Conservation of energy only temporary reprieve

Press, 31 August 1977, Page 34

Conservation of energy only temporary reprieve

ALAN KNOWLES

Growth, that panacea for all economic ailments, will do nothing to cure this country’s energy illness. Economic growth invariably means greater energy usage which in turn hastens the onset of the energy crunch — when' demand permanently exceeds supply. Ever since the Organisation of Petroleum Exporting Countries started demanding higher prices for oil in 19731 Western countries have been' in a panic about their future supplies of energy. Governments which previously advocated growth ,*t all costs have now jumped on the conservation bandwagon, but the paradox is that they are: still advocating grot. This farcial situation exists, in New Zealand where the! only real step forward has' been the achievement of. considerable conservation of energy through price increases. But conservation, offers only a temporary' reprieve, especially with the Government urging greaterl productivity from agriculture? and industry — both high, energy consumers.

There is a real possibility! that New Zealand’s traditional energy supplies will run out before new ones have been found — especially transport fuels. As transport is the basis of our way of life this country could be faced by i

I wrenching social upheavals in 20 years if drastic action is not taken now. “Growth” will have to cease being the byword of politicians and economists.

One of the biggest ‘problems about to be faced by the developing energy industry in New Zealand is the acquisition of suitably skilled staff. The Geological Society of New Zealand has 'made scathing attacks on the Government for its lack of geological and geophysical staff w’hich had resulted in inefficiencies in the petroleum exploration programme costing hundreds of thousands of dollars. The society said that .contracts between the ! Government and exploration .companies were so loaded in (the companies’ favour that 'the Government would .become a laughing stock if petroleum was found in New Zealand. The formation of a limited liability company to handle the Government’s interests in oil and gas marketing and exploration will enable the recruitment of expertise. Oil exploration scientists can command salaries in excess of 40.000 a year, far more than the Public Service pay scale.

Three weeks ago the Mines Department advertised in “The Press” for a petroleum engineer with a degree in

I petroleum. mining, or! engineering with experience in the petroleum industry. Experience in the establishment of offshore platforms was prefered. Many such people arc going to be required, and it is doubtful if any people with these ' qualifications can be found in New Zealand and not already working in the field. I And so the country is I going to have to look overseas to Australia, America, i

and Europe. But all of these countries are in the same situation as New Zealand — trying frantically to prove new coal, gas, and petroleum .resources and to expand present production. New Zealand will have to offer huge salaries to attract the already highly-paid experts it needs. There is not time to train people locally for the action is needed now if New Zealand, and the world, is not going to run out

lof existing energy sources! before new ones have been! developed. Finding skilled miners andi oil rig workers to staff new: coal mines, and gas, and) possibly petroleum, wells, will! be another headache for the) Government. However, morel time is available to overcome! this problem as the deposits) have to be proved before mining can proceed. More than 60 per cent of the electricity in New Zealand

5 to the national grid, in the s Waitaki Basin, and later the - Clutha Valley, the country 8 is relatively free from i dependence on imported I fossil fuels for its electricity. But transport is entirely > dependent on these fuels t which should cause particular I concern to the Government, t Alternative transport fuels, r such as ethanol and methane, r is generated from hydro ; dams, and with more stations t about to begin contributing

are available.but only a token interest has been shown in them by way of small research grants.

I Since the technology of I ethanol and methane (production already exists the (Government could well (consider establishing pilot (plants. These would supply (definite yields and costs which are at present only hypothetical for New Zealand conditions. Such pilot plants would also supply trained personnel which would alleviate delays in setting up full production plants because of a shortage of trained staff. The development of the Maui gas field suffered setbacks last year because of a shortage of experienc gas engineers.

Uncertainty surrounds the future of the manufactured gas industry in New’ Zealand. It is uneconomic and dependent on Government subsidies for its survival. The poor condition of the coal carbonising plants and the great expense of new equipment make it unlikely that coal gas production will continue for many more years.

The Masterton gas undertaking received permission from the Gas Council to close this year, and the Timaru gas works will close in 1978. Both local authorities will receive financial assistance to change consumers to an alternative energy supply. Much speculation surrounds the future of the Christchurch gas works after a series of breakdowns recently. The Gas Company, which has just installed new oil reforming plant, is adamant that it will stay in business. But, the final decision may not rest with the board of directors, for if the Government extends its "user pays” policy to the gas industry by withdrawing the subsidy, the company could not hope to pass on the full cost of gas manufacture to the public. However, the most likely Government decision will be to ship considerable quantities of liquified petroleum gas, from the Kapuni and Maui gas fields, to the South Island for the manufactured gas process. This will help appease those South Island authorities who were piqued at the thought of the natural gas being piped to North Island centres and not the south. It will also allow the Government to gracefully refuse to build a natural gas pipeline across Cook Strait.

Talk of a gas pipeline across Cook Strait is not likely to come to much in view of the expense and the

short life of the Maui and Kapuni gas fields, about 30 years. Unless natural gas is found in the South Island the flow of gas through such a pipeline would be one way and it is unlikely that the Government will build such a pipe in the mere hope that one day the flow will be two way.

The Government is using Natural Gas wherever it can make a saving in the imported energy bill, and wherever it can displace the use of electricity. For these reasons the Government is likely to look very hard at the possibilities of using liquified petroleum gas and condensates for automotive fuels. Already efforts are being mace to convert North Island electricity users to natural gas, but they are being partly thwarted by high gas appliance prices compared with their electric counterparts.

The Budget temporarily reduced the tariff on imported gas cookers for domestic use. However, with the Government already talking of another electricity price rise, a long term decision to increase taxes on electrical appliances is more likely. This would promote the use of an indiginous energy resource, natural gas, by making the appliances competitively priced. Placing higher taxes on electrical appliances will tend to pre-

vent their superfluous use, thus conserving electricity. A higher tax could also mean a lower price rise for power next April. Before the end of 1973 when the oil producing countries put the pressure on the West, coal was regarded as a dirty word. Coal mines had been progressively closing and no-one thought coal had much of a future. The situation has now reversed with governments and oil companies looking to coal as the saviour of our way of life. From 1960 to 1973 nobody wanted coal and the mines and equipment deteriorated and new expertise was not sought. The output of underground mines has steadily decreased since 1957, as has the number of people working in these mines. The output of opencast mines stayed at about I.IM tonnes a year until 1973 when it rose sharply. Nearly all of the under-

ground mines belong to the Crown and are on the West Coast of the South Island. These mines made a financial loss last year and the Mines Department has a policy ot not replacing staff who leave the mines. This is probably the prelude to a huge modernisation programme for the fewer men employed with traditional mining skills the easier it will be to introduce modern, efficient, mechanised mining techniques. The upgrading of coal handling facilities in railway yards has already begun. Because of the long lull in demand for coal the Mines Department did not concern itself with proving too many new deposits. Thus it has been caught on the hop by a Government which suddenly needs to know the extent of the coal reserves on which to base its energy policy. And so a frantic survey programme is likely to be undertaken. The immediate prospects are not bright with only 189 M tonnes of coal proved to exist in the country, and another 659 M tonnes throught to exist. It will take an enormous amount of work to prove that the indicated amount of coal exists and even then not all of it will be economically recoverable. Two 1200 MW capacity coal fired power stations have the capacity to absorb

nearly all of the 189 M tonnes of measured coal in the country, over the 25 year life of the stations. All attempts will probably be made to postpone the introduction of nuclear power in New Zealand as long as possible. It has been established that nuclear waste cannot be disposed of in New Zealand and that fuel for the stations will have to be imported. Before any station is built a guaranteed supply of fuel will have to be found and a guaranteed repository for the waste. Australia is the obvious sup-

plier but New Zealand could not hope to compete with much larger and wealthier nations (France and Japan) who are at present clamouring for a guaranteed supply of uranium from a ruthless Australian Government.

New Zealand is in a weak position regarding negotiations with the Australian Government on trade, and the position would only be further weakened if we were to become dependent on Australia for vital energy supplies. Opponents to the development of nuclear power stations in New Zealand have pointed to the geothermal fields as an alternative source of energy. It has been estimated that i power station about the size of Wairakei (150 MW capacity) could be bought into service every two years, up until the year 2001. This programme w’ould put a heavy demand on labour and resources. A considerably expanded geothermal expansion programme will probably be introduced by the Government because this is one area where the country has the trained personnel but is not utilising them fully. The financial input for research into alternative sources of energy is generally beyond the resources of New Zealand. And so the energy policy, which the Minister of Energy Resources (Mr Gair) is working on, is likely to keep a low key approach to the alternatives, and rely on overseas research. Surveys of sunlight hours, wind, sea waves, and tides in and around New Zealand would prepare the country for the advent of the technology which will make these energy sources worth tapping.

Much greater emphasis is being placed on the importance of small hydro-elec-tricity generating schemes but little action has yet been taken. However, the Government is likely to try and woo local authorities away from their rubbish and rates syndrome ' with substantial subsidies for the developments of small hydros. This should not be too difficult for since the 1974 power blackouts those few authorities with their own power stations, such as Dunedin, have been viewed with envy by the others.

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