NoRightTurn: National on energy

Written By: - Date published: 9:14 am, November 15th, 2011 - 9 comments
Categories: energy, Mining - Tags:

No Right Turn: National on energy

National has released its energy policy [PDF]. The short version? “Drill it, mine it, sell it”. Yes, seriously:

Our petroleum estate is under-explored. An independent valuation has put a value of $8 billion to $12 billion on potential future royalties from oil and gas production. Making New Zealand a destination for more exploration has the potential to contribute billions to our economy, and create higher-value jobs. Our new approach will focus on areas of greatest potential, emphasise safety, and allow more transparent engagement with local communities, industry, and iwi.

No mention of course of the environmental impacts of this proposed massive expansion in drilling and mining, or of its consequences for other policy areas such as climate change (or indeed, that 90% renewable target they’ve supposedly committed to). Just a bright, shiny future, funded by magic money put in the ground by Leprechauns. Which we haven’t discovered yet. Its like basing your household budget on winning the lottery – laughable in an individual, downright scary in a country.

As for the rest of the policy, there’s nothing there. They’re talking up home insulation, but not promising to do any more of it (their 50,000 new homes is part of their deal with the Greens, not new homes). There’s the usual empty promises of making the electricity market “more competitive”, as if that will somehow stop its new foreign owners from raising prices and bleeding us dry like the Aussie banks do. And of course National Grid upgrades – which is something they’ve already agreed to do. As for moving us to a more sustainable energy path, or dealing with peak oil when it comes, National just doesn’t want to know.

9 comments on “NoRightTurn: National on energy”

  1. Afewknowtheturth 1

    ‘ dealing with peak oil when it comes’


    Peak conventional oil was 2005.

    And the desperation attempts to prop up global economic arrangements via unconventional oil are coming unstuck right now.

    This excellent analysis indicates NZ will be in very, very deep trouble by 2015

    • Draco T Bastard 1.1

      This ‘triangle of hope’ in the top left corner of the chart, terminates (and I use the word advisedly!) in about 2016, five years from today.

      That’s about when I was guestimating when NZ and a large part of the world would have no oil. It’s pretty much my basis for the brown stuff hitting the whirly thing by 2020 guestimate.

      • Colonial Viper 1.1.1

        There will still be plenty of oil 2015-2016, just not oil most of us can afford to use.

        • Draco T Bastard

          Yep, and when most of us can’t afford to go to work because the only option is private cars because the stupid governments of the last few decades have been building roads rather than public transport the entire economy collapses.

  2. hoom 2

    $8 billion to $12 billion on potential future royalties from oil and gas production

    Over what time period?
    Over 5 years? 50 years?
    $8-12 billion per-year for 50 years & it might be worth considering but 8-12 total is appallingly low.

  3. Richard Watts 3

    It won’t make our petrol prices any cheaper, ask the farmers about our local milk prices. Personally we have two choices:
    1. Get off oil.
    2. Let oil smack us in the face as it leaves town.

    • Lanthanide 3.1

      In a truly energy constrained future, having domestic supply may be the difference between having oil and not having oil.

      Our oil is normally very sweet and light and fetches high prices, while the oil we actually import is generally of a much lower grade. Having supplies of very desirable sweet crude, even if we can’t use it, may open up trading deals where we can actually get better value out of the oil than we currently do. Eg at the moment we might sell our crude for $130/barrel and import other stuff for $90. But in the future we might be able to directly trade 1 barrel of sweet crude for 2 barrels of lower grade.

  4. exitlane 4

    “Our petroleum estate is under-explored. An independent valuation has put a value of $8 billion to $12 billion on potential future royalties from oil and gas production.”
    Pure guesswork based on even more guesswork.  How can you possibly “value” a royalty stream from oil and gas not even discovered yet.  see here why this is a mirage.
    even if you suspend belief for a moment it takes well into the 2020’s- 2030’s before the majority of this “income” would be available
    meanwhile we face an oil supply chasm in the next decade as production from existing fields declines sharply in the next three years to near zero by 2020, while our annual  year-on-year oil import bill soars to Christchurch earthquake proportions by 2015 ( assuming there will be oil to import by then ? )
    we desperately need an urgent fuel savings plan.  National is deep in denial,  but none of the main parties including Labour and the Greens are willing to face up to our dangerous exposure of having to rely almost entirely on imported oil.

  5. Key’s secret meeting with Anadarko Oil, last Tuesday bears some scrutiny. This company had an apalling record in the Guld of Mexico disaster last year, and tried to evade responsibility for the clean-up.

    Since then, their junk bond status – downgraded by Moodys soon after the Deepwater Horizon explosion – has made then motre of a liability than an asset. Could they afford to clean up a major spill here in NZ?

    Or would they do a runner, as they tried to last year?

    I wonder if this is one of the issues John Key wants discussed, instead of you-know-what?

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