Oil addiction: Steps to tackle our dependency

David Parker

What is the Government doing about our reliance on oil? To find out, we put questions to David Parker, Minister of Energy and Minister of Transport

Is New Zealand addicted to oil? If so, is it something we need to worry about?

Oil plays a very significant part in the New Zealand economy, as it does in every developed country, but we must moderate our consumption. We have to develop alternatives because without them we are vulnerable to oil production peaking and prices rising.

Does the Government have a policy on reducing oil consumption?

I am very focused on improving the fuel efficiency of the vehicle fleet. This will reduce our use of fossil fuels, reduce emissions and improve air quality as well as save motorists money.

As part of the climate change policy review, officials are looking at the options to improve vehicle fuel efficiency. More details will be available in April.

The Government is also committed to introducing biofuels.

There are genuine alternative fuels available now. What's stopping us switching to biofuels tomorrow?

We want to get the introduction of biofuels right. New legislation will be required to regulate the quality and form of biofuels and also to enable the biofuels sales obligation. The aim is to have the legislation in place by the end of next year, and to see biofuel blends available to motorists as soon as possible thereafter.

Although biofuels are cost-effective to produce at current oil prices, there is a reluctance to invest in the necessary infrastructure to produce and distribute biofuels in case the price of oil declines. By introducing a mandatory sales target, a specific level of demand can be created, giving certainty for investment.

The Government and car manufacturers are assessing the mix of biofuel to ordinary petrol and diesel that will work well in the vehicles we have here.

When biofuels are introduced, how will consumers be encouraged to use them?

To meet their Biofuels Sales Obligation, oil companies will need to market the biofuel blends. In addition, the Energy Efficiency and Conservation Authority (ECCA) will be providing information on biofuel blends to consumers and the motor trade.

Is there resistance from the transport and oil industries?

They have their interests to protect but I think they are realistic enough to know that we have to look at alternatives to oil for our long-term prosperity.

When it comes to reducing oil dependency, isn't the Government compromised by the fact it collects significant tax revenue through petrol sales?

No. We need to remember that a significant amount of tax revenue goes to building and maintaining roads. If our oil dependency reduces, there is an argument that so would spending in these areas.

How reliant on oil are you? Did you travel to work today by car?

Very, as we all are. I walked to work today, as I normally do.