Incentives likely for car conversions

Press, 10 May 1979, Page 10

Incentives likely for car conversions

An important feature of the coming Budget could be attractive incentives to convert vehicle fleets from petrol to compressed natural gas. according to Dr W. B. Earl, a chemical engineer at the University of Canterbury. Dr Earl made the statement at a Corso-sponsored meeting in Christchurch to discuss the question: "Is there really an oil crisis, or are the public being asked to take conservation measures for other reasons?”

The use of compressed natural gas as an alternative fuel to other hydro-carbon-based fuels would be especially applicable in the North Island, said Dr Earl. The South Island could benefit by using liquified petroleum gas. in the light of the Government’s offer to transport L.P.G. throughout New Zealand at a flat rate. But it would be unlikely that the private motorist would convert his car to run on gas. The cost of converting a vehicle to run on L.P.G. of about $7OO — even more to change to C.N.G. — could he prohibitive, said Dr Earl. Using methanol, which had an octane rate of a more efficient 110. could be a long-term solution, and synthetic petrols and electric cars were other alternatives, he said. The best option to petrol for transport was the use of methanol refined from fodder beet. The cost of using methanol-petrol blends at a level of 15-20 per cent would not be too dissimilar from importing the same amount of fuel from present sources. Dr Earl said. The second-best alternative would be to extract methanol from wood, but this would be very expensive. It would be too dear to get the wood into the factory to process it, he said. •‘All these alternatives are long-term." The costs are simply too high at the moment, but as the price of oil rises these other fuels will become economic,” Dr Earl said.

“But you cannot construct plants to deal with the alternatives overnight. We must plan ahead.”

The need to plan was emphasised also by Dr R. R. Mclntyre, a political scientist at the university. New Zealand would be in “real trouble” in 15 to 20 years, said Dr Mclntyre. The era of unlimited fossilised fuels was a thing of the past and nations of the Organisation of Petroleum Exporting Countries would continue to place higher prices on its fuel exports to get the best possible return from them, and to ensure their own adequate economic growth. Dr Mclntyre said the present “crisis.” was a “temporary aberration” arising from politics in Iran, and that it would be eased in the short term. But oil w-as a “finite resource,” he said, and the raising of O.P.E.C. prices was an indication of the fears of those countries that their oil would “run out.”

“The O.P.E.C. countries are no longer happy to see their cheap natural resources being exported to boost the development of other countries, especially in the West,” he said. Iran should not be seen as the villain of the piece on its own, but should be seen in the wider context of O.P.E.C. However, the lowering of Iran’s production rate has left a “critical world shortfall,” and the 14.5 per cent price rise announced recently would influence New Zealand’s balance of payments and aggravate the national debt. Dr Mclntyre said. The director of the planning and supply division of Mobil Oil New Zealand, Ltd (Mr R. W. L. Makeig) saw the Govehnment’s attempts to reduce the consumption of petrol as a prudent move, and denied that the measures were attempts to save foreign exchange. The Iranian revolution had disrupted the “artificial" balance in world oil supplies. Lower production levels after the overthrow of the Regime — Iran produces 91 per cent of the world’s supply — had caused a crisis of “some magnitude,” in the economi: sense, and had upsetthe false equilibrium, said Mr Makeig. Supply and demand

eventually would return to normal, but the result would be a higher price and a lower standard of living for consumer countries.

A somewhat different stance was adopted by a trade unionist on the panel, Mr L. Morel. The oil crisis was a misnomer and the oil companies and the Government were seeing to it that a “fraud was being perpetrated,” he said.

The oil shortage need not have caused “pandemonium” among Government circles: only one shipment had been cancelled, and the “artificial cuts” placed on the people by the Government wtre merely hiding “massive increases in profits” to the oil companies, Mr Morel said.

The oil companies had no interest in the welfare of New Zealand, he said. They were diversifying into other areas of production because they realised the resource would eventually dry up, and they were not interested in looking for alternatives.

Nationalisation of the companies was the answer to the problem, Mr Morel Said.

“We have reached tne stage where the oil companies must be nationalised and turned into distribution agents," he sa.d “We have to see if private enterprise is really serving the best interests of the country.”

But the present Government was not concerned that “fantastic profits” were being gleaned by the companies because of the shortage, and it would not dare to take the step and nationalise them, Mr Morel said.