The International Energy Agency has published it's “New Zealand Energy Review 2010" which confirms that New Zealand's oil and gas production has peaked and will enter a period of rapid decline. This was exactly the conclusion I reached in my earlier posts in January 2011 regarding the Venture Taranaki report, and the presentation by Dr Peter Crabtree of the Ministry of Economic Development to the Petroleum Conference in November 2010
"Production is expected to decline progressively if no new fields are discovered. This will have a significant impact on the country’s oil security. The fast rate of expected decline owes to the fact that recently commissioned producing fields, for example Tui, are relatively small and have a high rate of depletion."
"As the Maui field has depleted, more diverse sources of oil (and gas) have been found but New Zealand’s domestic production is forecast to decline significantly over the coming decade if new fields are not discovered and developed."
"Domestic crude oil production was almost 54 kb/d in 2009, and is expected to be similar in 2010. No sizeable new fields are forecast to come on line in the coming years, and production will decline rapidly if no new oilfields are discovered."
"New Zealand is self-reliant in natural gas but faces a decline in domestic production as output from the Taranaki Basin falls. The oil industry is similarly affected as production is forecast to decline rapidly."
Looking at consumption the IEA says --
"Oil consumption has grown steadily since the mid-1980s, reaching almost 150 thousand barrels per day (kb/d) in 2009 (including international transport). Although there was notable domestic crude oil production, approximately 54 kb/d in 2009, imports still met around two-thirds of New Zealand’s oil demand."
One of the key recommendations in the IEA review is that New Zealand should -
"Finalise and implement the New Zealand Energy Efficiency and Conservation Strategy and give priority to enhancing energy efficiency in the transport, commercial buildings and industry sectors by defining clear objectives for the sector supported by adequate cost-effective measures and long-term investments"
comprehensive blueprint for fuel conservation commissioned by the New Zealand Transport agency, which is just gathering dust.
And to those who say declining domestic production is even more reason to search for oil offshore, or convert Southland coal to lignite, or go electric, the response must be that apart from the obvious environmental and climate change issues - the timing is all wrong --
It will take 10 – 15 years at least to –
• Change even a fraction of the car fleet to electric
• Bring any new offshore or coal to liquid fuel or other unproven “solutions” into production
Meanwhile the oil crisis is upon us now…….
which means the only sensible option is for the government to do what the IEA suggests .. give priority to enhancing energy efficiency in the transport, commercial buildings and industry sectors.