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Opinion: How NZ can learn from the UK’s North Sea oil experience
December 3rd, 2009
By Rodney Dickens
To keep in touch with what is happening at the coalface I monitor developments in a range of industries. The recent flow of news about NZ oil and gas exploration has caught my attention and I believe this is an issue that warrants monitoring because it could have a massive impact on many NZ businesses, including a significant negative impact on non-energy exporters.
Having dismissed the recommendations of the 2025 Taskforce aimed at closing the gap between NZ and Australian incomes as being “too radical” the government needs to pull a rabbit out of the hat. The oil and gas industry appears to offer the government the only silver bullet available to both solve the major fiscal deficit problem and boost NZ economic growth.
Recent announcements by Energy Minister Brownlee highlight the massive impact the oil and gas industry could have on the NZ economy and also signal the government’s intention of chasing this opportunity.
I am no oil and gas analyst, but based on my layman’s reading of the tea leaves it seems that it is matter of when not if we strike pay-dirt. So this Raving tries to put this issue in context, including looking at the UK experience with North Sea oil.
In net, North Sea oil has been a godsend for the UK economy. However, it was not all roses because it is estimated to have boosted the pound sterling by 20%, which had a major negative impact on non-energy exporters.
The title to a recent article in The Independent by Kris Hall was: New Zealand ’set for an oil bonanza’. The following is taken from that article:
Renowned for his bullish views on New Zealand’s petroleum prospects, William Buechler insists New Zealand is set for an oil bonanza that will eclipse Britain’s North Sea oil boom. “New Zealand is at the beginning of a country-changing event; the challenge is going to be to embrace the change and get it right. Activity and momentum are increasing but going under the radar screen.”
For more than 25 years, New Zealand has thrived on the hydrocarbons produced by its Maui oil and gas field, prompting little in the way of new exploration. However, as global reserves dwindled and the price of crude soared, new exploration has began in earnest. More offshore wells have been drilled in the last two years than the rest of the decade combined: 35 on and offshore wells were drilled between January 2008 and July 2009 alone.
Helping drive this activity – some $200 million of exploratory drilling is planned this summer – has been a sea change in government attitude to the petroleum industry’s potential, says Buechler, lead portfolio manager of the Kiwi Pacific Fund. “Crown Minerals has been gathering seismic data and offering it for free and that’s allowed companies to look at data on a decreased risk basis.” Buechler says the scope for economic success from oil is “unquestionable” but investors must act now to get in ahead of overseas backers.
Only last week, Todd Energy chief executive Richard Tweedie confirmed Maari and its adjacent Manaia field in offshore Taranaki were home to 100 million barrels of recoverable oil, making it New Zealand’s largest crude oil field and twice the original 50 million barrels found at the Tui fields.
Another article on 19 November reported:
The Government is rolling out the welcome mat to foreign oil explorers as new estimates show the country could be sitting on $60 billion of untapped black gold. Energy and Resources Minister Gerry Brownlee said yesterday that by 2025 the amount of now untapped oil and gas off the coast could be worth about $30b a year in export receipts. Mr Brownlee said the tax receipts would amount to about $10b a year – enough to wipe out the current cash deficit.
There is nothing new in hype about NZ’s oil and gas potential, but a number of factors, including high oil prices, are currently aligned that increase the odds of this potential being realized. The government needs a solution to the fiscal deficit problem and a silver bullet to placate concern about our low standard of living vis-à-vis Australia. The 2025 Taskforce recommendations to address the income gap between NZ and Australia, released this week, have already been dismissed as “too radical” by the government (see here).
Dr Brash, who chaired the Taskforce, was reported to have responded to the “too radical” comments by Acting PM Bill English by saying, “there may be some other cunning plan, but I’m not aware of it”. The oil and gas industry could be the silver bullet the government has in mind.
The following extracts from a Businesswire article on www.sharechat.co.nz on 20 November makes interesting reading in the context of the idea that the government sees the oil and gas industry as the answer to both the fiscal deficit problem and boosting NZ economic growth prospects:
A partially privatised, government-backed oil and gas exploration business emerges as a practical option for kick-starting a higher level of activity in the New Zealand oil and gas sector, says a report prepared for Energy Minister Gerry Brownlee by broking firm McDouall Stuart.
The report was released with a speech from Brownlee this week showing the government is intent on making a bigger oil and gas sector part of its efforts to achieve a “step change” in New Zealand’s economic performance
It canvasses options rather than making firm recommendations, but dwells in detail on how a part-privatised exploration and production business would have relatively lower risk than other “significant stretch” options, while building on a range of other actions the government is already taking to boost oil and gas activity.
What makes the McDouall Stuart report particularly interesting is the fact that it identifies nine “minimal stretch option” actions that the government could take to encourage oil and gas discoveries, all of which the government is either undertaking or will do in coming months, in the eight point plan of action outlined this week by Brownlee.
On top of this, Brownlee also released this week a report from Aberdeen University Petroleum Economics Consultants suggesting that preferential tax treatment under the royalties regime for gas-only reservoirs could be used to make such finds commercially viable. At present, gas is only mined as a by-product of an oil find.
The government has motive to try and find a silver bullet, while Energy Minister Brownlee has shown intent to seek it in the oil and gas industry, but does the industry have the capacity to deliver? I am no oil and gas analyst, but based on my layman’s reading of the tea leaves it seems that it is matter of when not if we strike pay-dirt.
The appendix contains a selection of related the articles.
Putting NZ’s oil and gas potential in perspective
The left chart below shows the annual value of NZ imports and exports of petroleum and petroleum products, while the right chart shows the net balance of trade in petroleum and petroleum products in both $m and as a % of GDP.
Swings in the oil price have a major impact on both import costs and export earnings, but the left chart confirms the claims that energy is now one of NZ’s major exports. If oil and gas exports get even close to the $30bn a year level Brownlee has flagged then it would make oil and gas by far NZ’s largest export. To put it in perspective, in the year to June 2009 NZ’s total export earnings from all goods and services was $56b.
Lessons from the UK experience with North Sea oil
It was a drawn out process getting North Sea oil on stream. This Wikipedia link gives a good history. The salient points from the Wikipedia article are below, although the last two points are from a different source:
- Commercial extraction of oil on the shores of the North Sea dates back to 1851.
- The UK Continental Shelf Act came into force in May 1964. Seismic exploration and the first well followed later that year.
- BP’s Sea Gem rig struck gas in the West Sole field in September 1965. The celebrations were short-lived because the Sea Gem sank with the loss of 13 lives.
- The situation was transformed in December 1969, when Phillips Petroleum discovered oil in Norwegian waters. The same month, Amoco discovered the Montrose field about 217 km (135 miles) east of Aberdeen. The discovery of Ekofisk prompted BP to drill what turned out to be a dry hole in May 1970, followed by the discovery of the giant Forties oilfield in October 1970 – production from the field peaked in 1979 at 500,000 barrels per day. The following year, Shell Expro discovered the giant Brent oilfield in the northern North Sea east of Shetland. Oil production started from the Argyll field (now Ardmore) in June 1975 followed by Forties in November of that year, in a 17-year period the Argyll field produced 72.6 million barrels of sweet, light crude.
- The largest field discovered in the past 25 years is Buzzard, found in June 2001 with producible reserves of almost 64×106 m³ (400m bbl) and an average output of 28 600 m³ to 30 200 m³ (180,000-190,000 bbl) per day.
- Now, the North Sea is regarded as a mature province on a slow decline. However, thanks to ever more sophisticated technology, important amounts of oil and gas could be drawn for anything up to 50 years. New discoveries are still being made and the industry is now well established west of Shetland in the Atlantic.
- Two of the key centres of the industry have been the Great Yarmouth/Lowestoft area, centre of operations for the Southern North Sea gas industry, and subsequently, Aberdeen, now regarded as the oil capital of Europe. Other centres of the industry have been the northern isles of Orkney and Shetland. (See here)
The following is from an article by Philip Thornton, economic correspondent to The Independent in 2005. The article is dated in some respects but it is useful in terms of looking at the broader impact of North Sea oil on both the UK economy and on Aberdeen.
The impact of North Sea oil on the UK economic come via economic growth, the current account, sterling, employment, innovation, corporate profitability and the public finances
In 2004, for example, oil and gas extraction amounted to £32bn or around 3 per cent of total GDP.
Schlumberger Professor of Petroleum Economics at the University of Aberdeen who has written numerous articles about the prospects for North Sea oil, says the discovery of energy reserves has transformed the local economy.
He has calculated that while the population of the Aberdeen area fell by 32,000 to 436,000 in the 20 years up to 1971 it jumped back up to 533,000, an increase of almost 100,000, by 1995. However employment in the sector gyrated according to movement in oil prices and the timing of new oil field discoveries.
According to a research project led by Andrew Cumbers of the University of Glasgow and funded by the ESRC, the rapid growth of the North Sea oil industry fuelled the development of a cluster of oil-related activities around Aberdeen.
A survey of 192 companies and face-to-face interviews with 34 firms showed that there was a relatively high level of innovation among small- and medium-sized enterprises. More than three-quarters (77%) claimed to have developed new products and services in the previous five years.
Meanwhile a separate research project at the University of Strathclyde, also funded by the ESRC, found the global nature of the oil industry created potential opportunities for Scottish suppliers, as the same major oil-gas production and oil-related companies can be found in all the key international markets for the industry.
Until North Sea oil came fully on stream towards the end of the 1970s, sterling had traditionally been a weakening currency. But rising production of oil and gas from the North turned around the UK’s trade deficit in fuels from a peak of 4% of GDP in 1974 into a balance in 1980 and a surplus of 2% of GDP in 1983, leading to a 20% appreciation of sterling’s effective exchange rate.
The side-effect on the economy in the early 1980s was unfortunate, the rise in the pound’s exchange rate had a detrimental impact on the bulk of non-oil manufacturing as factories found their products rising in price in their key export markets.
Sir Michael Edwardes, then chairman of British Leyland, was reputed to have said he wished Britain would “leave the bloody oil in the ground”. Lady Thatcher, then Prime Minister, did not take that advice.
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* Rodney Dickens is the Managing Director and Chief Research Officer for Strategic Risk Analysis (SRA), which is a boutique economic, industry and property research company. Rodney produces regular free reports on topical issues and on specific property markets. Find out more about SRA here and sign up to SRA’s free reports here.
Appendix
$60b of oil off New Zealand coast?
Busy offshore oil and gas exploration season starts
Oil seeps to surface after earthquake
NZ Oil Exploration: Huge Pay-Off From Taranaki Oil
Untapped resource could offer energy boost
Tags: North Sea, Oil, Rodney Dickens, Strategic Risk Analysis, UK
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December 3rd, 2009 at 2:05 pm
So the Nat’s ” clever plan ” is to copy Britain’s use of hydrocarbon wealth , to prop up an ailing social-welfare system . And when the oil / gas runs out , what then ? ( and in the meanwhile the all comprehensive welfare ” package ” assists the expansion of an increased population or never-do-wells , with their flipping hands out , for a free ride , on the tax-payers’ backs . Better to leave the bloody oil in the ground ! )
December 3rd, 2009 at 2:18 pm
Rt is right…he leaves out the damage to the agr export sector from a Kiwi blowing past the US$..we would be deluged with boatloads of wannabee Kiwi types and of course Labour when in power would open the gates to all these new mates. Instead of being the making of the nation..a big oil/gas find would ensure the continuation of the same stupid policies by the next generation of morons in govt. Then the oil would run out and the rubbish left behind would be a much larger population dependent on welfare handouts from the cot to the grave.
December 3rd, 2009 at 2:52 pm
i.e.. , Wally , you end up with the detritis that is merry olde England , today . God save us all , from that ! You pegged it exactly . May as well pop into a cryogenics lab now , and skip the next 20 years , gotta feeling as to how it’s gonna pan out .
December 3rd, 2009 at 3:16 pm
Technically it is known as “Dutch disease”, when a boom in one sector crowds out others by altering the exchange rate, or starving the rest of the economy of capital.
We have seen a small example with the milk boom up to 2008, when high payout increased the price of farmland, making other ag returns uneconomic,
If we strike it big, I do home that NZ follows a “sovereign wealth fund” model ala Norway, which helps to sterilise the funds.
Rather than the UK path of spend it all now, cut taxes and increase spending.
December 3rd, 2009 at 3:31 pm
YYeess ! Take it – from the sea, soil, water, air, ground, nature as long as we can and as long it is available – and make money.
BB what a generation – we have everything that’s why – 100% pure megalomania and greed.
December 3rd, 2009 at 3:42 pm
Wally you sum it up beautifully !! +1
December 3rd, 2009 at 3:55 pm
As mentioned above, we need to seriously look at and hopefully follow Norway’s model.
It blew me away how far ahead of us they are in terms of infrastructure etc, with basically the same population.
For example, they wouldn’t think twice about tunneling under Auckland harbour, there would probably be 3 tunnels already!!
December 3rd, 2009 at 8:28 pm
Roger Thompson said: “So the Nat’s ” clever plan ” is to copy Britain’s use of hydrocarbon wealth , to prop up an ailing social-welfare system . And when the oil / gas runs out , what then ? ( and in the meanwhile the all comprehensive welfare ” package ” assists the expansion of an increased population or never-do-wells , with their flipping hands out , for a free ride , on the tax-payers’ backs . Better to leave the bloody oil in the ground ! )”.
Roger, I fear you are right. North Sea Oil cursed Britain by providing a ‘prodigal inheritance’ which has been foolishly squandered as you describe above. Now, with expectations of entitlement having been bid up to unimaginable levels, and the neglect of infrastructure coming home to roost, the Poms have to realise that there will probably be no ‘fatted calf’ to save them. Even if oil is discovered off the Falkland Islands its revenues will only be used to further finance what has become a dependency culture that simply beggars belief. Above everything, it is the waste of human potential that is so sickening – under the ‘benefits for votes’ policies of the British establishment.
In my view, New Zealand would be even more vulnerable to the ‘miss-use’ of such resources – especially given our current SOCIALIST government (that would give Gordon Brown a good ‘run for his money’). I am increasingly persuaded to your view – leave the wretched stuff in ground if you do not want your unique way of life ruined.
December 3rd, 2009 at 9:43 pm
My understanding is that the oil and gas is known to be there in NZ waters but until recently the cost of recovering it was too high compared with the price of oil. It seems not to be a “when or if” scenario as RD puts it, but a matter of when the oil price rises high enough to ensure big profits it will be worth extracting. National seems to be hoping that if it can keep the positive talk, and therefore public perception, going long enough the NZ economy will not crash before the global recovery happens for real. This oil and gas talk seems to me to be just that: talk without much in the way of solid plans behind it. Certainly makes everyone feel better having a bit of family silver in the cellar to be flogged off if needed.
December 3rd, 2009 at 10:22 pm
Who wrote the stuff article. Even with my basic mathematics 6.5bill barrels at todays price of around $75USD is a helluva lot more than $65bill more like $650 bill NZD. This becomes $1.25 trill if oil reaches $140USD again.
A lot of cash in anyones books.
Petrodollar anyone.
December 4th, 2009 at 5:00 am
The only lesson to learn from the UK’s North Sea Gas experience is how NOT to do it. The North Sea is now almost dry (the UK became a net oil and gas importer for the first time in 25 years in 2007/8) and Britain has nothing to show for their 30 year bonanza but a highly indebted consumption economy and B****r all manufacturing industry.
Norway have made a better job of it – particularly through their SWF and the enforced R&D development levy on drilling companies. Size and competency-wise they’re a better comparison to NZ too.
The worst thing that the NZ government can do in the current climate is roll over and give away licences for nothing – particulalrly givne how much government-funded seismic data there is now publically available . Note that in Iraq BP has just signed amajor extraction deal with the government which they recieve only 2.60 per barrel ( abarrel is ~$80 at the moment folks). Now Iraq is not the southern basin, but the lesson is: Oil companies will pay big money for licenses – if the government/crown minerals negotiates competently. However, if they roll over like a puppy dog NZ will get shafted. Again.
Why am i filled with foreboding?
December 4th, 2009 at 7:06 am
Oil and mineral bonanza to benefit who? thats the question.
Our first effort at exploiting our natural mineral resources in the wider public interest of the majority of New Zealander’s was stolen away from us by the predatory lending practices of the central banker/corporate subsidiary complexity that led to this nation, again, being put into receivership in 1984, and saw us forced to sell the “Think Big” projects back to the corporate subsidiaries of those that had extended us the credit then imposed tariff’s against the very goods we were mean’t to be able to export to pay down the loans, as explained by Rob Muldoon himself:
From page 109 Rob Muldoon’s Personal Veiw Of NZ Economy 1985
“Following the second oil shock in 1979 the volume of petro-dollars increased but the position of the non oil developing countries began to look less attractive, particularly as some of the new industries that were being developed found that when they came on stream their products, and steel was an example, were facing, protectionist barriers in their natural markets in the wealthy industrialised countries, in some cases the very countries that had provided the loans to build the plants.”
Full excerpts of his most enlightening book here
http://publiccreditorbust.blog.com/2009/05/30/rob-muldoon-made-a-scapegoat-for-bankers-repeated-crime-of-fraudulent-conveyance/
The Structural Adjustment Program imposed upon us after the 84 receivership by the international financial complexity opened the the borders of this nation to be hollowed and gutted by the very same interests. Since then we have received from foreign corporate raiders in return for our mineral resources a pittance by way of exploration license sales, miniscule royalties and tiny trickle down to local economies as most major plant was manufactured in slave labour economies and transported in.
The even greater deception is, that although most of the profit from exploitation of our own mineral resources now goes off shore, it is still recorded as a gain in our national interest when and added to our GDP, and said to assist our current account deficit, which is quite clearly nothing but “creative accountancy” at its glaringly obvious worst.
So I repeat, before we further open every inch of this country for exploitation, please think not only of the egological impact, but who will truly benefit from the “mineral bonananza”.
The answer is made even sadder when truly financially literate people know, despite what we are told, we can in-fact afford to underwrite these projects with our own public credit as they are perfect for the productive backing needed for our powered monetary base to be spent into circulation free of the cancer that is compounding interest.
December 4th, 2009 at 7:58 am
Can I vote for the Norwegian approach too please?
The pommes basically said whoopee and went and built some roads.
http://en.wikipedia.org/wiki/The_Government_Pension_Fund_of_Norway for an explanation of Norway’s approach…
December 4th, 2009 at 8:01 am
When I began work at the Moomba Gas Field , in 1985 ( South Australia ) , there was a guy with a tee-shirt which had printed on the back : God grant us another oil boom , I won’t piss it to the wall next time . . If we strike the big one , the gusher of all time , let us print up a batch of these tee-shirts for all those in parliament .
December 4th, 2009 at 9:33 am
RC and Slarty are right.
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The article should focus around the Norwegian approach and not be so UK centric.
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December 4th, 2009 at 10:02 am
A few things to think about – there’s a couple of multiple-variable equations here.
To put them in perspective, if the North Sea was to have powered the planet at current rates of consumption, would have done it for 4 – yes 4 – months. Our Great Southern Basin? 2 months.
Sure, they’re produced over decades, but:
There is typically a decade lead-time serious-seismic-to-production. That takes us past even the optimistic end of the Peak Oil plateau. Which takes us past a global fiscal collapse. (Can’t grow on dwindling energy, and needs to grow to continue).
What economists don’t get is that energy is needed for everything. Economists see it as 2% (or whatever) of a total, as if the other 98% could continue…….it can’t. No more than a body carries on without blood.
So it’s best to leave an energy source where it is. Invasion aside, you’re better off rationing it out over a very long period, for essential stuff like ambulances and agriculture.
Sooner we get efficient on the existing supply of renewable energy, the better.
December 4th, 2009 at 10:22 am
“including a significant negative impact on non-energy exporters” Agreed if we were to become a petro-currency we’d go from 0.75 on the dollar to 1.2…our exporters would be finished. We would then be dependent on tax revenue off oil and you only have to look at the likes of Mexico to see how bad that works out…. something Browlee if not National seem blind to.
If it was me I’d payout (fairly) the local oil companies and cap the stuff for the future….
regards
December 4th, 2009 at 10:38 am
“I am no oil and gas analyst, but based on my layman’s reading of the tea leaves it seems that it is matter of when not if we strike pay-dirt.”
I dont agree (on significant finds)…If we had the potential of a find on the scale of the North sea, with our current stable political system, with hick MPs….Exxon etc would be camped on the beehive steps…we need a North Sea/ Saudi every 4~5 years just to tread water on peak oil output of 74mbpd….
1) they have no where else to go…and are desperate to keep there “probable” reserve figures from dropping….
2) It takes 5~10 years to develop an oil field, no one in their right minds goes far out into the Gulf of Mexico and as deep as they have without real need….all for 300,000 bpd, maybe….if NZ could do that and more, Exxon would not have walked away…nor delayed….no one in their right mind these days does not drill in a good prospect where they wont get shot at and have a decent legal and political system to work with if need be ie wont get nationalised.
“prompting little in the way of new exploration.” The big oil corps have been scoring the world for places to drill….personally I think this is “pie in the sky” hype….just check to see what this guy is selling….
@RT: If they follow Norway, there is some hope…but given JBrownlee can be best described as a moron in energy understanding terms I don’t hold out much hope for finding anything and using it wisely if we do.
My best hope is that they find small oil fields of no use to the big guys such that indigenous companies develop over the next 20 years….giving NZ time to transition…and there is no adverse impact on other aspects of NZ.
regards
December 4th, 2009 at 10:57 am
These figures still seem wrong to me:
“The Government is rolling out the welcome mat to foreign oil explorers as new estimates show the country could be sitting on $60 billion of untapped black gold. Energy and Resources Minister Gerry Brownlee said yesterday that by 2025 the amount of now untapped oil and gas off the coast could be worth about $30b a year in export receipts. Mr Brownlee said the tax receipts would amount to about $10b a year – enough to wipe out the current cash deficit.”
1. It seems unlikely $30b in gross receipts will directly generate $10b net tax.
2. Or even close after input costs and “come to NZ” deals to oil companies.
3. $30b income on a $60b asset is a good rate of return.
4. 6.5b barrels of oil at 100NZD/barrel (say a 70USD Brent average) is more like $650 billion.
December 4th, 2009 at 11:22 am
Nicholas
I think your right re the value of the asset but the tax revenue could be right, mineral extraction is taxed at source (not GST/Profit)
Neven
December 4th, 2009 at 12:11 pm
@AndyM: “Who wrote the stuff article. Even with my basic mathematics 6.5bill barrels at todays price of around $75USD is a helluva lot more than $65bill more like $650 bill NZD. This becomes $1.25 trill if oil reaches $140USD again.
A lot of cash in anyones books.
Petrodollar anyone.”
6.5bbl according to “GNS Science”….There are about 2.3 trillion barrels known about / expected in the world….last year(?) these(?) twits said there could be another 1 Trillion out there for NZ….yeah right.
Lets not forget this is the GNS Science brigade and not real oil companies geologists….now there is one dept that can be sacked….
Anyway if there are 6.5B that I assume is “oil in place”…recovery factor is 35~55%…so realistically 3billion…is where you need to do the sums. This is after you have actually drilled as at that point both those numbers are reasonably accurate…So 3billion x $80 is a fair guess on its value…
At $80 though that’s 4% of GDP much if anything sends the developed world into recession…..$147 was 6.5~7%(?)….that’s what IMHO plunged us into the present fiasco. Some of the better writers I read now say that $147 was likely the peak price, from now on with our [global] weakness and shrinking GDP, $100 at most $120 is likely to do the same, presonally I agree…so I suggest you dont wish for $140.
The more interesting energy source is the deep sea methane…that seems far more likely to exist, may never be economical to get mind.
regards
December 4th, 2009 at 12:14 pm
“So it’s best to leave an energy source where it is. Invasion aside, you’re better off rationing it out over a very long period, for essential stuff like ambulances and agriculture.”
When this happens or it dawns on those that have the resources in demand, I expect this is what will happen….not nice to say the least…..bear in mind almost bankrupt states like Pakistan have nuclear weapons….
“Sooner we get efficient on the existing supply of renewable energy, the better.” For NZ that’s possible, for the rest of the world with too high a density of population well see my para above.
regards
December 4th, 2009 at 1:22 pm
http://money.cnn.com/2009/12/03/news/economy/cheap_oil/index.htm
Just one of the pieces arguing against ever seeing such a spike again…or maybe its we dont want to see it because if it happens then its meltdown time.
regards
December 4th, 2009 at 3:41 pm
“at least as necessary as acting to limit climate change, substituting the loss of world oil production capacity due to Peak Oil, through the next 20 years, itself sets massive challenges”
http://onlinejournal.com/artman/publish/article_5305.shtml
Any country sitting on oil should wait 20 years
December 5th, 2009 at 2:42 am
We should do what other Nth Euro’s have done. Invest and only use the interest on social spending. Only the dividend / interest gets spent and then there is still something left over, but capital should never be touch. Umm, like the idea of Cullen fund (is that too commie). But Roger and Nat boys in the 90’s taught us ” Govt is bad, let a very, very small group of people control the interests of our country and the market”. So, thats why we only have the best investment in town as Hanover and Blue chip and maybe Dan the Man from Qtown. Public goods are for everyone, I like Norway. Long term is good.
December 5th, 2009 at 3:09 am
PS: I work in the LNG industry, but only a hands on person, Not a uni grad. Above is too many numbers, Normal everyday people need concepts not numbers crunchers. JK and his mates can do that but normal people need to make the boundaries. Just like your kids, point them in right direction, all good. Forget the high end numbers, just need to create a balance of ‘ we own it, you pay us, Gov’t invests, all smilies. Works for Norway. All of the companies involved will still invest, but the rules will be different, they’ll make mega – bucks instead of extra mega – bucks. Win Win: as david brent would say.
December 5th, 2009 at 8:21 am
Ultimately Rogernomics doesn’t work. It runs into ‘doubling-time’, and into ultimate scarcity. But then, it was only about redistribution of the wealth, let’s face it.
If Brownlee understood doubling time, he would know that the fact he’s eyeing up Conservation land means he’s into the last – ever – doubling time.
These people are just so cranially bankrupt – makes you wonder.
A sustainable regime – by definition – doesn’t include finite resource extraction.
Which means the path he’s on is unsustainable.
Why we don’t spent the ‘lubed ‘ time left, to get to sustainable energy, beats me.
December 5th, 2009 at 8:52 am
Be careful what you wish for. Hobbiton was a paradise until Bilbo brought the ring back, but when the eye of Mordor turned on them, it was over. Iain is right to point out what happens to countries when the Economic Hit Men adjust their crosshairs.
December 5th, 2009 at 9:41 am
Ian Parker, spot on as usual.
Why the hell can’t we develop our own oil. Lets see;
Expertise: there are plenty of ex North Sea oilmen who’d prefer to be working out here (and helping train our own guys) than in the Mid East – same money, more women and booze less sand and camels
Capital: by focusing our limited resources and borrowing capacity on productive development as opposed to getting deeper into debt just to pay the grocery bill we can do it, or why not just issue the funds as Ian suggests.
What is the problem?
Even just seriously threatening to develop our own resources raises our bargaining position.
First step; tell the multi national oil companies “we are not for sale”
December 7th, 2009 at 7:15 am
@Powerdown: “time to get to sustainable energy”….you answered your own Q I think…”
“If Brownlee understood……….so cranially bankrupt”.
But apart from the Green’s, virtually all the rest dont want to know…
regards