"No shortage’ of oil

Press, 12 April 1979, Page 21

"No shortage’ of oil

PA Whangarel There is no shortage of oil in the world today, according to the member of Parliament for Kaipara (Mi P. I. Wilkinson). He told a meeting of Maungaturato Rotarians that some people were under the impression that there was an actual oil shortage — but they were wrong. ‘ There is a real immediate short-term oil-supply problem because of the revolution in Iran, but the real oil-crisis problem is one of price, not supplv.” he said. “The oil-produc-ing countries are strong enough today to charge exorbitant prices for oil and get away with it.” Mr Wilkinson said that publicity about the energy crisis in the last five years had included much speculation and rumour that had turned out to be wrong. Estimates of world petroleum reserves, had to be viewed with caution. For example, so-called proven oil reserves in the Middle East had risen every year since records had been kept. Mr Wilkinson said that the latest oil-price rise by the members of the Organisation Of Petroleum

Exporting Countries meant that New Zealand’s oil bill this year would be well over S6OOM. Most of the implications for New Zealand were harmful, although there should be one or two side benefits. The price increases meant that the price not only of oil and its byproducts went up but also the price of everything that New Zealand imported. It also meant a continuing big source of inflation over which no New Zealand government had control. Oil producers fixed their price according to what the wealthiest Western economy could afford and New' Zealand had to take it or leave it. This meant continuing pressure on the country’s overseas funds. Another adverse effect was the encouragement the O.P.E.C. success was giving to the formation of cartels for other key raw materials that had to be imported. Bauxite, copper, and nhosphate were some of the products to w’atch in that respect. Other effects included the boost to alternative domestic energy resources, the boost to local oil

exploration, a possible adverse effect on tourism through fare increases, pressure to speed up approval of the Marsden Point oil-refinery expansion, and a growing premium on natural gas reticulation as an influence on regional development. “It is our great good fortune to have the Maui gas field coming on stream on May 31 and at a time when revised electricpower estimates point to the likelihood that we can meet our future electricity needs mainly from renewable resources on hydro and geothermal power,” said Mr Wilkinson. “These developments focus attention on the use of natural gas as an alternative to existing liquid fuel, which could mean major savings on our future oil-import bills.”