The unexpected oil crisis

Written By: - Date published: 9:30 am, January 16th, 2016 - 186 comments
Categories: China, climate change, Economy, economy, energy, Globalisation, International, iraq, Syria - Tags:

Opec cheap oil

In a scenario put out late last year by the International Energy Agency, the price of oil might not again reach up to the US$50 to $60 range until the 2020s. Maybe won’t get back to US$85 until 2040. Right now it’s selling at $33 per barrel. This scenario would have a few big consequences.

As noted in Salon, the countries who own major oil companies and would forego that massive income will hurt. Think of what that low price may put at risk: Venezuela’s social programmes, Nigeria’s stability such as it is, Iraq’s postwar recovery, Iran’s post-sanctions recovery, etc. Maybe Russia and Saudi Arabia have enough cash saved not to worry about their state expenditures, and to keep their international engagement strong. Still, it’s not just BP and Shell that’s hurting.

This impact, as New Zealand and Alaska have already seen, also falls upon regions who need fresh investment and good jobs. They too have expected that major explorers would keep investing locally. East Timor, Tasmania, Indonesia, Myanmar, the Falklands, even New Plymouth and Dunedin. Many such peripheral and developing economies will feel the hurt as oil exploration largely ceases.

The politics of this will be that all but a few oil-producing countries will become less politically influential. Countries like Denmark, Spain, US and China who have great oil-substitution industries will rise.

This also matters for whole sharemarkets. Listed oil stocks don’t start looking so good. Schadenfreude, until we remember that a whole bunch of many public and private superannuation funds are at stake. Including ours.

Perhaps the longer term net outcome is that the world has just bought itself more time to make the adjustments towards a less oil-reliant future. Maybe, for now, it’s both a good and a bad thing; but if it’s continuing, it’s a massive thing.

This may not play out. Maybe Saudi Arabia and Iran will go to war. Maybe China will boom again and revert to buying gas-inefficient cars. Maybe ISIS starts winning again. None of these are more likely than the current trend.

We appear to be in a low oil price track for the medium term, and that has major consequences.

186 comments on “The unexpected oil crisis ”

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  1. travellerev 1
    16 January 2016 at 9:38 am

    There is nothing unexpected about this. Not unless you’ve been living under a rock since 9/11. The utter destruction of the US economy by outsourcing all the jobs to third world countries, the collapse of China’s fake bubbles, the collapse of the Baltic dry index, the illegal wars of aggression against Muslim countries and the money printing to keep the banking Ponsi scheme going were all indicative of an unsustainable global economy based on fraudulent fiat currencies. That is collapsing now and if people can’t afford oil the market for that collapses too!

    • Paul 1.1
      16 January 2016 at 10:03 am

      A website worth following on this
      http://robinwestenra.blogspot.co.nz/

    • Colonial Viper 1.2
      16 January 2016 at 10:42 am

      Correct. People need to recognise that the oil price is low because demand is flat as a consequence of economic stagnation.

      Even super low oil prices aren’t enough to stimulate poor people to spend more or for corporations to take on more staff, that’s how shit the real world economic situation is.

      Our financial system has also created the perversity of lower prices forcing production UP. Because highly indebted shale plays need to pump even more to try and cover their cashflow requirements.

      One other thing of note: even despite demand being flat and US shale output maxxing out…surplus production is only sitting at about 1.5M bb/day out of a total global consumption of 90+M bb/day.

      Anyone can see that a small production surplus like that can disappear overnight and all of a sudden oil will be back up at $100bb.

      And it is the volatility and unpredictability of this oil price which will destroy entire economies.

    • Draco T Bastard 1.3
      16 January 2016 at 11:02 am

      I was going to agree with you until “fraudulent fiat currencies” which is, quite simply, a load crock. All currencies are fiat including the Gold Standard.

      The problem with the present financial system is that the private banks create the money, charge interest on it and they can do it without limit.

      We must move to a sovereign monetary system where the government creates the money, spends it into the economy and then taxes it back out of existence.

      • travellerev 1.3.1
        16 January 2016 at 12:29 pm

        Hence the words Ponsi scheme and FRAUDULENT fiat currencies!

        • Draco T Bastard 1.3.1.1
          16 January 2016 at 1:17 pm

          The present system is a Ponzi scheme and thus fraudulent but that doesn’t make fiat currencies fraudulent. It’s the private creation of money that makes the present system fraudulent and that includes BitCoin and other digital currencies.

          • travellerev 1.3.1.1.1
            16 January 2016 at 3:35 pm

            Bitcoin is of an entirely different nature. Fiat currencies by their nature are fragile and prone to fraud. It can work but requires dedication and honesty and they generally don’t last long. But hey shells have been used with great success as money too!

            • Draco T Bastard 1.3.1.1.1.1
              16 January 2016 at 4:15 pm

              Bitcoin is of an entirely different nature.

              No it’s not.

              It’s effectively a Gold Standard and, as such, won’t work. It is also a fiat currency as people have asserted that it has value (value by fiat). And it’s also created, ex nihilo, by private interests.

              All the same problems that our present system has.

              To make it worse, if it’s accepted as a currency then every other such currency needs to be accepted which opens the gate for an infinite number of currencies created by an infinite number of people none of which are connected to the actual physical economy. Essentially what happen prior to 1694 (IIRC) and brought about the British law which stopped banks creating their own currency.

              The only currency that works is a fiat currency created by the government of the nation that it spends into the nations economy and then is taxed back out. A fiat currency that utilises the nations own wealth.

              • travellerev …
                17 January 2016 at 9:26 am

                Democrats for social credit are still around. I agree with you on the fiat currency thing being created by us the people. But for that you have to get rid of the current elite. Especially the money trader we call Prime Minister and his ilk!

      • Jones 1.3.2
        16 January 2016 at 1:35 pm

        The private banks creating the money through fractional reserve lending is the fraudulent part.

  2. savenz 2
    16 January 2016 at 9:44 am

    Personally feel it is a good thing.

    Lets leave the oil in the ground.

    Not make needless wars and refugees in the middle east.

    More jobs now are produced by solar. Economies need to move with the times.

    More deaths and wars and economic hardship are going to be caused by global warming and neoliberalism polices that put money and power above common sense than running out of oil.

    Now jobs should be put into innovation to solve current problems, not to exactebate existing ones.

    • Colonial Viper 2.1
      16 January 2016 at 10:43 am

      The oil will not be left in the ground.

      The more the price falls, the more the producers need to pump in order to pay their bills.

      That’s the perverse economic system we have created.

      • savenz 2.1.1
        16 January 2016 at 11:59 am

        That would be the neoliberalism that is part of the problem. Next thing will be corporate welfare to prop up the companies (because the banks don’t want to lose money or sue governments for unrealised profits under TPPA type agreements.

        • acrophobic 2.1.1.1
          16 January 2016 at 2:23 pm

          It’s got noting to do with neo-liberalism, it’s the basic economics of supply and demand. Demand for oil has plummeted. In the past in response to supply exceeding demand, oil producers have slowed down supply until prices firm. The last time this happened, those who took this course lost market share, and so this time they are pumping away as usual.

          • One Anonymous Bloke 2.1.1.1.1
            16 January 2016 at 2:36 pm

            noting [sic] to do with neo-liberalism, it’s the basic economics of supply and demand.

            The notion that neoliberalism might have something to do with the collapse in demand has not crossed the poor thing’s “mind”.

            • acrophobic 2.1.1.1.1.1
              16 January 2016 at 3:02 pm

              There are a number of reasons for the fall in oil demand.

              http://www.brookings.edu/blogs/planetpolicy/posts/2014/10/17-world-oil-demand-ebinger lists the following:

              1. Slowing global economic growth;
              2. Increasing energy efficiency, a response to three years of oil prices in excess of $110 per barrel, which, in turn, had an impact and continues to impact long-term global demand;
              3. Surging natural gas liquids and hydrocarbon gas liquids production outside the OPEC quota system;
              4. Natural gas eating away oil’s market share as a refining fuel and as a feedstock in petrochemicals;
              5. The decision by Japan to restart some of its nuclear reactors, reducing forward demand for fuel oil in the power sector;

              Economic slowdown happens in all kinds of economies. To blame neo-liberalism is a weak oversimplification.

              • One Anonymous Bloke …
                16 January 2016 at 4:27 pm

                …unless for example, we note that the OECD and World Bank have recently pointed out how much it slows economic growth. I expect they’re probably communists and scroungers.

                Edit: I note that “it’s got nothing to do with it” has been abandoned and now the claim is it’s a “weak oversimplification”. Do you actually pause to think about the shite you let dribble down your chin or is your main goal just to get it out?

                • acrophobic …
                  16 January 2016 at 7:26 pm

                  No, I said your reasoning for blaming it was weak over simplification.

                  “…we note that the OECD and World Bank have recently pointed out how much it slows economic growth. ”

                  You mean they blamed ‘neo-liberalism’? Really? I’d be interested to know if there’s even a single country where such a system exists. We certainly don’t have neo-liberalism in NZ.

                  Perhaps you want to start blaming socialism. After all it appears to have crippled just abot every nation that has tried it, the latest being Venezuela http://www.dailymail.co.uk/wires/ap/article-3401559/Venezuelas-president-declares-economic-emergency.html.

                  • One Anonymous Bloke …
                    16 January 2016 at 8:05 pm

                    You seem to be forgetting that I didn’t “blame” it (though I expect it played a role: cf: Greenspan’s humiliating admission to Congress for an example of how useless it it is). I’m just pointing out that a five-year old could drive a truck through your “argument”.

                    • acrophobic …
                      16 January 2016 at 8:50 pm

                      You related neoliberalism to the collapse in oil prices. You may as well relate the price fall to the tooth fairy, for all the evidence you have.

                    • Draco T Bastard …
                      16 January 2016 at 9:01 pm

                      @acrophobic

                      The evidence is there staring you in the face but, like all RWNJs, you ignore it as it doesn’t fit your preconceived notions.

                  • One Anonymous Bloke …
                    17 January 2016 at 6:58 am

                    the evidence you have.

                    Did you fail to grasp the significance of Greenspan’s confession? Of course you did: your entire worldview relies on your failure.

                  • One Anonymous Bloke …
                    17 January 2016 at 6:19 pm

                    The confession about his “shocked disbelief”. Are you really so ignorant of the recent history of your faith?

                    Confirmation bias much?

                    • acrophobic …
                      17 January 2016 at 6:40 pm

                      Greenspan didn’t say anything like you claimed (“Greenspan’s humiliating admission to Congress for an example of how useless it it is”).

                      Greenspan said he was ‘partially wrong’ (http://www.theguardian.com/business/2008/oct/24/economics-creditcrunch-federal-reserve-greenspan). He In fact he spelled out exactly what is mistake WAS “”I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms,””.

                      Capitalism lives on, as healthy as ever.

                  • reason …
                    17 January 2016 at 6:33 pm

                    http://www.actofkilling.com/

                    In 1965 the Indonesian government was overthrown by the military

                    Anybody opposed to the military dictatorship could be accused of being a communist: union members, landless farmers, intellectuals and ethnic chineese…..

                    In less than a year and with the direct aid of western governments over one million ‘communists’ were murdered……

                    “declassified documents[5] indicate that the United States “provided economic, technical and military aid to the army soon after the killings started. It continued to do so long after it was clear a ‘widespread slaughter’ was taking place in Northern Sumatra and other places, and in the expectation that US assistance would contribute to this end.”

                    Venezuela has been very lucky with the ‘soft’ touch of the u.s.a, so far ,…… Instead of outright death squads its been more a case of “make the economy scream” https://startpage.com/do/metasearch.pl

                    It’s still a very cruel policy ……

                    • acrophobic …
                      17 January 2016 at 6:42 pm

                      I’m not sure what point you’re making. We’re talking economic systems, not political regimes.

                    • One Anonymous Bloke …
                      17 January 2016 at 6:48 pm

                      Too funny. Shill pretends Economics is not a political shit-fight 😆

              • Draco T Bastard …
                16 January 2016 at 4:45 pm

                Economic slowdown happens in all kinds of economies. To blame neo-liberalism is a weak oversimplification.

                Supply and demand are the basic fundamentals of neo-liberalism.

                • acrophobic …
                  16 January 2016 at 7:29 pm

                  No. Supply and demand are basic fundamentals of any free market system, including our own here in NZ. Socialism failed, Draco, and continues to.

                  • ropata …
                    16 January 2016 at 7:36 pm

                    Have you tried reading the news? You might have heard of a GFC and all sorts of banks and markets collapsing due to capitalists running amok

                    • acrophobic …
                      16 January 2016 at 7:56 pm

                      …yet capitalism carries on. Yes, the free market has it’s blips, but ultimately the systems self corrects and continues. Unlike the soviet experience eh.

                    • ropata …
                      16 January 2016 at 11:08 pm

                      because when the “blips” happen either a) everyone goes broke and leaves whatever market just failed, or b) governments intervene and regulate bad behaviour

                    • Tautuhi …
                      17 January 2016 at 2:38 pm

                      Banks win when the market goes up and many are winners when the markets collapse!!! As they pick up the carcasses at bargain basement prices.

                    • Colonial Viper …
                      17 January 2016 at 6:15 pm

                      …yet capitalism carries on. Yes, the free market has it’s blips, but ultimately the systems self corrects and continues. Unlike the soviet experience eh.

                      LOL Russia has self corrected and continued.

                      As Orlov has observed, the USA is well en route to a similar kind of collapse, but is far less prepared for it than the people of the former Soviet Union were.

                  • Draco T Bastard …
                    16 January 2016 at 7:52 pm

                    Throughout recorded history the only system that failed is the capitalist type systems. It’s destroyed societies and empires after socialism type systems built them up.

                    NZ is a good example of this. Socialism built up our infrastructure and equitable social structure and then, from the 1970s, capitalism has destroyed it.

                    • acrophobic …
                      16 January 2016 at 8:00 pm

                      Draco, NZ has never been socialist. It was, for a time, propped up by mother England, but that’s all. Socialism destroyed Soviet Russia. It destroyed Greece. And it is destroying Venezuela.

                      https://mises.org/library/greece-illustrates-150-years-socialist-failure-europe
                      http://townhall.com/columnists/johnhawkins/2014/02/25/5-ways-socialism-destroys-societies-n1800086/page/full

                    • Draco T Bastard …
                      16 January 2016 at 8:58 pm

                      Really, read history, look at the structures of the societies that have collapsed rather than the names. Once you do that then the obvious conclusion is that hierarchy and the rich are the problem.

                      In other words, capitalism is the problem. Capitalism destroys.

                    • acrophobic …
                      16 January 2016 at 9:18 pm

                      “Once you do that then the obvious conclusion is that hierarchy and the rich are the problem.”

                      The rich in Soviet Russia stood by why he population starved. There is rich and poor in every economic system.

                      “In other words, capitalism is the problem. Capitalism destroys.”

                      No, capitalism empowers. Capitalism meets the needs of the population by responding to the market, not state fiat.

                      “…look at the structures of the societies that have collapsed rather than the names.”

                      This discussion is about economic systems, not societies. Socialism is a failed system (think Soviet Russia, Greece, Puerto Rico and now Venezuela). Capitalism has had no such failures.

                    • joe90 …
                      16 January 2016 at 9:31 pm

                      Capitalism has had no such failures.

                      banking crisis in the 14th century, tulip mania, the panics of 1776, 1819 and 1857 etc etc, no, never happened//

                      ((but if they did – it was the left running out of other peoples money))

                    • acrophobic …
                      16 January 2016 at 9:58 pm

                      “banking crisis in the 14th century, tulip mania, the panics of 1776, 1819 and 1857 etc etc, no, never happened//”

                      Which economies did these collapse? With TulipMania, for example, the Dutch still have a market based economy today.

                    • Draco T Bastard …
                      16 January 2016 at 10:18 pm

                      The rich in Soviet Russia stood by why he population starved.

                      Same as the rich are standing by while our own population starve. In fact, the rich are even blaming the starving for the results of the actions of the rich.

                      Capitalism meets the needs of the population by responding to the market

                      No it doesn’t else we wouldn’t have poverty.

                      This discussion is about economic systems, not societies.

                      The economic system is a subset of the society. If it fails then the society fails.

                      Capitalism has had no such failures.

                      As I said, read history and open your eyes. Capitalism has always failed and will continue to do so.

                    • Colonial Viper …
                      16 January 2016 at 10:22 pm

                      Which economies did these collapse? With TulipMania, for example, the Dutch still have a market based economy today.

                      Yeah like the Great Depression: the suffering, chaos and disaster it brought upon millions of American families doesn’t even register with people like you.

                      The bankster elite keep comfortably cruising along above all the carcasses.

                    • joe90 …
                      16 January 2016 at 10:29 pm

                      Which economies did these collapse?

                      Of course, economies don’t collapse, they have crises!.

                    • Paul …
                      17 January 2016 at 6:37 pm

                      Do you know no history?

                  • Macro …
                    16 January 2016 at 9:47 pm

                    Firstly – there is no such thing as a free market.
                    The TPPA, for instance, requires 6000 pages of regulations! Hardly “Free”.
                    and
                    Secondly – Says “Law” has about as much validity as a John Key promise.
                    Neo classical economic theory is just bunkum – a whole edifice of words with little connection to reality – piss and wind signifying nothing.

                    • acrophobic …
                      16 January 2016 at 9:55 pm

                      “Firstly – there is no such thing as a free market.”

                      True, I’m using the phrase carelessly. Most modern economies are ‘mixed markets’, with varying degrees of market economics and state regulation.

                      “Neo classical economic theory is just bunkum…”

                      True, again. In reality it doesn’t exist except in a text book. That’s why I find it strange that the left think it is brining down the price of oil!

                    • Colonial Viper …
                      16 January 2016 at 10:26 pm

                      Transnational corporations hate truly free markets and hate truly competitive environments.

                      What they want is a playing field completely slanted towards them: where they have unbeatable power to set pricing and to define the rules and regulations as it suits them and their shareholders.

                    • Macro …
                      17 January 2016 at 4:51 pm

                      @ Draco – thanks for that quote – so very true.

                  • One Anonymous Bloke …
                    17 January 2016 at 6:29 pm

                    Capitalism meets the needs of the population by responding to the market, not state fiat.

                    1. Mixed markets do it better than Capitalism does, as you’ve already acknowledged.

                    2. What Chomsky said: “Capitalism? Show me some!”

                    3. What Piketty said.

                    4. In New Zealand, on Earth, today, far from “meeting the needs of the population”, market failure is blighting lives and killing children, and it’s getting worse, while you argue whether the Emperor has any shiny clothes left. That’s pretty shabby.

                    • acrophobic …
                      17 January 2016 at 6:56 pm

                      1. A mixed market is a form of capitalism.
                      2. I agree with Chomsky. It’s like neoliberalism…it’s a theory that doesn’t actually exist in reality.
                      3. ??
                      4. Market failure is not doing any of those things. Poor choices. Inadequate education. Substance abuse. Laziness. Bad luck. Yep.

                    • One Anonymous Bloke …
                      17 January 2016 at 7:48 pm

                      Pretending it’s a consequence of “poor choices”, substance abuse” or “laziness” makes you come across like a self-aggrandising tosser, not to mention pathetically delusional. Not to mention so lazy your amygdala does all your “thinking”. You do realise that, eh?

                  • One Anonymous Bloke …
                    17 January 2016 at 6:45 pm

                    “Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity—myself especially—are in a state of shocked disbelief.”

                    Yeah, he sounds really just ‘partially’ wrong aye. Deregulation, neo-liberalism’s sacred cow, relies on that theoretical “self-interest” he genuflects to.

                    Will your amygdala let you think about this concept?

                    • acrophobic …
                      17 January 2016 at 6:51 pm

                      He’s not talking about deregulation per se. He’s talking about how self interest informs the decisions made by lending institutions. You’re not even close.

                    • One Anonymous Bloke …
                      17 January 2016 at 6:59 pm

                      Ah hahahahahahahahahahahahaha I know that’s what he’s genuflecting to, dunce.

                      I missed the part where he substantiated a single one of his deeply held Objectivist notions on the subject of the thought patterns of employees of lending institutions, or indeed, any humans whatsoever.

                      Randist fuckwits don’t pass go.

                    • acrophobic …
                      17 January 2016 at 7:03 pm

                      “I missed the part where he substantiated a single one of his deeply held Objectivist notions on the subject of the thought patterns of employees of lending institutions.”

                      No, you misrepresented what he said, thinking you’d get away with it. You were drawing a very long bow quoting a single individual on an entire economic system anyway. Misquoting him just made you look like an idiot.

                    • One Anonymous Bloke …
                      17 January 2016 at 7:09 pm

                      Yes! Because unsubstantiated notions of “self-interest” inform no Economic discussion whatsoever. No sirree.

                      You are the fish in the barrel.

                      Edit: I am somehow forcibly reminded of the way a history teacher had to rub the entire Treasury Department’s faces in the fact that raising the minimum wage doesn’t cause unemployment. Humiliation for the greater good 😆

                    • acrophobic …
                      17 January 2016 at 9:01 pm

                      “Because unsubstantiated notions of “self-interest” inform no Economic discussion whatsoever. No sirree.”

                      Well they obviously informed Greenspans views. But that was all he was talking about. You implied it was something more.

                      “Edit: I am somehow forcibly reminded of the way a history teacher had to rub the entire Treasury Department’s faces in the fact that raising the minimum wage doesn’t cause unemployment. Humiliation for the greater good ”

                      I’m not sure how that could be true. It would, after all, depend on the frequency and size of increase. There is widely varying opinion on the impacts of changes to the minimum wage, including between academics. My view is small (around the rate of inflation) and frequent (annually) increases in the minimum wage are positive for the economy.

                    • One Anonymous Bloke …
                      17 January 2016 at 10:18 pm

                      I’m not sure how that could be true.

                      So what? The only “evidence” you can offer is opinion. The history teacher rubbed Treasury’s face in stuff that actually happened.

                • greywarshark …
                  17 January 2016 at 3:35 pm

                  acrophobic
                  Dedicated to raising the number of comments and hits for TS to that of the RW blogs’ dubious stats. Thanks acro, helping TS to become the leading blog in NZ.

                  • acrophobic …
                    17 January 2016 at 7:05 pm

                    You’re welcome. I enjoy it here, I really do. There is more freedom of expression than at TDB (which is like expressing an opinion in a Gulag), and a far broader range of opinion that on WO. I don’t mind boosting the rankings.

      • Macro 2.1.2
        16 January 2016 at 3:23 pm

        And the Middle Eastern OPEC countries are pumping as hard as they can – flooding the world with oil.
        http://www.reuters.com/article/us-oil-ships-delays-idUSKCN0T21E220151113

    • Richardrawshark 2.2
      17 January 2016 at 7:22 pm

      +100

      Totally concur, the sun blasts us with free energy daily. Free. Money makers want anything but.

      Time to move with technology.

      Was looking at the neighbours she just put up solar, 7k it cost her. It’s getting extremely cheap and should be heavily promoted. So should cars to electric soon as that is done. innovation, and R&D credits heavily we could lead with out no 8 wire mentality.

      I honestly see it as a way to make us great again just wish there was more behind it than the greens to be honest. All parties should be heavily embracing it to get a head start on businesses and manufacturing of the future.

      • BM 2.2.1
        17 January 2016 at 7:47 pm

        7k to run a two bar heater.
        What a waste of money and the 7k doesn’t even include battery storage.

        https://solar.genesisenergy.co.nz/

        • Richardrawshark 2.2.1.1
          18 January 2016 at 1:36 am

          It does not include the battery storage, she didn’t buy from genesis, solar something website, powers her whole house, not sure her capacity and may have been 9k or 7k but was not over 10k from the conversation I had with her a little while ago.
          Still she has a massive double row of big panes on her garage and she’s very happy with it.
          Runs her pc’s, cooking, tv and anything else she wants and even during cloudy days.

          Solar panels have come along way in the last few years.

  3. BM 3
    16 January 2016 at 9:48 am

    Good thing National has invested heavily in roads.
    All that talk about horse and cart and sailing ships, lol.

    • Lanthanide 3.1
      16 January 2016 at 10:10 am

      Yip, that will help us meet our new obligations under COP21

      • Steve Withers 3.1.1
        16 January 2016 at 10:14 am

        They’ll just buy more fraudulent Ukrainian carbon credits.

      • BM 3.1.2
        16 January 2016 at 10:17 am

        Cars produce far less pollution if they’re not stuck in traffic, idling.

        • maui 3.1.2.1
          16 January 2016 at 10:31 am

          lol, Auckland has been saved from gridlock by National…

            • Naturesong 3.1.2.1.1.1
              16 January 2016 at 11:27 am

              As far as I can tell planning for the CRL was first mooted in 1920 so it’s around 95 late.

              The last concerted effort to get the rail system working properly was in 1970, Muldoon’s National govt was responsible for gutting that project.

              But if you’re talking about this specific National government, they are being forced to only start it 18 months later than ARTA/ARC/ACC had planned, which is 2 years earlier than National said they would.

              And critical rail links to the airport and north shore are still years away.

              • Draco T Bastard …
                16 January 2016 at 12:18 pm

                +1

                National has been standing in the way and thus preventing us from developing our economy.

              • millsy …
                16 January 2016 at 12:48 pm

                “As far as I can tell planning for the CRL was first mooted in 1920 so it’s around 95 late.”

                That hard-left Marxist greenie, Gordon Coates, rail minister in the 1920’s was a big support of it as well.

                • Draco T Bastard …
                  16 January 2016 at 1:24 pm

                  Yep, back when the politicians could see the advantages places like London and Manhattan were getting from having a subway.

                  Now all they see is the profit that the oil companies get from having so many cars on the road. They ignore the damage that cars do to the environment and society.

            • maui 3.1.2.1.1.2
              16 January 2016 at 12:32 pm

              In that article they say rail patronage has increased by over 700% in the last 10 years. I read another article that says Auckland car traffic has decreased over atleast part of that timeframe. Given those numbers its insane that roading gets the majority of transport funding.

            • Macro 3.1.2.1.1.3
              16 January 2016 at 3:28 pm

              Yeah the fat lazy bastards who warm the treasury benches were shamed into doing something for a change by the ACC.

        • Naturesong 3.1.2.2
          16 January 2016 at 10:31 am

          Thats true.

          Unfortunately all those new motorways will Induce demand.

          So more, not fewer, idling cars.

        • Lanthanide 3.1.2.3
          16 January 2016 at 10:36 am

          Busses and trains also produce less pollution, and need fewer motorways as well.

        • Draco T Bastard 3.1.2.5
          16 January 2016 at 11:08 am

          Cars produce even less pollution if they simply don’t exist.

          • Stuart Munro 3.1.2.5.1
            17 January 2016 at 12:50 am

            Cars have been an article of faith for western economies, with perhaps a third of manufacturing relating to internal combustion or its support, and it was for a time the proven path to development followed by all industrialised nations.

            We do not have politicians capable of responding to the long term problem of finite oil, or the long term trade imbalance NZ suffers by importing it.

            https://www.youtube.com/watch?v=F-QA2rkpBSY

            I expect a competent government to understand this kind of thing, but the Gnats of course are operating at a much lower level, simply stealing public resources, hooting, and flinging excrement about. They should all be in prison.

            • Pat 3.1.2.5.1.1
              17 January 2016 at 1:29 am

              that is indeed the most important video everyone should watch….. it should be compulsory viewing ….particularly in parliament.

            • Pat 3.1.2.5.1.2
              17 January 2016 at 1:41 am

              in fact this should now be the default response to all statements posited here …..and everywhere else for that matter

    • maui 3.2
      16 January 2016 at 10:19 am

      The fact the price is going through large swings and isn’t very stable should be concerning. Oil companies going bust doesn’t really help happy motoring.

    • Colonial Viper 3.3
      16 January 2016 at 10:45 am

      Good thing National has invested heavily in roads.
      All that talk about horse and cart and sailing ships, lol.

      throughout the western world road passenger kilometres are stagnant or falling.

      Build all the roads you want, personal motor vehicle transport is gradually going away.

      • BM 3.3.1
        16 January 2016 at 10:52 am

        This must be quite tough on you CV, you’ve been banging the PO doomer drum for a long time.

        How’s your faith, still strong or are a few doubts creeping in?

        • Colonial Viper 3.3.1.1
          16 January 2016 at 11:19 am

          I find it odd that you think that a low price is anything more than a temporary (manipulated) market situation or that it somehow creates new physical, accessible reserves of oil.

          I’ll put it another way – oil prices have collapsed by 2/3 but oil consumption by economies around the world isn’t increasing. What does that tell you about the state of those economies.

          I’ll put it yet another way – this is all part of economies failing to cope with post-peak oil.

        • Draco T Bastard 3.3.1.2
          16 January 2016 at 11:20 am

          Peak Oil is a physical thing and it happened, according to the IEA, back in 2006. Nothing has happened to have changed that.

          In fact, the only thing to have happened that has extended the use of oil is the ongoing collapse of the global economy.

        • Naturesong 3.3.1.3
          16 January 2016 at 11:45 am

          I don’t mind the motorway spending as much as the timing.

          The need for cycling infrastructure of this magnatude is still a few years away.

          • BM 3.3.1.3.1
            16 January 2016 at 11:50 am

            The problem with cycle ways is how do you pay for them and maintain them.

            Do you think cyclist should pay a yearly registration to help fund cycles ways?

            • RedLogix 3.3.1.3.1.1
              16 January 2016 at 11:56 am

              Most are already taxpayers. Funding cycleways from general taxation is far more efficient than dreaming up administratively complex user pays schemes.

              • BM …
                16 January 2016 at 11:57 am

                So are people who drive cars.

                • Draco T Bastard …
                  16 January 2016 at 12:00 pm

                  And the roads used to be aid for via general taxation (both local and national). Probably most of the roads in existence were actually paid for that way.

                • RedLogix …
                  16 January 2016 at 12:08 pm

                  The core problem with all user pay type schemes is they create market incentives to avoid them. Over time the income from them declines while most of your fixed costs remain.

                  Fuel taxes have long been considered a reasonable proxy for road usage, and while far from perfect, the administration of this tax is simple and reasonably efficient.

                  Of course you may want to consider what the advent of more electric vehicles on our roads may imply, how you might want to go about taxing them in an efficient manner. I suspect you’d finish up with something like the current road miles tax imposed on light diesel vehicles, and that’s not an especially well-liked model at all.

                  Bicycles … and their increasingly popular electric variants … are even more problematic. At some point it just gets simpler to cut the losses with user pays and just do it out of general taxation.

            • millsy 3.3.1.3.1.2
              16 January 2016 at 12:51 pm

              That would be a administrative nightmare.

            • Naturesong 3.3.1.3.1.3
              16 January 2016 at 1:30 pm

              Possibly, but that is beside the point. cycle infrastructure should be part of an integrated transport system.

              There are a couple of things to consider;
              Cyclists already contribute to the cost of roads/cycleways through rates, GST, income tax, driver licensing and vehicle registration. Most adult cyclists currently have cars, and that is likely to continue until the our transit system is mature enough that cars are no longer a necessity for most people.

              Every bike on the road is one less car (reduced congestion, less pollution et al.). Given measureable economic positives that cycling brings to health and reduction of congestion, why would you want to create additional barriers to people cycling?

              Then there is the relative cost of cycle infrastructure, which is negligable if it is planned and designed as part of the transit infrastucture.
              Unfortunately, because we voted in folks for teh last 50 years that had no fucking idea what they were doing, or simply didnt care, adding this critical infrastructure now is more expensive.

              Here’s a cheat sheet for roading costs in NZ
              http://www.gw.govt.nz/assets/Transport/Regional-transport/Pics/NewFolder/Road-funding-in-NZ-final.pdf

            • b waghorn 3.3.1.3.1.4
              16 January 2016 at 6:11 pm

              “”Do you think cyclist should pay a yearly registration to help fund cycles ways?””
              It would be simplified by a one of levy at point of purchase. Maybe some acc as well.

              • Ad …
                17 January 2016 at 9:04 am

                Attribution of tax back to those making the impact is about as good as its going to get. Wear and tear from cycling is stuff all and so needs little opex.

                Cycling capex is usually absorbed as 2-5% of a road in project already in planning.

                Current gov’t have also set up a big dedicated ate cycling fund, with big results.

                Bridges has signaled that the current funding system will be fine for a decade. After that if NZTA are losing too much to electric vehicles, probably the Electricity Commission would have a stronger role.

                The funding mechanisms for transport transition from oil already exist here.

        • ropata 3.3.1.4
          16 January 2016 at 3:26 pm

          BM, affordability is the first energy-related limit of a finite world

          1. Affordability / High prices reversing to low prices
          2. EROEI, Peak Oil
          3. Climate Change
          4. Running out of oil, fuels

          https://gailtheactuary.files.wordpress.com/2015/10/6-affordability-is-the-first-limit.png

          Read more: http://ourfiniteworld.com/2016/01/07/2016-oil-limits-and-the-end-of-the-debt-supercycle/

  4. grumpystilskin 4
    16 January 2016 at 9:58 am

    So, why are we paying close to $2 for petrol?
    I thought more supply = cheaper for the consumer?

    • Lanthanide 4.1
      16 January 2016 at 10:10 am

      Just over half the price of petrol at the pump is comprised of tax. Another quarter is operating costs / profit for the petrol companies.

      I saw a comment on stuff the other day, saying that even if oil cost $1/barrel, petrol in NZ would still cost about $1.30 per litre.

    • Gabby 4.2
      16 January 2016 at 10:18 am

      I think more supply = the consumer gets to pay for the increased cost of storage.

    • BM 4.3
      16 January 2016 at 10:23 am

      NZ/US gone from $.85 to $.64.

    • Stuart Munro 4.4
      16 January 2016 at 12:38 pm

      Don’t be silly – large corporates know they can keep gouging kiwi customers. You can’t get your petrol online yet.

    • Macro 4.5
      16 January 2016 at 3:46 pm

      Crude Oil is now at 2004 – but the cost of petrol in NZ is 62% above 2004 prices. Yes there have been tax increases – but not that much.
      Some one is doing some pretty heavy price gouging along the line.

  5. Lanthanide 5
    16 January 2016 at 10:05 am

    I think more likely than a decade+ of low oil prices, is a yo-yo effect of oil low oil prices, giving rise to low exploration and new wells while production continues to naturally decline, then eventually oil prices will rise to reflect shortage, and producers will scramble to try and bring resources on line.

    Alternatively, the entire world economy could actually be completely fucked, as Gail the Actuary argues, and low oil prices (and low other commodity prices) are just a reflection that the general populace can’t *afford* to buy the resources at the prices the producers *need* to charge. It’s a very deadly vicious circle.

    • Colonial Viper 5.1
      16 January 2016 at 10:47 am

      Also note that producers like Saudi Arabia, Russia, Venezuela, US shale oil operators, perversely have to pump more when prices are low in order to meet their budgets and debt repayments.

      As you say, a deadly vicious circle.

  6. Steve Withers 6
    16 January 2016 at 10:11 am

    This price drop is mainly being driven by the Saudis, as far as i can tell, and it coincides with three things: 1. the lifting of sanctions on Iran and 2. the growth of fracking / shale oil in the US reaching critical mass and 3. the impact of both renewable energy sources and people moving fairly rapidly to smaller cars and / or public transport.

    Some analysts have said that Saudia Arabia wants to hurt Iran in the short term and also undermine the economic case for all of the competing energy sources as well as undermine conservation measures.

    Why? The influence of Saudi Arabia is largely based on its position as an indispensable energy source (and money source?) for most of the developed world. Their government gets away with things that the US invaded Iraq to stop. Should Saudi Arabia no longer be untouchable….that could pose a mortal threat to the current regime there.

    Climate change? They don’t care. But we must….and the value of oil must (as in should) continue to decline because we just don’t need it. Our present government is useless in this area, but that won’t always be the case. We’re only two seats away from a different government.

  7. Draco T Bastard 7
    16 January 2016 at 10:48 am

    Think of what that low price may put at risk: Venezuela’s social programmes, Nigeria’s stability such as it is, Iraq’s postwar recovery, Iran’s post-sanctions recovery, etc.

    Actually, it wouldn’t put anything like that at risk if those countries used sovereign money to build up local infrastructure to support their people from local resources. The real problem is that we’ve come to believe that a nation needs foreign funds when it really doesn’t.

    This impact, as New Zealand and Alaska have already seen, also falls upon regions who need fresh investment and good jobs. They too have expected that major explorers would keep investing locally.

    And again in such cases the government could use sovereign money to do that too. Of course, the option that they should be choosing to do is to use that sovereign money to develop renewable energy sources locally.

  8. Bill 8
    16 January 2016 at 11:32 am

    In a world where there is only a given amount of a total something that can be used, those with access to the something behave as though they’re in a lolly scramble.

    I keep reading that Saudi Arabia is flooding the market to kill the US fracking industry. The flaw in that argument is that oil doesn’t have to drop to $30 to achieve that and anyway, Saudi Arabia could ‘game’ the price in a way that gets it max return while leaving it as a main player.

    I’m picking that a factor behind US militarism has been with the intent on securing as many as the lollies as it can. Meanwhile, Saudi Arabia hoovering them up with a huge sucky machine…which, in spite of what the post suggests, is hurting Russia big time.

    Bad analogy that lolly scramble thing, I know, but only one coffee down and can’t be doing with constructing a more appropriate one at the moment. 😉

    • David 8.1
      16 January 2016 at 12:10 pm

      “I keep reading that Saudi Arabia is flooding the market to kill the US fracking industry. ”

      This simply isn’t true, the fracking industry can’t be killed with a temporary low price. Saudi is simply badly managed and in a vice between conflict with Iran & Russia, weak demand from China and the need to keep the money flowing to maintain power at home.

      “Saudi Arabia could ‘game’ the price in a way that gets it max return while leaving it as a main player.”

      It can’t, the days of it having control over the oil market are long gone.

      • Colonial Viper 8.1.1
        16 January 2016 at 12:20 pm

        This simply isn’t true, the fracking industry can’t be killed with a temporary low price

        ?

        The financing to the fracking industry has been killed. And weak players in that industry (and the tar sands) are folding up on a weekly basis now.

        As for Saudi Arabia’s role in the pricing of oil. They still have significant influence, should they wish to use it. But notice, they have decided not to cut back on production.

        • David 8.1.1.1
          16 January 2016 at 12:57 pm

          Sure, companies will go bust, but if the price rises in future, new companies will start drilling again. On top of that fracking technology is moving very quickly and the costs are dropping very rapidly.

          The Saudis can’t cut production, they need the money too much,

          • Colonial Viper 8.1.1.1.1
            16 January 2016 at 1:09 pm

            So you accept that American and Canadian companies in the oil sector are going under and there are large numbers of job losses?

            Where do you think new fracking companies going to get financing from now that so many investors have been burned?

            Of course Saudi Arabia can reduce production. They have a massive amount of cash on hand.

            • David 8.1.1.1.1.1
              16 January 2016 at 2:08 pm

              “So you accept that American and Canadian companies in the oil sector are going under and there are large numbers of job losses?”

              It’s not for me to accept, if the oil price remains low there will be major job losses. It’s already been happening in the North Sea for the last year. I just need to look at many O&G people I know on Linkedin changing to ‘seeking new opportunity’ to know that.

              “Where do you think new fracking companies going to get financing from now that so many investors have been burned?”

              Same place they did last time, if the numbers work.

              “Of course Saudi Arabia can reduce production. They have a massive amount of cash on hand.”

              Saudi is running a $100bn deficit, that cash disappears very quickly at that rate. Without oil they are a third world nation.

      • Stuart Munro 8.1.2
        16 January 2016 at 12:42 pm

        When I was in Saudi, the word was they were still pumping at US request, both to stop the Russian embargo from pushing up prices, and to stimulate the flaccid world economy. Saudi can afford to do so and still maintain public services but some of the smaller oil states risk serious civil disorder – Kuwait for instance.

        • Colonial Viper 8.1.2.1
          16 January 2016 at 1:13 pm

          This is why Pepe Escobar terms the overall US geopolitical strategy that of the “Empire of Chaos.”

  9. Ad 9
    16 January 2016 at 1:59 pm

    Anyone got any policy ideas for New Zealand if this low price continues?

    • sabine 9.1
      16 January 2016 at 3:04 pm

      eat your own?

    • b waghorn 9.2
      16 January 2016 at 3:41 pm

      Make the tax on petrol flexible so that it stays at about $2.10 a litre and use the extra cash to target technology to transition nz away from oil .

      • Ad 9.2.1
        16 January 2016 at 4:08 pm

        Interesting.
        Like a Supplementary Minimum Price for oil companies.

        • b waghorn 9.2.1.1
          16 January 2016 at 8:22 pm

          It dawned on me after I put it up that it would make any government unelectable.
          And as for it getting the ball rolling on getting the standard posters to look for solutions instead finding the negatives it failed there to.

          • Ad 9.2.1.1.1
            17 January 2016 at 9:10 am

            But it gives the Righteous a moment to say it’s all impossible. I think it’s not easy, but in transport it’s possible. A subtext to my post is: without crisis, transition has no motivation, but with crisis, transition has no time. But as we saw in 1979, even the Nats can do post-oil transition.

    • David 9.3
      16 January 2016 at 3:52 pm

      Import more V8’s?

    • Draco T Bastard 9.4
      16 January 2016 at 9:05 pm

      The obvious one: Stop importing oil altogether and build up our renewables. It’s dangerous to remain so dependent upon resources from failed states and, no matter what, it will always be cheaper to produce renewable power.

      • Ad 9.4.1
        17 January 2016 at 9:13 am

        Fully agree.
        There are reasonably easy things like all Council’s who own ports requiring that all bulk freight enter and exit the port by rail. A good big target.

        Also reduces motorway maintenance, and good for Kiwi rail.

        • b waghorn 9.4.1.1
          17 January 2016 at 9:41 am

          “There are reasonably easy things like all Council’s who own ports requiring that all bulk freight enter and exit the port by rail. A good big target.”
          The logs I cut up for export in both Whanganui and dannevirke followed good rail lines on the back of trucks all the way to Wellington where the truckies had to deal with huge traffic and big waits, ironically for trains to get in and out. Absolute madness.

    • Graeme 9.5
      16 January 2016 at 9:27 pm

      Considering this may be caused in part by changing technology, there’s not much that can be done, we’re not going to be able to influence the price, but we can be ready to react to the changes that are coming. And be vigilant to incumbent industries trying to maintain their position.

      A study of the antics of the equine industry when the motor car came along will show a few things not to do.

  10. Graeme 10
    16 January 2016 at 8:07 pm

    I was looking up this quote by Sheik Yamani , it’s been running around in my head reading this,

    “the stone age didn’t end because we ran out of stones, and the oil age won’t end because we run out of oil”

    And came across this post http://www.koomey.com/post/116651386663 It draws from this Bloomberg article from April last year http://www.bloomberg.com/news/articles/2015-04-16/big-oil-is-about-to-lose-control-of-the-auto-industry

    Will be interesting if we are at the end of the oil age, or even the start of the end. But change comes fast when new technologies take hold, the motor vehicle replacing the horse or the internet replacing encyclopaedias. The change away from oil could be very rapid.

    • b waghorn 10.1
      16 January 2016 at 8:24 pm

      Good positive post.
      I think that China will possible lead the way , once they decide to do something they tend to make it happen.

      • Graeme 10.1.1
        16 January 2016 at 8:41 pm

        They are the ones producing the PVs, and the batteries. I saw some figures on the amount being installed in China and it was staggering, along with the whole growth in their renewables sector.

  11. Graeme 11
    16 January 2016 at 8:07 pm

    I was looking up this quote by Sheik Yamani , it’s been running around in my head reading this,

    “the stone age didn’t end because we ran out of stones, and the oil age won’t end because we run out of oil”

    And came across this post http://www.koomey.com/post/116651386663 It draws from this Bloomberg article from April last year http://www.bloomberg.com/news/articles/2015-04-16/big-oil-is-about-to-lose-control-of-the-auto-industry

    Will be interesting if we are at the end of the oil age, or even the start of the end. But change comes fast when new technologies take hold, the motor vehicle replacing the horse or the internet replacing encyclopaedias. The change away from oil could be very rapid.

  12. Johnny no friends 12
    16 January 2016 at 8:40 pm

    I have had a look around on websites trying to find the pump price in nz for when last oil was about 30 bucks a barrel.
    Haven’t had any luck, does anyone here know?

  13. ropata 13
    16 January 2016 at 11:24 pm

    Here’s a good chart – the red line is the inflation adjusted price.
    http://inflationdata.com/Inflation/Inflation_Rate/Historical_Oil_Prices_Chart.asp

    In inflation-adjusted USD the price was fairly stable between $20 and $30 a barrel from 1946 to 1973, then the oil shocks of the seventies kicked the price around a hell of a lot, and NZ embarked on Think Big, woohoo

  15. BM 15
    17 January 2016 at 9:31 am

    Saw this in stuff comments.

    According to the link below, the price we pay for petrol(excluding tax) is the 2nd highest in the OECD.

    If Labour has any brains they’d be on to this, pointing out how kiwis are getting tucked and the government needs to be doing something about it.

    Great chance to appeal to middle NZ.

    http://www.mbie.govt.nz/info-services/sectors-industries/energy/liquid-fuel-market/weekly-oil-price-monitoring/#margin

    • RedLogix 15.1
      17 January 2016 at 10:03 am

      Yeah but including tax we’re more or less in the middle of the pack.

      Given our relative isolation and small market, I’d expect the cost to provide fuel to the NZ market to be a bit higher than most.

      Just as an aside; go to Google Earth sometime, and zoom back so you can see the entire hemisphere and move it about so as NZ is right at the centre of the circular disc. (Technically this is called a circumpolar plot). Apart from Australia, PNG, Indonesia and the Philipines, almost all the of the humans on the planet live on the other side of the planet to us.

    • David 15.2
      17 January 2016 at 10:24 am

      “If Labour has any brains they’d be on to this, pointing out how kiwis are getting tucked and the government needs to be doing something about it.”

      What do you expect them to do exactly? Tow NZ north or something?

      • BM 15.2.1
        17 January 2016 at 10:34 am

        Point out the doubling of petrol/diesel margins.

        Also why can Gull provide petrol at a much cheaper price when they import all their product, unlike the other fuel companies who all part own and use the Marsden point refinery.

    • sabine 15.3
      17 January 2016 at 11:13 am

      Should you not demand that your National Party led Government to do something about, considering that Kiwis are getting tucked and that is no good?

      Surely that would be a great chance for the National led Government to appeal to the poor and the middle class NZ that is struggling to pay the high costs of Gasoline?

      Or are you looking for a reason to vote Labour at the next election?

      • BM 15.3.1
        17 January 2016 at 11:31 am

        No, just offering my 5 cents worth.

        NZ needs a decent opposition for democracy to work.

        • Paul 15.3.1.1
          17 January 2016 at 11:35 am

          It needs an independent media and a decent opposition.
          However, you and I probably disagree on what constitutes ‘a decent opposition’.
          My idea involves one that offers a genuine alternative rather than ‘National Lite.’
          Capitalism is failing the planet, its species and most of its human population.
          We need alternatives.

        • sabine 15.3.1.2
          17 January 2016 at 11:49 am

          Currently NZ needs a decent National led government for democracy to work.

          My comment stands.
          If you consider that the Citizens of this country are being ‘tucked’ or abused by the Gasoline Industry, i suggest that you ask the current National led Government do something to protect the citizens.

          You could start here 🙂 Its Steven Joyces baby that does the monitoring of prices 🙂

          http://www.mbie.govt.nz/info-services/sectors-industries/energy/liquid-fuel-market/weekly-oil-price-monitoring

          look as they said, in 2008 !!!! 🙂 (bwhahahahahahahahaha) they did a review about prices (obviously they liked what they saw, considering that they did not review it after that date)

          http://www.mbie.govt.nz/info-services/sectors-industries/energy/liquid-fuel-market/new-zealand-petrol-review

          and because i know that you don’t like reading links here are the findings of the 2008 review. 🙂

          Quote: The report concluded that:

          The New Zealand petrol market is fundamentally competitive.
          Retail petrol prices are not fast to rise and slow to fall.
          Price rises during 2008 were mainly due to increases in the international crude oil price.
          A Fuelwatch scheme like Australia’s wouldn’t benefit consumers, because our market works differently.
          More transparency about the makeup of importer margins and a move to report daily margin movements would be useful for consumers.
          As a result, the Ministry’s monitoring of margins achieved by retailers was strengthened to further enhance the transparency of the retail price.

          Quote End.

          and here is a little graph as to where NZ stands on the world in regards to prices…….:)

          http://www.mbie.govt.nz/info-services/sectors-industries/energy/liquid-fuel-market/weekly-oil-price-monitoring/#comparison

          Saying that the opposition do someting maybe in 2017 or later, just means that you are ok with your fellow citizens to be tucked by the Gasoline Industry and the National led Government as they are the ones profiting from the high gasoline tax that comes with high gasoline prices, and that you have been ok with the tucking of your fellow citizens since at least the last review.

          So you are sure you are not just wanting a few reasons that would make voting for Labour or the Greens palatable to you?

          • BM 15.3.1.2.1
            17 January 2016 at 11:58 am

            National has lots on it’s plate, this issue would be way down the list and never be dealt with.

            It’s a perfect issue for a opposition though, far better than pushing the rights of ex kiwi crims or pointing the finger at people with Asian sounding names.

            • sabine 15.3.1.2.1.1
              17 January 2016 at 2:09 pm

              hahahahahahaha you are a joke mate.

              The National Party together with its supporters from the Maori Party, the Peter fuckn Dunne Party and the conservatives and the “ActParty” are the government. No matter how much they have on their plate it is still their business, and you as their supporters should hold them to their business, after all you pay for their services, inclusive GST.

              So frankly if the National led Government find that they have too much on their place i suggest that they get themselves a bigger plate, cause you know governing is hard work, n working is hard. Don’t you know?

              gosh you are a turn coat aren’t you?

              • Ad …
                17 January 2016 at 2:19 pm

                When Clark’s government tried just increasing the RUC there was almighty protest and the gov’t backed down. Any gov’t would be spending major percentage points to achieve major change.

                TBH the current gov’t and Council investment in public transportation has paid off hugely in results.

                • sabine …
                  17 January 2016 at 2:32 pm

                  can you link to the significant spending on public transport by the current government?

                  Really I would like know more of it.
                  cheers

                  also what do you think of BM’s point that the Labour party should be governmental about these issues because teh National led Government can’t be governmental about it because their plate is to small for all the governmental things they ought to do but can’t because they don’t have a plate big enough. 🙂

                  • Ad …
                    17 January 2016 at 2:46 pm

                    I’d need to be at work for getting it all together, but the full breakdown of pt expenditure is in the NLTP (national land transport plan), which is also broken down into regional ones (RLTPs). Transport Blog is the best place to go for analysis of it.

                    As for “plate’s too full”, well, this is a specacularly lazy govt, so he’s probably right. No high oil price, no crisis. Only a quandary for the left really.

                    • sabine …
                      17 January 2016 at 3:26 pm

                      I think that making the upcoming / ongoing energy crisis an object of left vs right vs left is intellectually lazy, but i agree with you that this current government is spectacularly lazy in any regards and alas this laissez faire and can’t be bothered attitude of the current National led Government is going to be the problem of the people of this country that will bear the brunt of excesses and excuses of this current political leadership. After all, most of us have to pay for things like gasoline with our own money and not with governmental stipends and perks paid for courtesy of the taxpayer.

                      I am however looking forward to you showing me where our current National Government has heavily invested into public transport, it would please my inner german. So i am looking forward to your links tomorrow when you are back at work. Who knows you could even structure it as a guest post?
                      As far as I know, most lefties love themselves some public infrastructure. 🙂
                      cheers.

  17. Ad 17
    18 January 2016 at 7:27 am

    I’m beginning to think the low $$barrel is starting to cause both disinfection and a serious global bear market.

    Iran coming online is huge.

    Let’s see how much and how fast the oil market hits the share market and then crashes into the housing market here.

    A big few months ahead.

    • Paul 17.1
      18 January 2016 at 7:31 am

      ‘Iran is set to flood the oil market with an extra half a million barrels a day after international sanctions were lifted in a move that has been hailed by the country’s president as a “golden page” in its history.

      Hours after sanctions imposed by US, UN and EU on Tehran were lifted – thereby removing an obstacle to exports – the deputy oil minister announced Iran was ready to increase its crude oil exports by 500,000 barrels a day.

      “With consideration to global market conditions and the surplus that exists, Iran is ready to raise its crude oil exports by 500,000 barrels a day,” Deputy Oil Minister Amir Hossein Zamaninia was quoted as saying by the Shana news agency.

      Already there are some 38 million barrels of oil in Iran’s floating reserves, ready to enter the market, according to the International Energy Agency.’

      http://www.independent.co.uk/news/world/middle-east/iran-nuclear-deal-president-announces-golden-page-in-tehran-s-history-as-sanctions-lifted-a6817076.html

      • Paul 17.1.1
        18 January 2016 at 7:52 am

        Buckle your seatbelts: China could rock markets next week

        ‘Global markets are poised for more volatility next week with key economic data from China expected to show that the world’s second-largest economy continues to grow at its slowest pace since the financial crisis, despite aggressive measures taken by the central bank to boost growth.

        “There has been ongoing fear bubbling since August that the China slowdown is worse than expected. Investors are nervous that we’ll see a massive downside correction in China’s economy. That’s why this data is so important to markets,” said James Rossiter, senior global strategist at TD Securities.

        China is expected to release fourth-quarter GDP, industrial production and retail sales data Tuesday morning.’

        http://www.cnbc.com/2016/01/15/buckle-your-seatbelts-china-could-rock-markets-next-week.html

        • Paul 17.1.1.1
          18 January 2016 at 7:55 am

          Why are we looking on helplessly as markets crash all over the world?
          Will Hutton

          ‘The oil price collapse should be good news. It makes everything cheaper. It puts purchasing power in the hands of business and consumers elsewhere in the world who have a greater propensity to spend than most oil-producing countries. A low oil price historically presages economic good times. Instead, the markets are panicking.

          They are panicking because what is driving the lower oil price is global disorder, which capitalism is powerless to correct. Indeed, it is capitalism running amok that is one of the reasons for the disorder. Profits as a share of national income in Britain and the US touch all-time highs; wages touch an all-time low as the power of organised labour diminishes and the gig economy of short-term contracts takes hold. The excesses of the rich, digging underground basements to house swimming pools, cinemas and lavish gyms, sit alongside the travails of the new middle-class poor. These are no longer able to secure themselves decent pensions and their gig-economy children defer starting families because of the financial pressures.

          The country that has taken this further than any other is China. The Chinese economy is a giant Ponzi scheme. Tens of trillions of dollars are owed to essentially bankrupt banks – and worse, bankrupt near-banks that operate in the murky shadowlands of a deeply dysfunctional mix of Leninism and rapacious capitalism. The Chinese Communist party has bought itself temporary legitimacy by its shameless willingness to direct state-owned banks to lend to consumers and businesses with little attention to their creditworthiness. Thus it has lifted growth and created millions of jobs.

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          It is an edifice waiting to implode. Chinese business habitually bribes Communist officials to put pressure on their bankers to forgive loans or commute interest; most loans only receive interest payments haphazardly or not at all. If the losses were crystallised, the banking system would be bust overnight. On top, huge loans have been made to China’s vast oil, gas and chemical industries on the basis of oil being above $60 a barrel, so more losses are in prospect.

          Investors in China’s stock market took fright in the new year, with falling share prices only another turn of the screw. The only surprise is that nobody saw through it all earlier. China’s leaders are visibly frightened and at a loss, clamping down on any possible source of dissent as they flail to keep their Ponzi economy alive. As consumer demand falters in Europe, North America and Asia, so the demand for oil falls, even as Saudi Arabia, waging economic war against Iran and US shale producers, pumps oil out of the ground without limit. The whole structure of banking that was predicated upon higher oil prices gets more rickety still.

          At just this crucially sensitive moment, the US Federal Reserve last month raised interest rates from their extraordinary lows, more concerned to signal its ardent desire to return to the normality of business as usual than to face the reality we live in abnormal times. There is no danger of inflation. If credit growth is out of hand, the tool central banks must use, as the Bank of England recognises intellectually by equipping itself with such tools but as yet not bold enough to use them, is direct quantitative controls to constrain the growth of credit. The system is not robust enough to withstand a rise in interest rates.

          It’s clear what needs to happen. There needs to be wholesale change in economic thinking. Forces in world labour markets – new forms of 21st-century trade unionism – need to be strengthened. The power of financial markets needs to be constrained. Credit growth needs to be managed by direct controls on the growth of bank balance sheets and banks need to be weaned off the financial casino they have built. Great companies need to be allowed to purpose themselves around creating value rather than dancing to the interests of disengaged shareholders.

          All this requires a new generation of political leaders prepared to throw off the categories in which thinking has been cast since 1980 – and remake our world rather as the world was remade in the years after 1945. Prosperity, peace, co-existence and recognition of mutual interdependencies are too easily taken for granted. The financial markets are signalling deep unease, not least at the world they themselves have helped build. It is a message that should be heeded.’

          http://www.theguardian.com/commentisfree/2016/jan/17/china-economic-crisis-world-economy-global-capitalism

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