New Zealand’s emergency oil is actually a piece of paper in Japan

bplge0105We have received a letter from the Minister of Energy in reply. At a Transition Town Otaki meeting, a speaker from the Otaki Clean Tech Centre told us that our emergency oil is kept in the form of a contract in Japan.So I wrote to the Minister to get this clarified and confirmed. Here is his letter of confirmation. I guess it is time I wrote again (or someone else did) to clarify this further.

19 March, 2013

Deirdre Kent

New Economics Party

Dear Ms Kent

Thank you for your email dated 28 Feb 2013 regarding New Zealand’s “strategic oil reserve”.

As a member of the International Energy Agency (IEA) New Zealand has a treaty obligation to contribute to global oil security by maintaining oil stockholding equivalent to 90 days of net imports. Commercial inventories held by oil companies in New Zealand contribute to part of the IEA obligation. New Zealand meets the remainder of the obligation by entering into “ticket contracts” with companies in other IEA countries.

UnknownTickets are an option, in return for an annual fee, to purchase specified quantities of stock at market prices in the event of an IEA-declared oil supply emergency. Tickets are backed by government-to-government agreements that specify that the host government will not impede the release of stock in an emergency. New Zealand’s ticket contract stockholding is our closest equivalent to a “strategic oil reserve”. For the period 1 January 2012 to 31 March 2013, New Zealand held ticket contracts for 55,780 tonnes of crude oil in Japan.

For further information on New Zealand’s IEA obligation I refer you to the website of the Ministry of Business, Innovation and Employment:

Yours sincerely

Hon Simon Bridges

Minister of Energy and Resources.