Contrary to National’s belief fossil fuels are not dead – YET

Contrary to the belief of the National Party, the Government has no plans for a ban on coal. Part of this is pure necessity, ensuring that during dry seasons in the hydro-electric catchments where rains have failed to keep the hydroelectric storage lakes of the lower South Island and the Waikato power scheme topped up, the Huntly power station can still be started. It runs on coal and gas.

Part of the absence of a ban also rests on an acknowledgement that there is still a demand for New Zealand coal overseas, especially in China and Japan, with coal mining making up a significant part of the West Coast economy. The railway line from Ngakawau, north of Westport down to where it meets the Trans Alpine line is largely paid for by coal coming out of mines in this area.

There are other things that can be done first before any ban include:

  • No longer mining lignite or sub-bituminous coal which has a higher sulphur conent and releases
  • Focus on bituminous and anthracite coal which burn better

Power stations at Whiranaki in Hawkes Bay and Stratford in Taranaki are diesel fuel and natural gas based operations, respectively, that have installed capacity of 360 megawatts. Like Huntly, these are normally held in reserve unless there is a dearth of hydroelectric power available.

Contrary further to the National Party’s claims of fossil fuels being banned in the near future, Minister of Energy Megan Woods has stated that she can see oil and gas still being used in 50 years time. The reason for this is simple. National has ignored the finer print of the message and claimed that oil and gas will stop quickly, whereas the ban only exists on new exploration.

The claims made by New Zealand Gas have been completely dismantled by economic commentator Rod Oram. Among some of the rebuttals were:

  • Having the right geology – whilst true of Taranaki, it cannot be so easily said for the Canterbury Bight
  • The economics would suit New Zealand – actually the U.S. is becoming a major exporter, and the cost of selling N.Z. product at a price beneficial to both customers and shareholders alike is not likely to suitable
  • The fisheries will be okay – New Zealand has superb fisheries that are the envy of many nations, which is one of our biggest comparative advantages
  • The environment can survive an oil spill – The moves to protect the Southern Ocean fisheries aside, National slacked off in a big way on affording our marine environment the protection it badly needs and did not seem to think our capacity for dealing with an oil spill needed overhauling
  • No need for alternative sources – biomass is slowly becoming more popular; substantial research is going into other alternative energy sources, meaning the decline of gas is in some respects natural

Whilst it is true there is still an immediate future for fossil fuels, the long term outlook strongly suggests something approaching a gradual yet nearing terminal decline. New Zealand and the world are moving on, and at some point, N.Z. Gas will have to accept this.

Government to end oil and gas permits

On 12 April Prime Minister Jacinda  Ardern announced that Labour, in agreement with its  coalition partners New Zealand First and the Green Party of Aotearoa New Zealand is not going to issue any more oil and gas permits.

I am concerned that this is just political machinations at work and that just like the National Party with so many issues, not enough thought has been given to how such an announcement will impact on New Zealand. The Government can say that yes it has delivered on its promises and that means it is getting things done – just like National who I notice parroted every announcement former Prime Ministers John Key or Bill English or one of the Ministers made.

Yes, from an environmental stand point this is good news – a good start at least. But let us get real here. I have a number of questions from pure transport perspectives alone, never mind getting into the potential effects on social policy, the energy sector and so forth. Such as:

What thought has been given to how and where non electric vehicles are going to get their fuel from, other than expensive fuel imports from overseas?

What thought has been given to the fact that New Zealanders are grimly hanging onto their Toyota Corolla’s, Surfs and so forth because newer, cleaner vehicles are too expensive?

Even hybrid’s need to come down in cost before they have a chance of becoming plentiful.

People do not seem all that enthused by the advent of plug on points to charge their cars. And the simple idea of having to plug a car in to charge at some point is likely to turn many off from wanting an electric car. All of you who are applauding today’s announcement understand this don’t you?

Will some sort of road/transport/government working group be established to look at biofuels and alternative sources and the issues that New Zealand may confront if it finds a sustainable source?

The Green Party and Labour surely understand that one is unlikely to ever quite get rid of petroleum and diesel. New Zealand, like most western countries is probably not going to fully wean itself off either and that service stations will still be around for the foreseeable future at least.

I am sorry, but unless you can address these questions and others that will arise, I am NOT on board. This is basic planning for New Zealand’s future. Grand sweeping announcements like this look great, but are completely meaningless unless backed up by solid policy and implementation.

Common sense really.

Government considers moves to end oil exploration

I have serious questions about the consideration of a move to end oil exploration that was announced by Prime Minister Jacinda Ardern today. It is not that I necessarily agree with the exploration so much as I seriously wonder how much of this is not simply pandering to ideology.

It is true that oil exploration does indeed exact a substantial environmental toll. One only has to look at the devastation caused by Royal Dutch Shell and other companies in Nigeria to realize that the ecosystem suffers severely. On the Niger Delta in many places the ecosystem is effectively devoid of aquatic life. Another aspect is that the companies that engage in it are not exactly good corporate citizens in terms of social responsibility – Shell hired security for its facilities in Nigeria who happened to be from different militias, with the result being significant human rights abuses being committed.

Whilst I do not expect to see this happening in New Zealand, I wonder how much tolerance they will have for the right to protest peacefully on the high seas. The Government of former Prime Minister John Key amended the Crown Minerals Act in 2013 to effectively criminalize peaceful protests at sea.

It is perhaps the lack of planning that has obviously been done that bothers me the most. New Zealand is a very fossil fuel oriented country when it comes to transport. Whilst hybrids and electric cars are available in small numbers they only make up a fraction of the total car fleet. That fleet is getting older as New Zealanders shy away from expensive new models and hold on to their older Toyota Surfs, Hyundai Getz’s, Holden Commodore’s. It is not uncommon to see an early 2000’s or late 1990’s Toyota Surf with say 350,000-500,000 kilometres on the clock. None of these cars will be very fuel efficient compared with the Toyota Highlanders, Camry’s and Previa’s of now, or the newer model Hyundai Imax vans and so forth.

One problem is the cost of buying a new vehicle. For many low-middle income earners, their wages have been largely static for the last several years whilst fuel, maintenance and registration costs have all increased. Unless incomes substantially increase, many New Zealanders will only replace their vehicles when they die, get stolen or their individual needs change.

Another problem is that Labour and National have diverging priorities on transport. Labour favour public transport, railways and less emphasis on building motorways. It will have to compete with differing ideas such as New Zealand First’s Railways of National Importance, which aims to improve the rail network around New Zealand.  National’s Roads of National Significance programme cost New Zealand about N.Z.$12 billion and did not address the genuine need in many rural areas for improvements. These included items such as getting rid of the one way bridges on the West Coast, improving the passing lanes on roads other than State Highway 1.

A third and perhaps debatable problem is the actual investment and research effort being put into going fossil fuel clean. If one replaces fossil fuels that assumes a sustainable replacement fuel can be found. So far biofuel for vehicles in New Zealand is still in its dark ages.

Whilst trains could become electric and the diesel locomotive fleet is replaced, I cannot see electric trucks catching on. Where there exists scope is to increase the amount of freight being moved by railways. This is particularly so along the east coast of the South Island in the post-earthquake environment around Kaikoura where trucks have always found it difficult navigating the twisty and narrow corners.

In short I think Labour is trying to achieve something that is not going to happen. Fossil fuels in New Zealand will hang on grimly just like smoking will.  The socio-economic gains of totally getting rid of fossil fuels might not be worth the costs

Oil companies need to be held to account in New Zealand

Recently it emerged that New Zealanders pay up to 30 cents more per litre of product than the company importing the petroleum paid after tax. This came after a study found that the retail petrol market has features that make it not consistent with a working competitive market.

But should we be surprised? Not at all.

It has been a priority of this Government to permit oil and gas companies more exploration space in our waters. To ensure it has been able to go ahead without environmental protesters getting in the way, it even passed under urgency, laws attempting to criminalize the peaceful assembly of protesters on the high seas, permitting the Royal New Zealand Navy to be used as an arresting force.

Past Ministers for Energy and Resources have shown little inclination to act on concerns about petroleum companies conduct in terms of being fair players before the New Zealand Commerce Commission. So it was a pleasant surprise to hear that the current Minister of Energy and Resources, Judith Collins has demanded a report that should have been called for some time ago.

New Zealand has a few major players who take out most of the retail fuel market. They include Z, which entered the market in 2010 and acquired the old Shell stations. The other major players are B.P., Caltex and Mobil. Independent players such as Gull and Allied occupy significantly smaller parts of the market pie.

Part of the need for bringing petroleum companies to account for themselves deals with social and environmental pressures. Whilst oil companies in New Zealand might not commit environmental and human rights abuses as they do in places like Nigeria, the perceptions of improper ethics and legal conduct certainly do.

These, but also due to growing concerns about climate change, the Government needs to take the lead and set an example for the oil companies to follow. Part of it to make them realize that biofuel will need a lot of the infrastructure that is currently used for petroleum production. Thus refining and transporting is still going to be needed, as is a company to market the product.

One of the ways it could do this is to establish a national biofuel programme with buy in from the companies. To start the process a cross party working group should be established with three separate tasks:

  • Establish the economic feasbility of a biofuel progamme
  • Determine potential fuel sources with emphasis on waste stream product
  • Determine acceptable standards of biofuel for New Zealand motor vehicles

There are elements of the New Zealand political spectrum who see no future for petroleum. The sheer number of vehicles on the road, both here and abroad means there will probably always be a need for petroleum and in supplying that, there will also be a need for companies to supply the product to the New Zealand market. And at the other end there are politicians who see only the monetary and commercial gains to be had from petroleum, where the dollar blinds them to their social and legal responsibilities.

So whilst we might be reaching peak petroleum and the companies that sell this might be getting criticized for products that are increasingly being linked – rightfully or wrongfully to climate change – there is still a place for them in the future, but they need realize there is a life beyond petroleum.

Trump quits Climate Accord; World forges ahead

Yesterday I mentioned the role of the gases linked to climate change in causing acidification of the oceans and how it could wreck the food chain. I mentioned the potential economic consequences in Queensland of not doing more to protect the oceans.

Now United States President Donald Trump has walked away from the Paris Climate Accord. Citing the supposed economic toll to the United States if it continues working on the Accord, the United States Government has shown its preference for fossil fuels at a time when major in roads are being made into renewable fuels, more efficient methods of electricity generation and the rise of the electric car. Mr Trump has demonstrated a callous disregard for an environmental crisis where the overwhelming majority of scientists believe gas emissions from excessive fossil fuel burning is the cause of a major rise

But not all is lost. Even as the United States Government refused to have any more to do with it, a revolt is spreading across America. 61 cities decided to support the Paris Climate Accord anyway. On the world stage other big players including China, the European Union and even Australia – better known for deriding the Paris Climate Accord and the preceding Kyoto Climate Protocol – stepped up and indicated they would honour their commitments.

In New Zealand, despite the mediocre efforts made by this Government to date and the inability of the Opposition to gain traction in Parliament, the commitment to reduce our contribution to the greenhouse gas emissions equation has not changed.  In terms of going forward, I believe there are a significant range of energy sources that New Zealand could be significantly investing more into. Namely:

  • Biofuel
  • Tidal power
  • Solar

There are also a number of steps that could be taken to reduce the power footprint in New Zealand.

A Green audit done over a decade ago suggested that between 15-20% of New Zealand’s power usage was avoidable. If that is still the case today, with an installed generation capacity of 9637 megawatts, between about 7700 and 8200 megawatts would be needed if all of this could be saved.

Another step that could be taken is retrofitting. Retrofitting all large facilities such as hospitals, University buildings, airports with energy saving mechanisms such as automatic sensors which turn lights out after a certain time. If this were done with an incentive such as being able to keep the savings made by such investment, these would pay for themselves fairly quickly.

A third step that could be taken is enabling individuals who want to contribute power to the grid to do so without punishment. In January the Electricity Authority ruled against Solar Energy New Zealand, which had complained about the tariffs imposed by Unison Network Limited on retailers with residential customers on S.E.N.Z.’s network.

But overall there needs to be a blue print that could have been finished by now for looking forward into the future. We as a nation need to reduce our gas emissions just as we need to tackle the acidification from the ocean that is also aggravated by these gases.