MONDAY, FEBRUARY 24. 1969. The Future Of Coal

Press, Volume CIX, Issue 31921, 24 February 1969, Page 12

MONDAY, FEBRUARY 24. 1969. The Future Of Coal

Mr Shand's speech to the conference of the New Zealand Gas Association last week was particulary valuable for its outline of the great changes that have overtaken New Zealand’s fuel policy. The central point of Mr Shand’s account was that unless some revolutionary new process is developed, the generation of gas from coal will cease when the present installations in gas-works reach the end of their useful life. Acceptance of this central point involves fundamental changes in fuel and industrial policy over a very wide field. Of immediate interest and importance is the effect upon the Grey Valley, from which New Zealand’s gas-producing coal is mined. The formula for change in the town-gas industry makes prospects for this area look bleak indeed. The seriousness of the blow to the Grey Valley had not been completely appreciated, said Mr Shand.

Natural gas from Kapuni is partly responsible for the change. Already Auckland is producing gas entirely from oil in anticipation of converting to natural gas next year. The other undertakings on the North Island pipeline will cease using coal next year. It is expected that some of the South Island gas-works—all outside the range of reticulation from Kapuni—will continue using gas coal for several years: but even these “ must face up to, and plan for, “ the phasing out. of coal carbonisation ” within a period of four or five years, Mr Shand said. The reason is plain: cheaper, easier, and more effective ways of producing gas have been opened to the industry. The market for gas coal is dwindling sharply and will soon virtually disappear. This is unpalatable to the West Coast, where miners have been resentful of criticisms of inefficient mining practices, the elimination of which, even at this late stage, might tip the balance in favour of coal in spite of the fact that gas made from the carbonisation of coal is more expensive than gas made from oil. A factor in favour of coal is that oil for gas-making must, in present circumstances, be a charge on overseas funds. Indeed, there are a host of social, economic, and political considerations to be taken into account in determining fuel policy. The social factors are not the least of these, as the Government acknowledged when closing the Dobson mine. If the run-down of markets for the Grey Valley coal is inevitably to be accelerated, it is not by any means too soon to begin planning for social and economic changes that will affect the whole district and its people.

Mr Shand made it clear that he does not regard the declining market for gas coal as the death-knell of the coal industry: the effects will be confined mainly to the Grey Valley. The industry as a whole can look to heavy new demands from the coal-fired generating station at New Plymouth and the iron and steel industry in the Waikato. Indeed, coal is given a most important place in a projection of future energy demands in New Zealand in a naper presented to the World Power Conference in Moscow last year by Mr W. G. Hughson, of the New Zealand Scientific and Industrial Research Department. Petroleum’s energy share is expected to rise from 53 per cent in 1966 to 57 per cent in 1986. Natural gas is expected to account for 4 per cent in 1971, by 1986 only 2 per cent (The estimated life of the Kapuni gas field is 25 years.) New Zealand’s first nuclear power station is tentatively planned to produce electricity in 1977; and Mr Hughson estimates that this energy source will account for 4 per cent by 1981, rising to 6 per cent by 1986. Electricity from hydro and geothermal sources will continue to increase in quantity, but primary electricity’s share is expected to be 15 pep cent by 1986 against 17 per cent in 1966. Consumption of coal during the period 1966-1986 is expected to double, though in the larger pattern of energy 7 demand coal’s percentage of the total energy demand will drop from 30 to 20. The whole pattern might be changed by several things—for instance, the discovery of substantial quantities of oil in the offshore areas. But so far as can be seen, New Zealand’s coal industry will continue to have an important place in the economy. According to Mr Hughson’s projection, at the 1966 rate of consumption New Zealand’s coal reserves should last for 323 vears; at the estimated 1986 rate, for 162 years. The decline in the demand for Grey Valley gas coal must be seen as no more than a small part of an evolving energy’ pattern. This should make it somewhat easier to deal sensibly and justly with the economic and social consequences.