The amount of natural gas held in reserve will last less than 10 years, according to new information from the Ministry of Business, Innovation and Employment (MBIE).
And a major energy campaigner is comparing this problem to the European gas crisis and challenging Government leaders to come up with a solution.
The data covers both onshore and offshore gas permit holders, and reveals a 17% decrease in proven plus probable (2P) reserves.
It says 1635 Petajoules (PJ) of gas reserves have been reported as at 1 January 2023, down from 1967 PJ a year earlier.
The most significant decreases were in the Mangahewa and Maui fields.
The data has been revealed to give gas users a clear understanding of the industry, according to MBIE’s Digital, Data & Insights manager, Mike Hayward.
“Oil and gas are a finite resource and gas continues to play an important role in the energy system," Hayward says.
"We hope that by sharing this information, we can support informed gas supply and investment decisions to be made across the sector.”
Hayward says estimated gas reserves have now dropped below 10 years of remaining use for the first time, based on average usage over the last 10 years. He notes, however, that the rate of gas consumption is declining.
New Zealand used 145PJs of gas last year, down from 155PJs for 2021, and 183PJs for 2020. This decline was driven by things like the mothballing of Methanex’s Waitara Valley facility and the closure of the Marsden Point oil refinery.
The fall in reserves is also caused by lower production, with gas output falling in 2022. In addition, future production is forecast to fall.
A prominent energy campaigner says this is a serious problem.
"Almost 10% of the electricity we use to heat our homes and keep businesses’ lights on comes from New Zealand’s domestically produced natural gas," says John Carnegie of Energy Resources Aotearoa.
"It is a vital component in our energy mix and picks up the slack when weather-dependent renewables cannot get there on their own.
"Natural gas is not just used to generate electricity. New Zealand’s industry is powered by affordable natural gas, including industries such as dairy, methanol and steel."
Carnegie says that greater investment confidence is needed immediately, as New Zealand now faces an energy shortfall.
"What affordable alternative renewable energy source at scale can possibly fill the gap now forecast to emerge in less than eight years’ time? Alarm bells should be ringing," Carnegie says.
"Without enough domestic supply of energy there will be no further electrification of transport. Large manufacturers will close, and there will be no energy source capable of firming up renewables in the depths of winter other than high-emissions coal. That will be our reality if we continue down this track."
Carnegie is comparing New Zealand's problem to the gas crisis in Europe which was caused by Russia's invasion of Ukraine.
"I am throwing down the gauntlet to the Government, demanding to know what they will do about this problem."
The latest development comes after Transpower warned of a vulnerable electricity supply system.
Energy Resources Aotearoa is an umbrella group representing users and producers of energy such as oil, gas and hydrogen.
54 Comments
The challenge is getting anyone to stump up serious money for infrastructure (be it fracking, conventional oil/gas or LNG import terminals) for what is thought of as a stop-gap solution we may not need in 10-20 years time. Would that need government guarantees, and is there any political appetite to be seen throwing money at fossil fuel producers?
We do have tax payer under-write here.
https://www.stuff.co.nz/business/125396859/never-again-cost-to-taxpayer…
Although the minister has vowed 'never again'. Maybe not then.
You fall down the same rabbit-hole this piece of 'journalism' does.
All fossil energy is finite; it is therefore theft from ALL future generations, to use it short-term. The joke is that what we use it for short-term, is unsustainable by several orders of magnitude, sans fossil energy.
So this article should have been asking what a sustainable - meaning a long-term maintainable - NZ would look like.
But it didn't...
What a great idea kiwi. Give up using fossil fuels in the short term. Of course, the poorer of us will suffer the most as energy prices go through the roof. And of course, we should spend billions|trillions of dollars today to cool the earth by 1 degree in 40 years time. Oh wait, we are already doing that.... Here's a better plan. Keep using fossil fuels like gas, since it is relatively clean burning. We can expect in the next 40 years that we will have the technology that will create something better than fossil fuels, that will be cheaper and will mean the end of fossil fuel. In the meantime, we save the lives of 10's of thousands who would die from cold. Mostly the poor, and old folk.
Self-justifying, shallow, and ultimately flawed.
Technology; do NOT do something which relies on others getting a technology which hasn't first been perfected and proven - by your cohort. To believe, therefore you can indulge, is little better than heaven/hell religion.
Cheaper? No. Absolutely wrong; it takes energy to underwrite money, via work-done. Thus 'cheaper' would have to mean 'more compact, more abundant, less polluting' than fossil energy. There is no such animal.
Better we do what I did; build a passive-solar (not to be confused with passive-haus) house, so those oldies can stay warm without input. But of course, nobody would profit from that.....
"All fossil energy is finite"
Methane can be quite easily produced using organic waste and bio converter. It's part of the nitrogen cycle so can be infinite. It's also very clean to burn.
With a bit more RnD to safeguard against leakage and waste of unburnt methane, and improve efficiencies it could be totally sustainable without stealing from the future.
Probably won't hear a lot about it until someone works out a way to take complete control over any production of it and profit from it. I.e create laws to ban gas use and production first, then come in with incredible "new" biodigester invention. Then get regulations in place so only a select few can legal use the technology.
https://oilprice.com/Latest-Energy-News/World-News/Future-Of-Oil-Demand…
Oil demand’s future is rosier than the common narrative would have you believe, according to a report released today by Energy Outlook Advisors. According to energy analyst and the report’s author Anas Alhajji, the hope that oil demand will decrease as the world transitions to clean energy is built on a lot of hype and wishful thinking.
1. The natural gas is used to produce electricity. How are you going to push for more electrification without the fuel that creates the electricity in the first place?
2. There is no way to ramp up the production of biogas/methane and hydrogen to the scale required to replace natural gas at a cost that is acceptable to consumers. That's before you consider we don't even have the time do that, either.
Seems like people prefer looking at problems rather than solutions.
1) Generating electricity in NZ can be easily done with wind, solar, geothermal & hydro. We've got an ABUNDANCE of energy, we're just not making any use of it. You could also generate electricity from wood pellets and get on to clearing the gigatons of slash that's littering our coasts up and down the country.
2) Of course there is, where there is a will there's a way. Germany for example has more and more communities that run their own biogas production facilities because biological waste is ABUNDANT and bacteria work for free. You could harvest methane right now by turning your compost or your own excrements into a methane generator: https://www.youtube.com/results?search_query=compost+methane+generator
This technology can be easily scaled from household to industrial size. Where there is a will there's a way.
n-stalker - do some math?
https://open.umn.edu/opentextbooks/textbooks/980
Come back when you're informed?
Thanks for the insightful resource, took a minute to prove my point:
The sun sends energy toward the earth at a rate of 1,360 W/m2.
Multiplying this by the projected results in 174,000 TW of solar power intercepting the earth.
This number absolutely dwarfs the 18 TW societal energy budget of all humans on Earth.
PDK you’ve posted that book several times as though it's a trump card. It’s aimed at school c level. I mean, they explain what a natural logarithm is. The problem is that a lot of the dispute around climate change resides at a higher level. The so-called "equilibrium doubled CO2 sensitivity" model for example requires system dynamics understanding, and you don’t typically encounter non-analytically solvable differential equations that require numerical approximations like Runge-Kutta or Euler etc. until second year university math or engineering. The text in question is highly politicised aiming to teach just enough to think that co2=bad without any nuance or deeper understanding. A deliberate Dunning–Kruger effect hazard. I wouldn't be so critical of it if it wasn't so politicised.
Only about 60% of the natural gas consumed in NZ is for non-energy purposes, i.e., industrial feedstock for methanol, ammonia, etc.
One piece of analysis from EHINZ puts gas at 14% of all energy use in NZ, oil at 47% and renewables/cleaner gen electricity at 30%.
So, we need to 3x our renewable capacity to replace oil and gas plus the overbuild for intermittency and energy storage (battery, pumped hydro, etc.). We should also look to build an LNG terminal facility in Taranaki to import gas if we wish to replace burning coal during dry years.
How do we pay for all that infrastructure without the user bearing the cost?
That "solution" itself comes with a very hefty price tag!
Upgrading the Cook Strait HVDC is expected to cost $150 million to $200 million. Meanwhile upgrading capacity on the central North Island’s system, including the Wairakei Ring, is expected to cost $400 million to $500 million.
So no more than our non-means tested superannuation has increased in each and every single year since the year 2000?
https://www.stuff.co.nz/business/industries/97281269/chart-how-much-nz-…
Only about a-fourth the natural gas consumed in NZ is for non-energy purposes, i.e., industrial feedstock for methanol, ammonia, etc.
False.
Oops. Was looking at some weird numbers from MBIE that excluded industrial from non-energy use -> Gas statistics | Ministry of Business, Innovation & Employment (mbie.govt.nz) in the cover.
Building an LNG terminal makes no sense when we have plenty of gas (and pipeline infrastructure) here to extract )if the government permitted more exploration).
Mind you, always a bit wary of what the Maui operators say about field reserves - they said it would be fully depleted by 2009.
Mind you, always a bit wary of what the Maui operators say about field reserves - they said it would be fully depleted by 2009.
That's because newer technology and advancements in extraction techniques that did not exist back then have since allowed better recovery of O&G from aged and depleting wells.
In the current environment, these companies are wary of investing new capital in exploration and/or well recovery with the centre-left capable of slapping more bans and taxes on the sector. Even if Nat-ACT scrap those bans and taxes, these companies aren't betting several millions on a 3-year election cycle.
Don't worry the greens will come up with something least they will be able to fly around the world beating their chests about how good they are. Just imagine how our electricity supply will go when you add that extra 10percent draw on it along with everything else going electric. Remeber hold your green MPs accountable
Hmm powder, upthread you go after a greenist who says we don't need fossil fuels, and here you go after someone who bags the greenists. I'm sort of familiar with Murphy's writing so can say that in this text he addresses climate change (and mechanism of) as a serious issue, but less of a threat to civilisation than fossil fuel depletion. Therefore the greenists are not closer to the truth. I'd suggest that a decent chunk of what they come out with is over-egged.
Well , Genter did bike to hospital to deliver her baby.Her transport knowledge is way ahead of most Mp's, a stratosphere above potholes.
Swarbrick is the urban youth magnet. but she is well versed in drug education and youth issues.I'd be quite happy for my daughter to look up to her.
But yes , hopefully the Greens will get round to releasing some policy that will keep us hairy old rural types happy. i think part of the problem is the demographic has been fragmented by all this anti vax , 5G , Gmo/Ge, freedom,land/water rights issues.certainly have to have thick skin to wade into the "grass roots" now.
Been quite impressed by Teanau Tuiono lately.
Jeanette Fitzsimons wrote a paper on replacing all of coal with forestry waste. search leave the coal in the hole. no doubt it could be extended to Gas.
Plus methane etc . Replace the gas to Urea plant with natural nitrogen sources.
even if we 1/2 gas use ,that gives us 20 years , though i believe it becomes uneconomic to mine at low levels due to the cost of safety, insurance.
While other countries are defining their long term hydrogen vision and growing solar/wind/storage by leaps and bounds, NZ is absent from global news on sustainable energy. I am not an expert, but it seems we are going to miss the bus and stay in energy scavenging mode due to misplaced priorities of this government. By the way, I am a big fan of EV rebate.
Onslow would be a globally significant energy storage solution. We have the vision, but it is not shared across the political spectrum which makes it unlikely that it can happen, as the planning and building process will span parliaments of different colours.
As a side note - plans for Hydrogen plans are advancing - Woodside have been selected to build for Meridian/Contact in Southland, as part of their plan to side-step the obvious (but damaging to their profitability) solution of Onslow. I believe there are North Island hydrogen plans as well, but I don't follow them.
Hydrogen? I wish people would just let it die the death this idea deserves. Too expensive to make, too expensive to transport, it will be a very expensive product/service if its running on green hydrogen, almost certainly cheaper to do it on electricity where that is possible. And if its not green hydrogen, better to just use the fossil fuel directly.
I'm with you Pragmatist! Hydrogen is not the answer. All those who think it is need to go back to school and learn basic chemistry. First element on the periodic table, consequently very mobile, very difficult to store without leaks, to store any useful quantity requires very high pressures and VERY volatile! I know this from experience, worked for a company that manufactured electrolysers back in the late 80's. We had plenty of explosive events!
So many questions..
I didn't quite understand this statement "The fall in reserves is also caused by lower production..." So was the reduced production caused by lower demand? or was it actually due to the gas field running out of steam, so to speak?
Is it even possible to ramp up or ramp down gas production? I remember reading that Russia was burning off gas because it couldn't be sold to Europe.
How much unproven reserves are we likely to have?
If we burn gas to generate electricity via turbines then can that be done more efficiently, for example with direct electrochemical conversion of gas to electricity cf bloom corporation. That might produce more on-demand electricity thereby bridging the renewable gap.
Go back and read that textbook, sans bias.
Energy is the key, and entropy the enemy. The problem is that we have to be beyond stabs in the dark; we need to target an energy throughput level which can be maintained. And work backwards from there.
We'll find issues with sorts of things; what makes bitumen? Lays it? For what traffic? Most folk only address one item at a time; assuming all else to be equal. It seems the common way of thinking, and it's just plain faulty.
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