 |
|
|
|
|
|
 |
Sustainability forum March 20042025 - then what?Looking for Pathways to a Sustainable Energy Future for New ZealandResearch and Policy Group Paper to the Sustainable Development Forum Seminar, Wellington - 12th March 2003This paper considers the “Energy Outlook to 2025” that was produced by the Ministry for Economic Development in late 2003 as a business-as-usual scenario. It then examines changes that are required relative to that scenario to set New Zealand onto a pathway to a sustainable energy future beyond 2025. In addition, it examines the assumptions on which the MED scenario is based and considers the impact of the global supply of oil peaking prior to the 2025 horizon of that scenario. Traditional pathways to solving the energy supply problem are discussed. These include the “think big” concepts of the production of hydrogen from indigenous coal and the importation of liquefied natural gas. An alternative pathway based on major reduction in energy demand through a change in attitude to local energy production and use is presented. This provides for a “sum-of-trivia” result that may better insulate New Zealand from global energy shortages and set NZ on a pathway to a sustainable energy future. The “Energy Outlook to 2005” was released by the Ministry of Economic Development in November 2003. This document presents the results of detailed scenario modelling work, sets out the results and states “These indicate a range of possible outcomes under specified assumptions, none of which should be considered a prediction.” As such, it is a very useful document that quantifies the New Zealand energy scene for the next two decades. However, it also claims to be “… based on reasonably likely assumptions”. It describes a pathway that New Zealand is likely to follow and identifies a heavy dependence on non-sustainable imported energy if that pathway is followed. The Energy Outlook might appear to provide comfort by presenting a message that normal energy consumption can apparently continue for the medium term future without any dramatic need for change. However, it should be a wake-up call to all with a concern for New Zealand’s longer term energy future with the questions that it does not address including; what if Peak Oil is imminent and we are heading into a regime of permanent global oil shortage? The MED reference scenario is based on a set of assumptions which are then fed into a supply-side economic model to project the energy supply outcomes. It projects the distribution of primary energy resources in New Zealand.
This figure shows a steady continuous rise in oil demand, primarily due to the demands of the transport sector. The solid lines show the Reference Scenario from the new Energy Outlook report. The dotted lines show the corresponding projections from the previous Energy Outlook report published in 2000. This outlook does not address any impact of policy changes or the introduction of new and emerging energy technologies. The MED reference scenario is based on the assumptions that the benchmark price of crude oil will rise from US$20/barrel in 2004 to US$25/barrel in 2020 and will remain constant thereafter. This takes no account of the issue of Peak Oil, which is the fact that sooner or later, perhaps already, the global capacity to consume crude oil will exceed the global capacity to find and produce it. The economics of supply and demand dictate that this cause dramatic price rises. The “post Peak Oil” price might settle in the range of US$50-US$100 per barrel; maybe three times higher than the long term stable future oil price assumed in the Energy Outlook. Does New Zealand want to be reliant on trying to find increasingly scarce supplies of crude oil at that price? The MED reference scenario relies on new discoveries of natural gas in New Zealand and surrounding waters. However, in view of the uncertainty in this assumption, it assumes that imported Liquefied Natural Gas (LNG) will provide a backstop gas resource. The global market for LNG will be strongly influenced by Peak Oil and is itself a finite resource. Does New Zealand want to become reliant on an expensive imported LNG with questionable long term security of supply and questionable global greenhouse gas impacts? The MED Reference Scenario is incompatible with the Government’s Climate Change Goal “…that New Zealand should have made significant greenhouse gas reductions on business as usual and be set towards a permanent downward path for total gross emissions by 2012.” “ The promise of a hydrogen-based energy economy is clean and secure energy for all, forever” was made at the recent launch of a major research programme in New Zealand is based on the gasification of South Island lignite to produce a fuel gas that is processed to yield hydrogen and CO2. A major benefit of this concept for New Zealand is that it relies on an indigenous source of fossil energy. However, costs are unquantified, the safe storage and transport of hydrogen-fuel is unresolved and it requires the availability of suitable underground storage locations for CO2 if Climate Change consequences are to be avoided. The risk of these or other issues being potential show-stoppers to the hydrogen economy concept has not yet been eliminated. To achieve a sustainable energy future, New Zealand needs to find ways to control the demand for small amounts of energy in a way that energy pricing alone demonstrably cannot deliver. Although each little energy efficiency or conservation measure has a trivial impact on the national energy demand, the sum of those trivia has the potential to make a major difference to the demand for energy. Principles for minimisation of the impact of end-use demand on energy supply involve,, match the application to its primary energy source, understanding where energy is used, avoiding use of energy where possible, only converting energy from one form to another where that conversion improves the usefulness of the output energy, minimising the number of energy conversion steps and valuing e energy in proportion to its usefulness instead of its scarcity. Even with NEECS, carbon tax, and increased wind, biomass and geothermal use the Energy Outlook for New Zealand has been projected by MED to still be one of ever increasing demand for imported fossil fuels from a diminishing world resource pool. The principle of relying on the global energy markets to keep meeting the uncontrolled demands for energy is inherently unsustainable. To change direction from the pathway set out in MED’s Energy Outlook to 2025 to a pathway to a sustainable energy future, New Zealand will require widespread adoption of a changed way of thinking about energy. Instead of being a considered only as a tradable commodity, energy supply and its infrastructure need to be considered a privilege available to the present generation that must be handed down in good shape to future generations. A practical energy strategy to take New Zealand forward to a sustainable energy future needs to be developed and then the policies and prices needed to facilitate the change to that regime need to be defined. The energy markets must become the servants of the energy industry not their masters.
|