The Government has provided details on how the country will manage and conserve fuel if the situation worsens.
Finance Minister Nicola Willis and Associate Energy Minister Shane Jones made the announcement from Parliament on Friday. Willis said the measures; “reflect the specific potential risks New Zealand could face as a result of major fuel disruption driven by the conflict in the Middle East”.
“New Zealand has sufficient fuel stocks, but we are planning for potential scenarios where obtaining future supply could become increasingly difficult," Jones said.
Phases
The phases can apply differently to petrol, diesel and jet fuel if needed.
The country is currently at phase one - deemed the ‘watchful’ level which entails monitoring and strengthening diplomatic ties for supply.
Phase two would have more “active coordination between government and industry to shore up fuel supply and support increased efforts in demand reduction”, and a stronger push for voluntary fuel conservation and a public sector reduction in fuel use.
“If disruption increases, the plan allows for stronger interventions at Phases 3 and 4 including prioritising fuel for emergency services, freight and food supply chains, and key industries that underpin New Zealand’s economy,” Willis said.
“We have the gift of time,” Willis said, so would be consulting for the next two weeks with industry, fuel users, and local government on phase three and four implementation.
Moving phases
The Government’s Fuel Security Ministerial Oversight Group will decide whether the country needs to move phases based on any changes to six of the following criteria:
- export restrictions, if any of New Zealand’s source refineries introduce or relax export restrictions
- changes to New Zealand’s fuel stock levels of plus or minus three days since the most recent published update
- a fuel company informs the government that they are unlikely or unable to fill future orders
- a breach, or a notification of an imminent breach, of the minimum storage obligations
- any significant policy changes in Australia or from the International Energy Agency
- a significant disruption to regional distribution.
Fuel saving
In phase one, the the Energy Efficiency and Conservation Authority will launch an information campaign about voluntary ways New Zealanders can conserve fuel and save money. Moving up phases, phase two would encourage fuel reduction, in the hope that more intensive measures in phase 3 can be avoided.
"In preparation for potential phase fuel, we have directed the Public Service Commissioner to work with all government agencies to develop a public sector fuel plan. This includes identifying their essential fuel requirements, for example, school buses, hospital heating, but also to actively develop options for government agencies to minimise discretionary fuel use."
Willis said they wished to avoid phase three and it would only be necessary if supply tightened very significantly.
"If that occurs, the government will work with fuel companies to ensure fuel is directed to life supporting and economically critical services such as emergency services, hospitals, food supply chains and essential infrastructure."
Phase four would be due to a severe and sustained fuel supply disruption.
"In that case, the government would prioritise uninterrupted supply to life preserving services, and we would more strictly direct how fuel is distributed to other customers."
Schools
Willis said the one place they would draw the line was keeping children in schools.
"We do not want to see children forced to learn from home. We think maintaining access to schools... is essential in the Ministry of Education and working actively on plans to ensure that."
Hipkins asks; 'How's that actually going to work in practice?'
Labour leader Chris Hipkins said New Zealanders "want to know how fuel could be rationed if we get to that point".
"So if they end up at phases three and four and they're having to ration fuel, how's that actually going to work in practice? How will people find out whether they're on the priority list or not?"
He hoped the Government was working at pace.
"I understand that they're having to do things in sequence, but I think those are the sorts of questions people want to hear answers on sooner rather than later."
37 Comments
Moving phases step 2 suggests while should have already moved. And if not by Monday won’t we be 3 days shorter ?
They're still working out the framework.
If this is long term, whether we zig or zag on day 6 or 20 isn't changing the outcome.
It completely changes the outcome. You can't stay in "watch mode" until 6 days left and then tell the public fuel is going to be restricted by 50% , that only leaves you an extra 3 days. We need to be limiting supply now. Chances are we get some sort of a supply from offshore, but if not the implications are catastrophic.
Fuel companies are already rationing major users. Not sure how the Gov. can claim we are in level one when it appears evident we are already level 2.
Maybe it is because of the lack of buffer storage? If they ration now there might not be any where to put the incoming fuel as it arrives. If that is the case then it seems like a gamble that those ships won't turn around and go to a higher bidder....
That's an interesting point.
They are already rationing....storage is not the issue
What did France report? 30% of oil infra destroyed in the middle east? Jeepers, we should already be at level 2, eyeing level 3. Its hilariously short sighted for the government to just think that we won't be affected, heads in the sand stuff. We should be going to low use mode now, putting as much into storage as possible from that which we save, so we can serve necessary industries later when we are in short supply. And that WILL happen, we can't pretend that the destruction of the oil infra will have no disruptions to our supply.
"and get back to Phases 2/3 as soon as possible".
Yup.
That's all they're about.
Phase 1: Do nothing
Phase 2: Do nothing
Phase 3: Limits
Phase 4: Screwed (except PDK).
Stage 2 is clenching
Stage 3 change of pants needed
Stage 4.....no pants left
‘We remain on track’: The Government isn’t considering putting a pause on its plans to build a LNG import terminal, Energy Minister Simon Watts says
https://www.interest.co.nz/public-policy/137809/%E2%80%98we-remain-trac…
I’m not necessarily a fan of the LNG option, but I don’t really think the current scenario changes anything. LNG is meant to be an emergency backup for dry years, not something we rely on day to day.
Dry year back up is not the driver for this....it is possibly the worst option for that purpose.
The best option for that purpose (alone) is the cheapest option, assuming it will work. I’m not across whether there are cheaper ones.
Just about anything else would be cheaper (and more secure).....I suspect they are using the dry year fear to enable maintaining a viable (and horrendously expensive) gas network into the future rather than seeking alternatives.
It needs to be something significant, not just a few solar panels. What are the other options that can reliably generate significant amounts of electricity for a billion?
Like I say I’m not a big fan or anything, but it seems like a much cheaper option to Lake Onslow
Yes I would like some cheaper examples to generate on demand electricity, that also have greater availability.
If you are going to ignore emissions (as they do) then theres coal, which could be sourced domestically and stored cheaply...theres pumped hydro (not necessarily Onslow, but it has the scale) theres ramping up renewables to reduce load on hydro to extend storage capacity and probably a bunch of others I havnt named off the top of my head.
This option is expensive, will lock in fossil fuel dependency, is insecure and suck even more FX out of the economy on an ongoing basis.
Pumped hydro is a way bigger initial outlay. Do we know it's break even point compared to LNG.
Other electrical networks overseas have really struggled trying to manage loads from renewables when they're creating surplus. I dont think you can totally mitigate on demand in this way.
I would also imagine apart from overall electrical generation, our industrial requirements for LNG are fairly difficult or expensive to migrate.
Other electrical networks are not blessed with the proportion of hydro as we are. Our industrial requirements for gas (not necessarily LNG) appear to be diminishing by the week...not least because of cost.
Factor-in the need for time - Onslow is a 10-year thing, all requiring fossil energy.
Local water-at-height is easier, quicker and closer (only misses on scale, as pointed out).
But all contributions lower any peak...
"Factor-in the need for time - Onslow is a 10-year thing, all requiring fossil energy.'
True enough though would make the following points...the fossil energy to construct is largely a one off (there will be maintenance) and how much time has been wasted over solutions to this problem?
Even the LNG terminal will likely be around 4 years from resurrection to useable gas.....idea was first touted 2009
"In 2006, Contact and Genesis Energy set up the Gasbridge joint venture project to import LNG.[11] Their proposed terminal at Port Taranaki was highly controversial, and the plan was shelved in favour of an offshore terminal plan in mid-2009.[12] The project did not proceed and the venture was wound up.[13]"
Our industrial requirements for gas (not necessarily LNG) appear to be diminishing by the week...not least because of cost
We are somewhat de-indistrializing, but for certain industrial applications LNG is the best option - not just from a cost of fuel perspective.
We don't just get to up sticks and totally walk away from it.
'We don't just get to up sticks and totally walk away from it."
Sooner or later we will have too....though a simple time buying solution would be to buy Methanex (back)
Pumped hydro is a way bigger initial outlay. Do we know it's break even point compared to LNG.
I don't think break even is what matters here. Having a functioning electricity grid long term if and when oil becomes even more scarce and expensive is the main consideration. The second is parts to maintain said infra for maintenance for as long as possible.
Taking a 50 year horizon, my money would be on Onslow.
The best options were those that the NZ Battery project was going to suggest before National stepped in and killed it. They were (and still are):
1. Convert Huntly to a torrefied pellet burning plant. Had been proven to work. Can use NZ pine forests with limited need to import fuel additives. Uses Huntly's already tested generators. Only new infrastructure is the plant to build the pellets. And a small version is already being built.
2. Create one or two geo thermal plants that don't run at full capacity (I think they were talking about well switching, have 4 wells, only 2 running at any one time). When dry year hits, spin them up to full capacity.
Both of these are far more "known" than pumped hydro. Doing both would likely see us through dry years easily, using known tech/infra.
Hilariously Onslow was number 4 or 5 on their list of options and it was going to be a "don't recommend". But National killed the project to make it look like they were killing Onslow, which the report was going to do itself. Total own goal.
LNG wasn't even on the list, I believe, because it was laughably infeasible, would cost enormous amounts, unstable supply, dangerous storage, vulnerable to disruptions and very expensive operational costs. As it still is. So why is National still pursuing it? Well when you do a "study" and ask them to only look at fossil fuel sources, because the previous study said use renewables and you weren't happy about that... surprisingly you are going to get the answer you want.
As for wood pellets, there's the factor of energy used for felling, transportation, pellitizing, then using the pellets. All detracts from the total energy output from burning it, and is a good example of why oil is the most preferred energy, being so dense.
Sawdust can be directly injected, or mixed with coal, in to Huntly, so no need for pellets. It's just not a sexy as planting a farm in pine trees.
Moot point. You could say the same for shipping LNG around the world.
It'd be interesting to see the energy wastage from each to confirm if your statement is valid.
'The best option for that purpose (alone) is the cheapest option,'
No, it isn't.
That comes from the default$$$$$$$$$$$$$ mindset.
The best dry-year option is to so construct your energy use so as to be less-to-not vulnerable. Economic growth drives vulnerability, not he other way around; Jevons Paradox soaks up any buffer in 'market' conditions.
I think that's more the sales pitch than the reasoning
Talk with Keith Turner on RNZ this morning on the new Onslow. Changes from what Bardsley envisaged. Don't know the new operating scenario but it is definitely not just for a dry year. It would be earning generation revenue early on. Cost $10-12bil. They have available the reports that cost $30mil from the govt investigation. This seems a much better option.
I reckon spend 11 billion on something that generates electricity instead of just storing it. And then if we still need a backup, got a billion left for LNG. LNG may never even be used, but it sets the max price.
All the electricity that’s currently wasted off peak can be used to charge our EVs instead of pumping water back uphill.
Sigh
$$$$$$$$$$$$$$$$ is strong in that one
Storage is the problem, not harvesting (generating is not the right term, especially for folk so steeped in other than physics) which can be done many ways.
Onslow is a brave attempt to answer yesterday's storage problem. The bravest, indeed. But does it answer tomorrow's storage problem? I don't think so, but Bardsley has studiously avoided getting into a discussion re what is actually sustainable. Turner will be ever further adrift - and Parker came from Roxburgh (nice man, doesn't get it). That is the only question in town.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.