New Zealand is highly vulnerable to oil price shocks that are nearly certain to occur in the next few years according to a research report published by Parliament today, said the Green Party.
The report states that another supply crunch is likely to occur soon after 2012, and high oil prices will be sustained in the future because low-cost reserves are near exhaustion. It warns that the world economy could suffer recurrent recessions as the price fluctuates.
“This report makes it clear that the Government’s decision to spend over $11 billion on horrendously expensive new expressways is short-sighted and irresponsible,” said Green Party Co-leader Russel Norman.
“Continuing to spend the vast majority of the transport budget on roads will only make us more dependent on oil, and more vulnerable to high prices.”
New Zealand’s economy is extremely vulnerable to high oil prices because our transport sector is so reliant on imported oil. Oil and vehicles make up 30 percent of our total imports.
“The idea that New Zealanders will be able to switch to electric vehicles in a short period of time is unworkable – it would cost us a fortune,” said Dr Norman.
“The smart solution to both congestion and high oil prices is to invest in rail, buses, walking and cycling.
“We continue to ask Transport Minister Steven Joyce why he won’t shift funding to smart rail projects like the CBD Rail Loop, which should be the priority and is what Aucklanders clearly want.
“We need to future proof our transport system now. The Government has the means, there’s no excuse not to act,” said Dr Norman.
Link to Parliament Research Report “The Next Oil Shock”:
Link to Russel Norman’s question to Minister of Transport Steven Joyce yesterday: