Climate change zealots who press for New Zealand to lead the charge
globally in reaching a zero carbon target appear to be not too bothered by the
cuts in living standards New Zealanders would have to absorb.
According to the
most optimistic technology scenario used by the NZIER, there would be a $6.7bn
reduction in annual GDP – and if lower levels of innovation are achieved, in
areas such as forestry planting, methane vaccines for livestock and mass
electricification of transport and industry, the annual loss rises to $26.6bn.
And what if the
sacrifices made by NZ – that is, the reduction made in domestic emissions – are
counteracted by a rise in emissions elsewhere as domestic product is replaced
by imports?
Analysis to date has relied on substantial and unsupported assumptions on what can be achieved.
What should be
foremost for the government is to build a prosperous low-emissions economy, not
to destroy prosperity in a crusade for low emissions.
Proponents of
drastic action to cut NZ’s emissions underline how half of NZ’s greenhouse gas
emissions are from methane. They call for abolition of “industrial dairying”.
But what if the
government acts on those calls, only to see NZ’s dairy exports replaced by
higher production in the US, Australia, the UK and China?
Animal-sourced
foods are the major source of food-system greenhouse gases and their relative
importance is likely to increase in the future. Meat production is the single
most important source of methane from agriculture. Meat exports earned NZ
$6.7bn (and dairy $14Bn) in the latest year.
Dr Jim Salinger,
deputy editor of Climate Change, in an article in the NZ Herald says the
immediate challenge for the proposed new Climate Change Commission is to provide
solutions for agriculture.
True, particularly
if NZ could pioneer a vaccine against methane. But the hard fact is there are
many more beef animals in Texas or cows in India than in NZ and those countries
don’t seem too worried about methane emissions.
Wouldn’t it be
more sensible to be pursuing genetic changes to breed more productive animals
or higher-yield grasses?
Virtue-signalling
by governments may be great for the reputation of posturing politicians but
they always come at a cost to the population.
The government’s
decision to ban new permits for oil and gas exploration is but one example.
Only this week
Genesis Energy (a company owned 51% by the state) underlined the value of its
oil and gas production from the Kupe field offshore in Taranaki.
While Kupe’s field
production in the June quarter was 94% of maximum capacity, down 2 percentage
points, and Genesis’ share of gas sales was down 5% to 3 PJ due to contract
rebalancing, LPG production was up 21% on pcp to 13.5 kt with LPG yield at 4.43
t/TJ of gas produced, up 23% on pcp.
Oil production was
down 11% to 130 kbbl, due to natural decline in yield, and 70 kbbl of oil sales
were recorded, up 20% on pcp.
The rise in LPG
production underlines the value to the country of having this source of fuel
rather than having to import it.
The good news for
the shareholders of Genesis (which owns 46% of Kupe) is that it may be possible
to drain the Kupe gas field without drilling further wells.
Earlier this
month, Beach Energy, one of the Kupe partners, reported the nine-year-old field
has more than a decade of production remaining.
The venture is
considering installing onshore compression, which Beach describes as a “low-risk,
high-value” project to extend Kupe’s production plateau and field
life. A final investment decision on the compression project is expected
in the second half of 2019, it said.
Kupe, owned by
Beach, Genesis and New Zealand Oil & Gas, delivered 25 PJ of gas last
year, 1.2 million barrels of light oil and 94,700 tonnes of LPG from the project’s
three original wells. It is expected to continue producing out to 2034 if a
second phase of development is undertaken.
In late 2016, when
NZOG sold a 15% interest to Genesis, the scale of that phase-2 capex was
estimated at up to $250m, including adding compression and the drilling of at
least one additional well.
If some of the
wilder elements in the Green lobby had their way, not only would drilling more
wells in current permits be banned, but production in existing fields would be
curtailed, if not shut down.
But the stuff
would still be imported, almost certainly at higher cost – another penalty for
the ordinary Kiwi.
The report this
week from the Intergovernmental Panel on Climate Change was interpreted by some
commentators as a “dire, final warning to humanity: everyone must change
their habits, now”.
But China produces
26% of global GHG emissions, nearly twice as much as the next-highest producer,
the US.
NZ contributes
0.17%.
The average New
Zealander won’t be easily persuaded to become a world leader in the
emission-reducing crusadendeavour.
Bob Edlin is a veteran journalist and editor
for the Point of Order blog HERE.
1 comment:
NZ contributes 2% worlds Co2 emissions, half from agriculture. The vaccine against gut methanogens, of the family Archaea which make up about 60% of the world biomas is just pie in the sky. Our efforts physical , social and financial would be better directed to adapting to climate change than on a strategy on which we have only a 2% input into the outcome. The Gvts zero carbon policy is just plain stupid.
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