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Minister Of Energy's Response

Minister of Energy's response

21st of June 2011
Alan Preston

Tena koe Mr Preston

Thank you for your e-mail of 25 May to National Government Ministers regarding peak oil and the URL link to the 'Save Our Rail: Northland website. I am replying on behalf of Government as the issue of peak oil falls within my portfolio as the Acting Minister of Energy and Resources.

New Zealand is a member of the International Energy Agency ( IEA) , which provides credible information on the global oil market.

 The IEA projects that global oil production from currently producting fields is in decline but that new fields and unconventional sources will ensure that demand continues to be met.

The New Zealand Government takes the view that while we are going to require fossil fuels for the forseeable future, the are actions we can take now to reduce our dependence on oil and facilitate a transition to alternative sources of energy. To this end, the Government encourages entry of both biofuels and electric vehicles into the New Zealand market, and acts to stimulate new market developments to remove barriers where appropriate. A grants programme is in place for the production of New Zealand biodiesel to put it on the same favourable financial footing as bioethanol. The Government has also exempted electric vehicles from road user charges until 2013 to encourage uptake.

The Government also introduced the Emissions Trading Scheme ( ETS) in July 2010, which puts a price on greenhouse gases to provide an incentive to reduce emissions. Since 1 July 2010, suppliers of liquid fossil fuels have had obligations to pay for carbon emissions under the ETS . These obligations have been passed on to consumers in the form of higher prices. This incentivises energy efficiency improvements and alternative fuel options.

The Government is also making significant investment in transport infrastructure, including for public transport, cycling and walking, that will enable and encourage energy efficient transport choices. For example the Government is spending $1.6 billion on upgrading and electrifying the Auckland metro rail system, and a further $485 million for Wellington passenger rail.

With regards to the rail system, the Government is serious about ensuring that KiwiRail plays a strong role in New Zealand's future economic growth.
 The KiwiRail Turnaround Plan targets commercial sustainability over a 10 year period.
 The Government has in principal committe $750 million over three years to enable KiwiRail to play its part in meeting the transport needs of New Zealand.

As part of the Turnaround Plan, KiwiRail is reviewing the role of the Northland railway line.
I am assured that no decision regarding its future has yet been made.  I am assured that the review will take into account the business opportunities for the Northland rail link. From there, KiwiRail will form a commercial view assessing all relevant information.

The review will include a consultation process for the community and citizens later this year.
I encourage you to participate.
If you would like any further details on the consultation process, please contact Jenni Austin at KiwiRail on (09)363 7303.

Heoi ano.
Hon Hekia Parata.
Acting Minister of Energy and Resources.