Friday, March 05, 2004
On death, taxes and energy
They say there are only two certainties in this life: death and taxes. Perhaps we need to add, increasing energy costs.
Although prices for such essentials for modern living as electricity and petrol (gas, to my American friends) fluctuate greatly in any given short term period, over the long term there has been a steady rise in price. Some US states are currently experiencing all-time highs. Much of the time, the increases have political causes. For example, the New Zealand government recently added a 4cent per litre levy on petrol to pay for roading projects to relieve traffic congestion around Auckland. And a high proportion of the petrol price in the UK is government tax.
Nonetheless, as real estate agents say of land, "they're not making any more of it". That was underlined dramatically this week when Royal Dutch/Shell Group, Europe's second-largest oil company, asked Chairman Philip Watts to resign after an investigation into the company's announcement that it overstated oil and gas reserves. Watts, 58, yesterday became the first Shell chairman to leave before the end of his term in at least three decades. Investors had called for management changes after Shell cut its reserves estimate by 20 percent on January 9.
The same sort of issues are emerging in New Zealand over electricity. The country depends largely on hydro generation through a series of dams on major rivers, but when the country suffered a severe drought over many of the principle storage lakes last winter, demand outstripped supply and some spot prices shot up to more than $2 per kilowatt. NZ needs new sources of electricity, but cannot agree on how to provide it. A major proposal for a new hydro station on the Waitaki River in the South Island is stalled because of huge community concern over the environmental effects. No other significant sources are in the pipeline (so to speak).
The same sort of issues are being faced the world over. Non-renewable supplies are slowly being used up, and few technological breakthroughs are on the horizon. Most proposals have downsides equal to their upsides. The brownouts common in the Philippines may be a fact of life for many industrial nations in the near future unless we can put aside our partisan ways (and the oligopolies of most major energy corporations).
They say there are only two certainties in this life: death and taxes. Perhaps we need to add, increasing energy costs.
Although prices for such essentials for modern living as electricity and petrol (gas, to my American friends) fluctuate greatly in any given short term period, over the long term there has been a steady rise in price. Some US states are currently experiencing all-time highs. Much of the time, the increases have political causes. For example, the New Zealand government recently added a 4cent per litre levy on petrol to pay for roading projects to relieve traffic congestion around Auckland. And a high proportion of the petrol price in the UK is government tax.
Nonetheless, as real estate agents say of land, "they're not making any more of it". That was underlined dramatically this week when Royal Dutch/Shell Group, Europe's second-largest oil company, asked Chairman Philip Watts to resign after an investigation into the company's announcement that it overstated oil and gas reserves. Watts, 58, yesterday became the first Shell chairman to leave before the end of his term in at least three decades. Investors had called for management changes after Shell cut its reserves estimate by 20 percent on January 9.
The same sort of issues are emerging in New Zealand over electricity. The country depends largely on hydro generation through a series of dams on major rivers, but when the country suffered a severe drought over many of the principle storage lakes last winter, demand outstripped supply and some spot prices shot up to more than $2 per kilowatt. NZ needs new sources of electricity, but cannot agree on how to provide it. A major proposal for a new hydro station on the Waitaki River in the South Island is stalled because of huge community concern over the environmental effects. No other significant sources are in the pipeline (so to speak).
The same sort of issues are being faced the world over. Non-renewable supplies are slowly being used up, and few technological breakthroughs are on the horizon. Most proposals have downsides equal to their upsides. The brownouts common in the Philippines may be a fact of life for many industrial nations in the near future unless we can put aside our partisan ways (and the oligopolies of most major energy corporations).
