Our spe­cial com­pet­i­tive ad­van­tage in min­ing new, car­bon-neu­tral biomass – fu­els, coals and re­gional jobs

Element - - Element Promotion - By Nick Ger­rit­sen NICK GER­RIT­SEN

Biomass is at the core of the world’s en­ergy sec­tor. Over the last two hun­dred years or so we have spe­cialised in min­ing old biomass (biomass that has been fos­silised by heat and pres­sure over mil­lions of years).

This old biomass is mined from ge­ogra­phies that once had a nat­u­ral ad­van­tage in grow­ing it, and is ex­tracted as crude oils, coals and gases. Th­ese have dif­fer­ent ‘flavours’ or char­ac­ter­is­tics that re­quire blend­ing and re­fin­ing to achieve the con­sis­tent qual­ity prod­ucts that we de­pend on.

An ex­pert in a multi-national re­source com­pany neatly ex­plained that at any one time around 1% of the nat­u­ral process is fos­silised biomass that can be ex­tracted. The sim­ple fact of the multi-mil­lion-year cy­cle means that it takes a long time for th­ese re­sources to re­plen­ish.

So, the con­cept of con­vert­ing ‘new’ biomass that is grow­ing to­day and con­vert­ing that into en­ergy value, rather than leav­ing it to the slow nat­u­ral process – isn’t rocket science. This also means that there is a present­day com­pet­i­tive ad­van­tage for those coun­tries that are pro­fi­cient at grow­ing biomass – and of course New Zealand is in this cat­e­gory. In this we are the lucky coun­try.

Fo­cus­ing on new biomass is like switch­ing from ana­logue (fos­silised) to dig­i­tal (real-time con­ver­sion). It is im­pos­si­ble for to­tal sub­sti­tu­tion to oc­cur as there sim­ply isn’t enough fresh biomass avail­able, but there is, how­ever, a great op­por­tu­nity to make some dent in re­source im­por­ta­tion and al­lo­ca­tion by grow­ing a por­tion of our own en­ergy.

When you start to look at the avail­able new biomass op­por­tu­nity it is clear that there are large ex­ist­ing waste streams that could po­ten­tially be used im­me­di­ately, and then an op­por­tu­nity to de­velop fast-ro­tat­ing biomass plan­ta­tions on un­der-utilised and mar­ginal land. There is even the chance to com­pete di­rectly for ex­port logs – that may work for some of the high value/ strate­gic prod­ucts.

Be­lieve it or not, there are tech­nolo­gies that are get­ting close to mar­ket which of­fer the op­por­tu­nity to di­rectly sub­sti­tute liq­uid fu­els and qual­ity coals on a ba­sis that look to be eco­nomic to­day, even in New Zealand which has none of the ‘soft’ money – sub­si­dies and the like – avail­able in most other coun­tries.

You will never look at a log­ging port the same way again – when you con­sider that this biomass could be used at home to cre­ate petrol or used to re­place coal mined from the West Coast.

The driv­ers for switch­ing the use of a log do not nec­es­sar­ily have to come from cli­mate change mit­i­ga­tion but also flow from hard-edged prag­matic macro-eco­nomic risk anal­y­sis. The con­cepts of se­cu­rity of sup­ply, ver­ti­cal in­te­gra­tion and qual­ity con­trol are is­sues that many of our trad­ing part­ners and large multi-na­tion­als are di­rectly in­vest­ing in. For some rea­son we are op­er­at­ing on the ba­sis that some­one else will solve the prob­lem, but New Zealand – as an is­land na­tion – is ex­posed to re­source volatil­ity es­pe­cially for liq­uid fu­els, and in­creas­ingly for high-qual­ity coals and high-value car­bon prod­ucts. It is a high-stakes game if we do noth­ing.

Us­ing new biomass is still min­ing – it’s just that you no longer have to dig it out of the ground – rather you mine it on top. There is a sig­nif­i­cant op­por­tu­nity to cre­ate more jobs and more re­gional eco­nomic de­vel­op­ment – if we are able to open up to this much more com­mon sense ap­proach and break an old way of think­ing.

It is a valid ques­tion to then ask: What is hold­ing back the de­ploy­ment of th­ese new tech­nolo­gies –why aren’t they in use to­day? The big­gest im­ped­i­ment is sim­ply cap­i­tal. Whether it is an­gel, ven­ture or pri­vate eq­uity – our cap­i­tal mar­ket is strug­gling to get its head around th­ese strate­gic and highly de­fen­si­ble in­vest­ment op­por­tu­ni­ties. It is eas­ier to fo­cus on prop­erty, dairy and cloud com­put­ing than con­cepts of grow­ing our own en­ergy.

There isn’t any magic wand – the tech­no­log­i­cal so­lu­tions have to be ro­bust, smart and eco­nomic. This is ac­tu­ally the stuff that Ki­wis are good at. The re­ally ex­cit­ing di­men­sion is that th­ese tech­nolo­gies can also be de­ployed off­shore. So by act­ing do­mes­ti­cally we can un­lock a mas­sive op­por­tu­nity to en­gage in one of the great global com­mer­cial op­por­tu­ni­ties, and ex­port our know-how.

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