Mar 08 - Daily News; New Plymouth, New Zealand

Coal could play a big part in New Zealand's energy future.

Energy Minister David Parker told the New Zealand Petroleum Conference in Auckland that while there was an increasing focus on renewable energy, the role of coal in the energy mix should not be discounted.

Coal supplied around 12% of New Zealand's primary energy. However, a significant hurdle for the coal sector was the need to overcome the environmental impacts of coal production and use, particularly in relation to CO2 emissions.

"But we cannot lose sight of the fact that Otago and Southland lignite resources hold an estimated 75,000 peta joules of energy -- which equates to 20 Maui gas fields -- significant proportions of which are likely to be economically recoverable," said Mr Parker.

The real value in developing these vast resources might be to provide a chemical feedstock rather than a primary energy fuel, he added.

A example, an increasingly feasible technology is to convert lignite to synthetic gas, from which petroleum fuels, methanol, ammonia-urea and electricity can be produced.

Another technology, hydrogenation and liquefaction, may be close to being economically able to produce a synthetic crude that can be refined into petroleum products.

"In each of these applications, it is said that the associated greenhouse gas emissions per unit of energy produced are likely to be significantly less than from direct combustion using current technology."

Mr Parker said he did not share the pessimism that some had about New Zealand's future domestic energy sources.

"Like the rest of the world, we undoubtedly face some major energy challenges in the coming months. But I believe New Zealand is in a better position than most.

"Already, 70% of electricity comes from renewable sources. Our wind resources are probably second to none in the world and yet are largely undeveloped. In the liquid fuels area, if biofuels are an important part of the future, it is easy to conclude that New Zealand is well placed to grow the fuel stock.

"And of course, independent of these possible future trends, we have fossil fuel reserves in lignite and some very plausible prospects for both oil and gas."