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Salient. Victoria University Student Newspaper. Vol. 37, No. 6. April 10, 1974

Hot air on the energy crisis

page 2

Hot air on the energy crisis

Cartoon showing a middle eastern man pumping uncle sam through an oil pipeline

Last Wednesday evening, the Wellington branch of the New Zealand Institute of Chemistry held a panel discussion on the topic "The Energy Situation in New Zealand". You might have thought that a supposedly scientific body as this might have been concerned about the ecological significance of the situation, but this was not to be. In fact, two main causes of the so-called energy crisis emerged from what the experts said: one of these was the Arabs, while the other possible cause of the energy situation appeared to be a failure to carry out proper planning—a consequence of the greed of capitalist society.

The first of the speakers was Mr R.J. Hogg, the Commissioner of Energy Resources. He first of all told the audience that there was no such thing as an energy crisis. There was sufficient oil available to New Zealand thanks to the cooperation of the friendly oil companies, and thanks to measures taken to restrict demand. And so now all motorists know that there is no real need for them to keep to the 50 mph speed limit, and that banning petrol sales at weekends is an unnecessary measure.

The second of the speakers was Mr D.G. Niven, General Manager (Planning) of Shell Oil (NZ) Ltd. He noted that over the last three or six months there had been a sudden change in the oil supply situation. Over the previous 25 years oil companies had planned on the assumption that oil supplies were limitless. Mr Hogg had earlier made similar points about the generation of hydroelectricity in New Zealand. Capitalist enterprises frequently make the assumption that the resources they use are their unalienable rights, and ignore the possibility that they may be limited, and that there may be people to whom these resources belong whose interests differ from those of the capitalist plunderers.

Hence the point made by the third of the speakers, Mr W.A. Poole, research director of the New Zealand Banker's Association. He said that the blame for the current electricity shortages could be fairly attributed to two sources: one of these was that the long-term planning to estimate future electricity demands had been done in the middle of the 1967-68 recession, resulting in too low an estimate being made (note that it is only capitalist economies which suffer recessions).

But the other reason for the power shortage was a result of the activities of the environmentalists, who had been obstructive for no proper reason whatever. The implication is that the environment is allowed to be considered, but only after the legalised plunder that is capitalism has been taken care of.

But Mr Poole appeared to have difficulty in understanding certain aspects of the current situation. He was most disturbed at the decision of the Arabs to decide to cut oil supplies and to raise prices as a result of a war which they lost anyway. He should have listened to Mr Niven on this particular point. They Arabs realised that they had a scarce resource which they should try to get a better return for, especially as governments such as the New Zealand one were using low oil prices as a good excuse to impose a heavy sales tax on oil products. That is what in another context, Mr Poole would describe as good economics. But it is unforunate that after this little bit of understanding for the Arab cause, Mr Niven then had to go ahead and attack them. He launched into a spiel in the possibilities of a combination by the producers of phosphate rock, leading to price rise. This combination was going to be lead by the Moroccans, who, strangely enough, happen to be part of the great Arab conspiracy to destroy Western civilisation. And as Mr Poole pointed out, just because the Arabs were great once is no excuse for them to assert their rights to try to make themselves great again.

The Arabs were not to be relied upon in any circumstances, implied Mr Niven. They had removed the opportunities for the oil companies to show that they were one of the better aspects of free competition, by pricing oil somewhere between the cost of production and the price that the market would be prepared to pay. We presume that it is one of the better aspects of free competitor that the general trend of returns to crude oil producers was downward throughout the 1950s and 1960s while prices were rising steadily for most finished commodities throughout the world.

As soon as the continued oppression of the Arab countries provoked a response from the oppressed, what happens? The profits of most of the oil companies rise by an average of over 100% a year. It seems that the oil companies still win at the expense of both producers and consumers. And it looks as though they will continue to do so: Mr Poole suggested that governments will have to continue to allow the oil companies to earn high profits so that they will have the funds to be able to carry out the necessary research and development programmes. This arguments seems to involve the unwarranted assumption that research and development programmes can only be financed out of profits, but you could nonetheless describe it as a profitable argument for the oil companies.

But perhaps there is something definite and positive that can be said about the energy situation. All the speakers, except for one questioner from Action for Environment, firmly denied the validity of what are usually known as doomsday theories—that the natural resources of the earth are running out. So there can be no real energy shortages, only inefficient distribution procedures. Mr Poole said, however that he doubted whether the government had ever had any energy policy. So we can blame the energy shortage on a lack of planning then, as well. There has not been adequate planning because of the assumption of the capitalist economic system that it will always have someone to oppress and exploit; hence when there are no more sites available for hydro generating, there would be cheap oil to fuel oil-fired power stations. To expose the nature of the system, then, perhaps we sould be using as much of the precious energy resources as possible, and as wastefully as possible.