Govt denies contingency plan to handle oil crises

Press, 11 June 1979, Page 6

Govt denies contingency plan to handle oil crises

The Government has been!: challenged to reveal a con-h tingency plan it is said top have prepared to meet a ] ■ “catastrophic” shortage of oil) later this year, but it denies’ such a plan exists. The Friends of the Earth]; organisation has quoted “very; senior sources” in the oil in-i dustry as saying that the] Government has prepared] such a plan to cope with the] expected crisis, but it has) not released it for fear of; public reaction. The sources are quoted as saying that New Zealand will ; be forced to make “extremely drastic cuts” in oil imports about August or September. "It will not be a matter so ; much of difficulties with i supply as of New Zealand : simply lacking the foreign exchange to purchase overseas oil,” said the national organiser of Friends of the Earth (Mr.R. C. Wilson). The Parliamentary Undersecretary to the Minister of Energy (Mr Brill) has denied that any such contingency plan exists. He said last evening that information

■ available to the Government]' certainly did not support the: t contention that “cata- t ’ strophic” shortages would[ s ] occur this year. I “As to any contingency] < ’plan, to my knowledge no i Isuch comprehensive blue- s ; print exists,” he said. I “Naturally. a certain 1 {amount of thought has been 1 ' given as to the various steps 1 (that might be taken in the ! flight of some unexpected * ■ cataclysm in the Middle East, 1 but by no stretch of the ’ imagination could this be re- !< garded as an over-all, final; strategy or blueprint,” hep said. [ s Mr Brill said that he was]' surprised that the prediction i £ of a shortage came from 4 senior oil-industry officials.] I As he had just taken up the under-secretaryship, he had 1 been talking with senior oil 1 industry leaders recently, and t had not been told of any < likely difficulty of supply. “Someone is being mis- ’ led.” he said. I “The Government’s sources ' of intelligence include the oil!< industry in New Zealand as{;

well as other authorities herei ■and abroad. They lead us to!’ ithe conclusion that while 1 [stocks will be tight, the 10 i per cent savings target ' [already announced should see i {us through the problem,’’ he I i said. New Zealand was unlikely i to reach a stage where it was ; unable to afford oil from the ] • Organisation of Petroleum;, Exporting Countries, because]; O.P.E.C. knew “perfectly”; that there was a price at ’ i which alternative fuels be-]; 'came commercially viable, !; "In cases where the high-’t [est bidder is the only one i supplied, New Zealand is not i ■ able to foot it with countries 1 ■ such as the United States, Germany, or Japan,” said Mr < Brill. ’ 1 “However, in terms of the < International Energy Agree- i ment, we do not expect that t type of cut-throat bidding to I develop.” New Zealand was in line < for a very much higher price < for oil, said Mr Bril’, and ] wanted people to be aware ’ ■ of the problem, “but not to h [go overboard like this.” •;

i The Prime Minister (Mr [ Muldoon) had announced that oil prices could double or treble this year, but it was “hoped and expected” that these high figures would not be achieved. Friends of the Earth said that the Government had led people into a false sense of [security by asserting that the ■ present shortage was merely ja “hiccup” in supply. I Mr Wilson said that it was [the public’s right to know [ the consequences of the present situation, and the measures the Government was planning to ensure that there would be no undue hardship. He predicted that the second half of the year could bring about total economic collapse unless the Government moved to ensure a rational distribution of oilbased products. Mr Brill reaffirmed that the oil crisis was a “hiccup,” caused by the renewal of a number of contracts. “The oil price would have [ to rise very substantially, in- ; deed, before we got to the tage that Friends of the .arth are talking about,” he aid.