Tuesday, April 18, 2006

Oil Settles Over US$71.

Interestingly the media largely ignored the movement from around $62 a few weeks ago to the current 70 odd dollars a barrel. However the last 48 hours have seen all the usual excuses being rolled out, Nigerian concerns, Increasing descent into civil war in Iraq, Iranian Weapons of Mass Destruction etc.

So the average clueless punter queuing up at the pump is paying all time NZ record amount for petrol - almost $1.70 a litre.

Meanwhile the heavy machinery continues to roll around the Terrace Tunnel Wellington with the "bypass" well underway. It's hard not to question the sense in building all this shit. Millions of dollars building concrete ramps all for the holy grail, chopping 3 minutes off your commute time across town, by the time they are finished only the rich will be able to afford to drive on them. And I'm yet to see a single bio-fuel pump station pop into existence as the market promised. I guess there will be a run on used chip oil from the local greasy shop.

On another note, weeks ago I wrote to Trevor Mallard (acting Minister of Energy) with two points. 1. I pointed out the flaws in the MED Oil Pricing Assumptions and Modelling, I wrote a PowerLess NZ press release on this (follow the link). 2. I asked if the minister could assure me that appropriate transparent risk mitigation analysis be done before a billion tax payer dollars was spent on more roading (A billion dollars is the expected cost of the Transmission Gully road).

So far I recieved nothing although I was promised a reply. This from Bruce Donaldson, Trevor Mallards secretary.

Thanks Steve,

I can advise that a response is being prepared for the Acting Minister of Transport and will be copied to the Acting Minister of Energy for his information. The Acting Minister of Energy has noted your email Steve and is seperately enquiring of his MED officals the robustness of their and the IEAs modelling for his own information in light of your concerns.

Yours sincerely
Bruce Donaldson

Private Secretary to the Acting Minister of Energy, Hon Trevor Mallard

I wait with baited breath.
Steve McKinlay

1 comment:

benw said...

Hi Steve,

Enjoying your posts. The thing that I find most frustrating is that even if we can't agree on what the price will be in 5, 10, 20 years (or 5, 10, 20 weeks for that matter) the point should be that the fact that price of oil is so volatile that we should be looking to reduce dependance on it for that reason alone.

Then, still putting aside geological peak issues, there is the 'logistical peak' issues (lack of infrastructure and people to get even the known reserves out of the ground let alone find new ones) and the political instability (minor understatement) of the remaining major suppliers.

It really begs the question why we insist on making investment decisions such as Transmission Gully which put us further down the path of dependence on this commodity.

And then, let's talk about if Campbell and co. are right on the dates for a geological peak, and then all hell breaks loose; but my point is that we don't even need to get to that for it to not make sense to keep on the 'investment as usual' path for New Zealand.