by Geoffrey Churchman
The average price at the pump of a US gallon (3.8 litres) of gasoline has now almost reached $US 5 ($NZ 7.50) across the country; that’s about $NZ 2 per litre. You may ask, what have they got to complain about when it’s over $3 a litre in Jacindaland? The response is that both are historic highs and NZ is the second most car-centric major country in the world after America, a status it’s actually had now for a century. The disparity between the two countries in that has actually fallen in recent years, though: I can remember in 1980 in America it only cost about half what it was here (54 cents a litre).
The basic political message is that no matter how crazy the policies and decisions politicians make are, what affects attitudes towards them the most is people’s own financial circumstances. Both the Biden administration and the Jacinda regime know that and both have resorted to ‘quantitative easement’, in other words printing money. The resulting problem with that is without a corresponding increase in production it just causes stagflation — economic stagnation with inflation. It was something NZ was afflicted with in a big way for a decade from about 1973 to 1983 under both the Rowling (Labour) and Muldoon (National) governments; other countries were also hit by it, mostly to a lesser extent.
Rather than the OPEC organisation this time, the policies of the Biden administration are mainly responsible for causing big supply issues for oil (gasoline and diesel) by provoking the war with Russia in Ukraine and then slapping massive sanctions on Russia. It’s no wonder oil prices have risen. For the people of Europe it’s even worse because their sanctions have increased the price of natural gas steeply as well.
But whatever the price vissitudes, gasoline is a very good way to store energy, much more compact than the best batteries, and better than hydrogen.
One positive aspect of the rising prices is that oil fields discovered previously that were considered economically non-viable have become viable. So we don’t see any major long-term supply issues so long as politicians like Biden don’t stuff things up; and the next National-led government may reverse the Jacinda regime’s ban on oil and gas exploration around NZ. Getting it refined locally will be difficult, of course, with the substantial closure of Marsden Point, but again that could be reversed.
What about synthetic petrol? The Germans produced it during WW2 with the Bergius process using large amounts of coal and water. The large chemical company IG Farben in 1940 built 12 factories around Germany which produced a total of 11.4 million litres of synthetic fuel per day, an amount that was doubled over the next three years. The Fischer-Tropsch process was also used.
In the midst of these considerations, Eva and I decided to stick with a petrol-powered car when we felt the time had come to to replace our elderly vehicle with a new one (well, two years old) a couple of weeks ago. We looked at the Greta-friendly options but decided there are too many reliability issues with them still. In particular, in its devotion to Climatism the Jacinda government wants everyone to switch to battery-electric or hybrid and offers big subsidies on them, but knows the country won’t be able to produce enough electricity to power them if everybody does. In fact the country is going to have big power supply problems from population growth alone at the present rate.