The Place of Coal in New Zealand's Energy Future

Good morning and thank you for the opportunity to address this yearÆs New Zealand Minerals Conference.   As you have already heard from the Associate Minister of Energy, the Government believes that the minerals industry is an important part of our economy. In particular, our coal and lignite resources have the potential to play an important role in New ZealandÆs energy sector as both a primary fuel and as a means to produce electricity.   The Government has taken a keen interest in the primary fuel sector given the declining reserves of natural gas sector. The energy sector is a key driver of economic growth and it is therefore critical that we have a reliable supply of primary fuel as part of the energy mix.   In a global sense, New Zealand is like many other countries regarding the need to secure energy for the future. Natural gas will be a key bridging fuel in the transition from an energy market based on fossil fuels to one based on renewables over the next century.   However, natural gas as a solution to this energy transition has some pragmatic limitations for New Zealand. There is uncertainty as to when new domestic reserves of gas can be discovered and developed. And the alternative of imported LNG poses a number of costs and risks to the economy.   New ZealandÆs coal resources are vast-estimated to be enough to last hundreds of years at the current rate of extraction. The main question is can extraction be increased and sustained to meet the demand of domestic power producers and at the same time meet commitments to lucrative international markets?   At this point it is appropriate for me to place coal into context with Governments overarching policy objectives for energy. The Government has stated objectives for the energy sector emphasising energy efficiency and an increased focus of renewable energy, while still ensuring security of supply and certainty as to energy costs and risk. Coal certainly can make a contribution to these objectives going forward.