That was the 1970s — 6. Oil and power

Press, 8 January 1980, Page 13

That was the 1970s — 6. Oil and power

By

MIKE HANNAH

The date was January 1, 1970. Another decade had started, although it seemed no different from the secure sixties. Petrol was 39 cents a gallon, and it

New Zealand could not remain isolated from the wave of oil price rises. had been that price for almost three years. . The initials, . 0.P.E.C.,. were meaningless to the man-in-the-street, although the organisation which they represent had been established for seven years.

And Maui? Wasn’t he the Maori ancestor who fished the North Island from the sea?

An argument was raging over the cost of electricity — the cost to the environment. A petition was circulating around the country, fighting the despoliation of a lake in the Deep South, called Manapouri.

But power was cheap — 1.04 cents a unit in Christchurch, or $82.68 a year for the average householder. And it was plentiful (except in the occasional winter), with a huge hydro scheme planned for the Mackenzie Basin, harnessing the. vast lakes that feed the Waitaki River. They were building a village up there, calling .it Twizel. Coal was fast being displaced in factories and homes by oil, diesel, and electricity. Central heating was less the preserve of the rich, and electrical gadgets and appliances of all sorts, from shavers to freezers, were making life in God’s

Own that little bit more comfortable still.

Those halcyon days lasted another three years. Almost as a parting gesture to an age of innocence — a gesture many New.Zealanders have probably forgotten — the Government reduced the price of petrol in September, 1973, by 1 cent a gallon, to 48 cents. Seven months later, the price had rocketed to 68 cents, a rise of more than 40 per cent. The. Organisation of Petroleum Exporting Countries had flexed its political muscle — and now everyone knew what O.P.E.C. stood for.

The first great oil crisis took New Zealand unawares. It inflated the economy, affected politics and business, altered lifestyles and, for two years at least, gave energy a new Value. , ■

.Week-end sales bans on petrol were introduced in 1974 and there was talk in Government circles of rationing and ca rless days. But the price demanded by

oil producers was paid and these dire remedies were consigned to the records. Although inflation continued, the first savage onslaught in 1974 had been weathered, and a new Government pledging hard times to cure the economy had arrived. The price of petrol, having passed the $1 a gallon figure in May, 1975, stabilised at $1.22 for almost two years. Action, albeit inadequate, was taken to reduce New Zealand’s dependance on oil, which was putting the country deeper into debt. The Maui well, which had been spudded‘in off the south Taranaki coast in 1969, was developed in a joint venture between the Government and the Shell, BP and Todd Consortium. Condensate would cut the oil import bill, and gas

would be used for heating and to generate electricity. Generating electricity with natural gas was a wasteful process, but it presented . the quickest means of using the gas, for which the Government was contracted to “take or pay” whether it was used or not.

But the underlying assumption was that the country could use the extra

electricity. The assumption was proved mistaken. Power cuts continued, however, through to 1977, while storage lakes re-' mained low. Another big power scheme was adopted, this time involving the last major waterway which had not been harnessed for generation: the Clutha River.

Meanwhile, population growth and electricity use went out of fashion. The wasteful and extravagant consumption of the early 1970 s faded, giving way to

a persuasive conservation campaign, which switched off neon lights in shops and streets, and cut down the use of appliances in households around the country. The second great oil crisis, caused by the political turmoil in Iran last year, started a year in which all these strands of history were woven into an intricate political issue which will clothe the 1980 s.

While the price of petrol vaulted 35 per cent, almost clearing $2 a gallon (that dubious honour is left to

this decade to record), bulk electricity prices rose 60 per cent, launching the South Island once more into politics.

Because we didn’t need the . electricity, vast amounts of Maui gas were freed in time to be tagged for the production of a host of indigenous fuels. The early 1980 s will not be much different from the late 1970 s on the energy scene: prices will soar, “curtail and conserve” will be the name of the game. But from 1985, New Zealand should see improvements in energy and in the economy, as methanol, synthesised petrol, natural gas, compressed natural gas, liquefied petroleum gas, ethanol, coal and electricity reduce the country’s dependance on imported oil.

Research will not stop there: lignite fuels, wind power, and electrical power will no doubt be developed to the stage that they will herald a new energy scene in .the next decade.