Hon Simon Bridges
MP for Tauranga
Minister of Energy and Resources
Associate Minister for Climate Change issues
17 April 2013
Dear Simon,
I was very grateful to you for the effort you put in to respond to my email messages. I should point out that I have been corresponding with various Ministers’ of Energy from both political parties since 2007 hoping that they would reassure me that the government was doing the best that it could. During this time, I did not respond to any of the Ministers who wrote back to me. However, on this occasion, I feel that I have to respond to the content of your letter. The reasons are as follows.
When I first became interested in peak oil back in 2005, I could not find any reliable information. At that time, my initial understanding was that the oil industry was promoting oil abundance, while the peak oil group I joined conveyed the impression that the world economy was soon going to be in trouble. I’ll call the former group the optimists, and the latter the pessimists. I was looking for a third group who would be realists. When I saw the Murray and King commentary and the Energy Watch Group report, I thought I had at last found what I was looking for. The first point I’d like to indicate to you is that the commentary is published in a journal (Nature) that is internationally acclaimed for maintaining high research standards. Secondly, one of the authors (King) was chief scientific advisor to the UK government. I thought that you would take notice of what they said. But instead you preferred to quote the “most credible public source of information on the global oil market”, namely the IEA. I know, and the peak oil community knows, that the IEA belongs to the O group. To quote wikipedia:
Ahead of the launch of the 2009 World Energy Outlook, the British daily newspaper The Guardian, referring to an unidentified senior IEA official, alleged that the agency was deliberately downplaying the risk of peak oil under pressures from the USA. According to a second unidentified former senior IEA official it was "imperative not to anger the Americans" and that the world has already entered the "peak oil zone".
The Guardian also referred to a team of scientists from Uppsala University in Sweden who studied the 2008 World Energy Outlook and concluded the forecasts of the IEA were unattainable. According to their peer-reviewed report, oil production in 2030 would not exceed 75 million barrels per day (11.9×106 m3/d) while the IEA forecasts a production of 105 million barrels per day (16.7×106 m3/d). The lead author of the report, Dr. Kjell Aleklett, has claimed that IEA's reports are "political documents".
The Energy Watch Group (EWG), a coalition of scientists and politicians which analyses official energy industry predictions, claims that the IEA has had an institutional bias towards traditional energy sources and has been using "misleading data" to undermine the case for renewable energy, such as wind and solar.
Murray and King assert that the global production of crude oil has not risen above 75 million barrels per day since 2005. Their key point is that from that date (at peak oil) supply could not match demand which led to price swings. You don’t seem to acknowledge this. What you do quote is the WEO 2012 report which states that “reserves of natural gas liquids and unconventional oil are large enough to keep production rising for several decades”. There is an implicit acknowledgement in that statement based on the type of oil produced (they’re not talking about conventional crude) that peak oil is here. Furthermore, the EWG report I referred you to states that global natural gas production is likely to peak around 2020. In the meantime, production from the world’s major oil fields will continue to decline at around 5%-7% per year. Hence, it is unlikely that NGL and unconventional oil will continue to add to or maintain global oil production at 75 million barrel per day for decades.
Given that the government takes peak oil seriously, I was also interested to learn what policies it has to ensure that NZ “transitions to alternative sources of energy particularly in transport”. You briefly mentioned that biofuels, hybrid and electric vehicles which are entering the market but no further details are given especially regarding a roadmap for their future introduction. I live in Dunedin. I don’t see any sign of biofuels at pumps here nor do I see electric vehicles for sale either, although I do understand that hydrids have been on sale here for about ten years.
Does the government have a policy that allows the importation of new or used fuel-efficient vehicles? Where are charging stations/battery servicing centres for electric cars? I just heard from a Toyota dealer here that the government is considering setting up wireless electric charging plates at public car parks. When will this be introduced? Could prospective owners get tax rebates on purchase of electric cars from government? Do you see fuel-cell vehicles and a hydrogen fuel infrastructure being introduced to NZ? Are there tax incentives for domestic biofuel companies? What is the current status of biofuel legislation in NZ? Do you see butanol being made here? What plan does the government have for public transport particularly rail? These are issues that could be discussed in parliament. I’m sure that the MPs representing Energy and Resource issues know more about these than me. I have contacted them but they have chosen not to explain any of these issues to me either. Gareth Hughes did acknowledge that he read your letter and he agrees with me that peak oil has passed. I think that the general public would also be interested to learn more about what the government intends to do to lessen oil use in our country.
Do you see a time when petrol is not sold here? Did you know that Sweden intends to be the first oil-free nation by 2020? Can you tell me when NZ intends to be oil-free?
Regards
Graeme
Hon Simon Bridges
MP for Tauranga
Minister of Energy and Resources
Associate Minister for Climate Change issues
17 April 2013
Dear Simon,
I was very grateful to you for the effort you put in to respond to my email messages. I should point out that I have been corresponding with various Ministers’ of Energy from both political parties since 2007 hoping that they would reassure me that the government was doing the best that it could. During this time, I did not respond to any of the Ministers who wrote back to me. However, on this occasion, I feel that I have to respond to the content of your letter. The reasons are as follows.
When I first became interested in peak oil back in 2005, I could not find any reliable information. At that time, my initial understanding was that the oil industry was promoting oil abundance, while the peak oil group I joined conveyed the impression that the world economy was soon going to be in trouble. I’ll call the former group the optimists, and the latter the pessimists. I was looking for a third group who would be realists. When I saw the Murray and King commentary and the Energy Watch Group report, I thought I had at last found what I was looking for. The first point I’d like to indicate to you is that the commentary is published in a journal (Nature) that is internationally acclaimed for maintaining high research standards. Secondly, one of the authors (King) was chief scientific advisor to the UK government. I thought that you would take notice of what they said. But instead you preferred to quote the “most credible public source of information on the global oil market”, namely the IEA. I know, and the peak oil community knows, that the IEA belongs to the O group. To quote wikipedia:
Ahead of the launch of the 2009 World Energy Outlook, the British daily newspaper The Guardian, referring to an unidentified senior IEA official, alleged that the agency was deliberately downplaying the risk of peak oil under pressures from the USA. According to a second unidentified former senior IEA official it was "imperative not to anger the Americans" and that the world has already entered the "peak oil zone".
The Guardian also referred to a team of scientists from Uppsala University in Sweden who studied the 2008 World Energy Outlook and concluded the forecasts of the IEA were unattainable. According to their peer-reviewed report, oil production in 2030 would not exceed 75 million barrels per day (11.9×106 m3/d) while the IEA forecasts a production of 105 million barrels per day (16.7×106 m3/d). The lead author of the report, Dr. Kjell Aleklett, has claimed that IEA's reports are "political documents".
The Energy Watch Group (EWG), a coalition of scientists and politicians which analyses official energy industry predictions, claims that the IEA has had an institutional bias towards traditional energy sources and has been using "misleading data" to undermine the case for renewable energy, such as wind and solar.
Murray and King assert that the global production of crude oil has not risen above 75 million barrels per day since 2005. Their key point is that from that date (at peak oil) supply could not match demand which led to price swings. You don’t seem to acknowledge this. What you do quote is the WEO 2012 report which states that “reserves of natural gas liquids and unconventional oil are large enough to keep production rising for several decades”. There is an implicit acknowledgement in that statement based on the type of oil produced (they’re not talking about conventional crude) that peak oil is here. Furthermore, the EWG report I referred you to states that global natural gas production is likely to peak around 2020. In the meantime, production from the world’s major oil fields will continue to decline at around 5%-7% per year. Hence, it is unlikely that NGL and unconventional oil will continue to add to or maintain global oil production at 75 million barrel per day for decades.
Given that the government takes peak oil seriously, I was also interested to learn what policies it has to ensure that NZ “transitions to alternative sources of energy particularly in transport”. You briefly mentioned that biofuels, hybrid and electric vehicles which are entering the market but no further details are given especially regarding a roadmap for their future introduction. I live in Dunedin. I don’t see any sign of biofuels at pumps here nor do I see electric vehicles for sale either, although I do understand that hydrids have been on sale here for about ten years.
Does the government have a policy that allows the importation of new or used fuel-efficient vehicles? Where are charging stations/battery servicing centres for electric cars? I just heard from a Toyota dealer here that the government is considering setting up wireless electric charging plates at public car parks. When will this be introduced? Could prospective owners get tax rebates on purchase of electric cars from government? Do you see fuel-cell vehicles and a hydrogen fuel infrastructure being introduced to NZ? Are there tax incentives for domestic biofuel companies? What is the current status of biofuel legislation in NZ? Do you see butanol being made here? What plan does the government have for public transport particularly rail? These are issues that could be discussed in parliament. I’m sure that the MPs representing Energy and Resource issues know more about these than me. I have contacted them but they have chosen not to explain any of these issues to me either. Gareth Hughes did acknowledge that he read your letter and he agrees with me that peak oil has passed. I think that the general public would also be interested to learn more about what the government intends to do to lessen oil use in our country.
Do you see a time when petrol is not sold here? Did you know that Sweden intends to be the first oil-free nation by 2020? Can you tell me when NZ intends to be oil-free?
Regards
Graeme
Shell said it would take the company about 14 days to respond to a major deepwater drilling accident off the New Zealand coast.
Rob Jager, who is chairman of the Shell companies in New Zealand, told the Advantage NZ Petroleum Conference that the company was going through a process of evaluating the equipment required and the time it would take to respond to a major drilling incident.
Oil explorers often use a so-called "capping stack" device to stem the flow of hydrocarbons when things go wrong.
"We have our own capping stack which we would deploy, but I would expect that it would certainly be within that 14-day period," he said.
"It is first and foremost about preventing things from occurring and that's where a large amount of the focus is, but in the unlikely event of things going wrong, we would work through the scenarios, identify the equipment - including relief drilling facilities - to be able to respond to a disaster," he said during a question and answer session at the conference.
Thank you for your email of 16 April 2013 to Hon Simon Bridges, Minister for Energy and Resources regarding alternative sources of energy in transport. Your email has been referred to me for a reply as this issue falls within my portfolio responsibilities. Please accept my apologies for the delay in replying.
The government’s energy policy, including policy elated to alternative transport fuels, is set out in the New Zealand Energy Strategy 2011-2021 and the New Zealand Energy Efficiency and Conservation Strategy 2011-2016. These strategies note that the government is keeping a close eye on market developments to diversify New Zealand’s fuel mix over time and that the government will encourage the entry of alternative transport fuels and electric vehicles in the New Zealand energy market. You can find copies of these strategies at: www.med.govt.nz/sectors-industries/energy/strategies.
All drivers pay for their road use through either fuel excise duty or road user charges. The revenue from these charges funds the building and maintenance of New Zealand’s road network, as well as other transport activities such as public transport and road policing.
However, two types of alternative fuel are currently exempt from excise duty and road user charges to incentivise their use. The ethanol portion of petrol blended with ethanol is exempt from fuel excise duty under the Customs and Excise Act 1996. Light electric motor vehicles are exempt from road user charges. The exemption for electric vehicles is until 2020, and will incentivise the use of electricity as a transport energy source.
Government investment in public transport reduces fuel use and dependency on imported oil. In both Auckland and Wellington, public transport has received significant government investment.
In Auckland, over the period 2012 to 2015, the government is allocating an estimated $570 million to public transport services and infrastructure. In addition the government has invested $1.6 billion to upgrade and electrify Auckland’s rail network and to provide funding assistance to Auckland Council for the purchase of new electric trains.
In Wellington, the total government investment in the Wellington regional rail network is already electrified, is nearly $500 million.
Yours sincerely
Hon Gerry Brownlee
Thank you for your email of 16 April 2013 to Hon Simon Bridges, Minister for Energy and Resources regarding alternative sources of energy in transport. Your email has been referred to me for a reply as this issue falls within my portfolio responsibilities. Please accept my apologies for the delay in replying.
The government’s energy policy, including policy elated to alternative transport fuels, is set out in the New Zealand Energy Strategy 2011-2021 and the New Zealand Energy Efficiency and Conservation Strategy 2011-2016. These strategies note that the government is keeping a close eye on market developments to diversify New Zealand’s fuel mix over time and that the government will encourage the entry of alternative transport fuels and electric vehicles in the New Zealand energy market. You can find copies of these strategies at: www.med.govt.nz/sectors-industries/energy/strategies.
All drivers pay for their road use through either fuel excise duty or road user charges. The revenue from these charges funds the building and maintenance of New Zealand’s road network, as well as other transport activities such as public transport and road policing
However, two types of alternative fuel are currently exempt from excise duty and road user charges to incentivise their use. The ethanol portion of petrol blended with ethanol is exempt from fuel excise duty under the Customs and Excise Act 1996. Light electric motor vehicles are exempt from road user charges. The exemption for electric vehicles is until 2020, and will incentivise the use of electricity as a transport energy source.
Government investment in public transport reduces fuel use and dependency on imported oil. In both Auckland and Wellington, public transport has received significant government investment.
In Auckland, over the period 2012 to 2015, the government is allocating an estimated $570 million to public transport services and infrastructure. In addition the government has invested $1.6 billion to upgrade and electrify Auckland’s rail network and to provide funding assistance to Auckland Council for the purchase of new electric trains.
In Wellington, the total government investment in the Wellington regional rail network is already electrified, is nearly $500 million.
Yours sincerely
Hon Gerry Brownlee
The Government is putting nearly $7 million into a partnership that will investigate producing biofuel from forestry waste.
Science and Innovation Minister Steven Joyce says the project could be a game changer for New Zealand.
"If the technology can be proven and commercialised, the economic benefit over the next 20 to 25 years is estimated at an annual increase in GDP of up to $1 billion and the creation of 1200 jobs," he said on Thursday.
The Government's partners in the Stump to Pump project are paper making giant Norske Skog and petrol company Z Energy.
It will match their funding of $6.75m, bringing total funding for the project to $13.5m.
The announcement by the Government of Primary Growth Partnership funding of $6.75 million) to investigate producing biofuels from forestry residues is encouraging and supports the forestry and wood processing sector strategy that identified that some emerging biofuel technologies can provide attractive additional revenue streams for existing businesses.
Stump to Pump partners Norske Skog and Z Energy will match funding of $6.75 million, bringing the project’s total funding to $13.5 million.
Speaking today, Mr Brian Cox, Executive Officer of the Bioenergy Association of New Zealand (BANZ) said that “BANZ welcomes the involvement of the Government in the commercialisation of a transport biofuels sector. Work undertaken by BANZ and the wood sector shows that the emerging technologies for producing transport biofuels can be financially attractive as new enterprises. However these would be even more attractive as bolt-ons to an existing business such as Norske Skog who already have the infrastructure and technical capabilities to extend into these new products.”
Mr Cox added “BANZ shares Norske Skog's belief in the need to pursue new businesses from our international comparative advantage in growing trees. Having new products to support the revenue from existing traditional wood products will strengthen the financial viability of existing businesses. A more resilient wood processing sector from additional added value processing of biomass within New Zealand will create more employment and improve the economic strength on NZ Inc.”
For more information on the Bioenergy Association of New Zealand look at:
• www.bioenergy.org.nz for information on the association and the sector.
• www.biogas.org.nz for information on the production and use of biogas in New Zealand.
• www.liquidbiofuels.org.nz for information on the production and use of liquid biofuels in New Zealand, particularly as a transport fuel.
• www.woodpellets.org.nz for information on wood pellet production and use in New Zealand
• www.usewoodfuel.org.nz for information on the sourcing, availability and use of wood fuel in New Zealand.
• www.bioenergyprojects.org.nz for the location and information on the full range of bioenergy projects in operation throughout New Zealand. The interactive search capability also provides information on the people who designed and constructed these projects.
Climate Change Minister Tim Groser today welcomed the report by the Prime Minister’s Chief Science Advisor Sir Peter Gluckman, New Zealand’s Changing Oceans and Climate: the impact of human activity and implications for the future.
The report provides a useful overview of current scientific understanding of climate change. It endorses global consensus that greenhouse gas emissions are causing climate change.
“New Zealand is playing its part in climate change mitigation, with world-leading action on reducing agriculture emissions that are highlighted in the report.
“We lead the world by having established the Global Research Alliance on Agriculture Emissions. This involves linking in climate change and agriculture scientists from over 30 countries in the search for alternative technologies and management systems,” Mr Groser says.
Sir Peter Gluckman’s report comes ahead of the release of the next comprehensive assessment report on climate science, impacts and mitigation by the Intergovernmental Panel on Climate Change (IPCC), which will inform international negotiations and domestic decisions in the coming years. Mr Groser, having recently returned from the meeting in Poland of the Major Emitters Forum - the 17 largest global emitting nations responsible for some 80 per cent of emissions says, “given New Zealand's prominent role in facilitating these global negotiations, we have been invited to more of their meetings as a special guest. These issues were widely discussed at this meeting as we all look forward to the next comprehensive report on the science.”
“As Sir Peter says, scientific reports cannot address how countries like ours respond to climate change, and find an acceptable. balance between environmental and economic drivers.
“The Government’s primary response to climate change is the Emissions Trading Scheme. New Zealand is committed to doing its fair share of international climate change action and we're working to extend global emission reductions beyond our own footprint,” Mr Groser says.
The report is available at http://www.pmcsa.org.nz/wp-content/uplo ... report.pdf
Tim Groser wrote:find an acceptable balance between environmental and economic drivers
More than one billion dollars invested for New Zealanders’ futures is supporting some of the world’s most polluting and environmentally destructive companies, a report released today by WWF-New Zealand reveals.
Fossil Fuel Finance in NZ: The Superannuation Fund and ACC shows how the two largest state-owned investment agencies have more than one billion of a total of 40 billion dollars of assets invested in the fossil fuel industry worldwide (1). With over three quarters of existing fossil fuel reserves needing to remain unburned to meet global climate commitments, the report sets out how this investment is both financially risky and ethically questionable.
Peter Hardstaff, WWF-New Zealand’s Head of Campaigns, says: “Over $1billion of New Zealanders’ pension and accident insurance money is invested in coal, oil and gas companies who’s on-going profitability depends on digging up and burning the un-burnable: fossil fuels that have to remain untouched if we are to avoid ever greater climate change.”
SuperFund’s direct holdings include Soco International PLC, which is currently the focus of a global WWF campaign to stop them prospecting for oil in Virunga National Park, Africa’s oldest and most biodiverse national park (2). Both SuperFund and ACC hold shares in Shell, which is under pressure for drilling in the Arctic; Anadarko, the Texan oil company with permits to drill in New Zealand’s deep waters, including the Pegasus Basin and the Great South Basin; and BP which was involved in the ‘Deepwater Horizon’ disaster off the Gulf of Mexico.
The Environmental Protection Authority (EPA) has just released the results of shallow water oil spill modelling by Shell Todd Oil for Taranaki on their website. Their blowout scenario is modelled on a spill of 10,000 barrels a day for 106 days.
There has been criticism of the parameters used in the spill modelling report produced by data scientists Dumpark for Greenpeace of 10,000 barrels a day for 76 days, with the industry and government describing the report as “scaremongering”.
But as Shell’s release shows, the Greenpeace report has used industry standard parameters.
Greenpeace Campaigner Steve Abel said “This modelling proves that our scenario was realistic and consistent with the industry standard. We again challenge Texan oil driller Anadarko to release their oil spill modelling showing the potential impact a deep-sea oil spill could have on New Zealand.”
The Greenpeace report shows the possible blowout effects of two planned deep-sea drilling locations off the West Coast of the North Island and the East Coast of the South Island. The deepest current production well in New Zealand is 125 meters. Texan oil driller Anadarko is scheduled to begin the first deep-sea drilling (at 1500 meters) this summer off Auckland’s West Coast. Greenpeace’s model for the north shows the likelihood of oil hitting Auckland’s iconic West Coast beaches and harbours. In the south, a spill off the coast of Otago could spread across the Chatham Rise - a vital commercial fishing ground and marine wildlife habitat - reaching all the way to the Chatham Islands.
Human involvement guarantees it will happen...eventually.
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