Issue of National Significance: New Zealand's Energy Security   25 Nov 2011

Alan Preston and Marianne Riley

New Zealand’s energy security is an issue the public have the right to hear debated in the run up to the election. It reveals how vulnerable we are because of our dependency on oil and how this current National Government is withholding crucial information so they may continue their unsustainable approach to New Zealand's transport infrastructure. How is this honest or transparent?

The money NZ spends on importing oil has risen 22% this year to over $21 million per day, $7.7billion for the 2010 year,and while the International Energy Agency is warning us to reduce our vulnerability to what are going to become increasingly expensive post 2006 peak oil prices, the National Government is diverting funding from social, health, education and welfare programs, at the same time committing more than $11billion on Roads of ' National' Significance' and threatening to close another 5 of our regional railway lines.

In May of this year the International Energy Agency (IEA), an historically conservative organisation, revised their earlier forecast that peak oil was not due to occur until sometime after 2030, following a study of 800 of the world's oil fields. They are now saying that they believe the peak in conventional oil production actually occurred in 2006 and that unconventional sources (natural gas and tar sands) are extremely unlikely to make up the shortfall because of growing demand from China and India, concluding that 'the age of cheap oil is over' (Radio New Zealand National's Nine To Noon Program on the 25th of May 2011 with the International Energy Agency's Chief Economist , Fatih Birol). The IEA go on to warn that governments around the world urgently need to reduce their vulnerability to increasing fossil fuel prices. It is prudent to note at this point that as a member nation of the IEA New Zealand pays for their advice.

In the context of the above revelations, paying attention to and acting upon New Zealand's dependence on oil is imperative. Early in their first, and current, term in office the National Government was presented with the 2009 Ministerial Report on Oil Prices and Resilience in the Transport Sector which outlined some of the vulnerabilities that New Zealand faces, vulnerabilities that are further intensified by the IEA's latest findings. The National Government appears to not only ignore the agency's warnings, but has sought to ignore and indeed conceal critically relevant information.

The above Ministerial Report was one of at least two significant documents that were only made public after use of the Official Information Act forced their release. The other, the Bolland Report, the Ministry of Transport commissioned in 2010 to provide independant advice on the costs and benefits of rail vs road for freight transport. The report found in favour of rail. This finding is consistent with the IEA's clear indication that more sustainable approaches to transport must be pursued. Why then is this government intent on rationalising New Zealand's rail network in their KiwiRail Turnaround plan - which includes the 'mothballing' of 5 regional railway lines? Such action only serves to increase our vulnerability to oil while concurrently decreasing our resilience.

Equally alarming is this National Government's focus on building roads, and in particular the 'Roads of National Significance' (RoNS) projects. If it is in the country's, not to mention the planet's, best interest to reduce oil dependency, why is the government embarking on such major road building initiatives while systematically dismantling the rail network?

This question becomes even more significant when set alongside the SAHA Roads of National Significance: Economic Assessments Review which identified that at least three of the seven projects assessed prove economically non-viable (that is with BCRs of less than 1). The report also warned against putting too much weight on the incorporation of Wider Economic Benefits (WEBs) as their use is still in its infancy and to some degree contentious. This report was not released for public scrutiny.

What was released to the public was the SAHA Summary Report. This report appears to be a reworking of the original with what can only be described as manipulative changes to the data, including placing unwarranted emphasis on the WEBs despite the above caveats.

Mike Pickford, Independent Economic Researcher and former Chief Economist at the New Zealand Commerce Commission has reviewed both the 'First' and 'Second' SAHA reports . His findings point to inconsistencies both within the original report and between the two reports, as well as highlighting the unconventional and questionable practice of assessing the RoNS program as a whole 'portfolio' as opposed to the more appropriate approach of assessing each project on its own merits. It is this 'amalgamation' process that allows the disguising of the negative returns of some of the projects.

There seems little doubt that taxpayers are being sold a misrepresentation of the facts in order to validate the current National Government's uneconomic and unsustainable approach to transport infrastructure. The question then has to be 'who stands to benefit?'

• For the ministerial briefing on oil prices and transport sector resilience click here.
• For the Bolland Report April 2010 click here.
• For Comments on the Second SAHA Report click here.

(Save Our Rail Northland)

Add a comment

Bookmark and Share

News

Christchurch continuing to bounce back

23 Sep 2016 Canterbury Earthquake
New Zealand Government Hon Gerry BrownleeMinister supporting Greater Christchurch Regeneration   23 September... more

Local Government reforms extension

23 Sep 2016 News
New Zealand Government Hon Peseta Sam Lotu-IigaMinister of Local Government 23 September 2016 The Minister of Local Government ... more

Business

RBNZ pushes for new quarterly disclosure regime

23 Sep 2016 Business News
Article - BusinessDesk Friday 23 September 2016 12:47 PM RBNZ pushes for new quarterly disclosure regime By Paul McBeth Sept. 23 ... more

McClay says prospects for Indonesia trade good

23 Sep 2016 Business News
New Zealand Government Hon Todd McClayMinister of Trade 22 September 2016 Minister of Trade Todd McClay says he is encouraged by... more

Living

Young New Zealanders Making Films For Good

18 Jul 2016 Lifestyle
The Outlook for Someday Young New Zealanders Making Films For Good What does sustainability mean to you? Since 2007 The Outlook for... more

Review: NZ's Pitch Black - live in London

8 Jul 2016 Entertainment By Charlotte Everett
20 years after their debut at The Gathering, Pitch Black have satiated a packed venue of fans at London’s Oslo, in... more

Property

Auckland house prices are stabilising Barfoot says

3 Aug 2016 Property By Sophie Boot
Wednesday 03 August 2016 10:30 AM Auckland house prices are stabilising, may have plateaued, Barfoot says Aug. 3 (BusinessDesk) -... more

NZ home values rise at fastest quarterly pace in 12 years

2 Aug 2016 Property By Tina Morrison
Article - BusinessDesk NZ home values rise at fastest quarterly pace in 12 years By Tina Morrison Aug. 2 (BusinessDesk) - New... more

Migration

Kiwis could be affected by tighter UK rules

30 Mar 2016 Migration By Audrey Young
British High Commissioner Jonathan Sinclair is defending changes to skilled migrant rules for Britain but suggests they won't affect... more

Immigrants' attitudes to corruption worries SFO

17 Feb 2016 Migration By Sophie Boot
Feb. 17 (BusinessDesk) - New Zealand's record inbound migration has undermined the country's squeaky-clean reputation because of an... more

Travel

Newer, faster and simpler eGates for Wellington

25 Aug 2016 Travel & Tourism
New Zealand Government   Hon Wagner using the new eGates at Wellington Airport.... more

NZ guest nights jump to a record in June amid tourism boom

10 Aug 2016 Travel & Tourism By Tina Morrison
Article - BusinessDesk Wednesday 10 August 2016 12:19 PM Aug. 10 (BusinessDesk) - New Zealand accommodation providers had their... more

Sport

Stars to hit the court for FAST5 Ferns

23 Sep 2016 Netball
Netball NZ Stars to hit the court for FAST5 Ferns Friday 23 September, 2016The FAST5 Ferns will be eyeing off a fourth straight title... more

Columns

Gordon Campbell on the end game in Spain

25 Aug 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the end game in Spain First published on Werewolf more

Gordon Campbell on the Impotence of the Reserve Bank

11 Aug 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the Impotence of the Reserve Bank First published on Werewolf more

Kiwi Success

New appointment to FSANZ Board

29 Aug 2016 Appointments
New Zealand Government Hon Jo Goodhew Minister for Food Safety   29 August 2016 Jane Lancaster has been appointed to the Food ... more

Appointments to New Zealand National Commission for UNESCO

12 Aug 2016 Appointments
New Zealand Government Hon Hekia ParataMinister of Education 12 August 2016 Appointments to New Zealand National Commission for... more

Recruitment

Jobs growth continues to be strong

3 Aug 2016 Recruitment
New Zealand Government Hon Steven Joyce Minister for Tertiary Education, Skills and Employment 3 August 2016 Jobs growth continues... more

NZ private sector wage inflation misses expectations in June

3 Aug 2016 State of the Market Report By Paul McBeth
Wednesday 03 August 2016 11:57 AM NZ private sector wage inflation misses expectations in June quarter Aug. 3 (BusinessDesk) - New... more

s