25/07/2023
Are we running out of gas?
Government officials have clarified a statement that appeared to suggest the country might have less than 10 years’ gas reserves remaining, making clear that was based on an assumption that they believe is not accurate.
The Ministry of Business, Innovation and Employment (MBIE) stated in a report earlier this month that estimated gas reserves had now “dropped below 10 years of remaining use for the first time”.
That was based on an industry estimate that New Zealand had 1635 petajoules of commercially-exploitable reserves, and an assumption that the country would consume an average of 200 petajoules (PJ) of gas over the next 10 years.
The report noted while the country had been using gas at that average rate over the past 10 years, consumption dropped to 145PJ last year, down from 155PJs in 2021 and 183PJs in 2020.
A petajoule is equivalent to about a billion cubic feet of gas.
Energy Resources Aotearoa said the ministry’s report showed New Zealand’s energy security was “in peril”. The association, which represents oil and gas producers and explorers and associated service providers, has lobbied for a reversal of the Government ban on new offshore oil and gas exploration permits.
The ministry’s reserves estimates did not include the industry’s best guess of “contingent” gas reserves, which are reserves that are not economic to exploit today, but which may be in future.
MBIE gas policy manager Dominic Kebbell stated that the ministry expected demand for fossil gas would “continue to decline as more renewable energy becomes available”.
Instead of showing a risk of gas reserves running out within 10 years, “the reserves data shows we have enough fossil gas to support New Zealand through the transition to a fully renewable system,” Kebbell said.
Currently about a third of all gas is burnt to generate electricity, but the Government wants to reduce that to zero by 2030.
Yet at the same time the government is making legislative changes to transfer the use of fossil fuelled vehicles over to electric vehicles and to transfer from fossil fuel use for heating and industry over to the use of electricity.
We are constantly being told by the Government, Environmentalists and the Greens that renewable energy in the form of solar and wind generation is going to alleviate the need for burning fossil fuels; all we need to do is build wind and solar farms and install batteries to cover the times when the wind doesn’t blow and the sun doesn’t shine, and we will not have to worry about electricity supply.
But the reality is that renewable sources of energy (solar and wind) have limitations:
E.g. The maximum rate at which the sun's photons can be converted to electrons is about 33%. Our best solar technology is at 26% efficiency. For wind, the maximum capture is 60%. Our best machines are at 45%.
These technologies are pretty close to the top limits of possible generation even though we are being told that we can look forward to a brighter future using renewables. This means that we are close to reaching the maximum efficiency of this technology and therefore the only way to increase the output will be to build more solar or wind farms and install more batteries.
But again we need to remember that wind and solar only work when the wind blows and the sun shines. But we need energy all the time and supposedly the solution is to use batteries.
Reality, physics and chemistry show that batteries are not the answer.
For example consider the world's biggest battery factory that Tesla built in Nevada. It would take 500 years for that factory to make enough batteries to store just one day's worth of America's electricity needs alone. This helps explain why wind and solar currently still supply less than 3% of the world's energy, after 20 years and billions of dollars in subsidies.
Even forgetting about the economics when we look at the physical realities of developing renewable energy sources and the batteries to enable us to effectively use them; we need to remember that like all machines they are built using nonrenewable materials.
Some basic examples of what I mean are:
• A single electric-car (EV) battery weighs about half a ton. Fabricating one requires digging up, moving, and processing more than 250 tons of ore somewhere on the planet.
• Building a single 100 Megawatt wind farm, which can power 75,000 homes, requires some 30,000 tons of iron ore and 50,000 tons of concrete, as well as 900 tons of non-recyclable plastics for the huge blades. To get the same power from solar, the amount of cement, steel, and glass needed is 150% greater.
• Then there are the other minerals needed, including elements known as rare earth minerals. With current plans, the world will need an incredible 200 to 2,000 percent increase in mining for elements such as cobalt, lithium, and dysprosium, to name just a few.
Where's all this stuff going to come from? Massive new mining operations.
Australia's Institute for a Sustainable Future cautions that a global "gold" rush for energy materials will take miners into "…remote wilderness areas [that] have maintained high biodiversity simply because they haven't yet been disturbed."
And who is doing the mining?
Currently they're not all union workers with union protections in fact in many jurisdictions these rare earth elements are being mined using child labour. Amnesty International has said: "The… marketing of state-of-the-art technologies are a stark contrast to the children carrying bags of rocks."
Sixty-eight percent of the world’s cobalt, a significant part of an EV battery, comes from the Congo where the mines have no pollution controls and they employ children who die from handling this toxic material. So should we factor in these diseased kids as part of the embedded cost of driving an electric car?
The other issue in relation to this increase in mining will be the massive amounts of conventional energy required to first mine the ores, then refine the ores, process the ores into materials for building the renewable energy hardware and then the actual building of the hardware.
Wind turbines are the ultimate in embedded costs and environmental destruction. Each weighs approximately 1600 tonnes (the equivalent of 23 houses), contains 1300 tonnes of concrete, 250 tonnes of steel, 40 tonnes of iron, 20 tonnes of fiberglass, and the hard to extract rare earths neodymium, praseodymium, and dysprosium. Each blade weighs 36,000 Kgs and will last 15 to 20 years, at which time it must be replaced. We cannot recycle used blades so currently they are cut up and buried in landfills.
With current plans, the International Renewable Energy Agency calculates that by 2050, the disposal of worn-out solar panels will constitute over double the tonnage of all of today's global plastic waste. Worn-out wind turbines and batteries will add millions of tons more waste. It will be a whole new environmental challenge. Conventional energy machines, like gas turbines, last twice as long.
So before we launch history's biggest increase in mining, digging up millions of acres in pristine areas, encourage childhood labor, and create epic waste problems, we might want to reconsider our use of hydrocarbons—the fuels that make our modern world possible; and which technology is making easier to acquire and cleaner to use every day.
To put the renewable energy debate into perspective we need to look at some examples for comparison such as:
• It costs about the same to drill one oil well as it does to build one giant wind turbine.
• While that turbine generates the energy equivalent of about one barrel of oil per hour, the oil rig produces 10 barrels per hour.
• It costs less than 50 cents to store a barrel of oil or its equivalent in natural gas.
• But you need $200 worth of batteries to hold the energy contained in one oil barrel.
So the next time someone tells you that wind, solar and batteries are the magical solution for all our energy needs ask them if they have an idea of the cost... to the environment or are they just living in a dream.
It is the same when we look at the future use of electricity and the use of gas to generate that same electricity.
On one hand we have MBIE predicting that the demand for gas to generate electricity will drop as more renewable energy becomes available and that we have enough fossil gas to support New Zealand through the transition to a fully renewable system; and on the other hand we have the government trying to force us to convert to the use of electricity for all our energy needs.
The same government has committed to NOT building anymore hydro-electricity generation dams or using coal fired power generation yet somehow magically finding that our demand for gas, which is used for electricity generation will reduce while the demand increases.
Just recently we came very close to having rolling power cuts as a regular thing due to the lack of supply from hydro generation or wind generation. There was one incident in August 2021 where power cuts were instigated due to a lack of availability of electricity supply.
While we have stopped mining coal in New Zealand for power generation we haven’t actually stopped burning coal for generation. We have just exported the detrimental environmental effects of mining by sourcing coal imported from Indonesia.
We are importing millions of tonnes of dirty coal from Indonesia so that our thermal station at Huntly can continue to supply the power required to keep the lights on.
So the fact of the matter is that we will still need to use thermal generation for some time to come or face rolling blackouts at times.
Concept Consulting noted in a 2021 report that the country’s largest gas consumer, methanol exporter Methanex, was likely to exit the market early if gas production tailed off.
That meant it would “likely play the role of the ‘balancing demand’ to ensure sufficient gas is available to meet higher-value gas users’ long-term needs”, it said.
Should this come to pass that Methanex does exit the market in NZ this may help extend the time frame till our gas supply runs out it also adds another worry to the equation; where will we source a supply of Carbon Dioxide for use in manufacturing and food production.
As seen late last year with the closing of the Marsden Point Oil Refinery and the emergency shutdown of the Methanex plant, we faced a crisis in the lack of supply of Carbon Dioxide within NZ.
It is not a matter of whether or not we are running out of gas; it is just a matter of how soon it happens.
Given this current government’s ban on issuing any new offshore oil and gas exploration permits, it is a fact that eventually we will exhaust the current deposits of gas at some time in the near future. When we reach this point I don’t believe that NZ will be able to survive on renewable energy particularly with the pressure to hugely accelerate the use of electricity for our energy supply to replace coal fired power generation.
