This does not compute

The International Energy Agency has again warned that the high oil price could strangle hopes for a global economic recovery. It also says that 90% of future growth in oil production has to come from the Mid-East, mostly from Saudi Arabia. Without a $100 billion annual investment in that region, oil prices will exceed $150 a barrel. But Saudi Arabia has just announced it is halting its $100 billion oil expansion program? This does not compute.

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2007-08 oil shock caused "substantial" decline in New Zealand's GDP say Reserve Bank economists

In a recent report, two New Zealand Reserve Bank economists have estimated the real effects of oil price shocks on New Zealand’s GDP. The economists conclude --

1. a 5% permanent increase in retail fuel prices implies a decline in NZ's GDP of 0.3%
2. a succession of oil price shocks such as those in 2007-08 had "a substantial effect on real GDP in New Zealand"
3. New Zealand's oil use is different, leaving us more vulnerable to oil shocks. Faced with oil shocks New Zealand households and firms have only one third of the ability to lower the amount of oil they consume, compared with the United States.
4. real wages decline in response to an oil shock, as they are eroded by inflation.

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Keynote speaker at NZ Petroleum Conference confirms peak oil and warns of economic collapse

Farouk Al-Kasim. a Norwegian oil expert, was a invited by the NZ government to be a keynote speaker at the NZ Petroleum Conference.  But in an interview on Radio NZ with Kim Hill, he rained on the government's parade big time, stating that we have already reached global peak oil.  He also said that higher oil prices and oil scarcity will mean global recession and possibly economic collapse.

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Peak Oil Could Halve NZ's Economy - says Report

Two Canterbury University academics have analysed the impact of fuel restraint (peak oil) on New Zealand's economy.

Their alarming conclusion is that with just 10% less fuel available, New Zealand's economy would shrink by around  $115 billion in just five years. If a 10% fuel restraint continued for 20 years, New Zealand economy would shrink by $412 billion compared to a business as usual scenario. 

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