Monday, July 20, 2020

Out-greening the Greens

Over the weekend the Māori Party released their climate change policy. The headline promises? Immediately end new onshore oil and gas exploration permits, withdraw all existing permits within five years, and decommission the sites by 2030. In other words, end oil and gas in New Zealand in just a few years. Which leaves the Greens' promise of merely sunsetting coal in 2030, and gas in 2035 in the dust.

But is it doable? That's an interesting question. Wikipedia has a nice and relatively up-to-date summary of energy in New Zealand, and we extract about 200PJ of natural gas a year. But we use half of it as chemical feedstock (for methanol, but also urea fertiliser), and only about 80PJ of it gets directly used for heating (60PJ in industry, and the rest in small businesses and homes), with the remaining 20PJ being burned for electricity. Ending gas means replacing all of that with renewable generation. On a headline level it would mean increasing our electricity generation by two thirds, and all in the North Island. But its a little bit easier than that because replacing gas for heating means heat pumps, which are about three times as efficient as gas. Still: decarbonising our energy supply is going to mean a huge increase in electricity generation, on the order of 45%. In addition, we'd need to replace every industrial gas boiler in the country with an electrical one. While we could almost certainly do that in five years, it would mean the sort of crash-building / upgrade programme you only see in wartime.

And on the gripping hand: at current consumption, and assuming no further exploited discoveries, we have only ten years of gas left. So, we're going to have to do all that anyway. Throwing Methanex out of the country boosts that to twenty years, but the writing for gas is on the wall, and industrial operators need to be planning to switch to electricity anyway if they want to stay in business. The Greens timeline for a 15-year phaseout is right in the middle of that 10 - 20 year lifespan, so its a zero-cost "get people to do what they were going to have to do anyway" policy, basicly a baseline of minimum effort.

The question then is one of timelines. How fast can we do this? What will it take? What can we do to push it faster? The Māori Party's policy is valuable because it gets us to actually think about what we need to do, rather than having change happen in the indefinite future. Decarbonisation means big changes. And whether we're trying to make those changes in five years or fifteen, its best if we start now rather than later. Because the latter invites us to put it off and put it off and then suddenly its all too hard and nothing changes at all.

As for concrete, definite ways of pushing this change: both parties talk about support for upgrades, but the big change we need to make (and need to make for electrified transport too) is to massively increase our renewable electricity supply. We know that the electricity companies aren't going to do it, because they want high prices. And that market failure is a perfect case for the government to step in. As for how, establishing a new SOE with the sole purpose of building as much renewable electricity generation as quickly as possible and crashing prices is the obvious mechanism. And to get them started, they could compulsory acquire the constented windfarm projects the electricity companies are currently sitting on, and actually build them before those consents expire. Or do we want to leave saving the world to a market which sees more profit in letting it burn?