General principles that should guide the extraction of New Zealand's energy resources are presented. These principles are based on the objective of promoting the general economic and social benefit obtained from the use of the extracted fuel. For a single resource, the central question to be answered is, simply, what quantity of energy should be extracted in each year of the resource's lifetime. For the energy system as a whole the additional question must be answered of what mix of fuels should be used in any year. The analysis of optimal management of a single energy resource is specifically discussed. The general principles for optimal resource extraction are derived, and then applied to the examination of the characteristics of the optimal time paths of energy quantity and price; to the appraisal of the efficiency, in resource management, of various market structures; to the evaluation of various energy pricing policies; and to the examination of circumstances in which market organization is inefficient and the guidelines for corrective government policy in such cases.