Expert gives the good oil on energy options
New Zealand has "tremendous" renewable energy resources, with fantastic hydro and geothermal power and lots of wind, according to a visiting global energy expert, but in other parts of the world, the energy future would include more nuclear power.
Geologist Dr Scott Tinker also points out that in the United States, hydraulic fracturing, or "fracking", has seen natural gas prices plunge - and that has been a key factor in that country's economic recovery.
Tinker is in Wellington to host screenings of his documentary film Switch, about the global transition between different types of energy, from carbon-based fuels such as coal and oil to lower-emission natural gas, wind and biofuels.
Tinker is State Geologist of Texas and based at the University of Texas in Austin. He was invited to New Zealand by the Petroleum Exploration and Production Association, and the screenings of Switch are also being supported by the Energy Efficiency and Conservation Authority.
The global "switch" to renewables or lower carbon emission sources, including natural gas, as well as nuclear, would make up about half the world's energy supply by 2060, Tinker said. Although oil was falling as a total percentage of energy use around the world, natural gas was rising.
"It is abundant, reasonably affordable and very affordable in the US, but not so much in Europe," Tinker said.
The US was seeing an economic turning point with rising production from shale gas reached through fracking, which has been criticised by some environmental groups as posing risks to water tables.
But the new gas sources meant natural gas prices had come down from US$10 (NZ$12) a million cubic feet to just US$3.
"It has been a huge factor in our [American] economic recovery," Tinker said. "Where goes the energy price, so goes the US economy. "
There would always be environmental risks with oil and gas exploration, but better technology meant the risks were now relatively low.
Regulators needed to manage the industry well and get rid of any rogue operators.
"Shut them down, but don't shut the whole industry because of one or two bad eggs," he said.
The Gulf of Mexico Deepwater Horizon disaster in 2010 led to a major oil spill, raising concerns about the risks of deepwater drilling. Oil companies were "certainly pushing technology" with drilling in as much as 3000 metres of water in the Gulf of Mexico.
"They are pretty good about what they do . . . but the results of an accident are substantial, and Macondo [the prospect where the Deepwater Horizon rig exploded] is a good example," he said.
In the gradual switch to new forms of energy, nuclear would also have a part to play. Despite major disasters at the Chernobyl and Fukushima nuclear reactor plants, Tinker said nuclear energy was generally safe. Compared with health issues arising from coal or gas, "on a kilowatt hour basis, [nuclear] has been the safest [energy source]".
"You can say, ‘I don't like hydraulic fracking' [for oil and gas]. Fine, then you must like nuclear. If you don't like nuclear, then you must love coal," he said.
The alternative was renewable sources of power - and those were great in New Zealand.
"You are blessed with a lot, but most nations are not. You can't not like everything."
The dilemma was that New Zealand also had valuable oil, gas and coal resources.
For such countries, taking the low but real environmental risks of developing oil and gas could actually be to their longer-term benefit, as money generated by those resources could be reinvested in the environment.