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

PM saddened at passing of Dame Thea Muldoon

25 Feb 2015 News
PM saddened at passing of Dame Thea Muldoon Prime Minister John Key today expressed his sadness at the passing of Dame Thea ... more

Bill to fight child exploitation passes second reading

25 Feb 2015 News
  A Bill to better protect children from sexual exploitation passed its second reading in Parliament last night.   The... more

Business

MARKET CLOSE: NZX 50 rises to record, led by Xero

25 Feb 2015 Business News
By Suze Metherell Feb. 25 (BusinessDesk) - New Zealand shares rose to a record, led by Xero after it raised $147 million from two... more

Tourism Holdings beats 1H guidance on reduced fleet

25 Feb 2015 Business News
Article - BusinessDesk   Tourism Holdings beats 1H guidance on reduced fleet, wider margins By Suze Metherell Feb. 25 ... more

Living

A little drive goes a long way

25 Feb 2015 Lifestyle
Dunedin businesses have given their full support to the Otago Polytechnic Education Open 2015. The event will be taking place at... more

Duke Kahanamoku – 100 years of Surfing in New Zealand

25 Feb 2015 Lifestyle
Surfbreak Protection Society Duke Kahanamoku – 100 years of Surfing in New Zealand Celebrations are to be held in New Brighton... more

Property

Auckland inner-city height restrictions weighing on supply

25 Feb 2015 Property By Paul McBeth
Auckland inner-city height restrictions weighing on supply, RBNZ's Wheeler says Feb. 25 (BusinessDesk) - New Zealand's government... more

NZ house sales rise 2.6% in January, median price dips from December

11 Feb 2015 Property
Article - BusinessDesk Feb. 11 (BusinessDesk) - New Zealand residential property sales rose in January from the same month last... more

Migration

NZ migration rose to record in 2014

30 Jan 2015 Migration By Tina Morrison
  NZ migration surged to record in 2014, helped by robust economy Jan. 30 (BusinessDesk) - New Zealand migration surged to a... more

Free new Kiwi workshops return for fresh season

23 Jan 2015 Migration
Newcomer settlement support agency Auckland Regional Migrant Services (ARMS) is kick-starting the New Year with the return of its ... more

Travel

Air NZ sees fare discounts; yield pressure looms

25 Feb 2015 Travel & Tourism
By Fiona Rotherham Feb. 25 (BusinessDesk) - The only cloud on Air New Zealand’s horizon in coming months will be yield ... more

Air NZ posts higher normalised earnings

25 Feb 2015 Travel & Tourism
Article - BusinessDesk   Air NZ posts higher normalised earnings By Fiona Rotherham Feb. 25 (BusinessDesk) - Air New Zealand... more

Sport

2015 NZL Sailing Team Announced

25 Feb 2015 Sailing
Yachting New Zealand has named 15 campaigns in the 2015 NZL Sailing Team. All are chasing the ultimate goal of Olympic glory in... more

All Blacks Tours to South Africa on sale now

25 Feb 2015 Rugby
The All Blacks are set to return to South Africa this July to take on the Springboks at Ellis Park in Johannesburg. This will be the... more

Columns

Gordon Campbell: Are NZ troops the least of IS’s problems?

25 Feb 2015 Opinion By Gordon Campbell
Gordon Campbell on whether New Zealand troops are the least of Islamic State’s problems   Given that it has been ... more

Gordon Campbell on drip-fed info about the Iraq deployment

24 Feb 2015 Opinion By Gordon Campbell
Gordon Campbell on the drip-feeding of information about the Iraq deployment   There are two ways of framing the story of our... more

Kiwi Success

New Consul-General to Sydney

20 Feb 2015 Appointments
Foreign Minister Murray McCully has named diplomat Billie Moore as New Zealand’s new Consul-General in Sydney. "Ms Moore will... more

New Ambassador to Ethiopia and the AU

20 Feb 2015 Appointments
New Zealand Government New Ambassador to Ethiopia and the AU Foreign Minister Murray McCully has named diplomat Bruce Shepherd as ... more

Recruitment

Workforce skills target lifted

19 Feb 2015 Recruitment
Tertiary Education, Skills and Employment Minister Steven Joyce says better-than-expected Better Public Services results mean the ... more

Strong job growth and record labour market participation

4 Feb 2015 Recruitment
The latest labour market data shows continuing strong employment growth with 80,000 more jobs added to the New Zealand economy in ... more