The Press WEDNESDAY, OCTOBER 2, 1974. Prospects for coal need more study

Press, Volume CXIV, Issue 33654, 2 October 1974, Page 16

The Press WEDNESDAY, OCTOBER 2, 1974. Prospects for coal need more study

Far from having large deposits of coal and decreasing uses for it, New Zealand has power reserves sufficient for only another 50 years, according to the White Paper on the coal industry presented to Parliament by the Commissioner of Energy Resources (Mr R. J. Hogg). New Zealand is using 2.4 million tons of coal a year to supply about 17 per cent of the country’s demand for energy. Although the percentage is not expected to increase, the amount of coal used each year will rise as the over-all demand increases. At this rate New Zealand’s measured reserves of coal —lB6 million tons — will not last more than half a century. The estimated recoverable reserves are about 835 million, and another 1000 million tons is believed to exist in the Mataura Valley in Southland. Estimated reserves, and what the report calls “ speculative coal ”, cannot be counted as part of the country's certain resources. Any long-term policy on the use of coal must be preceded by a comprehensive survey of the reserves and their accessibility. In the meantime, decisions about exporting coal and its use for generating electricity might have to be deferred This is one of the important results of the preparation of the White Paper.

If coal’s value is to be fairly compared with that of other sources of energy, the price changes recommended in this report should be introduced. At present, only coal mined in the Waikato area for the thermal power station at Meremere is produced at a profit. The loss elsewhere is from $2.48 a ton In Southland to $6.39 a ton in Greymouth. The cost cf mining coal is only about a quarter of the price paid by domestic consumers. Although a price increase of up to 50 per cent at the mine might be needed to cover the cost of production, the price to consumers might rise by no more than 15 per cent if other costs can be held. The report shows that coal is especially important to the South Island; use of coal in South Island homes is about 10 times the rate of use in the North Island. Coal is becoming more important in the North Island for generating electricity. The report concludes that electricity generation will provide coal’s main and expanding market for many years. The need for early decisions on how to produce more electricity would “ fully “ justify an extensive exploration and proving “ programme ”, savs the report. The research must also determine whether economically recoverable coal is suitable for power stations.

In the light of the White Paper the exporting of large quantities of coal looks a less attractive proposition than the Government must have hoped for. Further proving of resources may produce a brighter picture. Much more research into improved ways of mining and using coal can be justified. This work might be done bv the Coal Research Association; the New Zealand Research and Development Committee, which has an agreement on technological co-operation with the United States, might manage to share American experience gained In a very large and active coal industry. It may be possible, for example, to derive petroleum and natural gas economically from some coals. Coal is a resource which cannot be renewed; New Zealanders should be prepared to spend time and money to ensure that the stocks they have are used wisely.