Mixed messages

December 6, 2019

The government is sending mixed messages on fuel prices.

It’s imposed a carbon tax as part of its climate change strategy while it’s also criticising fuel companies for charging too much.

In doing the latter they are conveniently ignoring the fact that nearly half of the cost of fuel at the pumps is tax.


Westpower hydro decision shows need for better process

August 30, 2019

The government’s decision to stop the Westpower Hydro scheme shows the urgent need for a better consenting process:

“The cancellation of the Westpower hydro scheme concession under the Conservation Act after years of community engagement has significant implications for the review of the resource management system that is about to commence and underlines the need for an improved system for planning consents,” says Paul Blair, the new CEO for Infrastructure New Zealand.

“Westpower, the locally owned electricity distributer and generator for Westland, had hoped to build a 20 MW hydro scheme on the Waitaha river on the South Island’s West Coast.

“The scheme would have improved resilience of electricity supply, was aligned with national carbon reduction priorities and would have injected millions of dollars into a part of the country whose traditional industries are under significant pressure.

An old joke asks: what do conservationists do if they see and endangered bird eating a threatened plant?

In this case conservation decided the natural beauty of the river trumped the need for renewable energy which gives credence to those opposed to declarations of climate emergencies.

“But it also would have reduced water flows along a pristine river, impacting recreational activities, and impacted the natural character of the area.

“This was always going to be a difficult decision, but the fact that a local company spent millions of dollars before a line call from a Cabinet Minister cancelled the proposal shows how tenuous and uncertain the consenting process is in New Zealand.

Is it any wonder we have such low productivity when so much time and money is wasted like this?

“Though this was a Conservation Act process, this is an excellent case study for the RMA review panel chaired by retired court of appeal judge Tony Randerson.

“How do we develop a system to optimally trade off the wider social, economic, cultural and environmental benefits of a proposal versus negative environmental effects?

“How do we balance local aspirations to grow and prosper against national objectives to retain areas of national significance?

“How do we provide guidance or accelerate decision making so that economic and social uncertainty, waste and frustration are mitigated, along with environmental impacts?

“In a better system, the need to expand renewable energy supply would have been part of a coordinated regional plan for Westland, led by the region, supported by central government, iwi and local communities, and linked to a wider programme designed to enhance regional wellbeing.

“National concerns about the significance of the Waitaha river would have been tackled through a collaborative planning process and either the effects mitigated or alternatives developed.

“That would have saved everyone a lot of time and cost and instead of wondering ‘what next?’ Westland would now be implementing an agreed strategy to lift incomes and improve the environment,” Blair says. 

Conservation concerns have stopped mining and forestry on the West Coast, now they’ve stopped the hydro project which could have provided jobs, renewable energy and energy security.

Whether or not the decision is the right one, the long and expensive process that preceded it is wrong and must be addressed through RMA reform.

 


Smartphone saves 444 watts

July 20, 2019

Our home has a lot of things that weren’t invented when I was a child and many of them use power.

But while we have a lot more electrical gadgets, the one that fits in our pocket or purse, has replaced lots of others.

 


Energy use unsustainable with renewables

September 29, 2018

Current trends of energy use won’t be sustainable when New Zealand relies only on renewable energy:

. . . Energy Research Centre co-director Michael Jack said the infrastructure and market structures needed to change.

“Wind is variable. It’s only generating when the wind blows.

“Solar is generating during the middle of the day, when there’s less demand for it.

Hydro generation is more reliable, except when droughts decrease river flows, but the chances of getting new hydro schemes through the consent process are remote.

“What you need to do is either shift your demand to those time when the renewables are being produced or somehow store those renewables for use at later times,” he said. . . 

Improved technology could provide better storage, but is unlikely to come up with something affordable in the near future.

He said if changes were not made, the switch to completely renewable energy would be costly.

Of course it will be costly and that will hit poorer people hardest.

This is another reminder of how ill-advised the government was to rush into the ban on oil and gas exploration.

Apropos of which, this week we learned that not only did the government rush into the ban, it’s also going to be rushing the select committee process:

PEPANZ says it is undemocratic and deeply unfair for the select committee considering changes to oil and gas legislation to have its consultation period slashed to just four weeks.

“Given the strong public interest and enormous ramifications of this decision, it’s crucial this process isn’t rushed,” says PEPANZ CEO Cameron Madgwick.

“Our industry doesn’t want a Block Offer this year if it means an undemocratic process. This means there should be no reason now for urgency.

“There has already been a shocking lack of consultation since the surprise announcement was made in April. To now slash the consultation time doesn’t seem fair, open or transparent to the communities, workers, and iwi directly affected.

“Given some of the outrageous comments from relevant MPs in the debate tonight, we have little confidence in a fair hearing from the Environment Select Committee. This is especially so in such a short timeframe which gives so little time for MPs to consider evidence and write a properly informed report.

“The legislative changes in the bill involves serious economic and environmental issues and go even further than expected. There needs to be proper scrutiny of the impacts through a normal four to six month select committee process.

“The entire process has been a disgrace with no warning, no consultation and the Government trashing their own expert advice on the devastating impacts of this policy.”

Why the rush?

Because the decision is made and the government has no wish to hear the facts submitters will put up to prove the economic, environmental and social damage the ban will do.

 

 

 


Emissions reduction project first victim

September 26, 2018

The government’s misguided ban on off-shore oil and gas exploration has claimed its first victim:

The government’s proposed ban on new offshore exploration looks likely to halt plans by Methanex for a $100 million-plus emissions reduction project at its Motunui plant.

The company uses natural gas to make methanol and had been considering a project to recover and re-use CO2 from its production processes in order to reduce emissions per tonne of product.

But that project is now unlikely to proceed due to uncertainty about the longevity of affordable gas supplies in New Zealand, says John Kidd, director of sector research at Woodward Partners.

“This is a project that should have been an absolute slam-dunk,” he said. “It’s good for emissions, it’s good for the economy and it’s good for gas continuity.”

Unlike the ban which is bad for emissions, bad for the economy and bad for gas continuity.

Vancouver-based Methanex is the world’s biggest methanol maker and the biggest gas user in New Zealand.

Methanex New Zealand declined to comment on the emissions reduction project. In July it said it had secured sufficient gas to meet half its New Zealand requirements through to 2029, but noted its disappointment with the exploration ban which it said would impact it long-term.

Kidd said carbon dioxide recovery would be a good project, but it required a long pay-back period. Methanex refurbishes its production trains every five years and the uncertainty the government policy change has created means it would struggle to justify investments needing more than five to 10 years to pay off.

Kidd says it is an example of the environmental costs of the proposed ban, which he believes is more likely to increase emissions than reduce them.

The potential for carbon leakage as New Zealand-made products are replaced with products made overseas is “absolutely real”, he said. The fact the coalition is proceeding with the ban shows the government is more focused on shutting down the country’s oil and gas sector earlier than would have been the case, rather than reducing emissions.

“All of the scenarios are negative – some of them dramatically so,” Kidd told BusinessDesk.

“And the policy objective of reducing emissions is actually worse.” . .

If the policy was going to have a positive environmental impact it might, just might, be justified but it will make emissions worse.

Oil and gas account for just over half the country’s primary energy supplies. Kidd noted that gas – produced as methanol – brings in more than $1 billion in exports. When converted to urea it displaces about $200 million of imported product, while locally produced LPG displaces about $200 million of imported fuel.

The ban loses billions in foregone income, will lead to job losses, will increase emissions and reduce fuel security.

It combines rank stupidity with political posturing at a high environmental, financial and social cost.


Fueling inflation

May 22, 2018

The headline said As fuel prices hit record high, govt mulls tax cut.

That was in India.

Prices are high in New Zealand too but the tax will be going up.

The AA’s weekly fuel price report last week noted:

Another increase in fuel prices, the second in a week, this time led by Z, with all fuels up 4 cents per litre. This brings the ‘national’ price of 91 octane to $2.30/litre, the highest price ever recorded – in nominal terms that is; as we note below, we’ve paid much more in real terms when you adjust for inflation. Plus the tax on petrol has now broken through the $1/litre barrier. And all this before Auckland Council is due to introduce a 10cpl regional fuel tax in July, and the Government a 3-4cpl increase in petrol excise later this year.

Why have prices risen 23cpl in the last 2 months? International refined commodity prices have risen over 16% since the last price cut in February due mostly to geopolitics, while the NZ dollar has fallen nearly 5c against the US$.

Petrol tax is already more than $1 a litre. It will go up three to four cents for all of us later in the year and Aucklanders will face another 10 cent/litre tax from their council.

It’s hard enough accepting more than $1 in fuel tax when it was going on roads. It will be even harder to swallow when it’s going to be spent on public transport in Auckland.

The government has been telling us about how it’s helping the poor.

With fuel prices rising and tax on top of that, they will be giving with one hand and taking with the other.

Everything we buy is transported. If the fuel price rises so will everything else and that will fuel inflation and it’s always the poor who are hardest hit by that.


Anti-oil greenwash adds costs for no gain

April 13, 2018

A friend who has a horticulture business estimates the government’s ban on further offshore oil and gas exploration will add around half a million dollars a year to his costs of production.

That comes on top of a similar amount more he’ll be paying for labour with the increases to the minimum wage.

He might be able to absorb some of the increased costs but will have to pass on at least some of the increase.

Food in New Zealand is already expensive. Government policies will make it even more expensive and will also lead to job losses.

Adding extra costs for green wash is economic vandalism for no environmental gain.

The Government’s decision to ban gas and petroleum exploration is economic vandalism that makes no environmental sense, National MPs Jonathan Young and Todd Muller says.

“This decision will ensure the demise of an industry that provides over 8000 high paying jobs and $2.5 billion for the economy,” Energy and Resources Spokesperson Jonathan Young says.

“Without exploration there will be no investment in oil and gas production or the downstream industries. That means significantly fewer jobs.

“This decision is devoid of any rationale. It certainly has nothing to do with climate change. These changes will simply shift production elsewhere in the world, not reduce emissions.

“Gas is used throughout New Zealand to ensure security of electricity supply to every home in New Zealand. Our current reserves will last less than ten years – when they run out we will simply have to burn coal instead, which means twice the emissions.

“The Government says that existing wells will continue but that’s code for winding the sector down.

Climate Change Spokesperson Todd Muller says the decision makes no sense – environmentally or economically – because less gas production means more coal being burnt and higher carbon emissions.

“Many overseas countries depend on coal for energy production. Those CO2 emissions would halve if they could switch to natural gas while they transition to renewable energy.

“By stopping New Zealand’s gas exploration we are turning our backs on an opportunity to help reduce global emissions while providing a major economic return to improve our standard of living and the environment.

“We need to reduce global CO2 emissions. But there is no need to put an entire industry and thousands of New Zealanders’ jobs at risk.”

Mr Young says the Government’s decision today is another blow to regional New Zealand, and Taranaki in particular.

“It comes hot on the heels of big decisions that reduce roading expenditure, cancel irrigation funding, and discourage international investment in the regions.

“This is simply Jacinda Ardern destroying an industry in the cause of a political slogan pushed by Greenpeace.”

You can sign a petition against this economic vandalism for no economic gain here.

When oil and gas are mentioned, we think of fuel for vehicles.

But oil isn’t just used for fuel.

Filling up at the gas station is certainly one of the ways to use oil that is most familiar to us. But guess what: of all the oil we use, only 43 per cent goes to fueling our cars.

Given this, can we seriously consider ending our “dependence on oil”, as some would suggest? Someone who wants to stop using oil will have to say goodbye to smart phones, ballpoint pens, candlelight, clothing made of synthetic fibers, glasses, toothpaste, tires (including those on bicycles), and thousands of other products made from plastic, a petroleum derivative.

Good luck with that program.

Problem is, the anti-oil discourse so demonized this resource that we came to forget the many benefits conferred by its use. Oil and its derivatives have improved living conditions in Western industrialized societies, as the list quoted above quite clearly demonstrates, but also worldwide. In Africa, for example, earthenware jars used to transport water have been replaced by plastic jars, which are much lighter, providing some relief to women who have to carry out this task.

What’s more, some of these products shaping everyday life are designed locally. That’s the case for Eska water bottles or Kraft mayonnaise recipients, manufactured in Montreal. So much so that a high-technology sector has emerged around Montreal refineries over the years, providing quality jobs for more than 3,600 workers. . . 

Like other greenwash, the anti-oil movement has gained traction based on half-truths and emotion.

Like other greenwash, the government’s decision to ban offshore exploration will come at a high economic and social cost with no environmental gain.

Like other green wash the ban is about doing something, not doing the right thing,


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