Gasline 40 February 06 Electricity Commission to consider role for LPG in load displacement

The LPG Association has met with “It was a very positive meeting,” said the Chair of the Electricity new LPGA President, John Cumming, Commission, Roy Hemmingway, to “and we have agreed to do some work discuss how LPG could contribute together to progress this issue.” on a large scale to displacing LPGA Executive Director, Peter electricity consumption through Gilbert, will be leading this project on load shedding. behalf of both Associations. He will The LPGA was joined for the work with the EC’s offi ce, which is meeting by the Gas Association. keen to gather technical data to assess The two organisations briefed the the viability of using gas on a wider Commission on the contribution they scale and a lad displacement option. EC Chair, Roy Hemmingway. Keen to consider a role for LPG. could make to electricity displacement, “LPG sales have jumped over particularly in the north of the North 50% in the last fi ve, and a signifi cant under-utilised – this is an excellent Island and the , and the proportion of that growth comes from opportunity to assess how it could issues that need to be addressed to the domestic market,” Peter said. be used best to support NZ’s energy ensure a useful degree of displacement “We have always maintained LPG security, Kyoto and energy effi ciency could be achieved. is a strategic energy asset that is being strategies.” New Association executive elected

The LPG Association executive for the new fi nancial year is John Cumming (president, NGC), Chris Mulvena (Shell Petroleum Mining), Owen Poole (Rockgas), Terry Barstead (Nova LPG), Mario Vulinovich( Shell Gas), Gregg Brown (AberGas), Ian Gallaugher ( BBQ Factory), Ian Macefi eld ( BOC Gases), David Browne (Gas Engineering Services), Albert de Geest LPGA President, John Cumming. (Liquigas), Mike Davis (On gas).

The industry’s conferences have LPG market and a strategic review of LPGA expanded in numbers and value each the future of forecourt LPG sales. year as the LPG industry itself has Already the conference has led grown into a sizeable and strategic to discussions at senior levels with conference energy asset for . Government offi cials on LPG’s role Key subjects covered included in the country’s energy supply sector. best yet progress with HSNO, the Electricity If you did not attend the 2005 The 2005 LPGA conference at Taupo Commission’s efforts to reduce conference, ensure you don’t miss next late last year was the most successful demand through fuel effi ciency, how year’s event, planning for which will event yet, with over 100 delegates and a NZ can develop a sustainable energy get underway early in the new year in range of insightful papers presented (not future and the role LPG might play in response to the size and status these to mention good fi shing and golf!). that, lessons from the United States conferences have attained.

1 Ministry's home heating report ranks

confidence in gas options our products, The Ministry for the Environment understands how has completed phase 1 of detailed to use them wisely study of heating options in New and effi ciently and Zealand. has access to good information at all The report is part of the Ministry’s times on these Warm Homes project which examines issues.” ways to encourage New Zealand households to move to cleaner heating Peter noted, sources and increase household energy however, that the effi ciency. The overall aim is to report stated ‘data develop warmer, healthier homes. from the Energy Safety Service The phase one report focuses on shows a relatively a thorough review of the literature low incidence (15- available on home heating, particularly 18pa) notifiable the technical and fi nancial aspects. gas emissions, health and safety accidents for all The social studies of heating choices issues, typical capital costs and risks natural gas and LPG applications, and incentives for behaviour change will associated with use. including home heating and other be handled in a separate report. Key risks for gas options are listed applications.’ as long term availability of supply and “This underlines quite clearly some perceived operating and safety just how reliable gas is when used “We need to ensure the issues. sensibly.” market has continued LPGA Executive Director, Peter LPG appliances also rate extremely confi dence in our Gilbert, says fi ndings such as these well in comparisons of particulate and reinforce the importance of industry’s sulphur emissions, and on par with most products, understands public awareness campaigns on security other fuels in terms of NOx outputs. how to use them wisely of gas supply and sensible handing and operation of gas appliance. “We need and effi ciently and to ensure the market has continued has access to good information at all times on these issues.” New CEO at Liquigas Albert de Geest (right) has been appointed Chief Executive Latter stages of the project will Offi cer of Liquigas. Prior to his include the development of an Excel appointment he worked model to be used as the framework for as Manager, Electricity, evaluating different heating sources, at the Ministry of Economic a rating of home-heating types by Development, Resources and selected criteria and case studies based Networks Branch. on different areas of New Zealand, Albert has over 20 years different household types and a range experience in the electricity industry of heating patterns. in Australia and New Zealand. The phase one literature review Previous positions include: Electricity Market (NZEM) and has examines a range of different fuel General Manager of Marketing and also served on numerous working types and heating options, including Trading at Hydro Tasmania, General groups, the Grid Security Committee fl ued and unfl ued gas. Manager Energy Procurement and and as Chair of the Rules Committee It discusses each option under National Sales at TransAlta New of the NZEM. Albert has a MBA a variety of headings including Zealand and General Manager (Distinction), Victoria University of availability, fuel/energy consumption, Energy Brokers New Zealand Ltd. Wellington, and other business and typical operating costs, heating He has been involved in the electrical degress from Canterbury capacity, effectiveness of heat development of the New Zealand and Massey. transfer, particulate and greenhouse

2 LPG gains traction with offi cials

The LPG industry is being taken Irrespective of the supply of ever more seriously by offi cials and indigenous LPG (and Kupe - and policy advisers in Government, possibly Pohokura - will provide many says former Association President, years of security), the New Zealand Owen Poole. market can access sustainable sources Addressing the recent conference, from a variety of locations, including Owen told delegates that industry is the Australian east coast. now starting to gain traction with our “This supply flexibility means goal of positioning LPG as a strategic the industry certainly does not face energy asset. constraints and it is imperative that “The Association has worked hard industry delivers this message strongly this year to direct our relationship with and regularly to all key stakeholders,” Government and reinforce the value Owen said. we are seen to offer as a sustainable A second focus for the Association energy source.” is continuing to promote itself to He said the fact that transport members and to increase membership offi cials are considering automotive numbers. LPG as a possible low-emission vehicle Doing so will strengthen industry’s fuel is very positive. advocacy position with Government And the Association is working and other stakeholders on a range of levels, and create additional on other fronts, which also look Former LPGA President, Owen Poole. like bearing fruit, to promote non- value-added opportunities for the membership base, he said. automotive LPG to energy sector While there are many positive offi cials. factors on the horizon, the Association “The Association has made strong “This indicates industry is now must still focus on dispelling myths progress this year and I’m very being taken seriously on both fronts surrounding any possible shortages of confi dent it is well positioned to add – albeit very late in the piece.” LPG linked to the Maui run-down. even greater value in future.” LPGA changes focus to support industry’s strategic positioning

The following are excerpts from On that basis, the LPG industry the repor of the LPGA Executive has defi nitely reached new levels of Director, Peter Gilbert, to the credibility and recognition among industry conference. energy sector offi cials - the much One indication - at least in Wellington increased Government relations - that an industry is considered a ‘player’ workload of the LPG Association is the amount of time that industry’s over the last 12-18 months testifi es association has to spend working with to that. offi cials, policy advisers and regulators In addition to this expanding to protect and advance member’s workload is the changing nature of the commercial interests. Cont. page 5

The Association is working to ensure Government, media and other infl uential stakeholders have a better understanding of the value LPG can offer in the current climate of fragile electricity supply and concern over New Zealand’s Kyoto response. Executive Director, Peter Gilbert.

3 Driver’s League: A winning tool for Shell Gas In 2004, Shell Gas made a commitment to achieve a signifi cant improvement in Health and Safety performance As part of this plan, a Driver’s League was introduced for the bulk carriers and distributors who deliver on behalf of Shell Gas. This Driver’s League incentivises drivers to exhibit the correct behaviours in areas including speed, personal protective equipment and daily vehicle checks. As part of the commitment to ‘Walking to Talk’: n Former General Manager Roland Pechtold personally launched the Driver’s League to drivers. n HSSE manager, Bill Shand, visits the four involved businesses on a regular basis to educate drivers and to show a visible commitment from Shell Gas to their safety. being rewarded with substantial n Toolbox meetings are now held n Driver behaviour is tracked over bonuses. regularly by drivers with their each quarter, with achievers managers. n All drivers were issued a Shell Gas New gas heater is key ring for easy reference to what they “should and shouldn’t do”. n Drivers receive a monthly message 92% effi cient to go in their cab, which serves as a daily reminder of the monthly focus A revolutionary new gas heater, which is 92% effi cient, e.g. “Please observe speed limits at has just been launched in New Zealand. all times. Thanks for respecting the The Archer Gas Log Space Heater is believed to be the most safety of yourself and others.” effi cient appliance of its kind on the market, and has won numerous n Drivers all receive a monthly prestigious overseas awards. newsletter with updates and Among its specialist features is the fact that, unlike other gas recognition of achievers. heaters which tend to dry out the air in the room, the Archer restores Although only recently launched, air humidity allowing the atmosphere in the home to remain fresh. the Driver’s League is already showing It uses a triple heat exchanger that extracts 92%+ heat from the results. incoming gas and transfers 78% of the heat directly into the home. There has been a noticeable The heat exchange system squeezes the combustible gases to increase in the number of reported 55 degrees Celsius before they enter the fl ue. This results in total potential incidents and a signifi cant combustion and ensures every megajoule of gas energy is put to reduction in speeding. work heating the home. “We’re not there yet,” says Bill The heater’s ignition system alleviates the need for pilot lights Shand, “but this has been a real step which means added reliability, safety and lower gas bills. forward. The heater’s innovative design means it can be installed safely "Attitudes take time to change, but against combustible materials without the added cost of installing the drivers are now starting to see for a zero clearance box. themselves the benefi ts of working This helps to keep installation costs to a minimum and makes safely.” the heater ideal for high rise apartments or for use as a replacement for existing gas or oil space heaters.

4 Owen Poole recognised with award

Former LPGA President, Rockgas from a virtually unknown General Manager and long-time player in the industry to industry member, Owen Poole, has its current position as been presented with a life membership one of its pre-eminent of the LPG Association. members. Owen was invested with this He has also been honour at the recent conference in a central figure in the Taupo. Association. He was also presented with a He has led it as journal of reminiscences from col- President on two occa- leagues and work mates stretching sions, has been a driv- back some 20 years. ing force in its strategic Owen has been a major fi gure in direction and achieve- the LPG industry and, in particular, ments over the years and the Association for most of the last has assisted it to develop two decades. a recognised and credible voice in Owen will retire later this year but He has developed Rockgas energy issue policy debates. his legacy will be remembered.

LPG Association changes focus - cont. from page 3 work in which the Association is now been ongoing work to review the infl uential stakeholders have a better more engaged. Whereas previously Association’s communications understanding of the value LPG can the emphasis was quite technical and activities, and to refocus them at a offer in the current climate of fragile operational, the LPGA is now also more strategic level. electricity supply and concern over concentrating much more heavily on This is consistent with industry New Zealand’s Kyoto response. strategic and policy-oriented projects objectives of positioning LPG as a A full copy of the LPGA which have greater potential to impact strategic energy asset and, in line with annual report can be found on on industry. this, the Association is working to www.lpga.co.nz Supporting these projects has ensure Government, media and other

Big projects on which aimed at consumers, offi cials cylinder valve design and the Association has and media. storage, use of LPG indoors and indoor air quality effects worked this year include: n A major and successful of LPG. These committees n Auditing and assessing initiative to overturn have far-reaching impacts on the industry’s cylinder threatening provisions in industry, for example filling processes, and Environment Canterbury’s developing a complex draft Clean Air Plan. This n Facilitated a new process workstream, in conjunction was a delicate project for compiling and analysing with the Environmental which, if the LPGA had been industry sales statistics, Risk Management Authority unsuccessful, could have including providing for monthly (ERMA), to remedy the issues seriously affected LPG heater returns, a North/South Island identifi ed in this audit. sales into Canterbury - and split and the inclusion for the ultimately, further afi eld. fi rst time of statistics in the n Ongoing work to change 45kg segment. This new n public misconceptions about Project managed four process has greatly assisted the future security of LPG industry-Government marketing planning and supplies. This involved a committees whose terms demand forecasting. nationwide public information of reference covered the campaign, which will form strategic review of cabinet the basis of continuing work heater design and use,

5 Minister outlines National Ene

In a recent speech, Minister of Energy, David Parker, outlined his thoughts concerning the development of a National Energy Strategy for New Zealand. Here are excerpts from that speech. Looking ahead to the upcoming available. It will also assess the scope energy policy programme in the for reducing greenhouse gas emissions current government term, a clear from changing the generation mix while challenge is meeting New Zealand’s maintaining acceptable thresholds of future energy needs in a way that price and security. protects our way of life, economy and Third, the Strategy will also give the environment. More specifi cally, some thought to the impact of energy to advance an energy system over choices more broadly. For example time that balances three high- the potential impact of land use level sustainable development change from growing biofuel feed outcomes: stocks on competing activities such 1. Reliability and resilience, balanced as agriculture. against costs involved; Fourth, the Strategy will integrate 2. Environment responsibility (both the aims of the National Energy locally and globally); and Effi ciency and Conservation Strategy. Where possible the National Energy 3. Fair and effi cient pricing. view. Of course it is diffi cult to set Strategy will focus on cost-effective To help us all concentrate our minds energy policy over decades due to renewable sources of energy, to on these issues, we announced last the uncertainty of future events and augment the renewable energy supplies year that we would develop a National developments – over 500 megawatts – that have come Energy Strategy. Instead the National Energy onstream over the past six years. It is intended that this will provide Strategy will involve exploring I am determined to maintain, long-term direction and leadership future energy scenarios, facilitating and where possible increase, a for the energy sector – and will put stakeholders’ views on possible high proportion of generation from New Zealand fi rmly on the path to an transition paths, identifying key renewable sources energy system that supports sustainable values/objectives and setting a long- economic development. term direction. In addition the National Energy Strategy will address any outstanding I would like now to outline some The strategy may develop a number barriers that might limit opportunities general guiding principles for the of possible different transition paths for energy effi ciency improvements National Energy Strategy. and the role of government and market from smaller scale generation in each of these paths. First, it needs to take a long-term technologies or utilising local energy Second, the Strategy will incorporate sources. a system-wide view, covering both demand and supply and related policy Cont. next page areas such as climate change. Security of supply of both stationary and transport fuels will remain a key Security of supply of both priority and the Strategy will draw on stationary and transport various scenarios that explore New Zealand’s energy options. fuels will remain a key We accept, of course, that some priority and the Strategy thermal power will be needed in our will draw on various energy system for the foreseeable future, to allow for the vagaries of scenarios that explore our weather that affect both hydro and New Zealand’s energy wind generation. options. The strategy will model the mix of generation types New Zealand has

6 ergy Strategy for New Zealand

Work is already underway to sometime in the second half of this explore whether there is a useful A draft Strategy is likely year. role for national guidance, under the Of course the Strategy will not be RMA, on generation and electricity to be available for wide the silver bullet, and it cannot provide transmission. consultation sometime the certainty of outcomes that we Hand in hand with these studies in the second half of this desire. Inherent unknowns include will be an assessment of the related New Zealand’s future climate change transmission, grid control and load year. obligations, the timing of a decline management issues associated with in oil reserves and availability of various types of distributed generation, future technological developments. particularly where generator outputs provide a long-term focus for energy Nonetheless the development of the vary markedly with time. R&D priorities and programmes and National Energy Strategy will aim Fifth, the Strategy needs to continue highlight where the potentials and to: to promote a favourable investment roadblocks currently lie in respect of n Clarify government policy. There environment in the energy sector. new energy technologies. has been a growing need to pin Businesses will be key players This is invaluable because timely down our policy in a number of and central to promoting and access to new technologies and energy areas and I look forward to progress promulgating sustainable energy resources is not something about which in the development of that work. practices, particularly through long- this government can be indifferent. n Integrate energy policy with lived, energy effi cient and emissions- I know that Energy Federation related policy areas such as climate reducing capital investments. has been very active in developing an change. Sixth, the Strategy will also Energy Research Investment Strategy n Highlight further development of and I thank you for this valuable existing policy where necessary. contribution. n Identify where new cost-effective (The Strategy) will Lastly, it is obvious that an actions/initiatives may be enduring sustainable long-term vision required. provide long-term will require strong energy sector/ community buy in. As you can no doubt appreciate the direction and leadership scope and scale of the work programme for the energy sector The development of the Strategy ahead is considerable. I would invite will require a robust, transparent you all, as well as the wider community, – and will put New process that encourages engagement to contribute to this important work. Zealand fi rmly on the with all interested parties. A key role for government will path to an energy system be to facilitate process/debate and to that supports sustainable ensure everyone has the opportunity economic development. to have their say. A draft Strategy is likely to be available for wide consultation EECA reviews energy effi ciency strategy

EECA is currently reviewing the strategy can be improved. It is expected and the Gas Industry Company has National Energy Efficiency and that the review of the NEECs will feed been established to co-regulate the Conservation Strategy, which was into the National Energy Strategy. industry. fi rst, was introduced in 2001 under the Since the Energy Efficiency Energy consumption has been Energy Effi ciency and Conservation strategy was introduced, for example, growing steadily, at around 2% a year, Act. The same Act provides for the oil prices have risen and the Kyoto and energy effi ciency improvements minister to replace the strategy, if Protocol has come into force. are very modest compared with some necessary, after fi ve years. In New Zealand, Maui gas reserves other modern economies. The review begins with the have been redetermined, LNG imports assumption that it is likely the current have come under serious consideration Cont. next page

7 EECA reviews The USA LPG market: strategy - cont. Some facts and fi gures Energy consumption Randy Ervin, President of Algas-SDI Venezuela, Norway, and the United has grown at around in Seattle, recently provided the NZ Kingdom. 2% a year, and energy industry with an overview of the The propane industry has invested interesting US LPG market. over $10 billion in transportation effi ciency improvements With a population of 296 million infrastructure and primary transportation are very modest and an LPG consumption of 75 billion is through 70,000 miles of pipeline. litres per year, the US LPG industry This is supported by secondary compared with some contributes $12 billion to GDP. transportation using 22,000 rail cars, other modern economies. This has to be put in context of a 7000 bulk trucks, and 60 barges. Retail total energy consumption equivalent delivery is via 35,500 bobtail trucks. to 3.8 trillion litres of LPG pa. There are roughly 8000 LPG retail In the face of changes and trends LPG use in the US has increased companies with 25,000 retail outlets like these it makes sense to take stock six percent over the last 10 years. and 13,500 bulk plants. of the current national strategy, to It provides four percent of the US’ They employ around 56,000 people check on progress and make sure it total energy consumption, servicing who sell directly to 16 million end meets our needs. five percent of households (6.8 users – that’s around 1.35 million Energy effi ciency and renewable million) where it is used primarily litres/employee per year. for heating. energy are widely recognised as US LPG prices often double essential to a more sustainable energy There are also 450,000 LPG- through the course of a heating system. New Zealand needs to ensure it powered forklifts, 270,000 autos and season. has a clear path towards that future. 80,000 buses, taxis and fl eet vehicles. Prices are driven by demand, The current strategy sets two Around 90 percent of LPG is storage, the need to import, and the national targets: an improvement of produced domestically - roughly cost of substitute energy sources. But at least 20% in economy-wide energy half from natural gas and half from the main factor is re-supply during effi ciency by 2012, and a 30 petajoule petroleum. peak season. p.a. increase in renewable consumer Around 10 percent is imported energy by 2012. Prices in the west can be 50 percent from Canada via pipeline and railcar, higher than in the midwest and gulf To achieve these targets the strategy and by sea from Algeria, Saudi Arabia, coast areas. includes action plans for government (including local government), industry, transport, buildings and appliances, and energy supply. Arrowtown gets EECA is now reviewing the strategy, looking at the progress that 'mains gas' has been made, how other countries are tackling similar issues and where Rockgas is now supplying reticulated reticulation networks, which, in the the current strategy could be improved. ‘mains’ gas to Arrowtown businesses. South Island Lakes District alone It will report to the minister, who The reticulation was commissioned include services in Queenstown, will decide if the strategy should be late last year to service Arrowtown’s , , and replaced. CBD. The company expects over 30 Ar- Walnut Grove, and Butel Park. If a new draft strategy is required rowtown businesses to convert to mains The company undertook the EECA expects to lead its development, gas in due course, including tenants in Arrowtown reticulation in conjunction seeking comment from a range of the new Royal Oak development. with the Queenstown Lakes District stakeholders including the energy There are also longer term plans to Council as an extension of its long term industry. The draft would then be open extend the Arrowtown LPG reticulation infrastructure investment strategies in for submissions in 2006. network to residential gas users. the South Island. Work started on the Arrowtown project in 2003. For more information visit www. “Our reticulation service will A feature of the project was the ‘direct eeca.govt.nz. To be added to a contact encourage more local businesses to drilling’ method that Rockgas used list, email [email protected] switch to gas because of its convenience,” Rockgas National Marketing Manager, wherever possible to lay gas pipes. This Ross Cameron, said. minimised street trenching work, greatly The Arrowtown project reducing disruptions and inconvenience complements the company’s other to traffi c and pedestrians.

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