NZ Govt report advocates lignite developments

A REPORT commissioned by the New Zealand Government has found the South Island’s vast lignite (brown coal) resources could provide the bulk of the country’s transport fuel and petrochemical requirements for many decades.
NZ Govt report advocates lignite developments NZ Govt report advocates lignite developments NZ Govt report advocates lignite developments NZ Govt report advocates lignite developments NZ Govt report advocates lignite developments

The Value of New Zealand’s Lignite Reserves: Hawkdun and Home Hills report, commissioned by the Ministry of Economic Development (MED), advocates enormous financial and economic gains from using the South Island’s lignite reserves.

International consultant David Natusch, who authored the report, says a mining and processing project producing petrochemicals or electricity at Central Otago’s Hawkdun-Home Hills is commercially feasible, in the national economic interest, and will substantially increase the country’s energy self reliance and security of supply.

If developed at the rate of 20 million tonnes (MMt) a year, lignite could provide energy and feedstock for most of New Zealand’s transport fuel and petrochemical requirements for more than 300 years, according to Natusch.

“New Zealand’s lignite resource will still be available long after most nations have exhausted their hydrocarbon feedstocks. This will place New Zealand in a future strategic position not dissimilar to that of the oil-rich nations today,” his report said.

The Hawkdun lignite deposit alone, if mined to completion, would have a gross product value of between $NZ75-120 billion ($A65-104 billion).

Natusch told PetroleumNews.net today that Hawkdun and Home Hills together contained about 4500 petajoules of energy, or about one-and-a-half times the energy contained in the original Maui gas field off Taranaki.

The total energy content of the 10 known lignite deposits was about 20 times that of Maui.

“These are big figures, big energy resources, which make New Zealand second only to Australia in terms of total brown coal reserves,” he told PNN.

Natusch said he knew of three companies investigating the feasibility of developing the Southland-Central Otago lignite reserves – the privately owned L&M Group, state-owned Solid Energy and Australia’s HRL Group, operating out of Victoria.

Solid Energy is investigating a $1 billion project to convert brown coal into liquid fuels in the Southland region, while L&M is conducting a full feasibility study into the economics of a $5.8 billion lignite-to-liquids plant, capable of producing about 50,000 barrels of diesel per day.

Natusch said the MED’s Crown Minerals unit had recently briefed Energy Minister David Parker on lignite as one of the various government departments involved in the forthcoming National Energy Strategy.

But Parker has reportedly been lukewarm about the lignite report, saying the financial and environmental impacts of greenhouse gases from lignite were not considered.

Carbon sequestration was not yet viable and there was no certainty the manufacture of petrochemicals or liquid fuels would happen, according to Parker.

Natusch’s report says development of a single lignite resource could provide:

  • About 71MMt of transport fuels (15-20 years’ national supply);
  • All New Zealand’s fertiliser requirements for 127 years, plus exports worth about $NZ540 million per year;
  • All domestic methanol requirements, plus methanol exports worth about $1 billion; and
  • All of the South Island electricity demand for 60 years.
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