Energy analysts are playing down a Green Party forecast of petrol costing $3 a litre and oil shortages within a decade.
After two years casting around for an issue to rival their genetic engineering campaign in the 2002 election, the Greens have put their first stake in the ground for election year and returned to an earlier core theme, New Zealand’s dependence on fossil fuels.
In a “state-of-the-planet” speech to party faithful on Waiheke Island at the weekend, Greens co-leader Jeanette Fitzsimons said her party’s task was to help transform civilisation to meet the challenges of dwindling oil reserves, climate change and ecological collapse.
She predicted oil demand could outstrip supply within 10 years and motorists would soon face petrol priced at $3 a litre and rationing.
“The cost of farming, fishing, manufacturing and international trade will skyrocket and our international markets will no longer be able to afford our butter,” she said.
Analysts have cast doubt on Ms Fitzsimons’ claims but she received support yesterday from Energy Minister Trevor Mallard.
“I am glad the Greens are pointing out the issues in the world,” Mr Mallard said. “Industrialised nations will need to look closely at alternative forms of fuel but the time scale depends on whether or not we discover more oil deposits.”
In her speech, Ms Fitzsimons, who drives a 1982 car converted to run on cng, said people’s reliance on fossil fuels was one of the greatest threats to the planet.
Cheap oil encouraged waste of resources, such as Australia shipping biscuits and icecream to New Zealand while New Zealand shipped biscuits and icecream to Australia.
The Government’s official estimate of “peak oil” – the point at which demand outstrips production – is 2037, based on the forecasts of oil companies, the United States Government and the International Energy Agency. But Ms Fitzsimons said the agencies were “daydreaming”.
“When you look beyond the oil companies to independent, experienced petroleum geologists, you find a consensus that we may well have less than 10 years before we reach this terrible tipping point.
“The end of cheap oil is coming toward us with the force of a tsunami and New Zealand is not ready.”
Energy analyst Robin Clements, a senior economist for Swiss bank UBS, said it was Ms Fitzsimons who was daydreaming. Whenever the oil price spiked as a result of world unrest, fear of shortages or strong growth, the scenario painted by the Greens appeared.
Mr Clements did not disagree that world demand for oil would sooner or later outstrip supply at current levels, but said markets rarely let such a thing happen. Either new reserves were found, price rises suppressed demand, or technology moved on.
When oil became more expensive, exploration became more affordable and it was possible that vast reserves were untapped off New Zealand’s coast.
The deputy secretary of the Economic Development Ministry, David Smol, said there were so many variables in predicting supply and demand that it was difficult to prove or to disprove Ms Fitzsimons’ scenario.
“To say the end of cheap oil is nigh is perhaps at the pessimistic end of the range of views.”
The Greens plan to push Labour to adopt more oil efficiency targets if they form a coalition in government later this year. Ms Fitzsimons said Green policies would include sending long-distance freight by rail or ship and extensive use of public transport. The party also advocated trading less and becoming more self-sufficient, and using wind-assisted shipping instead of aircraft.
