Here’s a bit of good news on the energy front to mitigate some of the gloom created by soaring costs, potential black-outs and rising carbon emissions.
Genesis Energy reported this week New Zealand’s gas supply has been boosted after a $72m project at the Kupe gas production station near New Plymouth has been finished.
The inlet compression project, undertaken by Genesis and its Kupe Joint Venture partners, operator Beach Energy and NZ Oil & Gas, increases production back to the plant’s full capacity of 77TJs a day, the equivalent of supplying around 15% of NZ’s natural gas demand.
Genesis’ group manager Kupe JV Craig Brown said despite some Covid-19 supply chain delays, the project was delivered within budget and with no lost-time injuries from 170,000 person-hours on site – a testament to the strong safety focus of the team on the ground. Continue reading “Big boost for NZ’s gas supply – and a setback for the climate-change warriors”
Soaring energy bills are a problem for firms, households, and the government. This was a headline in The Economist last week – but it can’t happen here, can it?
After all, NZ has plenty of energy. Unlike Europe, 80% of its electricity is from renewable sources. And according to oil industry authorities, NZ is surrounded by a massive continental shelf — the fifth largest in the world, beneath which lie vast quantities of undiscovered natural gas and, probably, some light oil.
So surely NZ can face the future with confidence?
Well, no: let’s not forget Prime Minister Jacinda Ardern had her “non-nuclear” moment and placed a ban on new offshore exploration permits for oil and gas. Since then, as international oil explorers gave up their offshore exploration licences, supplies from existing producing wells have begun to diminish for several reasons.
Higher costs are starting to flow into household and business gas bills. Vector is increasing Ongas LPG cylinders from $115.026 to $125.82. Continue reading “Emergency measures introduced in UK as energy bills soar – and NZ should brace for rising prices, too, thanks to exploration ban”
New Zealand has been facing some of the most challenging energy market conditions in over a decade, with simultaneous shortages in natural gas and hydro-electric generation. The consequence has been sustained high wholesale electricity prices, creating issues for electricity retailers without their own generating capacity, to the point where Electric Kiwi – for example – says it is turning to focus on the Australian market.
Some market-watchers contend the problems trace back to the decision of the Ardern government to ban any further offshore exploration for oil and gas. That drove away not only oil exploration companies but also the offshore rigs needed to complete planned drilling programmes.
Whether that is the case or not, some of the big generators like Contact Energy and Genesis are said by critics to be creaming it – but from their point of view, they are doing their utmost to meet the high demand for electricity. Their shareholders certainly should be happy with the healthy margins they are reporting while wholesale prices remain very high. Continue reading “How the govt’s ban on oil and gas exploration has tightened supplies – and resulted in NZ importing 2m tonnes of coal”
Two of the Labour government’s major policies are to reduce carbon emissions in the battle against climate change, and to produce 100% of NZ’s energy from renewable sources.
So are those policies going?
Reports this week make it clear: poorly.
So badly, indeed, that Energy Minister Megan Woods could be living in la-la land.
This was her response to RNZ’s finding that in the same year the government declared a climate emergency, imports of an especially dirty type of coal from Indonesia topped a million tonnes for the first time since 2006:
“This government is not been [sic] satisfied with this reliance on fossil fuels and last year we backed up our goal to have a fully renewable electricity grid with a $30m investigation into solving the dry year problem.
“The NZ Battery project is investigating the country’s potential for pumped hydro, as well as comparator technologies, and is progressing well but will take time.” Continue reading “Over $1bn is invested in renewable energy but meanwhile NZ must import coal to generate electricity”
Energy and climate change are key issues in the November 3 US presidential elections. Democratic challenged Joe Biden says he will return the US to the Paris Climate Accord, from which President Donald Trump withdrew, and hasten new and renewable energy projects.
But a new Energy Information Administration report demonstrates how fracking and competitive energy markets have done more to reduce CO2 emissions over the last decade than regulation and renewable subsidies.
Earlier this year the International Energy Agency said the US saw the largest decline in energy-related CO2 emissions in 2019 on a country basis due to a 15% reduction in coal for power generation while US emissions are now down almost 1 Gigatonne from their peak in the year 2000, the largest absolute decline by any country over that period.
According to the Energy Information Administration report, energy-related CO2 emissions in the US fell 2.8% last year with energy companies replacing coal and heating oil with less expensive natural gas. Hydraulic fracturing combined with horizontal drilling produced a surge of natural gas production in the Midwest and Southwest. With natural gas prices falling, many coal plants have shut up shop.
Between 2007 and 2019, CO2 emissions from coal declined by more than 50% and by 15% in 2019 alone. Between 2016 and 2019 the share of electricity generated by natural gas rose from 33.7% to 38.1% and by non-carbon generation (including nuclear and hydropower) to from 35.5% to 38.2%. Coal generation fell from 30.3% to 23.3%.
The report says power generation from natural gas accounts for 60% of the country’s decline in CO2 emissions from electricity since 2010. The carbon intensity of the country’s energy declined at about the same rate during the first three years of the Trump Administration, as from 2009 to 2016.
In another era, it would have been the lead story on every news channel. But in a country brainwashed into believing it’s apocalypse now, either from global warming or Covid-19 (and possibly both), news of a “significant” oil and gas discovery offshore in Taranaki barely registered in the mainstream media, although the New Zealand Herald did record it in the business pages.
There has not been a major energy find in NZ since 2006, and given New Zealand has only 11 years of gas reserves left, the discovery could be an exciting outcome at a crucial phase for the NZ economy.
Austrian giant OMV reported the Toutouwai-1 wildcat, drilled to a total depth of 4,317m some 50 km off the Taranaki coast in 130m of water, encountered several hydrocarbon-charged reservoir zones during drilling. Continue reading “Promising gas find is reported without much hoopla – Taranaki will welcome the boost but the Greens are coy”