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New Zealand parliament report: The next oil shock?

in Peak Oil by

On 13 October 2010, the New Zealand Parliament released a research report entitled “The next oil shock?” dealing with peak oil and future supply for the world.

Some key aspects of this paper concluded that “Low-cost reserves of oil are rapidly exhausted, forcing oil companies to turn to more expensive sources of oil. This replacement of cheap sources of oil with higher cost sources is driving the price of oil higher” and that “there is a risk that the world economy may be at the start of a cycle of supply crunches leading to price spikes and recessions, followed by recoveries leading to supply crunches.”

The main finding was that: “New Zealand is heavily dependent on oil imports and will remain so for the foreseeable future. While there is potential to increase domestic production substantially, domestic oil production cannot insulate New Zealand from global oil price shocks because New Zealand pays the world price for goods like oil” and “Key export-generating industries in the New Zealand economy including tourism and timber, dairy, and meat exports are very vulnerable to oil shocks because of their reliance on affordable international transport”.

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