Blinkered View Dangerous

There was “a public good” component for gas and it was a sad indictment that the government did not recognise that fact, Houwers told the 2012 New Zealand Petroleum Summit in Wellington.

The oil and gas sector also seemed to lack vision for using gas domestically beyond the present North Island petrochemical, electricity and small industrial, commercial and residential sectors.

There were many opportunities in the energy-constrained South Island, where gas shipped from Taranaki in tankers was only available as LPG in limited areas.

But there was also the transport sector, where compressed natural gas and liquefied petroleum gas offered opportunities, along with emerging octane-enhancing technology.

“We have a better story to tell [to prospective new players] but it needs to start with government energy policy,” Houwers said.

Methanex Corporation Asia-Pacific vice-president Harvey Weake said Methanex was working with many players overseas in emerging methanol technology, including blending methanol into gasoline – “there is an economic driver to do this”.

Both said New Zealand needed a liquid fuels strategy, something that already had been done once before.

The government set up the Liquid Fuels Trust Board in the early 1980s to investigate possible uses of gas from the then giant offshore Taranaki Maui gas field.

Some of the LFTB’s recommendations were the establishment of North Island CNG and LPG networks, the Motunui gas-to-gasoline plant and the Waitara Valley methanol plant.

Houwers said the New Zealand domestic gas market could be almost quadrupled – from 150-170 petajoules per annum to about 600PJ – on the back of further large gas discoveries, most likely offshore.

It would only be possible if more diverse uses for gas were investigated and found to be economically feasible, perhaps with some government assistance.

Earlier there were calls from several speakers for the hundreds of millions of dollars collected from the oil and gas sector by the government each year through royalties and taxes to not all go into the general fund but for some to be channelled back into expanding the options for exploration and for increasing domestic energy use.

At present, the Methanex NZ methanol plants act as a sink for most gas discovered in onshore Taranaki, while demand from other sectors is flat.

Likely development options for any major offshore gas discoveries seem limited, however, to LNG exports, for deepwater, mid-water and even shallow water finds.

Story courtesy of Energy News