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.


Green Party energy policy in 2017 election

Today the Green Party released their energy policy for the 2017 election.

The reaction from Business New Zealand has been largely positive. Other than the commitment to 100% renewable energy, the lobby group believes that it is constructive and comes about as a result of working with the party.

I support parts of the policy too. One area which is encouraging is the Green Party plan to support inter customer trading of electricity that private users generate and put back into the grid. Likewise encouraging the lines companies to amalgamate in places means that the management of the grid across New Zealand should hopefully become less fractured than 29 separate entities at work.

New Zealand is rich with options for renewable energy. It sits in the “Roaring Forties” belt of latitudinal westerly winds, which upon contact with the Southern Alps give rise to substantial rainfall enabling hydroelectric power generation, as well as significant opportunities for wind power. The reasonably high sunshine hours in towns like Blenheim, Whakatane and Nelson ensure the natural potential for solar power also exists. Around the coastal environment there are also several locations where tidal power can be potentially harnessed.

I am aware of significant investment in geothermal energy in New Zealand that has most likely utilized the available capacity. Geothermal systems are quite delicate in nature and thus a fine balance exists between re-injecting too much water back into the ground and not enough.

Another source of power that is heavily utilized is hydro power. Although it has lost a portion of the market as other sources have come online, hydroelectric power makes up about 60% of New Zealand’s total electricity supply. However it is dependent on reliable northwest rainfall feeding the Upper Waitaki Power Scheme, and the Clutha, Roxburgh and Manapouri power stations in Central Otago and Southland.

But there is undeveloped and under researched potential in New Zealand energy resources as well. One example is that New Zealand has a thriving waste stream of bio-waste ranging from waste cooking fat and oil, that at least on a small scale has been demonstrated to be suitable for refining. New Zealanders discharge a huge volume of green waste at refuse stations each week. On a local scale there are a few operations where the gas is captured and used to power onsite facilities. However these are few and far apart. Due to the uncertainty and a lack of interest by Government in biofuel, I support research into whether or not a nation wide bio-fuel programme can be developed in New Zealand.

There is one concern I do have though and that is that the Green Party might try to mothball with the intention of decommissioning thermal plants that rely on coal and oil, such as Huntly, Stratford and Whirinaki. These power stations would prove useful in maintaining energy supply during dry periods when the hydroelectric storage lakes are running low, or if there has been a problem with other sources.

Feasibility of Waste-to-Energy plants in New Zealand

As the world debates climate change issues, and the market for fossil fuels wanes from a combination of lower prices and a slowing market, questions continue to arise about energy sources in the 21st Century. As one who thinks there is significant potential for a technological based solution, I have been wondering what alternative energy sources might be used in place of non renewables that take thousands of years to form and whose consumption is causing massive environmental degradation.

Waste to energy plants are in effect high powered incinerators, that burn waste at close to 900-950 degrees celsius, and generating electricity in the process. In 2011 there were 86 known waste-to-energy plants in the United States, which generated about 2,700 megawatts of electricity powering about 2 million homes. The total installed U.S. waste-to-energy generation capacity at that time was roughly equivalent to three Huntly sized power stations in a New Zealand context.

In Norway a growing market for waste-to-energy power generation has been established. The country imports waste from towns in the United Kingdom to help feed the incinerator. It is divisive however, with some people and organizations believing the facility, near Bergen, to be a blot on the landscape. Others are concerned that it may undermine recycling efforts by causing confusion and providing an easy throw-away option. Supporters point to the large volume of waste dumped across Europe per annum – in 2013, roughly 150 million tons – saying it only represents a tiny fraction of the total amount dumped.

Could New Zealand apply such technology here? Possibly. Given the concentration of much of New Zealand’s population in urban areas, it is certainly worth investigating. I would envisage plants being built in the industrial parts of Auckland Wellington, Christchurch and Hamilton. Rather than taking the waste to landfills for dumping, the waste collected from kerb side collection could instead go to a waste-to-energy facility. This would have an added benefit of possibly lengthening the life time of existing landfills.

Each year 80,000 tons of electronic waste (e-waste)gets generated in New Zealand and can be as diverse as old  dumb and smart phones, printers, lap/desktops, kindles, digital camera’s, GPS units, microwaves, televisions and so forth. Less than 1% of it gets recycled. E-waste has significant minerals in it, including neodymium, europium and tantalum. The Basel Accord prevents toxics being sent to third world countries, but only a few first world countries have proper facilities and protocol for disposing of e-waste. Although New Zealand has ratified the Basel Convention, it has only made ad hoc efforts to support the recycling of e-waste.

New Zealand also throws out a large amount of plastics, ranging from soft drink and milk bottles, to product wrapping and bags. Despite assertions to the contrary the vast majority of this ends up in landfills. As a nation on the Pacific Rim, some of the plastics from ships that leave/enter New Zealand waters find their way into the Great Pacific Garbage Patch, a large area of seawater in the northern Pacific where ocean currents are depositing huge amounts of waste – one estimate suggests 5 trillion individual pieces of waste.


Could burning waste be a new energy source?

Over recent months I have been thinking about alternative energy sources that New Zealand could develop to the traditional hydro-electricity, coal, and geothermal power sources that dominate New Zealand energy production. With climate change challenging the suitability of coal and natural gas as sources of fuel, and nuclear power not being suitable due to the consequences of a melt down, it is time to look at other sources.

We are lucky as a nation to have substantial natural sources of energy. Our geothermal power generation is world class and New Zealand was the second country in the world after Italy to seriously investigate it. Now geothermal energy in New Zealand has nearly 1,000 megawatts of installed generating capacity. There are also significant wind power projects being developed, and whilst these have to overcome significant challenges such as noise and bird strike, wind power now supplies 5% of New Zealand electricity usage.

But there is one source that has has hardly been touched, which is not natural. An old adage says that what is waste to one person is a treasure to another. So, whilst the waste stream and the refuse stations around New Zealand are the recipient and processing stations for our garbage, does that mean it really is garbage?

Not necessarily. In the Scandanavian countries where managements of the waste stream does not produce such proactive recycling as New Zealanders like to believe management of ours does, it is perhaps because investment in high powered furnaces where heat from the incineration of waste drives turbines enabling generators to create electricity has caught hold. And a question that intrigues me is the feasibility of reproducing such a generation system here. A Wall Street Journal article with a pro and an anti-Waste To Energy view point based on experiences in Germany and the United States raises questions that would need to be considered in a New Zealand feasibility study before any attempt is made to try something similar here.

One concern I have is how readily a somewhat conservative society that seems reluctant to embrace ground breaking scientific innovation would embrace a Waste to Energy scheme. Even a biofuel scheme creating an alternative fuel source to fossil fuel from the waste stream seems to be hard for politicians to grasp. It would need some significant capital input from the private sector and what form the Government comes to the party – if at all – would depend on who was governing on the day.

New Zealand has an environmental reputation that is still relatively well regarded around the world to lose if such a project were to go wrong. However, if a model where the clean energy output significantly betters the environmental negatives, it is worth exploring. Where the capital to start such a venture would come from remains to be seen, but the potential to create jobs, reduce our ecological footprint and improve living standards in a successful case is too great to ignore.