Mining group believes in tooth fairy -- "New Zealand cushioned against oil shocks"

Straterra, a body representing mining companies has said, "New Zealand is in an excellent position to withstand any future oil shocks, thanks in particular to our lignite and geothermal resources". Straterra was commenting on the Parliament's research unit report called "The Next Oil Shock".  The Report says major international organisations are warning of another supply crunch as soon as 2012.

What planet are these guys on ? Let's be clear -- geo-thermal energy produces electricity. It cannot power New Zealand's internal transport system - or carry our imports and exports -- 99% of which relies on liquid fuels. If our transport systems cannot run efficiently the economy heads south into recession.

Pinning your hopes on electric cars? There are currently just 27 electric cars registered in NZ. Even if we were to build 50 million electric cars per year starting right now, it would be ten years before half the cars in the world had been replaced. And this does not even factor in the implied massive upgrades to the electrical grid and power stations, or the lithium needed for car batteries (peak lithium?) .

It is perhaps understandable that the general public is confused about various types of energy. But Straterra knows damn well that geothermal resources cannot cushion New Zealand from liquid fuel oil shocks. This is misinformation on a grand scale.

Staterra's other touted "solution" -- converting dirty lignite coal to fuel, similarly has zero chance of cushioning New Zealand from an oil shock expected within 2-5 years. It is a complete fabrication to say that it will.

The graph is from Don Elder's (CEO of Solid Energy) presentation to the Petroleum Conference. It shows that even with the rose tinted glasses firmly in place Elder is saying no unconventional fuel will be produced from lignite in Southland until at least 2015, and then only at a trickle and making up a minuscule part of our liquid fuel needs. Meanwhile the Parliamentary report says an oil supply crunch and petrol price hike may come as soon as 2012. And these are only projections from Elder. The lignite to fuel technology is still in the pre-feasibility stage. There is no guarantee that the technology will work, that it will receive multi-billion-dollar investment, when the world is in recession, or that it will receive the required environmental consents. Elder's projections already seem highly optimistic.

In May 2010 with much fanfare, Solid Energy announced plans with Australian company Ignite Energy Resources Pty to install a trial lignite to fuel plant in New Zealand. But those negotiations have already turned sour and Solid Energy has been unable to conclude a final licence agreement with Ignite. The reality is much different from the rose tinted projections from Straterra. Geothermal energy and lignite has zero chance of cushioning New Zealand from the next oil shock.

Note : The Parliamentary report said:-

  • major international organisations are warning of another supply crunch as soon as 2012.
  • The world may be entering an era defined by relatively short periods of economic growth terminating in oil price spikes and recession.
  • New Zealand is not immune to the consequences of this situation. In fact, its dependency on bulk exports and tourism makes New Zealand very vulnerable to oil shocks.

re-posted from my blog on peak oil -

So what’s the

So what’s the alternative…..obviously a lot less motoring but no matter what, we will still need liquid fuels to some extent.

We could wait for the corporate arm of government to deal with the problem in their dirty ways or we could as communities set up local biofuel co-ops that produce ethanol, where it will be used, as suggested by David Blume.

Food to fuel…..EROEI I hear everyone scream. The reality is that NZ grazes (not farms but grazes) 13.6 million hectares producing very little other than milk, methane and manure. MMM!

High yielding fuel crops like sugar cane can be grown anywhere north of the Waikato, raupo can be grown just about everywhere else. Both crops yield at least 3-4 times the amount of ethanol per acre than corn does. We also have Jerusalem artichoke, beets, and comfrey to name just a few that out perform corn on the ethanol front.

Further more both crops are essentially wetland grasses that can absorb massive amounts of the excess nutrients currently pouring off farms and polluting our waterways if they are grown in the appropriate place. i.e artificial wetlands buffering streams and rivers, areas that are currently drained and grazed.

The yield from these crops is either starches or sugars, which can easily be converted to ethanol, which can run your stock standard internal combustion engine if mixed with petroleum or can run an ICE on 100% ethanol when fitted with a conversion kit.

Converting the biomass to ethanol gives you a nutrient rich mash that can be converted to worm casting or compost, thus sequestering atmospheric carbon into the soil and giving your co-op a secondary product to sell. Humus (worm castings is approximately 60-70% carbon.) The cellulosic parts of the plant which are not brewed up can give you the energy to run your small community plant, or could be composted, if an energy source, such as small community sized hydro system is nearby. The inclusion of this kind of infrastructure could give your co-op another income strea as any excess electricity can be fed back into the grid,when not powering the still.

Setting up a community still that could produce 10,000 litres per week would cost approximately $10,000 in infrastructure. (resource consent etc is not included in that figure).

A couple of stills in your local area would provide enough fuel to keep it ticking over. That is, not meeting the current fuel demand but enough to provide emergency transport and some kind of rationing system, i.e ¼ of a tank for a couple of thousand cars each week.

Feedstock is the issue. Such a scheme would require approximately 1000 acres under fuel crop per scheme but again NZ grazes in total 13.6 million Hectares. There is also close to 1 million acres locked up in “lifestyle” blocks around the country, these are usually in the hinterland of the major cities and regional centres, that currently have “John Deere” mini tractors burning fuel on the weekends to keep them looking neat.

Approx $9.6 Billion leaves these shores annually in petroleum revenue. Some of that $9.6 Billion could be captured by local communities and fed back into their local communities paying farmers to grow the feedstock, thereby improving their farming practices by converting wasted nutrient currently polluting our waterways into a valuable cash crop; paying “lifestyle” owners to actually produce something rather than just being a resource sink and paying workers at the local ethanol plant.

If all organized through a local credit union any surplus could be invested back into other community projects to build further community resilience and if the existing monetary system ever does fall over your creit union could replace its existing currency with a community currency that is backed by energy and therefore holds true tangible value.

Why isn’t it happening already? Two things are missing from this system…no feedstock and no customers.

For such a localized fuel system to occur, it needs to be organized by local communities. The government won’t do it and the corporate certainly won’t.
So, If you want to prevent the government going down the insane path of coal to fuel, ditch the OPECs of the world and start a LOPEC…….Local Organic Permaculture Energy Co-op

Scott Willis's picture

bio fuel solution

We've had research offers for bio-fuel within the Waitati Energy Project zone before. Our research liaison group was not supportive in the idea which would have involved convincing local farmers on easily accessible good land to transform this land from market gardens and grazing to rape-seed, with extreme uncertainty around the EROI (possibly less than 1:1).
In 2008 at one of our energy expos we had a bio-fuel seminar, led by Shaun from Waste Solutions. The most interesting slide he projected showed how much of NZ land would be needed under current bio-fuel technological conditions to maintain our current fleet. It was either a little over our entire surface (mountains and lakes included) or a little under.
Bio-fuels in my opinion should not be mentioned without also mentioning the accompanying dramatic transformation in our transport system and our community organisation that will be required (loudly).
Weaning ourselves off oil really does require some central leadership if it is to happen via a transition: bio-fuels cannot simply replace fossil fuels, alternative systems are either too big for local groups (train networks) or too difficult to foster on a large local scale because of the unforgiving economic world most live in: we need to travel to our place of work and get there on time generally. Alternatively, building enduring structures that may provide alternatives is not only possible, it is desirable and necessary now. It is in this sense that small scale bio-fuel generation would be valuable - a small source of local fuel, while not neglecting the development of non-fossil fuel transport solutions, i.e. : 1. reduce the quantity of stuff we need transport for to survive; 2. rebuild utilitarian cycling networks; 3. lobby to rebuild national public transport networks like electric trains.
I would be keen to have real case examples of successful local bio-fuel production and use in NZ. I'm aware of Ecomatters (in Auckland) Biofuel co-op and would be particularly interested in transferable examples of successful local bio-fuel production.

Fully agree with everything

Fully agree with everything you say about the wider transformation of transport. All of the above most definietly needs to happen where possible, especially in built up areas. Biofuels will never replace the quantities of fuel we currently use, but in lower density areas I think they do offer a lot of potential, albeit a fraction of what is currently used.

We need to be looking at how to supplement fuel stocks efficiently with alternate modes of transport such as rail and buses as well as bicycles/walking etc, coupled with alternate technologies such as electric cars;not to mention urban planning, as well as alternate fuels.

And this is where in my opinion the baby gets thrown out with the bath water. As described by your description of the talk you guys hosted which outlined "how much of NZ land would be needed under current bio-fuel technological conditions to maintain our current fleet."

The choice of feedstock needs to be looked at as well. Its worth remembering Brazil during the 80's ran its entire fleet on sugarcane which yeilds significantly more than corn based ethanol. Whereasas most biofuel data is based on EROEI studies done on corn in the US. Big tractors, vast areas, highly energy intensive.....thats not what i am talking here. Small and local is what I am proposing, coupled with other forms of local energy such as wind or waterto supply the energy balance.

The other thing to watch is your choice of biofuel. Biodiesel sourced from oil crops like rape seed are considerably more energy intensive than sugar and starch based ethanol.

I too would love to see a trail happening but unfortunately nothing exists at the moment. The Ecomatters initiative is biodiesel not ethanol and is sourced from waste cooking oil. Not the most sustainable but better than burning 600million year old carbon sourced from a war zone.

I tried to initiate an ethanol trial a couple of years back through the Sustainable Farming Fund. I connected with the president of the local farmers federation group, who was very interested in the idea, but unfortunately we could not locate a willing farmer and so missed our chance for a small grant to get things rolling. Not too many farmers like to admit they have a nutrient run off problems.

In the trial I proposed using some permaculture strategies such as swales to create harvestable artificial wetland on nutrient seepage lines. Using such strategies to grow an ethanol crop like sugar cane or raupo, could actually complement existing farming practices rather than negatively impact them, by converting excess nutrient into a cash crop (if the market existed), whilst retiring land that should not be grazed in the first place.

Often raupo is already growing in these potential sites but it is considered a weed, and removed either by spraying or redigging drains to expel the wetland areas that raupo naturally grows in. According Environment Waikato NZ has lost 80-95% of its wetlands and 75% of the Waikato's waterways are so nutrient polluted they are not fit for stock to drink. So reinstating wetlands that could potential offer a financial return makes sense.

If a co-op formed that was willing to pay for the converted feedstock, say $1 per litre, an acre of raupo or sugar could be yielding potentially $5000, which I am sure would get some local farmers on board.

Finally other crops such as jerusalem artichoke, comfrey, paddy melons, prickly pear and a variety of other better than corn yeilding crops are all vigours sp, that could be grown on marginal land.

Lets not look at strategies like ethanol as a total substitute for oil, what they offer is a piece of the energy puzzle.

Scott Willis's picture

Bio fuel trial

Richard, thanks for your thoughts and ideas. I am interested in any existing practical examples or plans to move ideas to action, but only in so much as there's a proven case as this isn't my central passion. However I agree with you and think we're talking about the same thing - small, local + different (emerging) fuel use paradigm. If we could find something we could make happen with some of our local expertise, we'd seriously look into it. Sugar cane, for example, won't be useful in our climate as even if it could grow, it wouldn't develop the required sugars over our season as it is at present.

It would be interesting to find out about: 1) Technical plant needed for small scale bio-fuel production; 2). Ideal crop types for the diff. NZ climatic zones and preparation of crops (what/who involved/how long); 3). Fuel storage and use issues.

Any detail on these things in a NZ context that you're aware of?

Hi Scott, To answer your

Hi Scott,

To answer your questions
1) A small home still for anywhere between $600 -$1000 is enough to do some tests. Scaled up according to Blume and a local still manufacturer in Manukau about $10,000- $20,000 for significant quantities. 10,000+ litres per week.

2) I take it you are down south, so probably stuff like beets, jerusalem artichoke, comfrey, probably raupo (typha orientallis), would be best for you.

as for brewing. Sugar is easy, simply make beer and distill it to 99 proof. Starch is a little harder, as you need the right enzyme to break the starch down to sugar. Little bit more time but not too onerous. Essentially we are talking vodka (made from potaoes), that has been put through the distilation process twice.

3)Fuel storage.....just like an aged whiskey,as long is it is sealed it will last!

I have not looked at permits and so on yet....My main interest is more about using permaculture design principles to capture and store energy by converting polluting farm run off into a tangible value added yeild. Not to mention all the associated systemic benefits that could lead to.

As I said I was hoping to get a trail going a couple of years ago but could not locate a willing farmer. We have also had a couple of house moves since then, so I haven't had a chance to sink my teeth into it, but we are settled now and I'm currently fencing off our wet areas so I can start playing around with it on a small scale.

I've connected with a microbiologist friend, so we are hoping come autumn we'll have some sugar cane and raupo to put through a homebrew still,in order to get the basic process of starch conversion sorted and some base data. Never know might be enough to run the kids to school every now and then. Should at least be able to run my chainsaw!

Would love to see something larger happening. Got my eye on an small winery down the road as they have the infrastructure for processing essentially set up. But I think to get something larger happening their needs to be a market. No-ones going to produce 10,000+ litres per week, if there is nowhere to off load it. Chicken and egg scenario.

Scott Willis's picture

Bio-fuel details - thanks!

Hi Richard - much appreciated detail, thank you!
Yes, we're at Waitati - just north of Dunedin - the dryest city in NZ but not the warmest NZ zone.
I'll pass the information on to our local distillers who have an interesting system going. If we get the right person onto this we may be able to trial a small quantity of bio-fuel however there will always be the attraction to provide fuel directly for the humans involved rather than via a machine. I'll let you know end of summer if we have any luck.