Mining to Keep the Home Fires Burning - New Zealand's Energy in the 21st Century

As a result of cheap Maui gas and plentiful hydro-electricity, over the past few decades New Zealand has enjoyed some of the cheapest energy of any OECD country. The situation is changing; at best we are facing some radical changes in energy use, at worst we are facing a crisis resulting from the following:   Cause 1: Maui gas will be exhausted by 2012. Distorted pricing and supply contracts; resulted in Huntly Power Station, a coal mine mouth generator running on 70 per cent Maui gas until very recently!   Cause 2: Investment in new generating capacity (and transmission) is woefully inadequate; as a result hydro lake levels are being continually pushed to the limits.   Cause 3: Distorted thinking is everywhere, for example; æWe will find more cheap gasÆ. æGas is clean û coal is dirtyÆ. Hot air  û ægreen alternatives such as wind generation will save usÆ. æNo NuclearÆ. The outcomes of the distorted thinking will be price increases, then shortages (there is nothing like "black-outs" to focus national thinking) and finally recession.   But what can NZ do? - Mine Coal. Coal jump-started the industrial revolution, it can provide the transition to post-gas and oil. NZ has the second highest reserves of coal per capita in the world, yet we use less that any other country with significant coal reserves. Our exports of our best coal have increased threefold, yet out own consumption has remained static at about 1-1.5 Mtpa for the last 30 years. Our coal is NZ owned and inexpensive relative to other energy sources, even allowing for infrastructure and environmental costs.   What can we do? We as mining professionals can promote informed responsible development and investment in the country's mining and energy business. We can galvanise public opinion on issues such as æunbundlingÆ our entire energy chain from mine-to generator-through transmission, even if the nuclear issue has to wait! With oil above US$70/bbl substitution is feasible. For individuals, there is always solar!