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John Baker's avatar

We’ve got lots of coal. Lots and lots and lots of coal. There are seams from Coromandel to the Taranaki - so much that it has never been worthwhile to drill down to find out how much more, and where. There are the lignite fields in Southland. There is the beautiful anthracite from the West Coast.

Gas would be better, but coal is certain. And, Integrated Gasification Combined Cycle (IGCC) has a nice EROI - in the range of 7 to 10.

We could locate an IGCC in the Waikato, say at Huntly where the mining is easy. The syngas could go into the pipeline there and/or be fed to the power station. An IGCC plant could be sold based on carbon capture and storage (CCS) and have significantly lower greenhouse gas emissions than the Huntly power station on coal. (I don’t know how much life is left in the turbines there.) With CCS the EROI drops to 4 to 7, which is still respectable. If you take the energy cost of mining the coal the EROI drops to 3 to 6 if the mining is open pit, which is feasible at Huntly.

In which case, what is not to love. NZ could showcase a low emissions future and have energy security.

Alternatively, if imported gas is cheaper, where are the plans for the terminals and why are they not being built. Australia has plenty of gas. But then hmmmm. We may have gas too.

So it’s not a matter of ‘no gas, big problem’, it’s a matter of planning and political choices.

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Poisoned Kiwi's avatar

I know what you're saying, and I don't disagree, but there are a few other problems to add:

1. Fonterra mainly export v. low value added commodities (esp. milk powder, cheese, butter).

2. A huge amount of water is required to produce a litre of milk. Estimates of 11K litres of water per litre of milk for eg., though obviously some of this comes from rain, most requires energy of some sort (i.e. pumping from wells or rivers on farms plus that used on site).

3. Fonterra requires bonds to operate - not in itself a problem. The problem is they cannot sell on the market all the bonds they need operate, so the tax payer has to bail them out (in the guise of the RBNZ, who create the $ out of thin air to buy them - the data is on their website). So Fonterra in effect requires heavy subsidies from the tax payer while at the same time contributing to the debasement of the $ (which manifests as consumer price inflation).

So Fonterra's problems are more than just gas imo.

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