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Mining to Keep the Home Fires Burning

Mining to Keep the Home Fires Burning. - NZ's Energy in the 21st Century. Residential Cost NZ cents/kWh 1998. 0. 2. 4. 6. 8. 10. 12. 14. 16. 18. 20. 22. 24. 26. 28. 30. 32. 34. 36. 38. 40. Japan. Netherlands. Germany. Italy. United Kingdom. France. Sweden. USA.

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Mining to Keep the Home Fires Burning

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  1. Mining to Keep the Home Fires Burning - NZ's Energy in the 21st Century

  2. Residential Cost NZ cents/kWh 1998 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 Japan Netherlands Germany Italy United Kingdom France . Sweden USA New Zealand Australia Canada NZ has enjoyed some of the cheapest energy of any OECD country over the past decades: • Cheap Maui Gas • Plentiful hydro 2

  3. NZ is Facing an Energy Crunch! - • resulting from: • Demise of Maui Gas 4

  4. NZ is Facing an Energy Crunch! - • resulting from: • Demise of Maui Gas • Oil at $US60/bbl and beyond 5

  5. Oil beyond US$60/bbl? 6

  6. NZ is Facing an Energy Crunch! - • resulting from: • Demise of Maui Gas • Oil at $US60/bbl and beyond • Hydro capacity being pushed 7

  7. NZ is Facing an Energy Crunch! - • resulting from: • Demise of Maui Gas • Oil at $US60/bbl and beyond • Hydro capacity being pushed • Insufficient Capital Investment Electricity consumption in New Zealand, 1947–2002 Source: New Zealand Official Yearbook, 1947–2002 8

  8. NZ is Facing an Energy Crunch! - • resulting from: • Demise of Maui Gas • Oil at $US60/bbl and beyond • Hydro capacity being pushed • Insufficient Capital Investment • Distorted thinking 9

  9. Distorted thinking: • Results from poor or lacking information • We will find more cheap gas - convert it to electricity rather than reticulate it • Gas is clean -perhaps comparatively but still a fossil fuel that produces GHG • Coal is dirty - coal is a fossil fuel along with gas and oil • LNG will save us • NIMBY and BANANA • No nukes – the dangers of not going nuclear • Green Alternatives will save us • Hot air: Wind will save us • Groupthink? 10

  10. Wind will save us: 11

  11. 12

  12. The Outcomes: • Price increases • Shortages 13

  13. The Outcomes: • brown outs 14

  14. The Outcomes: • price increases • Shortages • brown outs • black outs 15

  15. Focused thinking 16

  16. The Outcomes: • Price increases • Shortages • Recession 17

  17. NZ’s Energy Sources 18

  18. What has lead to the crunch?Oil: • Oil at $US60/bbl and beyond • depletion of world reserves • profligate use • emerging consumers 19

  19. What has lead to the crunch?Maui Gas: • Too cheap • Take or pay • - Methanex 20% • - Electricity Generation 40% • - Huntly coal mine mouth generator run on 70% gas!!! 20

  20. What has lead to the crunch? Electricity capacity: • Hydro capacity being pushed to limit • Insufficient investment in new generation • Current economic model failing (SOE’s) • Lack of responsibility for security of supply • No independent generators • Thermal coal supply inflexible • 1.25 Million tpa import to Huntly!! 21

  21. What can NZ do? Gas • price properly • develop / find more • reticulate and use directly 22

  22. What about Coal? 23

  23. Coal • Coal kick started the industrial revolution • - It can provide the transition to post oil and gas 24

  24. NZ Coalfields Sub Bituminous 870Mt (18,000PJ) Bituminous 340Mt (9,000PJ) Lignite 7500Mt (110,000PJ) (NZ Consumption 750PJ/yr 2007) 25

  25. What about the Cost of Coal? 26

  26. What about Pollution? • Coal as a Fuel or as a Raw Material • Don’t burn coal – refine it • C + H2O + heat = CO + H2 27

  27. Fossil Fuels Price and Carbon Content(per GigaJoule) • Coal Crude Oil Natural Gas • Price NZ$/ GJ 5 18 12 • 42% 150% 100% • Carbon Kg / GJ 25 20 14 • 179% 143% 100% 28

  28. Global Warming - A theory • Global or Urban warming! • Effects: • 1841 Ross • Benchmark: 29

  29. What about Environmental Costs? 30

  30. What can we as Mining Professionals do? • Encourage responsible investment in energy • Promote informed decision making • Encourage new techniques for utilising our natural resources including coal 31

  31. What can we in NZ do? • Become better informed • Conserve • lobby for shrewd use and investment • Lifestyle • Be more efficient - insulate - heat pumps - gas for heating - • solar space heating or water heating 32

  32. Solar 33

  33. Private Coal 34

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