Oil glut to end in oil shock?

Press, 4 June 1982, Page 1

Oil glut to end in oil shock?

PA Auckland The present oil glut could end in a further “oil shock” in the late 1980 s. said the Minister of Energy (Mr Birch) in Auckland yesterday.

Back in New Zealand after attending a conference of the International Energy Agency in Par'is. Mr Birch said consultants to the New Zealand Government in' London believed the world was experiencing an “Indian summer" in its oil supply. "The glut is more likely to be short-lived." he said.

‘ If the price declines and oil consumption starts to grow rapidly, we can expect an oil shock in the mid-1980s or late 1980 s." Mr Birch said he had attended five previous energy agency meetings characterised by an atmosphere of crisis.

“This time it was quite the reverse. We were talking about over-production of oil

and how long the glut would last."

He predicted it would be sustained through 1982-83 and said he would tell the Government that New Zealand's energy policies were on the right track. “They are right because we are forging ahead and increasing our self-suffi-ciency." he said.

“It will help us strengthen our position. We will not be immune, but the more we can do to increase self-suffi-ciency. the more we can do to help decrease the effects of oil shocks." Mr Birch said he had had talks with the French firm. Pechiney. the prospective partner in the consortium behind the Aramoana smelter project. He confirmed that agreement had been reached on three of the five issues in the power package. The main outstanding issue was the basic price to be paid for electricity.

He said it was now largely a matter for Pechiney to decide whether it was prepared to make a move on the base price to a point where it was acceptable to the NewZealand Government. He reiterated his earlier comment that there was a bottom line below which the Government would not go.

Mr Birch will have discussions with the three Government members of Parliament who have yet to be persuaded of the need for the Clyde high dam.

He said yesterday that he did not think there was any alternative to the special legislation now proposed by the Government to allow the construction of the dam to proceed.