Rock and a hard place

Written By: - Date published: 11:49 am, May 11th, 2012 - 20 comments
Categories: economy, energy - Tags:

The world is in a second mini-recession/stall since the Great Recession began in 2008. As in 2010, we’ve seen oil prices ramp up and growth peter out. Now, because growth/oil demand is down, oil prices have dropped back a little. But the moment the economy shows mild signs of life, they’ll be back up again. Short periods of weak growth, oil price shocks, recessions – sounds like the cycle peak oil economists have predicted for years.

And before anyone says ‘well, we’ll just frack our way out of this problem’ or ‘electric cars to the rescue’ understand this: those are expensive energy sources (and also limited in their scalability). The problem we’re facing is not that we’re running out of energy but that we’re running out of energy that is cheap enough to burn and maintain the superstructure of our economy. Put another way, the ‘cost’ of an energy source is the energy that needs to be expended in accessing it – as we replace exhausted easy energy sources with ones that use a higher percentage of their energy potential to be accessed, the amount left for ‘everything else’, the economy, shrinks.

Only rising energy use efficiency or, more accurately, the fact there are so many low-hanging fruit of extravagant, low-value energy use that can be cut is allowing some moderate growth in the space between oil price shocks.

This isn’t an apocalypse, like that dinosaur John Armstrong, said yesterday. It’s a new challenge and it requires a new outlook that doesn’t assume growth is natural, inevitable, and the be all and end all of our society.

20 comments on “Rock and a hard place ”

  1. Lanthanide 1

    At the moment there’s a lot of demand from Japan since they shut down their nuclear power. I saw a number of something like 500,000 barrels of oil per day demand just for this.

    • Colonial Viper 1.1

      That’s about right; and it is also why the Japanese Government asked the US to be exempted from the embargo of Iranian oil. The Japanese nation risks being energy starved and even a 5% reduction of oil supplies would be a disaster for their economy.

      • Reagan Cline 1.1.1

        Does the embargo apply to the recently publicised agreement for China to buy Iranian oil with renminbi ?

  2. Agreed James and Central and Local Government need to realise that it is an issue for now, not something that you can put off for a decade or two.

    It should be at the forefront of every regional or national transport strategy as a threat.  Regrettably many strategies do not even mention it.

    • ad 2.1

      Of course we could all do more, but let’s take that car-happy wonderland Auckland for an example. All the trains are going fully electric in 2013-14- and it’s taking a couple of years just to get all those masts and wires in place, let alone build the trains.

      There’s a comprehensive review of all bus routes coming up this year, which will make buses a whole lot more accessable to a lot more of Auckland.

      In some of the difficult stretches of Auckland, like say Remuera Road and Lincoln Road, there are already designs well advanced for putting in bus lanes in which cars travel only if they have three people in them.

      I am not proposing that anyone be grateful, but things are underway in Auckland that have never been this comprehensive or effective in their efficiency drive.

      Regrettably, this is never going to be Melbourne.

      Just a question: have we really truly tested the elasticity of fuel demand since the 1979-1981 oil shocks?

    • Pete 2.2

      Local government may already be looking into it. Down here in Dunedin the council commissioned the Peak Oil Vulnerability Analysis Report (PDF).

      The consultants recommend that Dunedin should work on five objectives to enhance adaptive capacity, social, economic and cultural wellbeing, while requiring significantly less expenditure on transport fuel:
      *Plan to reduce oil consumption by 50% by 2050
      *Transition Dunedin’s urban form with central city lifestyle development, and urban villages, accessed by 100km of safe bikeways and pedestrian zones and served by public transport.
      *Build an electric trolley bus system using efficient modern technology made in New Zealand.
      *Improve Dunedin’s average vehicle fleet efficiency to 5 litres per 100km by 2030.
      *Audit and track fuel use in all sectors, organisations and households and develop action plans.

      I would imagine Wellington under Celia Wade-Brown is exploring similar paths. What matters is whether these are genuine plans rather than just greenwashing.

      • McFlock 2.2.1

        Given the council just got another $2mil of six-month operating shortfall from the stadium, I’d call it greenwashing.

        • Pete 2.2.1.1

          Between the new waterfront hotel/apartment complex announced today and the discussion of suburban development in this week’s Star, they might be moving towards the “central city lifestyle development and urban village” model. You’ll recall they also announced a couple of months ago that they plan to look at the one-way system. If they plan it right, they can have a gradual transition rather than a radical revolution.

  3. Bill 3

    “…it requires a new outlook that doesn’t assume growth is natural, inevitable, and the be all and end all of our society.”

    And so your post-market economy suggestion is…?

    • Dr Terry 3.1

      Yes, you might well quote and question the awful Armstrong statement, Bill. What does he believe is the “be all and end all” of culture and society? I would love to hear his answer (something better, I hope, than trite words like “new challenge”, “new outlook”). Apparently society can get along fine with no growth (economic, psychological, educational, spiritual, – even oil). Let’s just settle for happy stagnation!

  4. maffoo 4

    I know, lets sell the only means we have of making fossil-fuel-free energy !! that’ll help !

  5. captain hook 5

    fait ccompli.
    we are moving into a new reality.
    woo hoo.
    watchout!

  6. Liberal Realist 6

    EROEI = Usable Acquired Energy / Energy Expended.
    ^It’s a simple equation, too bad our politicians can’t grasp it.

  7. Georgecom 7

    Good news for the economy, price of oil is easing. Bad news for motorists, so is the dollar. So I am not expecting to see the price of oil slip much in the next little while, if it goes down at all. I do wonder however how motorists will feel if it edges up around $2.40 or more if the dollars slips below 70 c US.

  8. johnm 8

    Richard Heinberg :

    “Visualize life without gasoline. You might as well start doing so now, at least in imagination; soon enough, this will no longer be an exercise. Already prices are high and volatile. Next we’ll see international conflicts that shut down big portions of the global oil trade for weeks or months at a time. Strategic reserves will be tapped. The government will commandeer supplies for the military and police. One way or another, you’ll be using much less gasoline than you do today. How will your food be grown and transported? How will you get around? Will your job still exist? How will your community function?”

    Link: http://www.postcarbon.org/blog-post/840439-visualize-gasoline

    The end of the oil age has been happening since Peak Oil in 2005 and the Financial Collapse of 2008.
    We are at the end of growth too obviously how will we share a contracting pie? With greater inequality or more sharing?

  9. jack 9

    There are other sources of energy. Water being one of them but the oil cartels will do anything
    to keep that technology away from the pubic. Google Stan Meyers. He is one of many pioneers who had a deep desire to make us less dependent on oil. Took him 20 years to break the water
    molecule down and get more energy than what he put in..He thought he was a patriot.. He’s dead. Also, Google Nicola Tesla. His one aim in life was to make electricity free to everyone.. Yet, no one has heard of him. The father of AC current.

    The oil cartels rule the world. We’re at their mercy. Simple fact. You don’t have to like it but you
    can’t do anything about it. On the positive side shipping might be too expensive and local manufacturs will be back in business. More jobs.

  10. Even the IMF have woken up to peak oil see following for reference

    and Muldoon was right – think big was necessary – just not in 1980

    http://howdaft.blogspot.co.nz/2012/05/muldoon-vindicated.html 

    http://www.imf.org/external/pubs/cat/longres.aspx?sk=25884 

Recent Comments

Recent Posts

  • Patterson promoting NZ’s wool sector at International Congress
    Associate Agriculture Minister Mark Patterson is speaking at the International Wool Textile Organisation Congress in Adelaide, promoting New Zealand wool, and outlining the coalition Government’s support for the revitalisation the sector.    "New Zealand’s wool exports reached $400 million in the year to 30 June 2023, and the coalition Government ...
    BeehiveBy beehive.govt.nz
    15 hours ago
  • Removing red tape to help early learners thrive
    The Government is making legislative changes to make it easier for new early learning services to be established, and for existing services to operate, Associate Education Minister David Seymour says. The changes involve repealing the network approval provisions that apply when someone wants to establish a new early learning service, ...
    BeehiveBy beehive.govt.nz
    19 hours ago
  • McClay reaffirms strong NZ-China trade relationship
    Trade, Agriculture and Forestry Minister Todd McClay has concluded productive discussions with ministerial counterparts in Beijing today, in support of the New Zealand-China trade and economic relationship. “My meeting with Commerce Minister Wang Wentao reaffirmed the complementary nature of the bilateral trade relationship, with our Free Trade Agreement at its ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Prime Minister Luxon acknowledges legacy of Singapore Prime Minister Lee
    Prime Minister Christopher Luxon today paid tribute to Singapore’s outgoing Prime Minister Lee Hsien Loong.   Meeting in Singapore today immediately before Prime Minister Lee announced he was stepping down, Prime Minister Luxon warmly acknowledged his counterpart’s almost twenty years as leader, and the enduring legacy he has left for Singapore and South East ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • PMs Luxon and Lee deepen Singapore-NZ ties
    Prime Minister Christopher Luxon held a bilateral meeting today with Singapore Prime Minister Lee Hsien Loong. While in Singapore as part of his visit to South East Asia this week, Prime Minister Luxon also met with Singapore President Tharman Shanmugaratnam and will meet with Deputy Prime Minister Lawrence Wong.  During today’s meeting, Prime Minister Luxon ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Antarctica New Zealand Board appointments
    Foreign Minister Winston Peters has made further appointments to the Board of Antarctica New Zealand as part of a continued effort to ensure the Scott Base Redevelopment project is delivered in a cost-effective and efficient manner.  The Minister has appointed Neville Harris as a new member of the Board. Mr ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Finance Minister travels to Washington DC
    Finance Minister Nicola Willis will travel to the United States on Tuesday to attend a meeting of the Five Finance Ministers group, with counterparts from Australia, the United States, Canada, and the United Kingdom.  “I am looking forward to meeting with our Five Finance partners on how we can work ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Pet bonds a win/win for renters and landlords
    The coalition Government has today announced purrfect and pawsitive changes to the Residential Tenancies Act to give tenants with pets greater choice when looking for a rental property, says Housing Minister Chris Bishop. “Pets are important members of many Kiwi families. It’s estimated that around 64 per cent of New ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Long Tunnel for SH1 Wellington being considered
    State Highway 1 (SH1) through Wellington City is heavily congested at peak times and while planning continues on the duplicate Mt Victoria Tunnel and Basin Reserve project, the Government has also asked NZ Transport Agency (NZTA) to consider and provide advice on a Long Tunnel option, Transport Minister Simeon Brown ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Zealand condemns Iranian strikes
    Prime Minister Christopher Luxon and Foreign Minister Winston Peters have condemned Iran’s shocking and illegal strikes against Israel.    “These attacks are a major challenge to peace and stability in a region already under enormous pressure," Mr Luxon says.    "We are deeply concerned that miscalculation on any side could ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Huge interest in Government’s infrastructure plans
    Hundreds of people in little over a week have turned out in Northland to hear Regional Development Minister Shane Jones speak about plans for boosting the regional economy through infrastructure. About 200 people from the infrastructure and associated sectors attended an event headlined by Mr Jones in Whangarei today. Last ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Health Minister thanks outgoing Health New Zealand Chair
    Health Minister Dr Shane Reti has today thanked outgoing Health New Zealand – Te Whatu Ora Chair Dame Karen Poutasi for her service on the Board.   “Dame Karen tendered her resignation as Chair and as a member of the Board today,” says Dr Reti.  “I have asked her to ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Roads of National Significance planning underway
    The NZ Transport Agency (NZTA) has signalled their proposed delivery approach for the Government’s 15 Roads of National Significance (RoNS), with the release of the State Highway Investment Proposal (SHIP) today, Transport Minister Simeon Brown says.  “Boosting economic growth and productivity is a key part of the Government’s plan to ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Navigating an unstable global environment
    New Zealand is renewing its connections with a world facing urgent challenges by pursuing an active, energetic foreign policy, Foreign Minister Winston Peters says.   “Our country faces the most unstable global environment in decades,” Mr Peters says at the conclusion of two weeks of engagements in Egypt, Europe and the United States.    “We cannot afford to sit back in splendid ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • NZ welcomes Australian Governor-General
    Prime Minister Christopher Luxon has announced the Australian Governor-General, His Excellency General The Honourable David Hurley and his wife Her Excellency Mrs Linda Hurley, will make a State visit to New Zealand from Tuesday 16 April to Thursday 18 April. The visit reciprocates the State visit of former Governor-General Dame Patsy Reddy ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Pseudoephedrine back on shelves for Winter
    Associate Health Minister David Seymour has announced that Medsafe has approved 11 cold and flu medicines containing pseudoephedrine. Pharmaceutical suppliers have indicated they may be able to supply the first products in June. “This is much earlier than the original expectation of medicines being available by 2025. The Government recognised ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • NZ and the US: an ever closer partnership
    New Zealand and the United States have recommitted to their strategic partnership in Washington DC today, pledging to work ever more closely together in support of shared values and interests, Foreign Minister Winston Peters says.    “The strategic environment that New Zealand and the United States face is considerably more ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Joint US and NZ declaration
    April 11, 2024 Joint Declaration by United States Secretary of State the Honorable Antony J. Blinken and New Zealand Minister of Foreign Affairs the Right Honourable Winston Peters We met today in Washington, D.C. to recommit to the historic partnership between our two countries and the principles that underpin it—rule ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • NZ and US to undertake further practical Pacific cooperation
    Foreign Minister Winston Peters has announced further New Zealand cooperation with the United States in the Pacific Islands region through $16.4 million in funding for initiatives in digital connectivity and oceans and fisheries research.   “New Zealand can achieve more in the Pacific if we work together more urgently and ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Government redress for Te Korowai o Wainuiārua
    The Government is continuing the bipartisan effort to restore its relationship with iwi as the Te Korowai o Wainuiārua Claims Settlement Bill passed its first reading in Parliament today, says Treaty Negotiations Minister Paul Goldsmith. “Historical grievances of Te Korowai o Wainuiārua relate to 19th century warfare, land purchased or taken ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Focus on outstanding minerals permit applications
    New Zealand Petroleum and Minerals is working to resolve almost 150 outstanding minerals permit applications by the end of the financial year, enabling valuable mining activity and signalling to the sector that New Zealand is open for business, Resources Minister Shane Jones says.  “While there are no set timeframes for ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Applications open for NZ-Ireland Research Call
    The New Zealand and Irish governments have today announced that applications for the 2024 New Zealand-Ireland Joint Research Call on Agriculture and Climate Change are now open. This is the third research call in the three-year Joint Research Initiative pilot launched in 2022 by the Ministry for Primary Industries and Ireland’s ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Tenancy rules changes to improve rental market
    The coalition Government has today announced changes to the Residential Tenancies Act to encourage landlords back to the rental property market, says Housing Minister Chris Bishop. “The previous Government waged a war on landlords. Many landlords told us this caused them to exit the rental market altogether. It caused worse ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Boosting NZ’s trade and agricultural relationship with China
    Trade and Agriculture Minister Todd McClay will visit China next week, to strengthen relationships, support Kiwi exporters and promote New Zealand businesses on the world stage. “China is one of New Zealand’s most significant trade and economic relationships and remains an important destination for New Zealand’s products, accounting for nearly 22 per cent of our good and ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Freshwater farm plan systems to be improved
    The coalition Government intends to improve freshwater farm plans so that they are more cost-effective and practical for farmers, Associate Environment Minister Andrew Hoggard and Agriculture Minister Todd McClay have announced. “A fit-for-purpose freshwater farm plan system will enable farmers and growers to find the right solutions for their farm ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • New Fast Track Projects advisory group named
    The coalition Government has today announced the expert advisory group who will provide independent recommendations to Ministers on projects to be included in the Fast Track Approvals Bill, say RMA Reform Minister Chris Bishop and Regional Development Minister Shane Jones. “Our Fast Track Approval process will make it easier and ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Pacific and Gaza focus of UN talks
    Foreign Minister Winston Peters says his official talks with the United Nations Secretary-General Antonio Guterres in New York today focused on a shared commitment to partnering with the Pacific Islands region and a common concern about the humanitarian catastrophe in Gaza.    “Small states in the Pacific rely on collective ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Government honours Taranaki Maunga deal
    The Government is honouring commitments made to Taranaki iwi with the Te Pire Whakatupua mō Te Kāhui Tupua/Taranaki Maunga Collective Redress Bill passing its first reading Parliament today, Treaty Negotiations Minister Paul Goldsmith says. “This Bill addresses the commitment the Crown made to the eight iwi of Taranaki to negotiate ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Enhanced partnership to reduce agricultural emissions
    The Government and four further companies are together committing an additional $18 million towards AgriZeroNZ to boost New Zealand’s efforts to reduce agricultural emissions. Agriculture Minister Todd McClay says the strength of the New Zealand economy relies on us getting effective and affordable emission reduction solutions for New Zealand. “The ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • 110km/h limit proposed for Kāpiti Expressway
    Transport Minister Simeon Brown has welcomed news the NZ Transport Agency (NZTA) will begin consultation this month on raising speed limits for the Kāpiti Expressway to 110km/h. “Boosting economic growth and productivity is a key part of the Government’s plan to rebuild the economy and this proposal supports that outcome ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand Biosecurity Awards – Winners announced
    Two New Zealanders who’ve used their unique skills to help fight the exotic caulerpa seaweed are this year’s Biosecurity Awards Supreme Winners, says Biosecurity Minister Andrew Hoggard. “Strong biosecurity is vital and underpins the whole New Zealand economy and our native flora and fauna. These awards celebrate all those in ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Attendance action plan to lift student attendance rates
    The Government is taking action to address the truancy crisis and raise attendance by delivering the attendance action plan, Associate Education Minister David Seymour announced today.   New Zealand attendance rates are low by national and international standards. Regular attendance, defined as being in school over 90 per cent of the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • World must act to halt Gaza catastrophe – Peters
    Foreign Minister Winston Peters has told the United Nations General Assembly (UNGA) in New York today that an immediate ceasefire is needed in Gaza to halt the ongoing humanitarian catastrophe.    “Palestinian civilians continue to bear the brunt of Israel’s military actions,” Mr Peters said in his speech to a ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Speech to United Nations General Assembly: 66th plenary meeting, 78th session
    Mr President,   The situation in Gaza is an utter catastrophe.   New Zealand condemns Hamas for its heinous terrorist attacks on 7 October and since, including its barbaric violations of women and children. All of us here must demand that Hamas release all remaining hostages immediately.   At the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government woolshed roadshow kicks off
    Today the Government Agriculture Ministers started their national woolshed roadshow, kicking off in the Wairarapa. Agriculture Minister Todd McClay said it has been a tough time for farmers over the past few years. The sector has faced high domestic inflation rates, high interest rates, adverse weather events, and increasing farm ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • PM heads to Singapore, Thailand, and Philippines
    Prime Minister Christopher Luxon will travel to Singapore, Thailand and the Philippines this week (April 14-20), along with a senior business delegation, signalling the Government’s commitment to deepen New Zealand’s international engagement, especially our relationships in South East Asia. “South East Asia is a region that is more crucial than ever to ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Prime Minister launches Government Targets
    Prime Minister Christopher Luxon has announced further steps to get New Zealand back on track, launching nine ambitious Government Targets to help improve the lives of New Zealanders. “Our Government has a plan that is focused on three key promises we made to New Zealanders – to rebuild the economy, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Natural hydrogen resource should be free of Treaty claims entanglement
    Natural hydrogen could be a game-changing new source of energy for New Zealand but it is essential it is treated as a critical development that benefits all New Zealanders, Resources Minister Shane Jones says. Mr Jones is seeking to give regulatory certainty for those keen to develop natural, or geological, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government responds to unsustainable net migration
    ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand on stage at global Space Symposium
    Space Minister Judith Collins will speak at the Space Symposium in the United States next week, promoting New Zealand’s rapidly growing place in the sector as we work to rebuild the economy. “As one of the largest global space events, attended by more than 10,000 business and government representatives from ...
    BeehiveBy beehive.govt.nz
    1 week ago

Page generated in The Standard by Wordpress at 2024-04-16T15:34:19+00:00