Ambitious for big oil

74 comments on “Ambitious for big oil ”

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1. sean14 1

   27 May 2008 at 12:03 pm

   Ambitious for big oil? Presumably motorists would be able to choose whether they drove on said four-lane highway or not.

   Either way, things are getting a bit desperate for National when they have to leave their policy announcements to The Standard!
2. Daveo 2

   27 May 2008 at 12:04 pm

   Presumably motorists would be able to choose whether they drove on said four-lane highway or not.

   You tories just don’t get incentives do you? 🙂
3. James Kearney 3

   27 May 2008 at 12:06 pm

   things are getting a bit desperate for National when they have to leave their policy announcements to The Standard!

   Mate the Nats leak like a sieve, that’s their problem.
4. Pascal's bookie 4

   27 May 2008 at 12:06 pm

   Jeez IB, how un-aspirational and narrowminded of you.

   Personally I think that this is just the sort of forward looking sort of project NZ needs to drag us into the future, although I suspect that it is just a trojan horse for the real big announcement to come.

   Some might remember that in a State of The Union address a few years back GWB blurted out that he wanted to put men on Mars. People laughed.

   The Americans don’t seem to be running with the ‘manned flight to Mars programme’, but I have a sneaky feeling our own far sighted Tories might be planning on beating them to the punch.

   They’ll pay for it with tax cuts to motivate the wealthy, so it’s fully costed, no worries.
5. IrishBill 5

   27 May 2008 at 12:10 pm

   Yes Sean, but they will only get one chance to choose whether they have to pay for it or not.
6. rjs131 6

   27 May 2008 at 12:20 pm

   Yes because everyone wants to spend 12 hours on a train travelling from AUckland to wellington, which leaves once a day.
   IB you are sounding like you want a North Korea esq travel system where cars arent utilised and everyone goes by train at the behest of the government.
7. sean14 7

   27 May 2008 at 12:25 pm

   You should be happy either way then IB – if it’s such a big vote-losing policy then Labour will get another three years, and if it’s a big vote-winning policy then people will be getting what they want. Democracy in action!
8. Ari 8

   27 May 2008 at 12:25 pm

   rjs: I’m sure they don’t, but we don’t exactly need a bleeding four-lane highway for the people who do decide to drive. Especially as they’ll get rarer and rarer as the cost of petrol goes up…
9. MacDoctor 9

   27 May 2008 at 12:26 pm

   and with oil prices going the way they are it will probably end up as an unused monument to Key’s shortsightedness.

   And by the time it is finished, how many cars on the road will still be petrol- or diesel-powered, assuming oil is that expensive? Electrical and hydrogen-powered cars are within a few years of becoming main-stream and there are plenty of other technologies in the pipeline.

   The only person without vision here is the one who bought an antiquated, narrow-gauge train set recently.
10. Billy 10

    27 May 2008 at 12:31 pm

    Ari, if we had private roads, the road users alone could pay the cost of the road. I expect you are all for that.
11. IrishBill 11

    27 May 2008 at 12:33 pm

    rjs, doubletracking the main trunk line and bringing the rails up to scratch for high-speed use would make a lot more sense than blowing hundreds of millions on roads that will be used less and less over a pretty short period of time.

    I would say that in a few years the choice won’t be between slow train or road but between highspeed train or several hundred dollars worth of gas.

    MacDoctor, personal transport is dead. Hydrogen is not a fuel it is a storage method and it is only about 40% efficient i.e. for every 100kw you use to make it you get about 40kw back. The electric car is also a farce as is biofuel. There is simply no likely replacement for the massive energy we have had provided by oil. As this is the case the best and only move is to reduce energy consumption. Rail is a good start.
12. higherstandard 12

    27 May 2008 at 12:48 pm

    IB

    Rubbish personal transport is not dead and it won’t be for the foreseeable future there is no scientific data that suggests that world oil reserves are going run out anytime soon.
13. insider 13

    27 May 2008 at 12:55 pm

    we don’t need four lanes. We need three lanes so there are frequent passing opportunities in both directions.

    And surely this will make current transport more efficient so reducing consumption?

    And the big advantage of roads is, you can get on an off where you want rather than where the train planners want, so transit time is lower overall.
14. Robinsod 14

    27 May 2008 at 12:55 pm

    This isn’t really my field of expertise but isn’t the issue not that oil is running out but that from now on in it will cost more and more to extract?
15. randal 15

    27 May 2008 at 1:00 pm

    and will produce more and more co2 and carbon and rubber and other particulates. plus more wussy boy wacers
16. insider 16

    27 May 2008 at 1:01 pm

    As I heard Jeanette Fitzsimons once say “I’ve been talking about peak oil for 30 years…” Yes she has and it still isn’t here despite all the certainty expressed by various ‘experts’ over the years. Imagine if we had taken the Club of Rome’s advice 30 years ago like JF and her ilk suggested.

    I’d suggest Irish’s assumptions about a glorious rail driven future are as unlikely as CoR’s.

    capcha The planning
17. Stephen 17

    27 May 2008 at 1:01 pm

    Robinsod – yeah!

    Someone will probably come up with a cost effective electric car in the next few decades, but if oil prices keep going up there will be a painful transition period where the technology is no widely available or affordable…
18. Steve Pierson 18

    27 May 2008 at 1:06 pm

    I just talked to someone who works on the state highway system.

    They laughed at this idea, a massive white elephant they said. Estimated the cost would be enourmous and there simply is not the road usage to justify it, nor will there be even assuming private vehicle usage remains at current levels.

    Transit decides where to expand capacity based on vehicle numbers, not some silly notion that sounds cool, and that’s the way it should be.
19. T-rex 19

    27 May 2008 at 1:09 pm

    RJS131: North Korea? What? No, actually, I’d like a rail network like Switzerland. If you want it, you’ve got to start progressing towards it one day.

    MadDoctor: You see an antiquated train set. People with vision see something else entirely.

    Irish: With respect, your last paragraph is a total load of rubbish.

    Sod: It is mine – cost to extract will be an issue (which is essentially defined by remaining reserves, as you take the easy stuff first), as will absolute reserves, as will demand. Most of the peak-oil websites can give a reasonable primer on the issues – the general thrust however is that oil will not remain competive as an energy source (and in fact isn’t really already – some applications requiring very high energy density excepted for now).
20. Lyn 20

    27 May 2008 at 1:11 pm

    Imagine getting between Wellington and Auckland in under two hours on a diesel-powered TGV or similar. The fastest trains have a cruising speed comparable to a 737 but even the more standard 350km/hr is going to rocket through the countryside and presumably be very fuel-efficient compared to flying. I’d do it just for the experience.
21. T-rex 21

    27 May 2008 at 1:15 pm

    Cost estimate below:
    2 lane to 4 lane upgrade project in aussie – 114 million for 12km = 9.5mil/km
    658km from auckland to wellington.
    82cAUD/NZ$

    Rough indicative cost of 2 -> 4 lane upgrade Auck to Well: 7.6 billion NZD

    —

    From: http://www.minister.infrastructure.gov.au/jl/releases/2005/December/l149_2005.htm

    Construction of the 12 km Karuah to Bulahdelah Stage 1 is well advanced, transforming a two-lane highway into a four-lane divided highway. The work is costing $114 million and is jointly funded by both Governments. Work is due to be completed in mid 2006.
22. Pascal's bookie 22

    27 May 2008 at 1:15 pm

    What’s your explanation for current oil prices Insider?

    I’ve seen all sorts of things named. The war. North sea storms. Hurricanes in the gulf of mexico. No spare refining capacity. etc and so on.

    What I haven’t seem is the price drop after the ‘one off events’ or lot’s of new refining capacity that must surely be being built, given the prices being paid.

    Didn’t peak oil estimates prove quite reliable for the areas it was originally formulated for?
23. IrishBill 23

    27 May 2008 at 1:19 pm

    T-Rex, putting “with respect” in front of a statement doesn’t stop it being an insult. Are you referring to the last paragraph of my post or my comment? And why is it bullshit?
24. Bryan Spondre 24

    27 May 2008 at 1:23 pm

    “In the transport business of today, truck transportation is steadily increasing. In the EU, truck transports accounts for more than 70% of today’s commercial goods transportation. And in the United States, the truck plays almost an equally significant role.”

    Volvo
25. Steve Pierson 25

    27 May 2008 at 1:28 pm

    Bryan. irrelevant. There simply is not the usage to justiify such a huge investment in extra carrying capacity on this route. Transit, using its usage stats, should be the ones who say where new roads are needed.

    Also, we’ve had all the major land freight users (Fonterra, Solid Energy, Mainfreight) say they will be using more rail over trucking now the govt is investing money in rail.

    Also, quoting a major truck maker’s vague remarks on how everyone loves using trucks is not very powerful.
26. T-rex 26

    27 May 2008 at 1:33 pm

    The ‘with respect’ was because generally I respect what you say, and wanted to affirm that despite the fact that in this particular instance I didn’t.

    The last paragraph of your comment is what I was referring to – unclear, sorry.

    “MacDoctor, personal transport is dead. Hydrogen is not a fuel it is a storage method and it is only about 40% efficient i.e. for every 100kw you use to make it you get about 40kw back. The electric car is also a farce as is biofuel. There is simply no likely replacement for the massive energy we have had provided by oil. As this is the case the best and only move is to reduce energy consumption. Rail is a good start.”

    Point by point.
    1) Personal transport is far from dead. The only question is the mechanism. I assume you’re not forecasting the fall of bicycles?
    2) “Hydrogen is not a fuel” – don’t form arguments baesd on meaningless semantics… by your logic oil isn’t a fuel either. A fuel is “any material that is capable of releasing energy when its chemical or physical structure is altered.”. Hydrogen is a fuel. Agreed, however, that the efficiency is pretty unimpressive – if anything your 40% is very optimistic for the application under discussion.
    3) The electric car is not a farce – I think the burden of proof lies fairly well with you in this case but I can argue the point if you wish.
    4) I am not a fan of biofuels in general, however there is a lot of research going into algae etc that I wouldn’t be writing off just yet.
    5) There are loads of replacements for the massive energy provided by oil. Read the NZ energy strategy and look at the estimates for economically recoverable wind/tidal/wave/geothermal reserves.
    6) Increasing efficiency is a good thing, and rail is a great start – here, to an extent, we agree.
27. Luke C 27

    27 May 2008 at 1:34 pm

    If Transmission Gully alone is ging to cost over 1 billion I imagine 4 laning the whole lot is going to cost alot more than 7.6 billion. Consider the engineering challenges of building a motorway through the desert road or along side Lake Taupo. Just another ridiculous gimmick from the National Party.
    Compare that with spending say a few hundred million on the Auckland Wellington railway it could be upgraded to a decent speed so it would be able to cmpete with trucks trasnit time. The current road is not to bad really, just there are too many trucks on it. If most of the trucks can be transferred to rail there is no need for this ridiculous project.
28. T-rex 28

    27 May 2008 at 1:34 pm

    Ha, yeah, that made me laugh! About as credible as the nuclear energy industry assuring everyone that nuclear is the fuel of the future.
29. T-rex 29

    27 May 2008 at 1:35 pm

    Luke – agreed, but I couldn’t begin to estimate that. Was just pointing out that the “hundreds of millions” mentioned earlier were at least an order of magnitude low.
30. Steve Pierson 30

    27 May 2008 at 1:41 pm

    The cost of adding two lanes to SH1 would obviously vary hugely depending on the geography and cost of the land the road was being expanded onto. Hard to imagine it could be done for under a billion though, several billion surely.

    But there’s also maintainance costs. Transit spends over $1 million a day on maintainance, and double laning SH1 would add heaps to that.
31. Bryan Spondre 31

    27 May 2008 at 1:41 pm

    SP: fair point. Here is an article that suggests that while trains are good for bulk commodities like coal ( & I assume bulk milk & milk powder) they are less efficient than road transport for light loads i.e. people. Rail V Truck
32. insider 32

    27 May 2008 at 1:51 pm

    Pascal

    If you call being out by 30% on total production and peak timing to be at the extreme range of the prediction, and decline rates to be much higher than what has happened, then yes you could call the estimates reliable. The followers of hubbert have regularly had to recast their estimates of reserves as production realities overtake them.

    The real question re price is, what has changed in the fundamentals of supply and demand? The issue I believe is the delta has closed, but there still is one, and paper oil is being traded as a speculation at much higher levels than traditionally done. This and geo politics has heightened volatility and sensitivity, just like we are experiencing with spot electricity prices with uncertainty over rain.

    Other questions to me are:

    are we producing more oil? yes
    Are more projects coming online? yes
    Will these precede or lag demand growth? uncertain – and uncertainty drives price.

    remember there are a lot of vested interests out there with strong incentives to talk up uncertainty
33. Ari 33

    27 May 2008 at 2:01 pm

    Billy- While I have no personal objection to private roads, I think they’re impractical for New Zealand, and I especially cannot see anyone dishing out billions of dollars needed for this kind of project. I think the highway would be an extraordinary waste of money- whether it’s private or public money.

    T-rex- I agree the electric car is very real, but it’s also very impractical as really you need to charge it at your destination or stopover point, and it will not be able to perform the long-distance feats of current personal transportation. Of course, this problem will be overcome gradually if we do go with large fleets of electric cars, as it will incentivise development of new, more robust batteries. The really big downside of electric cars is that it may mean significant increases in electricity generation.

    Bryan- the efficiacy of a rail passenger service is a little more complicated than that. Rail tends to have lower travel times, (at least, when you actually invest in the infrastructure associated with it) and it has a much lower staff-to-passenger ratio. If you value work hours very highly, then rail is actually a very good way to transport people long distances, especially as a very high number of people can read, write, listen to audio presentations, talk with their workmates, and so on while on the train, remaining relatively productive. (of course, not everyone will take advantage of that, but in principle the less work hours consumed by transportation- either through driving or wasted time while being a passenger- the better)
34. T-rex 34

    27 May 2008 at 2:08 pm

    Ari – you raise two issues, one of storage and another of generation.

    For the first – Look up EESTOR. They are not the only ones doing similar development. You can bet others will follow very quickly once certain market shares begin to erode.

    For the second – it will definitely mean increases in electricity generation, which is why I’ll argue as loud as anyone for additional clean generation capacity in NZ so we’re not forced to use off-peak coal/gas/oil fired generation to substitute for oil in an I/C engine.

    You also might be interested in checking out http://www.aptera.com – their electric variant is only average at present (due to the average storage techs you mention) but will only improve.
35. IrishBill 35

    27 May 2008 at 2:10 pm

    T-Rex, I changed the post to account for your costings. I don’t have time to argue the toss about electric cars and biofuel from algae but I do think that any answer like that is a long way off. Perhaps we can pick this up at a later date.
36. Stephen 36

    27 May 2008 at 2:12 pm

    RNZ National’s science programme ‘Our Changing World’ had an update on the University of Waikato’s UltraCommuter EV (electric car) on the 15th. Their archive is there: http://www.radionz.co.nz/national/programmes/ourchangingworld/programme_archive
37. T-rex 37

    27 May 2008 at 2:16 pm

    Irish – no worries, wasn’t spoiling for a fight
38. National disgrace 38

    27 May 2008 at 3:15 pm

    No doubt the nats will invite the private sector to participate in this brilliant scheme. Anyone who has driven across Europe will know that the roads are almost as fantastic as the toll fees you pay to get on and off them. Let’s see, by the time the road has been built, (2020?) 60 litres @ $3 (I know, I’m an optimist), plus $100 (just guessing) tolls = a mere $300+ to take the car from Auckland to Wellington . Only 25 hours work to pay for that on the 2020 minimum wage if the nats win, and stay in power.
    Oops, forgot tax on that wage….
39. Quoth the Raven 39

    27 May 2008 at 3:41 pm

    MacDoctor – You seem to be assuming that narrow gauge is antiquated. So the majority of Japan’s rail system is antiquated. Narrow gauge is best suited for New Zealand’s rugged terrain.

    I heard not long ago that Nissan plans to release full electric cars in 2 years time.
40. mondograss 40

    27 May 2008 at 4:40 pm

    Here’s some figures just out on the efficiency of rail vs road:
    Rail 4x more efficient than road
41. roger nome 41

    27 May 2008 at 5:06 pm

    Insider:

    According to the IEA, non-OPEC production peaks in 2010. The few giant fields that make up 60% of economically recoverable reserves are in decline, and the hundreds of small ones due to come on line can’t compensate.

    As to how much the definition of “economically recoverable oil” changes over time, well it isn’t actually very significant. i.e. 40 years ago it was usually about 40% of total oil in place, and now it’s about 45%. So, when there was massive investment in technology during the 1970s and 1980s (when oil prices were high), oil production in the lower-48 US states continued to decline (it has been declining since 1970-71).

    So, it seems very unlikely that oil production in the non-OPEC countries will increase at all, let alone at levels in-line with demand, after 2010.

    So we’re left with OPEC to increase production after 2010. As you know the US in particular has been pleading with OPEC to increase production for the last 5 years or so, but this has fallen on deaf ears.

    Conclusion: OPEC cannot be trusted to increase production in a way that will ensure oil at a price comparable to what we experience today. In fact they will likely make it as expensive as is possible, without causing so much demand destruction that the flow of income is diminished. They will look to maximise the returns from their resource base (wouldn’t you?).

    So, the likelihood is that we’re looking at very high oil prices within 3 years. After 10 years the sky really is the limit.

    The National Party, and to a lesser degree the Government, has its head in the sand over this issue. The prospect is just too frightening for them to deal practically with. It really does pose the very real prospect of sustained stagflation, much worse than what happened in the 1970s and 1980s (the inflation-adjusted price of oil is already higher than its highest point during that period).

    So my opinion is that roads are a wasted investment.

    Any way of creating electricity is far more expensive than the oil extraction and production process. You get about 50-60 units of energy back for every unit of energy you put in with oil. With electricity it’s more like 10-20 (apart from hydro – and there’s only so many rivers to dam up). We’ll never get around using electricity, anywhere near as cheaply as we do with oil. So mass-transport it is.

    As for hydrogen, I can’t believe people are still seriously discussing it. If you still are, you just have no idea of what you’re talking about.
42. T-Rex 42

    27 May 2008 at 6:22 pm

    Roger – I’ve seen figures for new generation large wind turbines with EROI in excess of 40. Factor in the fact that oil burnt in an I/C engine delivers around 20% efficiency, whereas electricity well-to-wheel for wind-batteries-power can readily exceed 70% and I’m pretty sure you’re wrong. Even more so when you allow for the fact that the energy consumption/km of some of the prototype vehicles being fielded can be as much as an order of magnitude less than those in common use today (see VW 1 litre car for eg).

    Solar EROI is now able to exceed 20 (Sorry – Energy Returned on Energy Invested for those who aren’t following). 3rd and subsequent generation PV technologies could readily leave that in the dust. This from an essentially unconstrained resource.
43. Psycho.Milt 43

    27 May 2008 at 6:56 pm

    Only 4 lanes? Every decent motorway since Hitler’s time has had 6. Key thinks small, that’s his trouble. Re who would use it – I recall a TV vox pop while I was living in Germany in the mid-90s, in which various Jerries declared they certainly would think of using their car less if petrol was to hit $5 a litre. I’m with them.
44. Dean 44

    27 May 2008 at 7:04 pm

    “Only 4 lanes? Every decent motorway since Hitler’s time has had 6. Key thinks small, that’s his trouble.”

    Is there a reason why you think people should take anything you said after this at all seriously?
45. vto 45

    27 May 2008 at 7:34 pm

    the problem isn’t cars. the problem is that cars at the moment run on oil, and they belch out stuff that apparently affects the climate.

    take out those two problems and we’re sweet as a nut. and/or sweet and nutty. so don’t blame cars – blame a couple of current problems with cars.

    problem solved – what’s next?
46. vto 46

    27 May 2008 at 7:39 pm

    and by the way – no fool would build a 4 lane highway like that from there to there. What a load of bullpoop. Sucked in looks like.
47. ghostwhowalks 47

    27 May 2008 at 9:45 pm

    Regarding the efficency of IC engines.
    This graphic shows the detail
    http://www.fueleconomy.gov/FEG/atv.shtml
    17% is lost is in standby/ idle alone.
48. milo 48

    27 May 2008 at 10:28 pm

    Oh, you people. Don’t you realise? The extra two lanes are to be bicycle lanes.
49. QoT 49

    27 May 2008 at 10:46 pm

    Goshdarn you, Lyn, now I’m all drooly with nostalgia for those delicious, sexy European trains. *shakes fist*
50. T-Rex 50

    28 May 2008 at 8:17 am

    vto: LOL! ‘Problem solved’? Not until we’ve actually got the cars buddy! They’re not there yet… unless you’ve got something sitting in your garage you’re not telling us about, in which case give me a bell when you go IPO.

    Also doesn’t solve congestion, parking, etc etc etc. Mass transit done properly rocks, and is worthy of investment. I’m just saying I don’t anticipate the fall of personal transport anytime soon.

    Perhaps ‘Solution at hand’ would be a better choice of words?
51. killinginthenameof 51

    28 May 2008 at 8:25 am

    cue redbaiters (tired) lecture on how socialists love trains…
52. roger nome 52

    28 May 2008 at 5:33 pm

    T-Rex:

    You forgot the substantial transmission efficiency losses with electricity.

    Also – you need to use oil-based products to build the turbines, transport them, erect them, maintain them. This will make it even more expensive.

    Then there’s the problem of supply and demand. Oil currently supplies about 33% of our energy needs. Gas supplies about 32%. A you may know, gas production in NZ is projected to start declining shortly (it’s very expensive to transport/import), so we’re going to be facing a twin peak energy crisis involving the two commodities that account for the vast bulk of our energy supply.

    Hydro supplies only 10% of our energy needs, and we’ve dammed up all of our best rivers, except for the Waitaki. Wind might be able to supply us with 5-10% of our energy demands one day. Any more than that and you get difficulties associated with supply fluctuation.

    Solar is a limited option in NZ (we don’t have the sunniest country). It’s also limited by the scarcity of silicon – though you do hear stories about new materials being developed.

    All in all I just don’t see potential growth in the electricity sector being able to replace the energy supplied by oil and gas (if say they were to decline at around 2% from 2010-2020 onwards), let alone be able to keep up with energy demand growth in away that will keep energy vaguely around the same price it is now.

    Energy in general is just going to keep on getting more and more expensive, and we’re just going to have to start re-organising our infrastructure/society to maximise efficiency. The current scenario of 95% of us driving around in personal vehicles with an average of 1.2 passengers per journey isn’t part of that future.

    Bulk transport options will become ever more primary, and personal transport options less so. That’s why I think we need to be reorienting our transport infrastructure spending gradually away from roads, toward rail and shipping. Get most of the large trucks of the roads and w will to spend a hell of a lot less maintaining them as well!
53. Ted 53

    28 May 2008 at 5:44 pm

    IrishBill, given that it’s well known National are going to play it safe this time around, do you seriously believe they are going to announce this as part of their infrastructure policy?
54. T-Rex 54

    28 May 2008 at 5:55 pm

    Roger – cheers for the reply. Will answer your points once I have taken care of more pressing concerns, such as the search for food. For me, now, I mean. Not in the ‘starving children in africa’ sense.
55. RedLogix 55

    28 May 2008 at 6:45 pm

    Wind might be able to supply us with 5-10% of our energy demands one day. Any more than that and you get difficulties associated with supply fluctuation.

    5-10% is a rather low estimate. The Spainish are up over 15% and have peaked recently at 27%.

    Of course the higher the proportion from wind the greater the problems that variation will cause. But this objection can be mitigated with the use of “pumped” hydro plant. At present all of NZ’s hydro plant is more or less “run of the river”, with a storage lake acting as a seasonal buffer. This means that each station can only use the water once.

    Pumped hydro means that when you have excess wind energy production, you can direct it to run your hydro plant so that it pumps water uphill back into the storage lake. Later when there is a shortfall of wind-energy the stored water is simply run back down through the hydro plant to fill in the generation. In principle if you took this far enough, there is nothing stopping us having a grid that is 100% wind energy sourced and no problems with variability.

    It would not be the very cheapest option, but the technology is robustly simple and to my mind would be something you would explore very thoroughly before considering nuclear.
56. T-Rex 56

    28 May 2008 at 8:37 pm

    You forgot the substantial transmission efficiency losses with electricity.

    No, I didn’t. I was allowing 10% transmission loss, 10% for the charger to the battery, and 10% for the battery to the motor. These are all pretty reasonable numbers.

    Also – you need to use oil-based products to build the turbines, transport them, erect them, maintain them. This will make it even more expensive.

    That’s true to a pretty limited degree – there’s no underlying reason for oil to play a significant role.

    Then there’s the problem of supply and demand. Oil currently supplies about 33% of our energy needs. Gas supplies about 32%. A you may know, gas production in NZ is projected to start declining shortly (it’s very expensive to transport/import), so we’re going to be facing a twin peak energy crisis involving the two commodities that account for the vast bulk of our energy supply.

    You only mention supply, but yup, obviously demand is also going to increase. Have you read the MED’s energy strategy to 2050?

    Hydro supplies only 10% of our energy needs, and we’ve dammed up all of our best rivers, except for the Waitaki. Wind might be able to supply us with 5-10% of our energy demands one day. Any more than that and you get difficulties associated with supply fluctuation.

    I won’t debate the point as to additional hydro potential, as I don’t think it’s necessarily the best option even if the potential does exist. Red – on the issue of pumped storage – that would actually require new lakes in most cases in NZ. I can’t think, off the top of my head, of any hydro plants except manapouri that have a decent storage lake at the bottom – you’ve got to have something to pump back up from. Your wind estimate is grossly conservative though – the main proponents of that figure are the nuclear and coal lobby groups. The only issue is storage – the old argument of “grid stability” is basically outdated. Once again – reference the NZES for their (hugely conservative) estimates on NZ’s wind resource.

    Solar is a limited option in NZ (we don’t have the sunniest country). It’s also limited by the scarcity of silicon – though you do hear stories about new materials being developed.

    Their is no scarcity of silicon. There’s a scarcity of purified silicon, which (much like aluminium) is pretty much just solidified energy. There is tons of R&D being done in the field, there’s no guarantee silicon will still be the dominant technology in ten years time – though if it is we’re not going to run out. Anyway, agreed, the cost/benefit in NZ isn’t very attractive with present panel costs. I’m happy to bet money that will change, but in any event we don’t particularly need it for now.
57. T-Rex 57

    28 May 2008 at 8:38 pm

    Crap – sorry. Some detective work will need to be done on the above to work out what’s in reply and what’s not. How do you create different texts in this, emph didn’t work obviously…

    Nevermind – found it in FAQ
58. libertyscott 58

    28 May 2008 at 10:42 pm

    A four lane highway between Wellington and Auckland is insane, yet both main parties are pushing the Transmission Gully cargo cult which is well over a billion dollars to fix a minor problem.

    There was nothing much wrong with the road funding framework that was put in place in the 1990s based on prioritising funds by benefit/cost appraisal. That has been bastardised somewhat under Labour, with priorities being politically determined – the politics needs to be taken out of it altogether.

    Sadly Transit, a major spender of land transport funding is being merged with Land Transport NZ – the funder. So the funder and a bidder for funding will be in the same organisation, and local government will have to bid to the same body that seeks funding from itself. Labour got this badly wrong, but there are no votes in pointing out such things – sadly I expect the Nats and Labour to engage in an auction of road/rail building – with little debate about the true economic merits of any of it.
59. T-Rex 59

    29 May 2008 at 8:01 am

    Agreed – transmission gully won’t solve the problem, as L.A. has demonstrated so well.

    I really doubt National has any intention of promoting a 4 lane auckland-wellington highway.
60. IrishBill 60

    29 May 2008 at 8:11 am

    “I really doubt National has any intention of promoting a 4 lane auckland-wellington highway.”

    I thought the same thing but my source is sound and since this post went up I’ve been informed Key told a closed meeting of business representatives it would be announced as part of National’s infrastructure plan.
61. T-Rex 61

    29 May 2008 at 8:23 am

    Oh man, that will be FUN to watch.

    I wonder if he’ll give any justification other than general all pervading ambitiousness. I’d love to see the traffic density figures for the existing 2 lane system. I bet 10 grand JK hasn’t looked at them objectively.
62. roger nome 62

    29 May 2008 at 3:10 pm

    T-Rex:

    With regard to wind, I know that Denmark produces the equivalent of about 25% of its electricity supply by wind. But that’s too much supply variation, so it exports most of it to neighbouring countries. I think about 10% wind is the maximum at this stage.

    Would be interesting to see the EROEI for using wind to pump water back up to a lake to store the energy. At first glance it seems inefficient though.

    As to silicon – my bad. It appears that there’s a temporary supply problem, which should be solved in the next 10-20 years or so as the price increases with demand. Having said that, I still think we will struggle to upscale solar at a meaningful rate in the next 20 years. Solar at the moment makes up a tiny amount of our electricity production. It’s one of the most expensive options. I would put money on Solar not making up anything like even 5% of energy supply within the next 20 years.

    With energy demand projected to increase by about 30% within the next 20 years, and oil and gas supply declining within that time frame you’re really asking a lot from the electricity sector to make up for the short-fall. It probably means something like a tripling of supply. I just don’t see it happening. Energy prices are going to keep on increasing, and more transport is going to shift from road to rail and shipping. Do you disagree with this?
63. roger nome 63

    29 May 2008 at 4:53 pm

    There’s also the point that electricity is only projected to provide around 17% of transport energy by 2050 in a low-carbon-reduced scenario. This shows that the ministry of economic development doesn’t expect electricity to grow to anywhere near the levels require to keep transport energy prices around about where they are now (with reductions in fossil fuels, with increasing energy demand). – see graph on page 33:

    http://www.climateneutral.unep.org/New_Zealand_Energy_Strategy_to_2050_0SkLM.pdf.file –

    With this in mind do you really believe that we should continue to increase spending levels on roads every year whilst bulk transport infrastructure gets next to nothing in comparison? It’s head in the clouds stuff.
64. T-rex 64

    30 May 2008 at 10:00 am

    Hi Roger – This has pretty much just become a discussion between us two I think, so I’m just going to answer with bullet points and leave you to look into them if you feel like it.

    Wind: Check out Mawson base in antarctica – they acheive around 95% wind power penetration in an isolated grid using a combination of low-load diesels and thermal reservoirs. This approach is transferrable to large scale grids. The only issue with high wind penetration is security of supply. This can be ensured with standby generation – gas turbines being an excellent candidate.

    Pumped hydro: The figures I saw indicated about 75% efficiency for the pumped hydro loop (seems high to me, I’m still looking into it). The impact on the EROI of the source of the power will depend on how much of its energy ends up going through the pumped hydro loop compared to how much is used directly. Anyway, you’re as free to hunt down that answer as I am, don’t have time right now.

    Solar: I don’t know where you got your figures on silicon production – the price of purified silicon is already more than adequate to justify further investment… as indicated by multiple billion dollar fabrication plants already being built. As to growth, well, it’s been running at about 30% CAGR for the last several years. Grid parity is forecast by 2015. Last year about 6GW was installed.

    You’d put money on it? Ooooooh… I’m tempted. Lets check the numbers… can we make it “by 2030”? Are we talking about NZ or the world? I’ll think about it… Just to be vague (and ignore growth) – at present we’re running at about 15TW. 5% of that is 750GW. Per year, that’s 37.5GW… except it’s not, because solar cells only run about 1/3rd of the time at best, so call it 130GW installed. Sounds like a lot really… maybe you’re right. On the other hand – by solar, we’re talking Solar PV, Solar Thermal, Natural light use, passive solar design… Tell you what, lets wait and see and if you’re right I’ll buy you a beer.

    Energy prices are going to keep on increasing, and more transport is going to shift from road to rail and shipping. Do you disagree with this?
    I’m very wary of predictions such as “commodity price x is going to keep increasign”, because such predictions have, historically, almost always been wrong. If correct, it’s only because commodity x is something like “whale blubber” or whatever, and some cheaper equivalent is found.
    That said – I do agree that bulk transport will probably move in the direction of rail/shipping for long haul.

    On the MED’s transport energy prediction – I think they’ve relied more than they should on biofuel and that they’re wrong.

    With this in mind do you really believe that we should continue to increase spending levels on roads every year whilst bulk transport infrastructure gets next to nothing in comparison? It’s head in the clouds stuff.

    Woah there! I NEVER said that! This discussion arose from a comment along the lines of “The era of personal transport is dead” and that we can never expect to get around as cheaply as we do now. You said:

    “Any way of creating electricity is far more expensive than the oil extraction and production process. You get about 50-60 units of energy back for every unit of energy you put in with oil. With electricity it’s more like 10-20 (apart from hydro – and there’s only so many rivers to dam up). We’ll never get around using electricity, anywhere near as cheaply as we do with oil. So mass-transport it is.”

    You’re already miles wrong. A litre of petrol costs $2, and contains about 9.6kWh of energy. Burnt in an IC engine at about 20% average efficiency, that means 0.96kWh/$. From your wall socket, you can get electricity at about 5kWh/$, converted at 85% through a charger/battery/motor cycle gives 4.25kWh/$. So – even without allowing for the massive potential improvements in vehicle efficiency, electricity is already 1/4 the price of oil as an energy source for personal transport.

    DESPITE THAT! I think spending on bulk transport infrastructure should take precedence over spending on roads. It’s been neglected in NZ to our cost, way past time to increase spending. I strongly support the govt’s purchase of the railways, and just hope to god that they get someone competent to manage it.
    And to get back to the topic at hand – I can think of few worse ways to spend billions than a 4 lane motorway from wellington to auckland.
    A ‘Methamphetamine for preschoolers” program would be worse… I’m sure we can think of some other things. But the highway is still right down there.
65. roger nome 65

    30 May 2008 at 3:22 pm

    T-Rex

    “Wind: Check out Mawson base in antarctica – they acheive around 95% wind power penetration in an isolated grid using a combination of low-load diesels and thermal reservoirs.”

    Presumably they store the power in batteries? This isn’t practical on a large scale.

    “I don’t know where you got your figures on silicon production”

    I checked it. The source was good.

    “? I’ll think about it Just to be vague (and ignore growth)”

    No, let’s not ignore reality. 20 years at 2% demand growth means about 12,000 megawatts total capacity, with 5% coming from Solar meaning about 2,100 megawatts of total installed capacity (as you say, it only operates at an average of about 30% capacity). Nearly two Huntley power stations. Nearly enough installed capacity to power the whole of the South Island at present. Find a government report that shows anything like that coming from Solar in the next 20 years.

    The main problem with solar on the large scale is that it requires batteries, making it more expensive than the other options. That’s why the government doesn’t expect too much out of solar in the future. The future of solar lies in small-scale use in the home. So it won’t replace oil as far as transport energy goes.

    Also, I just don’t agree with your belief that demand for cheaper energy (in terms of market rate not EROEI) will cause cheaper energy to occur.

    Oil between $10 and $20 per barrel was a pretty sweet deal, and most of all, it was supper-abundant, so there was always more of it to meet demand. Once its supply starts declining, and you start pushing the shortfall onto electricity, all of a sudden you’ve got very expensive electricity. Then the question becomes, can we grow the electricity sector at a rate of around say 7% per year sustained for twenty years? I don’t think so. I think we’re going to be stuck with increasing energy prices for some time yet. Perhaps for the next 50 years (especially considering the cost of carbon associated with the ETS).

    I do accept that I was wrong on the EROEI of oil vs electricity though. The supply-demand gap, and the cost of batteries will account for most of the price increases as far as the electric car goes.

    oh and as for your name – thanks very much, I’ve got “mambo sun” stuck in head now!
66. T-rex 66

    30 May 2008 at 4:18 pm

    Ha! It’s a great song, don’t be glum 🙂

    Mawson – Nope, no batteries. You always need heat down there, and heat is quite easy to store, so they turn excess power into hot water. If the wind isn’t blowing, the diesels take over the load. Large scale storage is purely a matter of storage tech – there is no reason to assume this will not develop before it becomes necessary based on present trends.

    Silicon – Ok. I’ll simplify my point. Expect continued high growth in solar until a better alternative appears.

    Growth – I don’t mind whether it comes from solar or wind. Wind is great in NZ, we should use that. Anyway, I’m not bothered about arguing the point. And I’m definitely not taking govt reports as gospel! (I only pointed you to the MED work for basic outlines)

    The main problem with solar on the large scale is that it requires batteries, making it more expensive than the other options. That’s why the government doesn’t expect too much out of solar in the future. The future of solar lies in small-scale use in the home. So it won’t replace oil as far as transport energy goes.

    Argh… I’m this freakin close to playing the “actually I do know a lot about this card”! The future of solar is huge. Ask germany, spain, portugal, australia, and even the US. This is why solar stocks have been going nuts. I repeat – grid parity in 8 years!

    Anyway – for the NZ case, no, I wouldn’t advocate solar. Wind. Wind wind wind wind wind.

    Add in tidal/geothermal as required. Or add in nuclear if you’re really desperate. Having looked into it in considerable detail, I’m not convinced nuclear is at all necessary. But it IS expensive, and faces opposition (except from idiots like graham sydney who really should just shut up and get back to painting) and we’ve no effective waste storage solution.

    Tired, stopping and going back to work!
67. T-rex 67

    30 May 2008 at 4:21 pm

    Sorry – the “actually I do know a lot about this” is just smug-fnckerness. But I really did look into this stuff, I first read the peak oil end-of-civilisation sh*t about 6 years ago, and I’m presently working in the renewable energy area. I’m not saying this invalidates your perspective at all, just saying that if I seem stubborn that’s why!
68. roger nome 68

    30 May 2008 at 5:20 pm

    “I only pointed you to the MED work for basic outlines”

    Yeah thanks smarty. I have read those reports before though.

    “Nope, no batteries. You always need heat down there, and heat is quite easy to store, so they turn excess power into hot water. If the wind isn’t blowing….”

    Indeed. Antarctica is know for its extreme wind though, no?

    “Large scale storage is purely a matter of storage tech – there is no reason to assume this will not develop before it becomes necessary based on present trends.”

    Still, sources that require storage are always going to be disadvantaged by this extra cost no?

    Also, when you’re integrating wind with hydro on a large scale (as we do in NZ) I understand that there are problems do to the inflexibility of hydro. i.e. you can’t go extremely increasing and decreasing output every hour to suit wind output. Only small regular changes are practical (according to Keith Turner).

    “Add in tidal/geothermal as required.”

    Tidal faces similar problems to wind. It fluctuates and is difficult to integrate into a hydrp-dominated grid. Not that I don’t think it has a future. Just that in the next 40 years it won’t take off. I think the govt projects about 1% of our electricity from it in 40 years time.

    Electricity is constrained. You seem to expect massive growth out of the electricity very soon. I just don’t see any evidence that we’ll go much above 2-3% growth trend.
69. RedLogix 69

    30 May 2008 at 6:20 pm

    I’ve been too busy to keep up with the thread properly, but I would like to take this late opportunity to detail the case for pumped hydro a little more. Think of these systems as the very big batteries needed to eliminate the variations inherent in solar/wind/wave power sources.

    Yes the total loop efficiency is around 75%. Big pumps/generators have an efficiency of about 86%, and you loose this once on the way up and once coming back down, ie 0.86 * 0.86 = 0.75%. The important thing is that once you have sunk the cost into the generating plant, renewables have a zero marginal cost, therefore the 25% lost in pumped hydro has not lost any actual operating cash.

    Pumped hydro is not just a reverse of the normal “run of river” stations we are used to. Power generated is basically equal to the (FlowRate * HeadLoss). A typical river station has a head limited to about 50-150m, therefore the flow rates have to be quite high in order to generate lots of power.

    By contrast a pumped hydro station can push water uphill more or less as far as you like. (Usually done in stages.) A total head of 500-1500m is perfectly feasible. This means you can be storing/generating quite large amounts of power with relatively small amounts of water. In other words wherever NZ has a small lake near some mountains with a nearby alpine basin that can be dammed, then pumped hydro is technically feasible. The politics of this might be tough, but a lot less rugged than the opposition nuclear power would arouse.

    The amount of energy that needs to be stored depends on the geographic diversity and generation profile of the renewable generators. Solar has an obvious daily cycle, and along with wind and wave energy, all are dependent on weather patterns. If we designed our renewables to work in synergy with pump hydro, then I would guess that the actual amount of stored energy required might be less than 20% of the total generation capacity.
70. RedLogix 70

    30 May 2008 at 6:34 pm

    Also, when you’re integrating wind with hydro on a large scale (as we do in NZ) I understand that there are problems do to the inflexibility of hydro. i.e. you can’t go extremely increasing and decreasing output every hour to suit wind output.

    This is mainly because rapid changes stuff up the complex software optimisations that are used maximise the total value of the water in the entire river catchment. Sudden changes likely uses lots of water less than optimally, and are avoided more for commercial reasons than technical ones.

    There is no limiting reason why a hydro generator cannot be loaded/unloaded quite quickly if you design it for that requirement. Certainly pumped hydro systems could be configured to do this quite readily.
71. T-Rex 71

    30 May 2008 at 9:58 pm

    Roger:

    Antarctica – Yes, extremes of high and low though. My point was just that there’s no technical issue with having a lot of wind generation in a network – contrary to what’s often claimed.

    Yup, fair call though, it definitely adds to the effective cost of the system.

    Re: Ramping of generation – hydro is actually almost ideal for this. Staggered systems (like ohau) are much less so because of the obvious system latency, but somewhere like benmore or clyde are ideal. Commercial issues are probably the constraint like Red says – I imagine having the wind and hydro owned by the same entity would get around that.

    Tidal – it fluctuates in an almost totally deterministic way – it is IDEAL for integration with hydro.

    Growth will come as a result of demand. This is a pointless argument in any event, neither of us can prove our case, we’re already agreed that a four lane highway is a waste of money, and I’ve already illustrated that personal transport has plenty of potential into the future.

    Red – yup, agree with all of what you say in principle. Especially that the likely requirement for storage as a fraction of the grid is relatively low. I’m just not convinced it will be needed at all. If we shift to electric vehicles, we’re going to have a whole heap of storage elements throughout the grid. If you’re interested read up on V2G. I wrote a paper on it a while back specific to NZ – potential resource is huge.
72. roger nome 72

    31 May 2008 at 3:10 pm

    “Growth will come as a result of demand.”

    But that’s not what’s being debated. It’s whether supply will grow at a rate fast enough to keep energy prices somewhere near their current level once oil and gas supply start to decline. You seem to think that 7% growth per annum of cheep electricity supply is possible. I don’t see any evidence of that in what you have provided.

    “This is a pointless argument in any event, neither of us can prove our case”

    True, though I think my case has more likelihood of being close to the truth. Electricity supply growth is currently very constrained in NZ. The industry is struggling at the moment just to keep up growth of 2-3%.

    “we’re already agreed that a four lane highway is a waste of money”

    Yep. Defiantly.

    “I’ve already illustrated that personal transport has plenty of potential into the future.”

    That’s pretty vague though. I also think personal transport has a future. Just nothing like now (90% of adults making driving personal vehicles with an average of 1.2 people per journey).

    Use of personal transport will decline in line with increased energy prices, so we need to start decreasing investments in highways (if we get most of the big trucks of the road this will be practical), and start investing in bulk transport infrastructure (which you agree with in spite of thinking renewables can grow at an amazing rate in the next 20 years).

    Electricity from renewables currently make up something like 20% (hydro 10%, wind 3%, and geothermal 7%) of our energy supply. Once Gas and Oil (60% of our energy supply) start to decline, you’re asking for a massive increase in wind and solar (hydro is nearly maxed out). So far I haven’t seen any document that projects anything like this happening.
73. T-Rex 73

    2 June 2008 at 9:10 pm

    Hi Roger

    Just to reframe the argument: It started with a discussion of the highway mentioned in the title post which we obviously both agree isn’t the best use of money, but we appear to now be debating the future of personal transport. The below are from your previous posts.

    So my opinion is that roads are a wasted investment

    Bulk transport options will become ever more primary, and personal transport options less so. That’s why I think we need to be reorienting our transport infrastructure spending gradually away from roads, toward rail and shipping.

    Use of personal transport will decline in line with increased energy prices, so we need to start decreasing investments in highways (if we get most of the big trucks of the road this will be practical)

    In your above post, however, you say:

    I also think personal transport has a future. Just nothing like now (90% of adults making driving personal vehicles with an average of 1.2 people per journey).

    I think mass transport is likely to be the long haul solution, which is why I don’t think a 4 lane transnational highway is a good idea. I also agree that 1.2 people per journey in a 1 tonne vehicle able to carry 5 is not exactly the way of the future. But I don’t think we should stop spending money on roads – just that we should be clever in how we anticipate their use in 20 years time. Roads are an extremely useful bit of infrastructure, and your statement above of “wasted investment” seems to ignore this. Bikes use roads. Cars use roads. Trucks use roads. Scooters use roads. The personal vehicles that I HOPE represent the future of transport in urban areas (to a large degree) will almost certainly use roads. I hate the way cars interact with the rest of the world, but I think that can (and will) change.

    I definitely don’t think that the end of cheap oil will mean the end of prolific personal transport. You’re talking about energy budgets and stuff – you mentioned 60%? I can’t be bothered researching the figures right now, but if we assume that 30% of your 60% is oil used for personal transport, take into account the point I’ve already made – that electricity is about 4 times as efficient as petrol, meaning we’re now down to finding 7.5% energy equivalent – and then factor in the gross inefficiency of scale of our vehicle fleet and the fact that prototypes already exist that can achieve 10 times the average fleet efficiency, and suddenly we’re at 0.75% and could completely replace at least the majority (all those 1.2 person trips) of personal transport energy needs by only increasing our wind generation by 25%. There are LOTS of forecasts of that.

    There are two sides to the energy price knife. One is that prices will become lower per unit – that’s debateable, I agree. The other is that prices will drop per unit of usefulness… and on that I’d be money. A 50cc scooter gets 50k/l. Put that motor inside a 3 wheeler with a fairing and you’ve got a weatherproof vehicle that can do 100kph. Replace the 50cc petrol engine with electric and you can go 100km on about 10c* of electricity. It would be cost effective for people to buy solar panels for their own garage even at the present obscene market rate to use that as their transport fuel source.

    Roads will be in regular use until we start flying, and probably well after.

    That’s my vision of the future anyway – maybe I just need to communicate it more widely so that the market grows to meet it and the manufacturers get on with making it a reality.

    *Number picked out of thin air coz I can’t be bothered anymore

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1. Getting blood from a stone at The Standard 2.01: posted on 27 May 2008 at 2:20 pm

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