Academic journal article New Zealand International Review

The Foreign Policy Implications of Energy Security: Brian Lynch Reports on a Seminar Held in Wellington on 21 November 2007

Academic journal article New Zealand International Review

The Foreign Policy Implications of Energy Security: Brian Lynch Reports on a Seminar Held in Wellington on 21 November 2007

Article excerpt

The NZIIA's all-day seminar discussed the factors that nations must address to assure themselves of continued access to an affordable and reliable supply of energy. Presentations and discussion made plain that New Zealand is not immune from the forces at work, energy dependence being a fact of contemporary life. Domestic non-renewable energy sources are dwindling and a substantial part of the country's primary energy requirements are now imported. Issues surrounding climate change and global warming were a prominent aspect of the seminar's proceedings.

The seminar confirmed that, in the face of seemingly insatiable consumer and commercial demand, energy security involves a much wider range of policy elements than simply measures to conserve supply and diversify energy sources. Complex matters to do with environmental well-being, economic competitiveness, research expenditure, resource management, tax regimes, technology investment, export competitiveness and the balance of trade all now enter into the policy mix and must be managed.

The underpinning theme of the seminar was that unease over future energy supply has become a major influence on the way that countries conduct their relations with each other. Only a handful of economies have abundant reserves of commodities such as coal, oil and natural gas, and are in the privileged position of being willing, at a price, to provide these to others. Most nations, including many with surging economic growth trends, do not enjoy a high level of energy self-sufficiency.

It is difficult to assess the weight that individual countries place on the energy component in their external relationships. There is increasing evidence, however, that a growing degree of dependence has the potential to create tension between importing countries and their suppliers. This can be seen, for example, in plans for future exploration, for pipeline construction, and for safeguarding maritime supply routes. It is present as well in disputes over access rights where extended economic zones rub against each other, and in aid schemes that have oil and gas supply strings attached.

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The panel of speakers the NZIIA brought together for the seminar came from a variety of perspectives. This made for some robust discussion.

Michael Richardson, a visiting senior research fellow at the Institute of South East Asian Studies, Singapore, has made energy a special field of interest. He outlined the levels of energy dependence of Australia and New Zealand, noting the downside effects on either country if supply was significantly disrupted. His remarks highlighted the global importance of the Middle East as an oil source, and the consequences of so pre-eminent a supplier being also such a politically volatile region.

Four other speakers focused primarily on New Zealand's energy position. Michael Gould, the chairman of the New Zealand Futures Trust, emphasised the dominant place of oil imports among the country's energy needs and the heavy reliance of the transport sector on this source. He noted the claim of some analysts that worldwide oil production had already peaked, but observed that New Zealand had a number of positive primary energy options available, even allowing for the impact of global warming.

The same reassuring conclusion was drawn by Peter Neilson, chief executive of the Business Council for Sustainable Development. He noted, however, that the average cost of energy is rising and a major challenge is to achieve wider consumer acceptance of the need for prudent energy use. Innovative new technology offered to make some reserves, not least New Zealand's extensive lignite deposits, more economically viable and environmentally friendly than has been possible until now. With good fortune this technology could come on-stream at the time that the country's supplies of non-renewable options are likely to be running out. …

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