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Chapter 3: Energy

3.1 Sector overview

The energy sector produced 34,069.3 Gg carbon dioxide equivalent (CO2-e) in 2006, representing 43.8 per cent of New Zealand’s total greenhouse gas emissions. Emissions from the energy sector are now 45.0 per cent above the 1990 value of 23,499.1 Gg CO2-e (Figure 3.1.1). The sources contributing most to the increase since 1990 are emissions from “public electricity and heat production”, an increase of 4,807.3 Gg CO2-e (137.6 per cent), and “road transportation”, an increase of 5,127.3 Gg CO2-e (66.9 per cent). Emissions from the “manufacture of solid fuels and other energy industries” subcategory have decreased by 1,426.1 Gg CO2-e (-80.3 per cent) from 1990; this is primarily due to the cessation of synthetic petrol production in 1997.

Figure 3.1.1 Energy sector emissions from 1990 to 2006 (all figures are Gg CO2-e)

Year

Gg CO2-equivalent

1990

23,499.1

1991

23,775.2

1992

25,502.5

1993

24,805.5

1994

25,064.6

1995

24,998.5

1996

26,044.9

1997

28,399.5

1998

27,012.3

1999

28,251.1

2000

28,934.8

2001

30,806.5

2002

30,887.9

2003

32,491.8

2004

31,704.9

2005

33,582.0

2006

34,069.3

3.2 Fuel combustion (CRF 1A)

Description

The “fuel combustion” category reports all emissions from fuel combustion activities. This includes “energy industries”, “manufacturing industries and construction”, “transport” and “other sectors” (commercial, residential and agriculture/forestry/fisheries) (Figure 3.2.1). These subcategories use common activity data sources and emission factors. The common reporting tables require energy emissions to be reported by sub category. Splitting energy activity data across sub categories is not as accurate as splitting activity data by fuel type because of difficulties in allocating liquid fuel use.

Examples of the calculations used to estimate emissions for 2006 are included in the excel workbooks available for download with this report from the Ministry for the Environment’s website. Information about methodologies, emission factors, uncertainty and quality control and assurance relevant to each of the subcategories are discussed below.

Figure 3.2.1 Change in emissions from the energy sector from 1990 to 2006: fuel combustion (all figures are Gg CO2-e)

Category

1990
(Gg CO2-equivalent)

2006
(Gg CO2- equivalent)

Energy Industries

6,043.0

9,570.7

Manufacturing industries & construction

4,583.6

5,078.4

Transport

8,778.2

14,406.4

Other Sectors

3,245.6

2,890.2

Methodological issues

Energy activity data is compiled using the Ministry of Economic Development’s energy database along with relevant country specific emission factors. Greenhouse gas emissions are calculated by multiplying the emission factor of specific fuels by the activity data. There are only a few occasions where emission factors are not able to be reported due to confidentiality reasons and instances where natural gas is used as a feedstock.

The “fuel combustion” category is separated into stationary combustion and mobile combustion. Carbon dioxide emissions from the stationary combustion of gas, solid fuels, and liquid fuels are identified as key categories. New Zealand has data on fuel combustion detailed by fuel type and sub category but not for every individual energy facility therefore the methodologies used to calculate emissions for the energy sector are based on the IPCC Tier 1 approach.

Activity data – liquid fuels

Statistics New Zealand conducts the “Delivery of Petroleum Fuels by Industry Survey”. The survey is run as a quarterly census. The purpose of the census is to provide data on the amount of fuel delivered by all oil companies to end-users and other distribution outlets. Each oil company in New Zealand supplies Statistics New Zealand with the volume of petroleum fuels delivered to resellers and industry groups.

Activity data – solid fuels

The “New Zealand Coal Sales Survey” conducted by Statistics New Zealand is an ongoing quarterly survey which began on 1 March 1981. The purpose of this survey is to measure the amount of coal which is sold and available to users. The target population is all coal mines and major resellers of coal in New Zealand. Completion of the survey has been approved by the Minister of Statistics. Returning the completed and signed questionnaire is a requirement under the Statistics Act 1975.

The three ranks of coal measured are bituminous, sub-bituminous and lignite coal. From 1988 onwards the coal sales questionnaire separated coal sales into seven end-use sectors; however these do not match the IPCC sectors. The sectoral shares of coal use that can be used for the inventory are based on CRL Energy Limited’s survey of sectoral coal use for 1990 and 1995. Data is interpolated between 1990 and 1995 and extrapolated for all years beyond 1995. The exceptions are for the coal used for “iron and steel”, “public electricity and heat production” and the “residential household” sector where the Ministry of Economic Development use data from the New Zealand Coal Sales Survey. Sectoral shares are calculated by:

  • Summing the four calendar year quarters of coal sales data from the New Zealand Coal Sales Survey.

  • Subtracting coal exports, coal used by the “residential” sector, coal used for “iron and steel production” and coal used for “public electricity and heat production”; then, dividing CRL’s annual coal tonnage for each sector by the total (excluding exports, steel, electricity and residential coal use) to give sectoral shares of coal use for 1990 and 1995.

  • Interpolating sectoral shares between 1990 and 1995 and extrapolating from 1995 to 2006.

Activity data – gaseous fuels

The amount of gas extracted, vented and flared at each gas field in New Zealand is provided to the MED by the individual gas field operators. Activity data on processed gas from the Kapuni gas field and gas transmission and distribution throughout New Zealand is provided to the MED by the gas transportation and processing company Vector. Large users of gas, including electricity generation companies, provide their activity data directly to the MED. Gas activity data from small industrial, commercial and residential users is obtained by the MED through a quarterly gas survey sent to gas retailers and wholesalers.

Activity data – biomass

Activity data for the use of biomass comes directly from the companies involved with combusting wood residues to provide process heat in the wood processing industry (such as kiln drying) and electricity production from cogeneration plants.

Emission factors

New Zealand emission factors are based on gross calorific values. A list of emission factors for CO2, CH4 and N2O for all fuel types is listed in Annex 2. Explanation of the characteristics of liquid, solid and gaseous fuels and biomass used in New Zealand are described under each of the fuel sections below.

A review of New Zealand’s energy emission factors (Hale and Twomey Ltd, 2003) identified a number of non-CO2 emission factors where the supporting information was assessed to be insufficient to retain the country-specific emission factors used in previous inventories. Where a country-specific value is not available, New Zealand uses either the IPCC value that best reflects New Zealand conditions or the mid-point value from the IPCC range. All emission factors from the revised IPCC 1996 guidelines (IPCC, 1996) are converted from net calorific value to gross calorific value.

The emission factors recommended by the Hale and Twomey review and agreed by a New Zealand review panel were first used in the 2004 inventory submission, and have been used in all subsequent inventory submissions. The exception is the use of IPCC default emission factors for CH4 emissions in “road transport” which have been used since the 2007 inventory submission.

Emission factors – liquid fuels

The CO2 emission factors for oil products are from the New Zealand Refining Company (NZRC) data, import data from industry and from Baines (1993). There is a direct relationship between each fuel’s carbon content and the corresponding CO2 emissions during combustion. However, the carbon composition of oil products is not closely monitored and there will be variation over time, depending on the crude oil used in production.

Before the 2004 inventory submission, the CO2 emission factors used in inventories for the “transport” category were sourced from the New Zealand Energy Information Handbook (Baines, 1993). As a result of the Hale and Twomey review the CO2 emission factors were replaced with individual liquid fuels emission factors derived from the New Zealand Refining Company data on carbon content and calorific values. The emission factors will be updated if the fuel specifications of liquid fuels change.

Emission factors – solid fuels

New Zealand’s emissions from coal burning are calculated using the emission factor for sub-bituminous coal of 91.2 kt CO2/PJ (Baines, 1993). Using the sub-bituminous value for all ranks of coal is a reasonable assumption for New Zealand as the bulk of the high-quality bituminous coal is exported and all coal used in public electricity generation is of sub-bituminous rank (Ministry of Economic Development, 2006).

Emission factors – gaseous fuels

New Zealand uses the gas production from the Maui and Kapuni gas fields reported in the New Zealand Energy Data File (Ministry of Economic Development, 2007b) to support the calculation of a weighted average annual CO2 emission factor for natural gas. The average emission factor is applied to a number of categories in the energy sector, for example in the “manufacturing industries and construction category”.

New Zealand has a gas field (Kapuni) with particularly high CO2 content which has historically been valued by the petrochemicals industry as a feedstock. However, most of the gas from this field is now treated and the excess CO2 removed. Separate emissions factors are used for Kapuni treated and un-treated gas due to the difference in carbon content (refer to Annex 2).

Emission factors – biomass

The emission factors for wood consumption are calculated from the IPCC default emission factors (IPCC, 1996) assuming the net calorific value is five per cent less than the gross calorific value. In accordance with good practice (IPCC, 2000) CO2 emissions from wood used for energy production are reported as a memo item and not included in the greenhouse gas emissions total.

Uncertainties and time-series consistency

Uncertainty in greenhouse gas emissions from fuel combustion varies depending on the gas (Table 3.2.1). The uncertainty of CO2 emissions is relatively low at ± 5 per cent and is primarily due to uncertainty in activity data rather than emission factors. This is because of the direct relationship between fuels’ carbon content and the corresponding CO2 emissions during combustion. The low level of uncertainty in CO2 emissions is important as CO2 emissions comprise 96.8 per cent of emissions in the energy sector. Details of how uncertainty in CO2 emissions is assessed are provided under each fuel type in Annex 2.

In comparison, emissions of the non-CO2 gases are much less certain as emissions vary with combustion conditions. Many of the non-CO2 emission factors used by New Zealand are the IPCC default values. The revised 1996 IPCC guidelines (IPCC, 1996) often do not quantify the uncertainty in the default emission factors. The uncertainties proposed in Table 3.2.1 are best estimates derived for New Zealand conditions (Ministry of Economic Development, 2006).

Table 3.2.1 General uncertainty ranges for emission estimates from fuel combustion (Ministry of Economic Development, 2006)

Gas Uncertainty

CO2

± 5%

CH4

± 50%

N2O

± 50%

NOx

± 33%

CO

± 50%

NMVOC

± 50%

3.2.1 Fuel combustion: Energy industries (CRF 1A1)

Description

This category comprises emissions from fossil fuels burnt in stationary combustion. It includes combustion for “public electricity and heat production”, “petroleum refining”, the “manufacture of solid fuels” and “other energy industries”.

In 2006, emissions in the “energy industries” category totalled 9570.7 Gg CO2-e (28.1 per cent) of the energy sector. Emissions from energy industries have increased 3,527.7 Gg CO2-e (58.4 per cent) since the 1990 level of 6,043.0 Gg CO2-e. Public electricity and heat production accounted for 8,300.5 Gg CO2-e (86.7 per cent) of the emissions from energy industries in 2006. This is an increase of 4,807.3 Gg CO2-e (137.6 per cent) from the 1990 level of 3,493.2 Gg CO2-e.

New Zealand’s electricity generation is dominated by hydro-electric generation. For the 2006 calendar year, hydro generation provided 55 per cent of New Zealand’s electricity generation. A further 11 per cent came from other renewable sources (such as geothermal, wind and biomass) and waste heat sources. The remaining 34 per cent was provided by fossil fuel thermal generation plants using coal and gas (Ministry of Economic Development, 2007b).

Greenhouse gas emissions from “public electricity and heat production” show large year-to-year fluctuations because use of thermal power generation stations complements the hydro-electric generation available. Generation in a ‘normal’ hydro year requires lower gas and coal use, while a ‘dry’ hydro year requires higher gas and coal use. This is a different trend from the steady increase in emissions from coal and gas observed in electricity generation in many other countries.

Figure 3.2.2, which shows net electricity production by fuel type from 1990 to 2006, clearly illustrates that on an annual basis when the level of hydro-electric generation decreases, the level of thermal electricity generation from fossil fuels (gas, coal and oil) increases.

Figure 3.2.2 Hydro-electric and thermal generation from 1990 to 2006

Year

Electricity generated - hydro (GWh)

Electricity generated - thermal (GWh)

1990

22,953.0

8,047.0

1991

22,666.0

9,447.0

1992

20,882.0

10,560.0

1993

23,258.0

9,576.0

1994

25,579.0

7,926.0

1995

27,259.0

7,475.0

1996

25,713.0

9,323.0

1997

23,594.0

11,805.0

1998

24,165.0

11,996.0

1999

23,221.0

13,344.0

2000

24,387.0

13,230.0

2001

22,391.0

15,398.0

2002

24,970.0

13,978.0

2003

23,455.0

15,630.0

2004

26,932.0

13,760.0

2005

23,099.0

17,271.0

2006

23,220.0

17,531.0

Methodological issues

Public electricity and heat production

All thermal electricity generators provide the amount of coal, gas and oil used for electricity production to the Ministry of Economic Development.

A small percentage of New Zealand’s electricity is supplied by co-generation (also known as combined heat and power). Most of the major co-generation plants are attached to large industrial facilities that consume most of the electricity and heat generated. According to the definition of public electricity and heat production in the revised 1996 IPCC guidelines (IPCC, 1996) there is only one co-generation plant in New Zealand producing electricity as its primary purpose. The emissions from this plant are included under electricity and heat production whereas emissions from other co-generation plants are included under the “manufacturing industries and construction (other)” subcategory.

Petroleum refining

The New Zealand Refining Company Limited provides the MED with CO2 emissions associated with activities from the “petroleum refining” category. As no data is available concerning non-CO2 emissions from the refinery, IPCC default emission factors for industrial boilers are used (IPCC, 1996).

Manufacturing of solid fuels and other energy industries

New Zealand reports emissions from natural gas in oil and gas extraction and natural gas in synthetic petrol production.

Activity data for oil and gas extraction is provided by each individual gas field operator. Activity data for synthetic petrol production was provided by Methanex New Zealand Limited while the plant was in operation. Production of synthetic petrol stopped in New Zealand in 1997.

The low implied emission factors (IEFs) for “manufacturing of solid fuels and other energy industries” subcategory for gaseous fuels between 1990 and 1996 was caused by the sequestration of carbon in the process of producing synthetic petrol.

Uncertainties and time-series consistency

Uncertainties in emissions estimates for this category are relevant to the entire fuel combustion sector (refer to Table 3.2.1 and Annex 2).

Source-specific QA/QC and verification

In preparation of this inventory, the “energy industries” category underwent Tier 1 quality checks.

Source-specific recalculations

In previous inventory submissions, constant calorific values were used to convert tonnes (t) of fuel to peta joules (PJ) of fuel. For the 2008 inventory submission year-specific calorific values have been introduced to improve the accuracy of the activity data between 1990 and 2006.

3.2.2 Fuel combustion: manufacturing industries and construction (CRF 1A2)

Description

This category comprises emissions from fuels burnt in manufacturing industries and construction, including iron and steel, other non-ferrous metals, chemicals, pulp, paper and print, food processing, beverages and tobacco, and other uses.

In 2006, emissions from “manufacturing industries and construction” accounted for 5,078.4 Gg CO2-e (14.9 per cent) emissions from the energy sector. Emissions are 494.8 Gg CO2-e (10.8 per cent) above the 1990 level of 4,583.6 Gg CO2-e. Emissions from this category declined significantly between 2003 and 2004, mainly as a result of a decrease in the production of methanol.

Methodological issues

Activity data for coal used in iron and steel production is reported to the Ministry of Economic Development by Blue Scope Steel Limited. A considerable amount of coal is used in the production of iron, however virtually all the coal is used in a direct reduction process to remove oxygen from ironsand and not as a fuel. All emissions from the use of coal are therefore included in the industrial processes sector. A small amount of gas is used in the production of iron and steel to provide energy for the process. This data also comes directly from Blue Scope Steel Limited.

Methanol production is the largest source of emissions in the “chemical” subcategory. The activity data for methanol production is supplied directly by Methanex New Zealand Limited. Carbon dioxide emissions are calculated by comparing the amount of carbon in the gas purchased by the plants with the amount stored in methanol as shown in Box 3.1.

Box 3.1 Calculation of CO2 emissions from methanol production (Ministry of Economic Development, 2006)

Assumptions

  • Synthetic petrol is 85.8% carbon by weight.

  • Methanol is 37.5% carbon by weight.

  • CO2 emissions factor for Maui gas is 52.0 kt/PJ (2006) (refer Annex 2).

  • CO2 emissions factor for Kapuni gas is 84.1kt/PJ.

  • CO2 emissions factor for mixed feed gas is 62.4 kt/PJ.

The resulting calculations are:

  • Weight of carbon in gas to Methanex = [(PJ Maui)*52.0 + (PJ Kapuni)*84.1 + (PJ mixed feed)*62.4] *12/44 kilotonnes.

  • Weight of carbon in synthetic petrol = [amount of petrol produced * 0.858] kilotonnes.

  • Weight of carbon in methanol = [amount of methanol produced * 0.375] kilotonnes.

  • Weight of carbon sequestered in the products = [weight of carbon in petrol + weight of carbon in methanol] kilotonnes.

  • Total emissions of CO2 = [(weight of carbon in gas to Methanex)–(weight of carbon sequestered)] * 44/12 kilotonnes.

The activity data for the “other” sub category (including construction, food and beverage and dairy processing) is from the “Delivery of Petroleum Fuels by Industry Survey”, the “New Zealand Coal Sales Survey” and energy supply and demand balance tables in the Energy Data File (Ministry of Economic Development, 2007b).

Uncertainties and time-series consistency

Uncertainties in emission estimates are those relevant to the entire energy sector (refer table 3.2.1 and Annex 2).

Source-specific QA/QC and verification

In preparation of this inventory, the data for CO2 emissions from stationary combustion underwent Tier 1 quality checks.

Source-specific recalculations

In previous inventory submissions, constant calorific values were used to convert tonnes (t) of fuel to peta joules (PJ) of fuel. For the 2008 inventory submission year-specific calorific values have been introduced to improve the accuracy of the activity data between 1990 and 2006.

3.2.3 Fuel combustion: transport (CRF 1A3)

Description

This category includes emissions from fuels combusted during transportation such as civil aviation, road, rail and domestic marine transport. Emissions from international marine and aviation bunkers are reported but not included in the total emissions.

In 2006, transport was responsible for 14,406.4 Gg CO2-e (42.3 per cent) of emissions from the energy sector. Emissions have increased 5,628.2 Gg CO2-e (64.1 per cent) from the 8,778.2 Gg CO2-e emitted in 1990. The transport emissions profile in 2006 is dominated by emissions from the “road transportation” subcategory. Road transport accounted for 12,795.7 Gg CO2-e (88.8 per cent) of total transport emissions. This is an increase of 5,127.3 Gg CO2-e (66.9 per cent) from the 1990 level of 7,668.4 Gg CO2-e. Carbon dioxide emissions from the “road transportation” subcategory were identified as having a major influence on the trend in New Zealand’s greenhouse gas emissions (Table 1.5.3).

Methodological issues

Emissions from transport are compiled from the Ministry for Economic Development’s energy database. It is good practice to use a Tier 1 approach (total fuel consumed multiplied by an emission factor) for calculating CO2 emissions as this provides the most reliable estimate of emissions using country-specific and IPCC default emission factors (IPCC, 2000).

Activity data on the consumption of fuel by the transport sector are extracted from the “Delivery of Petroleum Fuels by Industry Survey” conducted by Statistics New Zealand. Liquefied petroleum gas (LPG) and compressed natural gas (CNG) consumption figures are reported in the Energy Data File (Ministry of Economic Development, 2007b).

Road transport

The Tier 1 approach has been used to calculate CO2 from road transport which is consistent with good practice (IPCC, 2000). Although good practice encourages the use of a Tier 2 approach for calculating emissions of CH4 and N2O, calculating emissions from these gases is more complicated because emission factors depend on vehicle technology, fuel and operating characteristics. New Zealand does not currently have all of the data to accurately estimate non-CO2 emissions from transport using a Tier 2 methodology. Therefore estimates of CH4 and N2O emissions from “road transportation” are calculated using a Tier 1 approach. Emission factors of CO2 and non-CO2 gases for the various fuel types used in “road transportation” can be found in Annex 2.

Navigation (domestic marine transport)

Emissions from “navigation” in New Zealand are estimated using a Tier 1 approach with country-specific emission factors for estimating CO2 emissions and IPCC default emission factors for CH4 and N2O. Prior to the 2004 inventory submission, New Zealand specific emission factors were used for CH4 and N2O emissions from fuel oil in domestic transport. The 2003 review of emission factors (Hale and Twomey Ltd, 2003) recommended reverting to the IPCC default emission factors.

Civil aviation

The New Zealand methodology for estimating emissions from “civil aviation” is a Tier 1 approach that does not use landing and take-off (LTO) cycles. There is no gain in inventory quality by moving from a Tier 1 to a Tier 2 approach using LTO cycles (IPCC, 2000). The distinction between domestic and international flights is based on refuelling at the domestic and international terminals of New Zealand airports. There is no basis for splitting the domestic and international components of fuel use for international flights with a domestic leg. This is because information on fuel use for “civil aviation” and “navigation” is available from the oil companies rather than from the individual airlines or shipping companies.

Uncertainties and time-series consistency

Uncertainties in emission estimates from the “transport” category are relevant to the entire fuel combustion sector (refer Table 3.2.1 and Annex 2).

Source-specific QA/QC and verification

In preparation of this inventory, data for carbon dioxide emissions from the “transport” category underwent Tier 1 quality checks.

Source-specific recalculations

In previous inventory submissions, constant calorific values were used to convert tonnes (t) of fuel to peta joules (PJ) of fuel. For the 2008 inventory submission year-specific calorific values have been introduced to improve the accuracy of the activity data between 1990 and 2006.

3.2.4 Fuel combustion: other sectors (CRF 1A4)

Description

This sector comprises emissions from fuels combusted in the “commercial/institutional”, “residential” and “agriculture, forestry and fisheries” sub-categories.

In 2006, fuel combustion of the “other sectors” category accounted for 3,245.6 Gg CO2-e (9.5 per cent) of the emissions from the energy sector. This is an increase of 355.3 Gg CO2-e (12.3 per cent) above the 1990 value of 2,890.2 Gg CO2-e. The emissions contribution in 2006 is divided between the “commercial and institutional” subcategory and the “agriculture, forestry and fisheries” subcategory with the “residential” subcategory.

Commercial and institutional emissions were 1,321.6 Gg CO2-e (40.7 per cent) of the other sectors category in 2006. This is an increase of 155.7 (13.4 per cent) since the 1990 level of 1,165.8 Gg CO2-e.

Agricultural, forestry and fisheries emissions were 1,283.9 Gg CO2-e (39.6 per cent) of the other sectors category in 2006. This is an increase of 163.0 Gg CO2-e (14.5 per cent) since the 1990 level of 1,120.9 Gg CO2-e.

Residential emissions were 640.1 Gg CO2-e (19.7 per cent) of the other sectors category in 2006. This is an increase of 36.6 Gg CO2-e (6.1 per cent) from the 1990 level of 603.5 Gg CO2-e.

Methodological issues

Accurately partitioning energy use between categories is difficult. This means that some categories eg, “agriculture, forestry and fisheries” subcategory may be underestimated. However, the fuel use and associated emissions have been included in other subcategories such as industry and transport and are therefore included in New Zealand’s total emissions.

More accurate activity data for residential biomass has been included from 2000. Activity data prior to this date is based on a 1996 study which estimated average wood consumption per household at 4.3GJ. A subsequent study which involved monitoring of residential wood use provided a more accurate estimate of 13.7 GJ per household. Activity data for residential biomass has been revised back to 2000 based on this more accurate estimate and is consistent with the Energy Data File (Ministry of Economic Development, 2007b).

Uncertainties and time-series consistency

Uncertainties in emission estimates for data from other sectors is relevant to the entire energy sector (refer Table 3.2.1 and Annex 2).

Source-specific QA/QC and verification

There were no specific Tier 1 quality checks undertaken for this category as it is not a key category. It was checked in the previous submission as part of a selection of non-key categories chosen for quality checking.

Source-specific recalculations

In previous inventory submissions, constant calorific values were used to convert tonnes (t) of fuel to peta joules (PJ) of fuel. For the 2008 inventory submission year-specific calorific values have been introduced to improve the accuracy of the activity data between 1990 and 2006.

Revisions to residential biomass activity data is outlined in section 3.2.4.2 above.

Source-specific planned improvements

New Zealand will reassess the methodology and assumptions used to calculate emissions from residential biomass consumption.

3.3 Fugitive emissions from fuels (CRF 1B)

Fugitive emissions arise from the production, processing, transmission, storage and use of fossil fuels, and from non-productive combustion. This category is comprised of two sub-categories, solid fuels and oil and natural gas.

In 2006, fugitive emissions from fuels accounted for 1,768.3 (5.2 per cent) of energy emissions from the energy sector. This is an increase of 564.1 (46.8 per cent) from the 1990 level of 1,204.2 Gg CO2-e.

3.3.1 Fugitive emissions from fuels: solid fuels (CRF 1B1)

Description

In 2006, fugitive emissions from the “solid fuels” sub-category produced 450.2 Gg CO2-e (25.5 per cent) of emissions from the fugitive emissions category. This is an increase of 178.1 Gg CO2-e (65.4 per cent) from the 272.1 Gg CO2-e reported in 1990.

New Zealand’s fugitive emissions from the “solid fuels” category are a product of coal mining operations. Methane is created during coal formation. The amount of CH4 released during coal mining is dependant on the coal rank and the depth of the coal seam. In 2006, 82 per cent of the CH4 from coal mining (including post-mining emissions) came from underground mining. There is no flaring of CH4 at coal mines and CH4 is rarely captured for industrial uses. Methane is also emitted during post-mining activities such as coal processing, transportation and use.

Methodological issues

The underground mining subcategory dominates fugitive emissions from coal mining. New Zealand focuses its efforts on accurately estimating emissions from this subcategory in accordance with good practice. A New Zealand-specific emission factor for underground mining of sub-bituminous coal is used to calculate CH4 emissions (Beamish and Vance, 1992). Emission factors for the other subcategories, for example, surface mining, are sourced from the revised 1996 IPCC guidelines (IPCC, 1996) as shown in Table 3.3.1.

Table 3.3.1 Methane release factors for New Zealand coal

Activity Release factors (t CH4/kt coal) Source of release factors

Surface mining

0.77

Mid-point IPCC default range (0.2–1.34 t/kt coal)

Underground: bituminous mining

16.75

Top end of IPCC default range (6.7–16.75 t/kt coal)

Underground: sub-bituminous mining

12.1

Beamish and Vance, 1992

Surface post mining

0.067

Mid-point IPCC default range (0.0–0.134 t/kt coal)

Underground post mining

1.6

Mid-point IPCC default range (0.6–2.7 t/kt coal)

Note: There is no release factor for lignite from underground mining as all lignite is taken from surface mining.

Uncertainties and time-series consistency

Uncertainties in fugitive emissions are relevant to the entire energy sector (refer Table 3.2.1 and Annex 2).

Source-specific QA/QC and verification

There were no specific Tier 1 quality checks undertaken for this category as it is not a key category. It was checked in the previous submission as part of a selection of non-key categories chosen for quality checking.

Source-specific recalculations

There were no recalculations for the “fugitive emissions from fuels: solid fuels” subcategory.

3.3.2 Fugitive emissions from fuels: oil and natural gas (CRF 1B2)

Description

In 2006, fugitive emissions from the “oil and natural gas” sub-category totalled 1,318.1 Gg CO2-e (74.5 per cent) of emissions from the fugitive emissions category. This is an increase of 386.0 Gg CO2-e (41.4 per cent) from 932.0 Gg CO2-e in 1990.

The main source of emissions from the production and processing of natural gas is the Kapuni gas treatment plant. The plant removes CO2 from a portion of the Kapuni gas (a high CO2 gas when untreated) before it enters the distribution network. Although emissions from the source are not technically due to flaring, they are included under this category because of data confidentiality concerns. The large increase in CO2 emissions for this source between 2003 and 2004 (from 388 to 620 Gg CO2-e) and 2004 to 2005 (620 to 661 Gg CO2-e) is related to a drop in methanol production. Carbon previously sequestered during this process is now being released as fugitive emissions from venting at the Kapuni gas treatment plant.

Carbon dioxide is also produced when natural gas is flared at the wellheads of other fields. The combustion efficiency of flaring is 95–99 per cent (Ministry of Economic Development, 2007a), leaving some fugitive emissions as a result of incomplete combustion.

Fugitive emissions also occur in transmission and distribution of the natural gas although they are relatively minor in comparison with those from venting and flaring.

This sector also includes emissions from geothermal operations. Some of the energy from geothermal fields is transformed into electricity and the emissions are reported under the “fugitive emissions from fuels” category. Emissions from geothermal electricity generation are reported in the fugitive emissions category because they are not the result of fuel combustion, unlike the emissions reported under the “energy industries” category. Sites with naturally occurring emissions where there is no use of geothermal steam for energy production are excluded from the inventory.

Methodological issues

Venting and flaring from oil and gas production

Data on the amount of CO2 released through flaring is either supplied directly by the gas field operators or calculated from the supplied energy data using emission factors from Baines (1993). Vector Limited supplies estimates of CO2 released during the processing of the natural gas.

Gas transmission and distribution

Gas leakage occurs almost exclusively from low-pressure “distribution” pipelines rather than from high-pressure “transmission” pipelines. Estimates of annual leakage in 2006 from transmission pipelines, provided by Vector Limited, are approximately 20 tonnes of CO2 and 150 tonnes of CH4 (Ministry of Economic Development, 2007a). In consultation with the Gas Association of New Zealand, the Ministry of Economic Development estimates that 3.5 per cent of the gas entering the distribution system is unaccounted for and that half of this (1.75 per cent) is lost through leakage. The other half is unaccounted for due to metering errors and theft. The split between fugitive CO2 and CH4 emissions is based on gas composition data.

Oil transport, refining and storage

Fugitive emissions from the “oil-transport” and “oil-refining/storage” subcategories are calculated using an IPCC Tier 1 approach. For “oil-transport”, the fuel activity data are the total New Zealand production of crude oil reported in the Energy Data File (Ministry of Economic Development, 2007b), and the CH4 emission factor is the mid-point of the IPCC default value range (0.745 t CH4/PJ). Emissions from “oil-refining/storage” are based on oil intake at New Zealand’s single oil refinery. The CH4 emission factor for refining is the same as that for transportation. The emission factor for storage is 0.14 t CH4/PJ (a New Zealand-specific emission factor). The combined emissions factor for “oil-refining/storage” is 0.885 t CH4/PJ, derived by adding the emissions factors for refining and storage together.

Geothermal

Estimates of CO2 and CH4 for the “geothermal” subcategory are obtained directly from the geothermal field operators. Analyses of the gases emitted from the geothermal fields occur on a routine basis (at least once a year) and are carried out by a single independent laboratory.

No fuel is burnt in the geothermal operations as the process harnesses the energy in tapped geothermal fluid. High pressure steam (26 bar) is used to power the main electricity-producing back pressure turbines. In some plants, the low pressure exhaust steam is then used to drive secondary (binary) turbines. The gases CO2 and CH4 dissolved in the geothermal fluid are released along with steam.

Uncertainties and time-series consistency

The time-series of data from the various geothermal fields varies in completeness. Some fields were not commissioned until after 1990 and hence do not have records back to 1990.

Source-specific QA/QC and verification

No specific QA/QC activities are performed for this category.

Source-specific recalculations

There were also minor recalculations of CO2, and CH4 emissions in the “fugitive emissions from fuels: oil and natural gas” category due to increased precision in data entry into the CRF Reporter.

3.4 Other information

3.4.1 Comparison of sectoral approach with reference approach

The reference approach calculation identifies the apparent consumption of fuels in New Zealand from production, import and export data. This information is included as a check for combustion related emissions (IPCC, 2000). The check is performed for all years from 1990 to 2006.

The majority of the CO2 emission factors for the reference approach are New Zealand specific. The natural gas emission factors used, which change from year to year are estimated based on a production-derived weighted average of emission factors from the Kapuni and Maui gas fields. This approach differs from previous inventories, where the emissions factors were estimated from the sectoral approach analysis by dividing aggregated CO2 emissions (including carbon later stored) by aggregate energy use.

Comparison of the reference approach and sectoral approach in 2006 shows the sectoral total of CO2 emissions is 1.06 per cent more than the reference total. This is mainly related to the differences in energy consumption.

The activity data for the reference approach are obtained from “calculated” energy use figures. These are derived as a residual figure from an energy-balance equation comprising production, imports, exports, stock change and international transport on the supply side (from which energy use for transformation activities is subtracted). The activity data used for the sectoral approach are referred to as “observed” energy-use figures. These are based on surveys and questionnaires administered by Statistics New Zealand on behalf of the Ministry of Economic Development or by the Ministry itself. The differences between “calculated” and “observed” figures are reported as statistical differences in the energy-balance tables contained in the Energy Data File (Ministry of Economic Development, 2007b).

The energy-use and calculated emissions for the major fuel categories are not directly comparable between the reference and sectoral approaches. First, the reference approach counts non-energy sector use of fuels such as gas in ammonia production, coal in steel production and bitumen use, whereas the sectoral approach does not. However, the carbon embodied in fuels used for these purposes is included under stored carbon in the reference approach. Another difference is that combustion of refinery gas is included under gaseous fuels consumption in the sectoral approach but is not in the reference approach. This is because refinery gas is a by-product of the refining process derived from crude oil inputs. Consequently, emissions from the combustion of refinery gas are counted against crude oil in the reference approach.

Figure 3.4.1 Percentage difference between the reference and sectoral approach for New Zealand’s inventory

Year

Difference between New Zealand’s reference and sectoral approach (%)

1990

-4.6

1991

-2.2

1992

-6.2

1993

-5.2

1994

-8.2

1995

-2.1

1996

2.8

1997

3.1

1998

1.6

1999

5.4

2000

2.0

2001

2.7

2002

0.7

2003

-0.8

2004

0.9

2005

-1.0

2006

-1.1

3.4.2 International bunker fuels

The data on fuel use by international transportation come from the Energy Data File (Ministry of Economic Development, 2007b). This uses information from oil company survey returns provided to the Ministry for Economic Development. Data on fuel use by domestic transport are sourced from the “Deliveries of Petroleum Fuels by Industry” survey undertaken by Statistics New Zealand.

3.4.3 Feedstock and non-energy use of fuels

The fuels supplied to industrial companies are used both as fuel and as feedstock. Emissions are calculated using the total fuel supplied to each company (this includes fuel used as feedstock) and by estimating the difference between the carbon content of the fuels used and the carbon sequestered in the final output (this is based on industry production and chemical composition of the products). This difference is assumed to be the amount of carbon emitted as CO2.

3.4.4 CO2 capture from flue gases and subsequent CO2 storage

There is no CO2 capture from flue gases and subsequent CO2 storage occurring in New Zealand.

3.4.5 Country-specific issues

Energy sector reporting shows very few areas of divergence from the IPCC guidelines and good practice (IPCC 1996; 2000). The differences that exist are listed below:

  • A detailed subdivision of the “manufacturing and construction” category as set out in the IPCC guidelines is currently not available due to historical needs and practices of energy statistics collection in New Zealand.

  • Some gas usage data from large industrial consumers in New Zealand and some emission factors for gas have been withheld for confidentiality reasons.

  • Some of the coal production activity data in the reference approach is used in steel production. The CO2 emissions from this coal are accounted for under the “industrial processes” sector and have been netted out of the energy reference approach using the “Estimating the carbon stored in products” table.

  • Excel workbooks containing the activity data for the sectoral approach are available for download with this report from the Ministry for the Environment’s website. The sectoral activity data excludes energy sources containing carbon that is later stored in manufactured products, specifically methanol. Therefore no subsequent subtraction of emissions is needed to account for this carbon sequestration.

  • An additional worksheet is included in the excel workbooks to cover fugitive CO2 and CH4 emissions from geothermal electricity and heat generation plants.

3.4.6 Ozone precursors and SO2 from oil refining

New Zealand’s only oil refinery does not have a catalytic cracker. The emission factors used are the IPCC default values. The amounts of sulphur recovered at the refinery are provided by the New Zealand Refining Company. All storage tanks at the refinery are equipped with floating roofs and all but two have primary seals installed.

3.4.7 Energy balance

The New Zealand Energy Data File is an annual publication from the Ministry of Economic Development. It covers energy statistics including supply and demand by fuel types, energy balance tables, pricing information and international comparisons. An electronic copy of this report is available online at www.med.govt.nz/energy/info.

A table providing an overview of the 2006 energy supply and demand balance for New Zealand is included in Annex 2 of this report.