The Prime Minister’s statement was made as she responded to questions from the NZ parliamentary press gallery. The audio is online at Scoop (NZ). The remarks on peak oil were made at about 10:15 minutes into the 16:29 minute video.

Q: … the economic impact of oil prices is causing concern.

Prime Minister: I’m sure it’s causing concern in every county because everyone is on the receiving end of the same phenomenon, which is oil price is very high because probably we’re not too far short from peak production if we’re not already there. That concentrates the mind on alternatives to oil.

I quoted before on what President Bush said in the State of the Union address in January: America must give over its addiction to oil.

We have to focus and borrow and adapt practices and ideas from elsewhere
on how to move to the post-oil economy because it isn’t going to get cheaper in the long-term.

Q: [inaudible]

Prime Minister: Oh no, there’s a lot of work going on. both in the national energy strategy, energy efficiency strategy. climate change strategy work that’s been done.

There’s a lot of thinking being appplied to it.

The prime minister’s remarks were pointed out by Steve McKinlay of Powerless NZ in an article at the OilCrash website: NZ Prime Minister out of the closet on Peak Oil:

…This week Helen Clark, New Zealand’s Prime Minister joined a rapidly growing but exclusive club, the penny has obviously dropped – she openly admitted the real reasons behind high oil prices, “because we’re probably not too far short of peak production, if we’re not already there” [1].

This watershed statement, which incidentally went over the heads of most of the media turkeys in attendance, has enormous economic and social implications. Firstly it absolves Trevor Mallard (acting Minister of Energy) from having to regurgitate International Energy Agency nonsense that Peak Oil is at least 30 years away. “Not too far short of peak production, if not already there” surely can’t mean the same thing as 30 years away. The minister can now base policy in geological reality rather than the flawed economic “business as usual” fantasy that has cheap abundant oil production growing alongside the economy for all eternity.

But will he? Will she?

I can already hear the screams of the damned led by Peter Dunne, all the way down every double-laned highway in the country. By this very admission the Prime Minister puts the Government in a very sticky situation. If indeed we are already at peak oil multi-billion dollar roading projects are about as sensible as New Zealand developing it’s own uranium enrichment program. But New Zealand is obsessed with the “growth” dilemma. Economic growth necessarily depends on a cheap energy subsidy, to grow economically one needs to increase energy consumption. As the price of oil continues to creep upwards the spectre of oil-shock induced stagflation looms. The economy is already stagnant. Interest rates are relatively high and inflation is expected to run at over 3% this year. Expect the ride to become somewhat bumpy over the next couple of years.

In light of Prime Minister Helen Clarks peak oil admission the concept of growth must be re-evaluated….