Aviation, tourism and energy writer for the Business Herald

Pricey petrol's here to stay

Oil will be the primary transport fuel for the foreseeable future, says Sir Tony Brenton. Photo / APN
Oil will be the primary transport fuel for the foreseeable future, says Sir Tony Brenton. Photo / APN

Get used to high petrol prices - that's the stark warning for New Zealand motorists from an expert on global energy politics.

Sir Tony Brenton, a British diplomat for 30 years in the Middle East, Russia and the United States, said the threat of social unrest in the big oil-producing Gulf states and the other oil giant, Russia, had put a floor under prices with US$80 ($94.78) a barrel being the new low.

In response to disturbances in the Arab world, Saudi Arabia and other Gulf sheikhdoms had thrown money at their populations. "Russia's in the same position. The price per barrel they need to pay for their social expenditure is around US$80 to US$90."

Unrest during the Arab Spring was the inevitable consequence of the "energy curse".

"If you're an oil-producing state or have access to oil revenues, it's very easy to run a country undemocratically - the energy curse," Brenton said.

"As we've seen in the last couple of years there's been the reaction to this - it raises deep uncertainties about energy supply in the region if what's going on in Egypt and Tunisia spreads. What already feels like high oil prices will get a good deal higher with very damaging effects for what are already very shaky economies."

At the weekend, petrol prices in New Zealand rose to a near-record $2.20 a litre for 91 unleaded petrol.

Oil would be the primary transport fuel for the foreseeable future, he said, and New Zealand needed to keep its supply options open. Powerful allies such as the US were critical to keeping sea routes open.

"You can't [do] as Europe has done and get locked on to Russian gas and found itself worrying about stability of supply."

Brenton was also a negotiator for Britain at the 1992 Earth Summit at Rio and the Kyoto agreement.

Without the inclusion of China, other rapidly developing countries and the United States in treaties, future prospects were not bright, he said. China and countries such as India argued they were poor and trying to help their populations become richer, not pay carbon charges.

Brenton said there were some hopeful technological solutions using experimental geo-engineering to counter carbon emissions.

Postings to Cairo, Moscow and Washington DC had confirmed his views on the influence of energy on global politics. "Energy is the ghost in the machine. It's a lot of what goes on in world politics without necessarily being [visible]."

Energy series

* The University of Auckland's Energy Centre is hosting a series of speakers during the year.

* Former British diplomat Sir Tony Brenton will speak at the university's business school today at 6.30pm.

- NZ Herald

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