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Thursday, July 7, 2011

Infrastructure Plan wilfully oblivious of peak oil

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The government's Infrastructure Plan is meant to map out a strategic direction for New Zealand infrastructure for the next 20 years. It fails miserably because it wilfully ignores peak oil.

Okay, peak oil does get a mention -- just once in the 68 page document. Here is the quote...
"A number of high level trends will shape our economy (including global trends around climate change, technology and peak oil), and with it the demands for infrastructure."
But that's it. None of the subsequent analysis and strategic planning takes any account of the likely impact of higher fuel prices and shortages. This, in spite of the advice from the Reserve Bank that oil shocks are already substantially lowering GDP and causing higher inflation.

It gets worse. The transport/roading projections - see graph - totally ignore the available data that vehicle kilometres travelled have not increased and freight tonnes per kilometre have actually fallen. The plan magically conjures up substantial increases in the next 20 years which exceed even the misnamed "current growth path" ! (Even this a fiction as there is no "current growth", and it does not follow the flat or declining trend  of the past 5 years or so.)

click to enlarge

One obvious reason for these absurd predictions is that they are based on hopelessly optimistic forecasts of oil prices

What would a peak oil aware infrastructure plan look like?

The Association for the Study of Peak Oil (ASPO) in Australia made a compelling submission on the Australian Infrastructure Plan in 2008.

These extracts could be applied directly to New Zealand infrastructure planning word for word!

"Existing shortcomings in transport infrastructure planning are largely attributable to discredited oil price forecasts and flawed transport projections by official government agencies, which ignore the onset of peak oil and its various socio-economic impacts.

These projections either ignore oil prices as an ‘externality’ or make unsupportable assumptions about alternative fuels and propulsion systems, in terms of scale, time, cost and the laws of physics.

Underlying assumptions about perpetual economic, employment and population growth are also highly questionable. No detailed studies into the nature and magnitude of peak oil mitigation have been undertaken in Australia to support these assumptions.

The absence of an Australian equivalent of the Hirsch Report, coupled with widespread ignorance and/or denial of peak oil, has resulted in the predominance of wishful thinking rather than rigorous, objective analysis."

The key recommendation from ASPO in Australia was therefore to:-
“Commission an independent study into the implications of peak oil for transport planning, in order to determine realistic planning assumptions.”

Here are ASPO's other recommendations (which again could be transposed to New Zealand almost without change) :-
  • Include the need to “reduce Australia’s oil vulnerability” in Infrastructure Australia’s goals and strategic priorities.
  • Mandate the conduct of oil vulnerability assessments in the feasibility studies for significant infrastructure.
  • Establish a strategic petroleum reserve.
  • The Federal Government should invest directly in renewable, distributed energy infrastructure.
  • Allocate a high priority for world class public transport and enhanced freight rail infrastructure.
  • Allocate a low priority for airport expansions.
  • Investigate the feasibility of high speed passenger rail to connect capital cities and regional centres.

The contrast between the rigorous objective analysis from ASPO and the wishful thinking from the government could not be starker.


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