1. JEANETTE FITZSIMONS (Co-Leader—Green) Link to this
to the Prime Minister
What instructions, if any, has she given her Ministers and her department to develop a strategy for New Zealand’s primary industry, transport, tourism, and trading relationships to adapt to the reality of more expensive and less available oil, in light of her statement of 18 April that the reason for high oil prices is “because we’re probably not too far short of peak production, if we’re not already there”?
Rt Hon HELEN CLARK (Prime Minister) Link to this
Ministers and officials are working on how to increase the use of bio-fuels, as well as researching improvements in vehicle fleet efficiency. As well, a New Zealand energy strategy is being developed, and the National Energy Efficiency and Conservation Strategy is being reviewed, and I thank the member for the work she is doing in respect of that. The actual date for peak oil production is a matter of debate but there is no doubt that it will occur.
Jeanette Fitzsimons Link to this
Is she confident that the national energy strategy will take sufficient account of her statement, with which I agree, that oil is not going to get cheaper over the long term, given Treasury’s projection in the December Economic and Fiscal Update that prices will drop to $54 a barrel, from $75 now, after this year and the 2003 projections still on the Ministry of Economic Development’s website that forecast a drop in oil prices to $25 a barrel by 2020 and constant prices thereafter?
Rt Hon HELEN CLARK Link to this
I think there will be fluctuations around the price, but I have little doubt that the long-term trend will be for the price to go higher. That is because of the huge demand for oil now as a finite resource from the emerging mega-economies of China and India and also the fact that the world’s oil supplies tend to be drawn from rather unstable parts of the world. All those factors are leading great economies like that of the United States to start to think actively about how to move to a post-oil economy.
Jeanette Fitzsimons Link to this
Does she agree that if cities are to remain viable, investment must shift from new motorways into better public transport, especially electric rail in Auckland and trolley buses in Wellington, and what does her statement about peak oil imply for the economics of a new Transmission Gully motorway at a time when the affordability of private motoring is declining?
Rt Hon HELEN CLARK Link to this
I absolutely agree with the member about the importance of investment in public transport. The investment that has gone in over the last 6½ years is many times what was there before then, and that is the right thing to do. I think for the modern day and age, people want the independence the private vehicle offers, but for the future I think we will see the private vehicle increasingly be powered by sources other than oil.
Jeanette Fitzsimons Link to this
Has she received any reports that suggest that our current high use of transport fuels, which is growing by nearly 4 percent a year, could be sustained by bio-fuels alone, and what impact would that have on land available for agriculture in New Zealand?
Rt Hon HELEN CLARK Link to this
No, I have not seen reports on that, but I understand from colleagues that the Government is likely to be setting a target around bio-fuels in June. I look forward to that, because I think that will be part of our energy future.
Jeanette Fitzsimons Link to this
Will the Government consider establishing a process involving both the Government and the private sector to study the work done in Sweden, which plans to cut its reliance on petroleum by 2020, and to plan a similar transition here?
Rt Hon HELEN CLARK Link to this
I am open to such suggestions. I am well aware of the impetus that Sweden is giving to how to develop a post-oil economy, and it is good to see those kinds of initiatives from offshore now being reported in our own press, and quite fully. I think we do need new initiatives, and I am certainly open to discussing initiatives like that.