Energy supply and net energy in New Zealand

Abstract

In order to supply consumer energy to an economy, energy must always be expended elsewhere in that economy, in the form of capital plant, goods and services. As easily accessible, high quality energy resources are used up, it becomes necessary to use less accessible, lower quality resources. As a logical consequence of this argument, it may be hypothesized that in the longer term the energy supply industries' subeconomy will have to grow more rapidly than the main economy, and that eventually a ‘point of futility’ would be reached, at which no net energy is supplied to the economy. The principal implication of this trend is that current expectations for ‘sustainable economic growth’ must be seriously challenged. We examine this hypothesis, using historical and other data on the energy supply industries in New Zealand. We conclude that there is some evidence to support it, and suggest ways in which energy planning procedures might need to evolve in order to take account of such an eventuality.