NZ Energy Strategy- Transport Summary

I’m hoping as many as possible will read the whole (NZ Energy Strategy) document but I’m guessing that won’t happen. Given that 86% of NZ oil consumption is used by the transport sector, the transport implications are worth looking at more closely. However from a climate change perspective “Greenhouse gas emissions from domestic transport (air, land and sea) make up about 18 per cent of New Zealand’s total emissions.”

Here is an excerpt from the Part 2 – Actions -Transport section 7 on “Resilient, low carbon transport” (quotes from Direction on p33.) since that is the area where most of us will feel the impact first. Sections in Italics are my emphasis.

There has to be some business opportunities here and also some real debates over planning assumptions. Also many transport companies are really single mode with a specialty and most of their investment in road, water or rail modes when it looks like greater flexibility will be required.

“Transport emissions currently represent around half of emissions from the energy sector, and are growing at an unsustainable rate. Bold action is required. The government is committed to building momentum in the adoption and uptake of sustainable transport measures and has taken an in-principle decision to halve domestic transport emissions per capita by 2040. (14)

A low carbon transport future scenario to 2050 has been established that reflects possible behavioural changes, travel demand management, improvements in vehicle efficiency and uptake of alternative low carbon fuels. (15)

The challenge is to ensure we are well placed to commence the transition to this low carbon transport future. There are many initiatives by both local and central government to manage private vehicle travel demand by improving urban design and promoting use of less carbon-intensive modes such as walking, cycling and public transport. We believe that, over time, significant demand reductions compared to business as usual can be achieved by building on current initiatives.

In the low carbon scenario, we have also assumed a significant reduction in the kilometres travelled by large vehicles through diverting freight from road transport to coastal shipping or rail, raising average loads of trucks and improving distribution practices.

I have been working on a project in the Transport sector and I have been stunned by the high number of very large trucking companies outside the main centres. They are major businesses with 100+ staff in some cases making them very large companies in the NZ context. According to the Road Transport Forum the links between GDP and trucking activity appear to be finely balanced and quite significant*.

For Coastal shipping there is a “Coastal Sea Freight Strategy” document which is being prepared. (See page 48 for a table which shows the linkages between these strategies.)

The Energy Strategy envisages changes to the distribution transport mix so while similar results come from other transport modes it would be smart not to underestimate the impacts of even small changes. (*NZRF Stats are mostly based on 2003 figures and need to be updated)

Previously they have been beneficiaries of a rail network that was trashed by private owners and run down especially in the 1980’s. The National Rail Strategy (NRS) mentions 3 significant extensions that will help change the transport mix. There has been some progress on Marsden Point and a similar dairy related project at Waitoa has been successful but …

– a new branch line to the port at Marsden Point (still being negotiated)
– a new branch line at Clandeboye (to serve the dairy factory directly)
– a short spur line to service the dairy factory at Edendale.

The NRS notes that rail remains the safest form of land transport and arguably the least polluting. It also notes rail’s advantages in terms of energy efficiency. The Energy Efficiency and Conservation Authority says rail freight consumes 200 Watt hours/tonne km compared with 810 Wh/tonne km for trucks. This will become a critical issue as renewable sources of energy diminish. from Ontrack Nov 2005

Here are some charts on the mix between road and rail. The local charts don’t go back before 1990 when I recall rail had a higher proportion of on the distribution market. The source is the Road Transport Forum which is appears to be a lobby group for truck companies, however they make some good points such as:

* Most freight travels less than 100 kilometres. Rail, which is best suited to hauling bulk items 300 kilometres or more, is less fuel and cost efficient over such relatively short distances.
* Rail with its inflexible timetables and restricted network can’t provide the personalised, door-to-door, on-demand service the modern truck delivers. It simply doesn’t go where much of the freight goes and when the customer wants it.
* Livestock, perishable items such as groceries, fruit and vegetables, refrigerated and dangerous goods, like LPG, aren’t suited to the repeated transhipping rail requires.
* The risk of breakage and pilfering is significantly lessened.

Managing this transition will have major impact on agriculture for example. I doubt that many road users want to see larger loads on trucks (does that means larger trucks?) and what does improving distribution practices mean. On page 52 of the NZES “7.5.2 Land and marine freight movement” there is some recognition that switching modes is not so easy, however investing $1.4b (page 51) on rail over the next 6 years should help.

There are also hidden congestion costs that especially penalise road based transport.

For example, there was an Unlimited story last year on one of the largest container moving trucking company which now does (<75%) as much as possible of its work at night because of excessive road congestion which already add $m to the price of distribution. This is from the Night Owls story.

If you head to most businesses at around 5pm they’ll be starting to wind down the day’s activities. But after five at Tapper Transport is when the action really gets going. The transport company, which runs the country’s biggest container unpacking operation, earns 75% of its $22 million annual revenue at night. Most of its business is delivering export containers to the wharves and picking up import containers to deliver elsewhere.

“Our whole business erupts into activity after everyone else goes to bed,” says director Simon Tapper.

Why? Blame Auckland’s roading congestion. The 28km round trip to pick up containers from the Ports of Auckland wharves in the central city to Tapper’s Penrose warehouse takes two hours during peak daytime traffic; the same trip takes just 45 minutes at night. That daytime trip takes about 40% longer than it did five years ago…..

Tapper says roading congestion is a difficult issue because although it directly impacts the company’s bottom line, it’s not easy to convince customers that it is a tangible cost in the same way you can with diesel price rises or inflation.

And it’s only going to get worse.

A report commissioned by the Road Transport Forum estimates the amount of freight being moved around New Zealand will double in the next 20 years. Rail will pick up some of that growth but it accounts for only 11% of the mix. The rest is transported by trucks so that means we’re likely to see twice as many trucks on the roads in future.”

Back to the energy strategy

The low carbon scenario assumes a 20 per cent improvement in the overall efficiency of the vehicle fleet by 2050, which is based on the technological improvements available from fleet turnover.

Diesel-fuelled cars are, on average, 30 per cent more effi cient than their petrol equivalents. We expect half of all internal combustion cars purchased by 2050 to be fuelled by diesel, which will be well suited to use of biodiesel.

There will be an obvious upwards impact on the price of Diesel powered cars.

In this scenario, the greatest reductions in carbon emissions from transport are the result of increased use of biofuels, electricity and hydrogen. Each fuel source has significant technical challenges, so no one source is a comprehensive solution. For example, electric vehicles are unlikely to be as useful for the heavy fleet.

The Royal Society of New Zealand reports that “New Zealand has enough land to be more than self-sufficient in biofuels”. Improvements in production technologies will further improve the viability of second and third generation biofuels and allow a Biofuels Sales Obligation well beyond the current level. (16)

The low carbon scenario estimates that, by 2020, 25 per cent of liquid fuels used in transport will be derived from renewable sources, and 85 per cent by 2050.

Major vehicle manufacturers (17) recently made a commitment to commercially develop electric cars, with reports suggesting that these may be available from as early as 2010. Our scenario assumes electric vehicle sales reach five per cent of market share in 2020, followed by a period of rapid growth that reaches a plateau of 60 per cent by 2040.

Hydrogen-powered vehicles have a similar performance to fossil-fuelled vehicles, and substantial international research is being carried out into addressing the major technological challenges involved in using hydrogen as a transport fuel. The scenario speculates that 25 per cent of New Zealand’s light vehicles could be hydrogen powered by 2050.”

I’d like to be that enthusiastic about hydrogen based cars but many of the practicalities seem like that one could take longer.

Footnotes

14) Relative to 2007 emissions per capita.
15) 2020: Energy Opportunities, Report of the Energy Panel of the Royal Society of New Zealand available here

16) It has become common to divide biofuels into ‘generations’, depending on the crop or the conversion technology involved. First generation biofuels: proven and on the market in commercial quantities now, typically sugar cane ethanol, starch-based or corn ethanol, biodiesel from pure plant oil or tallow, and are mostly from food related feed stocks or food wastes. Second generation biofuels: commercially unproven in development and typically derived from non-food related agricultural and forest biomass, algae and wastes, with many being derived from lignocellulosic materials from plants.

17) www.chevrolet.com/electriccar/ , electric car, media mitsubishi

It is not until we get to page 49 that we get a summary on the concept of Peak Oil where 5 key questions are listed although an earlier statement “Focusing on reducing greenhouse gas emissions from the transport sector will also help to reduce New Zealand’s dependency on oil.” gives some indication of the linkage and importance.

  1. How much oil is out there?
  2. How much will the demand for oil grow?
  3. Are the published statistics accurate?
  4. What level of oil recovery is economically feasible?
  5. How feasible is unconventional oil?

After looking at this area earlier this year, my view is that the impact of peak oil is much more prosaic and dramatic than any of these questions suggest. The key question for most users including businesses will be

How much does oil cost now? and how are we going to cope with the various scenarios that see the barrel price go up from already historically high levels. It wouldn’t take much for petrol prices to double and that would remove income from lots of families who don’t always have the flexibility to change jobs or home locations.

On the same day that the NZES came out a historic report on Peak Oil was issued by the Queensland government. Australian government report: Peak oil is real, get ready
by The Honourable Andrew McNamara
– See full McNamara report here

“A report tabled in State Parliament today highlights the need for Queensland industry, primary producers and communities to lessen their dependence on imported oil supplies.

The report – Queensland’s Vulnerability to Rising Oil Prices – was tabled by the Minister for Sustainability, Climate Change and Innovation, Andrew McNamara, who authored the report as a backbencher before his appointment as a Minister last month.

Mr McNamara said the report canvassed a range of options for reducing Queensland’s reliance on oil imports, from reducing our demand to developing alternate energy sources.

“I’m now in the unique position, as the Minister for Sustainability, Climate Change and Innovation, of having to co-ordinate a whole-of-Government response to my own report,” Mr McNamara said.”

What will be even more interesting in NZ is what will happen to the sustainability arguments if/when there is a change of government at the next election. I’m aware that many interests contributed to this statement of intent document however my concern is that not many (if any)besides lobby groups and the usual suspects will even read it.

There are even a few good charts to help out see page 54 for example on “Increasing the Fuel efficiency of the vehicle fleet”

Given the length of time drivers keep their vehicles, there are significant climate change benefits to targeting vehicles entering the fleet for the first time.

As a result, the government is making it a priority to develop policies to improve the fuel economy of the New Zealand light vehicle fleet. It will do this by working with industry representatives to encourage drivers to buy fuel-efficient vehicles, ensure in-service vehicles meet environmental standards and promote the scrapping
of inefficient vehicles.

Over at the NZ Business Council for Sustainable Development there is some kind of parallel universe going on with their Energy 2050 project which needs to be updated now that this Government Energy Strategy document has been released.

What do you think about the Energy Strategy and Impacts on Transport or any other areas for that matter. You’ve had the weekend to read the document now.

In the words of the King Julian: [shouts] “How long is this going to take?”(To read that is?)