Liquid fuels development key to strategy

Press, 17 July 1979, Page 26

Liquid fuels development key to strategy

By

MIKE HANNAH

New Zealand’s energy future in the next 20 years depends on the development of indigenous fuels to boost continued imports of oil. This is the view, not only of oil companies, which have a vested interest in petroleum imports and in the development of our vast natural gas reserves, but also of scientists, who have been researching alternative fuels.

Oil industry sources say that whatever uses are made of Maui and Kapuni gas, we still have to import about 50 per cent of our energy needs as petroleum. Researchers believe we could be half-way to selfsufficiency in six years by using compressed natural gas, liquefied petroleum gas and petrol-extenders such as methanol and ethanol.

Beyond that figure, they say, the picture is not so clear.

The high proportion .of motor vehicles per head of population makes the conversion of vehicles from the internal combustion engine to alternative motors prohibitively expensive. Just as we are reliant on the interna] combustion engine, so we are reliant on liquid fuels. Hence the priority the Government is giving to proposals that will develop the liquid fuels potential in the Maui reserves.

Our dependence on liquid fuels will have increasing repercussions on the economy as more expensive oil imports take a bigger share of our overseas funds. We can expect this pattern to continue for the next five years, until proposals for Maui gas are realised. If the drain on overseas funds is to be minimised we must, as one scientist has put it, “conserve and curtail” our use of petroleum products: motor spirits, diesel and heating oils. The rocketing prices of oil can be expected to keep inflation an everyday reality in New Zealand for some time to c.ome unless our use of oil drastically falls.

The future beyond 1984 — perhaps not the most auspicious date — looks very promising, however. It is now estimated that the Maui reserves, together with some “slack” from Kapuni, could easily accommodate all the proposals that have been suggested. These include a huge methanol plant, currently costed at S3SOM; a synthetic gasoline plant, costed at SISOM, but needing a methanol plant first; a liquefied natural gas plant; and continued production of L.P.G. and C.N.G.

All these proposals would provide for, internal needs, and some would provide enough fuels for export as well. A decision

on which will be given priority will probably be made by the Government in October, after it has received a report and recommendations from the Liquid Fuels Trust Board. The Government is also expecting a report from the technical advisers to the Marsden Point .oil refinery on extensions to the refinery. Extensions will allow New Zealand to import a cruder oil, at a lower price, for internal refining, reducing our oil bill further. • About the same time, ethanol could be in production for use as either a petrol-extender in blends or as a fuel in its own right. The technology has already been developed in Brazil to draw ethanol out of sugar cane and other crops with a high sugar content.

Research is under way in New Zealand to produce the alcohol fuel from sugar beet or fodder beet, and the research has recently received encouragement from the Liquid Fuels Trust Board in the form of a grant of $120,000.

In the long term, biomass and possibly electricity hold the key to our energy future. Biomass refers to anything that grows or has grown, but specifically to methanol, produced from trees, and other fuels produced from sources as diverse as flowers, whey and garbage. New Zealand’s vast forestry resources provide a head start for moves to biomass production, but, because of the time lag from planting to using trees, we cannot expect major developments in this field for another 20 or 30 years at the earliest. In all, the immediate prospect for New Zealand is not bright. We have been told by overseas economists that our longterm future is so good that we should be developing alternative fuels, which we could use for trade and even as collateral for future Loans.

We have the resources to improve our balance of payments and to stabilise our economy, but, as ever, the decisions will be influenced by politics as much as by pragmatism.