06-09-04

"Gas depletes differently from oil. ... There were no market signals of the approach of the cliff at the end of the plateau. It accordingly came without warning, causing prices to surge through the roof, and bringing power blackouts to California."
Colin Campbell, 2001.

"Gas production for the year ended June 2004 was 171,500 TeraJoule. This was 21.6 % lower than in the year ended June 2003, and 33.5 % lower than in the June 2002 year when production reached the highest level recorded in a June year."
Statistics NZ, 3 September 2004.

When the question of oil and gas depletion is raised the flat earth fraternity often can’t help themselves laughing whilst pointing out "but we’ve never produced more than we are today, the world is awash in oil and gas". A sobering lesson is to be learnt by looking at the current depletion rates in the Maui natural gas field.
Production this year was 21.6 % less than the 2003. Production in 2003 was 33.5 % less than in 2002. In 2002 the Maui natural gas field produced a volume of gas higher than it ever had in its past. This illustrates the depletion issue with such clarity that even a flat-earther should recognise it. The volume of gas produced in the June 2004 year was the lowest level recorded for a year since 1986.

Maui gas production is in free fall. In peak oil terminology we are over the cliff. Within a year, maybe two tops, Maui gas will be gone. We are not the only nation facing natural gas depletion. The great Canadian natural gas fields, which power much of the United States, are on the production plateau.

Major blackouts have already plagued the US over the last couple of years caused by peak surges in electricity consumption. As Canadian gas production hits the cliff it is almost certain that the US will experience severe and lasting electricity outages.

The Maui gas field has been responsible for 25 % of New Zealand’s electricity generation. When it runs out in a year or two, not only will a multibillion dollar infrastructure become essentially obsolete overnight but New Zealand will have lost 25 % of it’s electricity generation capacity. If you thought New Zealand’s electricity crisis was a concern it is about to get a whole lot worse.

To meet the shortfall one alternative is to import LNG from offshore. Oil giant BP’s Peter Griffiths argues however, if New Zealand decides to import LNG further investment of over a billion dollars is necessary to build the infrastructure required.

PowerLess NZ argue this would be investment in an infrastructure that has absolutely no future. Natural gas depletion is being experienced all over the globe. LNG trade has been increasing over the last 10 years at an average rate of 6.4 %. In 2003 the growth in LNG trade was 11 %. (Natural Gas Future Supply, Laherre, June 2004).

It is clearly evident that as countries deplete their own supplies they will look offshore to secure more gas. This scenario is wholly unsustainable.

Natural gas discovery peaked in the 1970’s and has been steeply declining since. Any proposal by any political party to further invest in natural gas is a distraction of human industrial resources consuming time and capital. It represents investment in an infrastructure that will soon become obsolete.

With the recent Maui depletion figures from Statistics NZ, New Zealand’s energy problems are coming home to roost. We are months (not years) away from not being able to provide enough gas to run electricity generation plants. The solution might be to pray for mild winters and that Maui’s gas doesn’t deplete so rapidly. If our prayers are answered we might have no crisis for 2-3 years. After that it is a certainty.
The recent Maui gas depletion figures represent a host of energy issues that will ultimately prevent future economic growth in New Zealand. As Dr Richard Duncan notes, "when the electricity goes out you are back in the dark age. And the stone age is just around the corner."

Source: Scoop