Parliament's ostriches ignore oil price dangers

Parliament's Finance and Expenditure Committee has failed to support a Green Party proposal for a select committee inquiry into the impact of an oil price shock on New Zealand. The inquiry had the support of the Greens, Labour and the Maori Party but was opposed by Act and National.

“This Government has its head in the sand about the end of cheap oil, and this wilful ignorance will prove very damaging for New Zealand,” Green Party Co-leader Dr Russel Norman said.

The International Energy Agency, the US Department of Energy and Lloyd’s of London are all warning of an imminent oil supply crunch and price spike.

“All these institutions have made it very clear that the world is facing an oil price shock in a few short years and this will have a very significant impact on the world economy,” Dr Norman said.

“The Government can put its head in the sand but that won’t make it go away.

“It is urgent that we have a rational debate on the impact of an oil price shock so that we can make rational decisions on infrastructure spending now.

“Infrastructure such as motorways and public transport will last for decades and will cover the period of the oil price shock, so their relative merits need to be examined.

“The Government must also reconsider the vehicle fuel efficiency standards it scrapped last year and other means of reducing New Zealand’s dependence on oil.

“No matter how many oil wells are drilled, New Zealand’s economy will be hit hard by the coming price shocks.

“It’s time to face the future rather than stick our heads in the sand in the hope that it will all go away,” Dr Norman said.

Sustainable Energy Security: A new Lloyd's 360 Risk Insight report examines the growing risks to business around securing reliable and sustainable future energy supplies.
http://www.lloyds.com/News-and-Insight/360-Risk-Insight/Research-and-Reports/Energy-Security/Energy-Security