of Total, September 2009 – “We are running the risk of another oil crisis when demand outstrips supply around 2014 or 2015. There won’t be enough oil and gas by the middle of the next decade.” View reference
Fatih Birol, Chief Economist of the International Energy Agency, August 2009 – “Many governments now are more and more aware that at least the day of cheap and easy oil is over… [however] I’m not very optimistic about governments being aware of the difficulties we may face in the oil supply,” View reference
Vince Cable, Lib Dem Shadow Chancellor of the Exchequer, June 2009 – “Long-term thinking is difficult in the current political crisis, when most politicians are obsessed by tomorrow’s headlines,…but our future as a country depends much more on our ability to plan ahead for the next oil shock and the post-oil world.” View reference
Andris Piebalgs, EU Energy Commissioner, May 2009 “The current relatively low oil prices give a respite to prepare for the coming new oil crisis. We have to reduce our dependency in all those areas in which black gold is not indispensable… And in all sectors, we have to accelerate our efficiency being aware that every barrel of oil that we are using is one of the last.” View reference
Christophe de Margerie , CEO Total, February 2009 The world will never be able to produce more than 89m barrels a day of oil, the head of Europe’s third-largest energy group has warned, citing high costs in areas such as Canada and political restrictions in countries such as Iran and Iraq. Christophe de Margerie, chief executive of Total, the French oil and gas company, said he had revised his forecast for 2015 oil production downward by at least 4m barrels a day because of the current economic crisis and the collapse in oil prices. View reference
2008
Katsuaki Watanabe, President, Toyota– June 2008 “Our view is that oil production will peak in the near future. We need to develop power train(s) for alternative energy sources.” View reference
T. Boone Pickens, Chair BP Capital Management hedge fund – 17th June 2008 “I do believe we have peaked out at 85 million barrels a day globally,” View reference
Shokri Ghanem – head of Libya’s National Oil Corporation, 8th June 2008 “The easy, cheap oil is over. Peak oil is looming” View reference
Jeroen van de Veer – CEO of Shell, 22nd January 2008 “Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.” View reference
Rick Wagoner – ex GM Chairman and Chief Exec, at the Detroit Motor Show, 13th January, 2008 “There is no doubt demand for oil is outpacing supply at a rapid pace, and has been for some time now,…As a business necessity and an obligation to society we need to develop alternative sources of propulsion.” View reference
Dave O’Reilly – Chevron, 15th February 2008, “We’re seeing the beginnings of a bidding war for Middle Eastern oil between east and west,” View reference
Fatih Birol – IEA, writing in The Independent 2nd March 2008 – “We are on the brink of a new energy order. Over the next few decades, our reserves of oil will start to run out and it is imperative that governments in both producing and consuming nations prepare now for that time. We should not cling to crude down to the last drop – we should leave oil before it leaves us. That means new approaches must be found soon….. The really important thing is that even though we are not yet running out of oil, we are running out of time.” View reference
George W. Bush, March 5th 2008 “We gotta get off oil, American has got to change its habits,”.. “It should be obvious to all, demand has outstripped supply, which makes prices go up.” View reference
James W. Buckee -Retired President and CEO of Talisman Energy Inc., 29th January 2008. “If you think that at the moment the world is consuming 30-plus billion barrels a year of oil and is finding seven or eight billion barrels a year, and this state of affairs has been going on now for 20 or more years. “It’s obviously unsustainable and the world is increasingly drawing on the bigger, older fields. You couple that notion with the irreversibility of decline and you’ve got a very alarming picture.” View reference
Jeremy Leggett and Shell – Advertisement appeared in Time Europe Edition, one of the CNN Principal Voices series, 31st March 2008 “A premature topping point in global oil production would wipe out economic plans currently on offer in boardrooms and finance ministries around the world. This is because such plans assume growing supplies of affordable oil for several decades to come.“ View reference
2007
Sadad al-Huseini – former head of exploration and production at Saudi Aramco, 31st October, 2007 “The evidence is that in spite of the increases – very large increases – in oil prices over the last four years, we haven’t been able to match that with increasing capacity. So, essentially, we are on a plateau.” View reference
Christophe de Margerie – CEO Total, 30/31st October 2007. “100m barrels per day is now in my view an optimistic case…” View reference
Fatih Birol – IEA, interviewed in Le Monde, June 2007 “From now to 2015, the market and the oil industry will be severely tested. In the next five to ten years, oil production from non-OPEC producers will reach a peak before starting to decline, for lack of sufficient reserves. As each day passes, new evidence of this fact appears. At the same time the peak of the economic expansion phase of China will take place. The two events will coincide: the explosion of the growth of the Chinese demand, and the fall in production of non-OPEC oil. Will our oil system be it able to answer this challenge, that is the question.” “If production does not increase in Iraq in an exponential way between now and 2015, we have a very big problem, even if Saudi Arabia meets its obligations. The figures are very simple, you do not need to be an expert. It is enough to know how to do a subtraction. China will grow very quickly, India also, and even Saudi Arabia projections of the 3 Mb/day will not be enough to meet the rise of Chinese demand.” View reference
Lord Oxburgh- former CEO of Shell, September 2007 “…you’ve got three main variables: rising world demand, and it’s a bit hard to predict exactly how fast that is going to rise; how much oil is going to be available; and how fast substitutes for oil come to market (synthetic fuels can be made in quite a number of ways). But all of that said I don’t think this is going to happen in the next five years, and I would be surprised if the difficulties ahead had not really emerged within the next twenty.”
“The message in short is that we are just about to enter hot water, quite serious hot water. And the danger is that we sit there blissfully like the frog in the pan of water gently heating on the stove until – as the Irish would say – it wakes up to find itself dead. In other words we may be sleepwalking into a problem which is actually going to be very serious and that it may be too late to do anything about it by the time we are fully aware.” View reference
2005
Dr. James Schlesinger – former US Energy Secretary, 16th November 2005 “In the longer run, unless we take serious steps to prepare for the day that we can no longer increase production of conventional oil, we are faced with the possibility of a major economic shock—and the political unrest that would ensue.” View reference
Dave O’Reilly – CEO, Chevron in their Real Issues Ad, 12th July 2005 “Energy will be one of the defining issues of this century. One thing is clear: the era of easy oil is over. What we all do next will determine How well we meet the energy needs of the entire world in this century and beyond.” “It took us 125 years to use the first trillion barrels of oil. We’ll use the next trillion in 30.“ View reference
References from the press
2010
The Financial Times, 21st April, 2010 “Are policymakers, economists and peak oilists starting to speak the same language? A rash of papers, comments and interviews have made us think this recently. It’s not as simple as ‘policymakers are waking up to peak oil’, but that all those groups — and indeed, industry — are increasingly talking about the same issues looming in fossil fuel production, even if they’re using different terminology.” View original article
2008
The Independent Lead Article, 28th April 2008 “In the broader context, this crisis must be seen as part of the global energy squeeze. It has been clear for some time that global demand for oil has been outstripping supply. That is what is pushing up prices around the world. That a relatively minor industrial dispute such as this can have such a knock-on effect demonstrates how dependent Britain is on a relatively small number of supply outlets. The Grangemouth dispute will eventually, no doubt, be settled, but the chronic crisis of our economy’s total reliance on environmentally damaging and dwindling oil supplies will continue.” View original article
Financial Times Lead Article, 17th April 2008 “Preparing for the age of peak oil – Russia’s vast oil and gas reserves were seen not so long ago as the best hope of meeting growing world energy demand. No more. This week a top Russian oil executive echoed earlier official warnings that oil production could fall for the first time in a decade.” View original article
2007
Independent, 17th September 2007 “Oil Industry ‘Sleepwalking into crisis’ – Former Shell chairman says that diminishing resources could push price of crude to $150 a barrel’ View original article
CNNMoney.com – 7th August 2007 “Why oil won’t hit $100 – New production, new energy sources and some conservation could push down prices by 2010 – but don’t expect $20 a barrel anytime soon.” View original article
William Rees Mogg, The Times, 16th July 2007 “Oil ruled the 20th century; the shortage of oil will rule the 21st. There is now no doubt about the rising trend of oil prices.” View original article
Financial Times, 10th July 2007 “World will face oil crunch in five years – IEA says supply falling faster than expected.” View original article
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Permaculture Research Institute of Australia » Peak Oil – “The Debate is Over
http://permaculture.org.au/2010/11/10/peak-oil-the-debate-is-over/
Peak Oil – “The Debate is Over”
Consumerism, Economics, Food Shortages, Society, peak oil — by Craig Mackintosh November 10, 2010
It’s been a long time coming, but the uber-significant Peak Oil issue has finally started to infiltrate the corridors of power. What they’ll do with this information remains to be seen….
There is no reason for optimism. — Dr. James Schlesinger (former Secretary of Defence and the U.S.’s first Secretary of Energy)
I made mention recently of the leaked German Military Peak Oil study (German PDF here, key points summarised in English here) which looked at the Peak Oil issue from a national security standpoint. Now the New Zealand government has created their own study — releasing it publicly, rather than forcing some conscientious and concerned person to have to sneak it out the back door.
The summary findings of the study are almost word-for-word with what I wrote a long time ago (here and here for example).
Although there remain large reserves of oil which can be extracted, the world’s daily capacity to extract oil cannot keep increasing indefinitely. A point will be reached where it is not economically and physically feasible to replace the declining production from existing wells and add new production fast enough for total production capacity to increase. Projections from the IEA and other groups have this occurring, at least temporarily, as soon as 2012.
The difference between the global capacity to produce oil and global demand is the supply buffer. When the supply buffer is large, oil prices will be low. When the supply buffer shrinks – due to demand rising faster than production capacity or production capacity falling – prices will rise as markets add in the risk that supply will not be available to meet demand at any given point in time.
When a supply crunch forces oil prices beyond a certain point, the cost of oil forces consumers and businesses to cut other spending, inducing a recession. The recession destroys demand for oil, allowing prices to drop. Major international organisations are warning of another supply crunch as soon as 2012.
The world may be entering an era defined by relatively short periods of economic growth terminating in oil price spikes and recession.
New Zealand is not immune to the consequences of this situation. In fact, its dependency on bulk exports and tourism makes New Zealand very vulnerable to oil shocks. — The Next Oil Shock? Parliamentary Library Research Paper (emphasis added)
What we’re talking about is, quite simply, perpetual recession:
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. — The Next Oil Shock? Parliamentary Library Research Paper
END SNIP