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FarmGeek » Deckchairs on the Titanic…

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Deckchairs on the Titanic…

139…it’s amazing how much fuss a number can generate. With the price of oil reaching a new high last week, the concept of further, unending rises has finally made it’s way half-heartedly into the mainstream media.

With the story is covered by every major news outlet, estimates of $150 to $250 oil are floating around. I suspect both estimates will be correct, given enough time. Coverage or investigation into the actual causes of the situation, or the possible ramifications has been fairly thin on the ground.

It’s ironic that while both the Automobile Association and some NZ banks are calling for relief for motorists in this “extraordinary time” in the form of reduced pump prices and tax relief respectively, the US and other developing countries are crying foul about fuel subsidies in the developing world. Apparently, the current high prices are the fault of India, China, Japan, South Korea etc who subsidize their nation’s fuel use. There is very little mention of the fact that global oil production has been fairly static around 85 million barrels per day for the last 3 years while demand has continued to climb. If Saudi Arabia could produce more oil to increase supplies, don’t you think they already would be?

So if the markets are this jittery now in the face of constrained supply, how will they react when available oil actually starts declining? Once you are at the plateau of the peak curve, there’s only one way to go. The media and most of the public are treating the current high oil prices like an extraordinary event – and sure they are, but not in the way the 70’s oil shock was or the ’87 stock market crash was. The current situation is extraordinary because it is the first time we’ve been in this position (in the 70’s there was plenty of oil available, just not to us), but it certainly isn’t going to be a one-off occurrence.

In addition to the calls for a reduction in tax on food (and just this week, petrol), we’ve just been told each working person will get a few dollars of tax relief a week come October. Even if all of these measures come to pass, the actual benefit to consumers will be completely swallowed up by the continuous march of food and fuel prices over the coming months.

The link between energy prices and our standard of living isn’t being spelled out clearly enough. This week in Spain “the regional government of Catalonia enacted an emergency action plan to bring in fresh food and fuel supplies after nearly half of its forecourts ran dry and supermarkets shelves were left bare. The situation was the result of the second day of an “indefinite” nationwide strike staged by lorry drivers”. Just two days without fuel deliveries and supermarkets were running empty. Admittedly, this was due to local protest action, but it shows how fragile our supply chain has become in the face of any disruptions to fuel availability.

NZ is at the end of a very long, fragile supply chain when it comes to getting most of our energy. We are deluding ourselves if we think we will always have access to plentiful oil (at any price) when the rest of the world it scrabbling to control what is a declining global supply. We urgently need to have the discussion about our food and energy security, but I fear we will have to hit the iceberg before we realise it’s time to change course.


  1. Robin Marshall said,

    June 24, 2008 @ 3:32 pm

    I think people are either in shock or denial about this right now, the difficulty is going to be compounded when we factor in the near doubling price of fertiliser along with the transport costs. There are some good side effects though, local organic farming will become more cost effective, people will need to stop living as consumers and expensive transport may force people to slow down and spend more time with their families.

  2. FarmGeek said,

    June 24, 2008 @ 4:53 pm

    I think denial is in full effect at the moment – from government, to business and the media. Nobody wants to know how bad the news really might be. For the last 3-4 years I’ve been trying to spread the word but have come to the realisation that preparation and mitigation strategies are now more urgent and useful than changing minds. Hence our move to lifeboat farm last year. The best thing to do is grow more veges, quickly.

  3. Kevyn Miller said,

    October 31, 2008 @ 1:28 am

    The fragility of our oil supply lines was dramaticly illustrated two days before Labour weekend. Arthurs Pass service didn’t receive the delivery of 91 that it had ordered a week earlier because the ship was running late. The fuel was delivered on Tuesday. This service station is the only one remaining between the plains and Hokitika. If oil companies can’t meet the needs of rural New Zealand in good times what are things going to be like after the peak?

  4. Sonja said,

    December 27, 2013 @ 6:41 am

    Wow, this article is good, my sister is analyzing such things, so I am going to inform her.

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