Bob Lloyd
Dunedin's water pipes must be upgraded before oil shocks
intensify and worldwide energy prices surge, a draft paper
prepared for the city council suggests.
The paper warns potentially expensive improvements could be
much harder to afford in the maelstrom of supply crunches and
price spikes as the world grapples with peak oil.
Author Associate Prof Bob Lloyd, of the University of Otago's
physics department, said research suggested declining oil
stocks would come with a succession of recessions.
Unemployment and the cost of materials could rise to put new
pressures on ratepayers and make it even more expensive to
improve infrastructure, Dr Lloyd said.
"We expect these shocks to come, and we must now decide where
our vulnerabilities are and take care of them while we can.
The end of cheap oil won't just be about the end of cheap
travel; it will be part of a shock to the world economy that
will have a much greater impact."
Dr Lloyd's paper is part of a suite of work the council
commissioned to help it consider the potential consequences
of peak oil.
The main report is still being written.
It pre-dated the release of parliamentary researcher Clint
Smith's paper The Next Oil Shock which last week warned an
oil-supply crunch could start in 2012.
A cycle of supply crunches would lead to price shocks, each
shock leading to recession as consumers cut back to pay for
petrol and oil-influenced consumables.
Key earners including tourism, and meat, dairy and timber
exports, were among the most vulnerable, Mr Smith's report
said.
Dr Lloyd said food supplies, especially imports, might also
be vulnerable in a world where the cost of production was
linked to international oil prices.
The council needed to promote local gardens to ensure Dunedin
could feed itself if food imports became too expensive or
difficult to secure.
This was especially important if successive recessions led to
unemployment, Dr Lloyd said.
An author of the main report to the council, University of
Otago Associate Prof Dr Susan Krumdieck, said Dunedin had
time to plan its response to peak oil.
Fuel supplies were likely to slowly dwindle to be about the
same as in the 1960s by 2050.
The decline would be measured in decades, not months.
Recessions affected the least productive parts of the
economy, so further investment in the productive sectors
might help the city prepare for the future, she said.
Referring to Dr Lloyd's concerns about the water system, she
said oil shocks and recession could see communities managing
local infrastructure through organisations such as water
boards.
"What has happened since the 1940s and 1950s is the
amalgamation effect, where single entities have taken on
responsibility for infrastructure that covers a wide
geographic area.
"This has been possible because of the use of cheap oil, but
as it becomes more expensive, then it might make sense for
local communities themselves to take control of local
resources," Dr Krumdieck said.
Localisation would also mean local schools and local
libraries could be revived as people moved to live closer to
amenities.
Surveys in August suggested a "significant" commuter
population might struggle to afford travelling 15km to 20km
into the city each day.
The council had to improve mass transport.
The surveys suggested there was a "great deal" of
dissatisfaction with public transport.
- stu.oldham@odt.co.nz
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