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Chapter 3: Energy

3.1 Sector overview

The energy sector produced 33,481.7 Gg CO2 equivalent (CO2-e) in 2005, representing 43.4 per cent of New Zealand’s total greenhouse gas emissions. Emissions from the energy sector are now 42.0 per cent above the 1990 value of 23,577.5 CO2-e (Figure 3.1.1). The sources contributing most to this increase since 1990 are emissions from “public electricity and heat production” (an increase of 134.5 per cent) and “road transportation” (an increase of 64.7 per cent). Emissions from the “manufacture of solid fuels and other energy industries” subcategory have decreased by 1526.8 Gg CO2-e (–86.0 per cent) from 1990. This is due to the cessation of synthetic petrol production in 1997.

Figure 3.1.1 Energy sector emissions 1990–2005

 

Year

Gg CO2 equivalent

1990

23,577.52

1991

23,843.69

1992

25,604.91

1993

24,875.92

1994

25,132.59

1995

25,027.40

1996

26,090.90

1997

28,445.12

1998

27,050.80

1999

28,393.05

2000

28,914.17

2001

30,859.68

2002

30,867.70

2003

32,428.46

2004

31,703.87

2005

33,481.65

3.2 Fuel combustion (CRF 1A)

3.2.0.1 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. Details on the activity data and emission factors are included in Annex 2. Calculation worksheets used for the 2005 inventory are included in Annex 8. Information about methodologies, emission factors, uncertainty and quality assurance relevant to each of the subcategories are discussed below.

Figure 3.2.1 Emissions from the energy sector: fuel combustion category in 2005 (all figures Gg CO2-equivalent)

 

Category

Gg CO2 equivalent

Percent of total

Energy Industries

9,288.5

29.2

Manufacturing Industries and Construction

4,919.5

15.4

Transport

14,207.5

44.6

Other Sectors

3,437.0

10.8

3.2.0.2 Methodological issues

Energy sector emissions for New Zealand’s inventory are compiled from the Ministry of Economic Developments energy database along with relevant emission factors (Annex 2). Generally, 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 unavailable due to confidentiality reasons and instances where natural gas was used as a feedstock.

The “fuel combustion” category is separated into two main divisions – stationary combustion and mobile combustion. Carbon dioxide emissions from the stationary combustion of gas, solid fuels, and liquid fuels are identified as key categories for New Zealand in the 2005 inventory. The relevant good practice decision tree (figure 2.1 in IPCC, 2000) identifies that to meet good practice, emissions should be estimated using data from sectors correcting for stored carbon and oxidation (a Tier 1 sectoral approach). New Zealand has data on fuel combustion detailed by sector but not by individual plants. The methodologies used for the energy sector are consistent with the Tier 1 sectoral approach. Good practice for methodological choice in the “mobile combustion” category is discussed in section 3.2.3.

Emission factors

New Zealand emission factors are based on Gross Calorific Value (GCV). Energy use in New Zealand is conventionally reported in gross terms with some minor exceptions (refer to Annex 2 for further details). New Zealand commissioned a review of all emission factors used in the energy sector in 2003 (Hale and Twomey Ltd, 2003). In accordance with good practice, New Zealand reverted to the IPCC default emission factors where country-specific values could not be supported (Annex 2). The new emission factors recommended by the review and agreed by a review panel were first used in the 2002 inventory, and have been used in all subsequent inventories. The exception is the use of IPCC default emission factors for CH4 emissions in “road transport” which are being used for the first time in the 2005 inventory.

before the 2002 inventory, 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 Ltd. (2003) review the CO2 emission factors are replaced with the individual liquid fuels emission factors derived from the New Zealand Refining Company data on carbon content and calorific values (Annex 2). When the fuel specifications of key liquid fuels are modified over time these will be noted and the emission factors altered according to the updated carbon content and the calorific values of the modified fuels.

3.2.0.3 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 (IPCC, 2000). 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 and the IPCC Guidelines (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 (MED, 2006a).

Table 3.2.1 General uncertainty ranges for emission estimates from fuel combustion (MED, 2006a)

Gas Uncertainty

CO2

± 5%

CH4

± 50%

N2O

± 50%

NOx

± 33%

CO

± 50%

NMVOC

± 50%

3.2.1 Fuel combustion: Energy industries (CRF 1A1)

3.2.1.1 Description

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

Emissions in the “energy industries” category totalled 9,288.5 Gg CO2-e in 2005 and have increased 3,245.5 Gg CO2-e (53.7 per cent) since 1990. The emissions profile in 2005 is dominated by emissions from “public electricity and heat production” which contributed 88.2 per cent of the CO2-e emissions from the “energy industries” category.

New Zealand’s electricity generation is dominated by hydro-electric generation. For the 2005 calendar year, hydro generation provided 56% of New Zealand’s electricity generation. A further 10% came from other renewable sources (such as geothermal, wind and biomass) and waste heat sources. The remaining 34% was provided by fossil fuel thermal generation plants using coal and gas (MED 2006a).

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 and in 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 1974 to 2005, clearly illustrates that on an annual basis when the level of hydro-electric generation decreases, the level of fossil-fuel based thermal generation (gas, coal and oil) increases. Since 1998 there has been added thermal capacity of approximately 700 MW from new gas combined cycle plants, which is mainly responsible for the rise above 10,000 GWh.

Figure 3.2.2 Hydro-electric and thermal generation 1974–2005

 

Year

Electricity generated - hydro (GWh)

Electricity generated - thermal (GWh)

1974

15,037

3,454

1975

16,497

1,889

1976

15,344

4,183

1977

14,573

5,599

1978

15,503

4,705

1979

18,259

2,385

1980

19,171

1,909

1981

19,483

2,195

1982

18,121

4,806

1983

19,554

4,932

1984

20,173

5,283

1985

19,511

6,452

1986

21,877

4,880

1987

21,709

5,543

1988

22,733

5,754

1989

22,333

5,949

1990

22,953

5,959

1991

22,666

7,262

1992

20,882

8,380

1993

23,258

7,292

1994

25,579

5,786

1995

27,259

5,426

1996

25,713

7,303

1997

23,594

9,675

1998

24,165

9,609

1999

23,221

10,708

2000

24,387

9,881

2001

22,391

12,161

2002

24,970

10,871

2003

23,455

12,705

2004

26,932

11,062

2005

23,238

14,286

3.2.1.2 Methodological issues

Public electricity and heat production

The CO2 emissions from fossil-fuel based thermal electricity generation are derived from consumption figures provided by all the thermal electricity generators that use coal, oil and gas. The 155 MW oil-fired Whirinaki reserve generation plant was commissioned in June 2004. This additional generation helps to provide increased certainty of the electricity supply.

The data for liquid fuel use are from the “Delivery of Petroleum Fuels by Industry Survey” compiled by Statistics New Zealand (refer to Annex 2).

A large percentage of New Zealand’s electricity is supplied by co-generation (otherwise 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. In accordance with 1996 IPCC guidelines, where electricity and heat production is the primary activity of the enterprise operating the co-generation plant, emissions should be included in the “manufacturing industries” category. Where electricity generation is the primary activity the emissions should be included in the “electricity and heat production” category. According to this classification, there is only one plant determined to produce 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

Energy use data for the “petroleum refining” subcategory are supplied to the Ministry for Economic Development by the New Zealand Refining Company Limited. For the refinery, a weighted-average CO2 emissions factor is estimated based on the fuel used. The main liquid fuel used is fuel oil and the main gas is refinery gas. As there are no data available concerning non-CO2 emissions from the refinery, IPCC default (IPCC, 1996) emission factors for industrial boilers are used.

Manufacturing of solid fuels and other energy industries

The low implied emission factors (IEFs) for “manufacturing of solid fuels and other energy industries” subcategory for gaseous fuels between 1990 and 1996 are caused by carbon sequestration in the process of producing synthetic petrol. Production of synthetic petrol stopped in New Zealand in 1997.

New Zealand has a gas field (Kapuni) with particularly high CO2 content (refer to Annex 2). Most of the gas from this field is subsequently treated and the excess CO2 is removed. The carbon content, and therefore the CO2 emission factor, for this gas is lower for end users than when it is used by the gas field itself. Therefore the CO2 implied emission factor for “manufacturing of solid fuels and other energy industries” subcategory is significantly higher than the CO2 implied emission factor for typical gaseous fuels for other energy subcategories. The sequestration of carbon in synthetic petrol made up for this difference before 1997.

Emission factors

Carbon dioxide and non-CO2 emission factors for fossil fuels are discussed in detail in Annex 2. Wood is also used for energy production. For wood consumption, the CO2 emissions factor is 104.2 kt CO2/PJ. This is calculated from the IPCC default emission factors, assuming the net calorific value (NCV) is five per cent less than the gross calorific value (GCV). In line with good practice (IPCC, 2000) CO2 emissions from wood used for energy production are not included in the greenhouse gas emissions total.

The worksheets used for calculating emissions from the “energy industries” category are shown in Annex 8.

3.2.1.3 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).

3.2.1.4 Source-specific QA/QC and verification

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

3.2.1.5 Source-specific recalculations

The CO2 emission factors for “stationary gas combustion” have been updated by the Ministry of Economic Development. In previous submissions the proportions of Maui and treated gas from the Kapuni gas field have been assumed to be 50 per cent each. The Energy Data File (MED, 2006b) reports annual production of the local gas fields for the period 1970 to 2005. For the 1990 to 2005 inventory, annual production of gas fields has been used to calculate weighted average annual CO2 emission factors. This has resulted in recalculations of CO2 emissions from gaseous fuels for 1990 to 2005.

There were also minor recalculations of CO2, CH4 and N2O emissions in the “energy industries” category due to increased precision in data entry into the CRF Reporter.

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

3.2.2.1 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.

Emissions in the “manufacturing industries and construction” category totalled 4,919.46 Gg CO2-e in 2005. Emissions are 6.4 per cent above 1990 values. Between 2005 and 2004, emissions from this category decreased by 7.4 per cent. The main reason for this decrease is the reduction in methanol production following the shutdown of one of the methanol plants in November 2004.

The largest single source in 2005 is the “other” subcategory, which is a combination of manufacturing, food process, building and construction and other industrial activities.

3.2.2.2 Methodological issues

The energy data for the “other” subcategory is sourced from the “Delivery of Petroleum Fuels by Industry Survey” conducted by Statistics New Zealand (refer Annex 2.1). Methanol production produces the bulk of the emissions in the “chemical” subcategory. The energy data for methanol production is supplied directly to the Ministry for Economic Development 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 (refer Box 3.1). The data for gas use in “iron and steel” is also supplied direct to the Ministry for Economic Development. The data for other industry uses of gas are from the energy supply and demand balance tables in the Energy Data File (MED, 2006b).

Box 3.1 Calculation of CO2 emissions from methanol production (MED, 2006a)

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 (2005) (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 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.

Liquid fuel data are extracted from the “Deliveries of Petroleum Fuels by Industry Survey” conducted by Statistics New Zealand. Coal consumption data are determined from the “New Zealand Coal Sales Survey” also conducted by Statistics New Zealand (refer Annex 2). A considerable amount of coal is used in the production of steel, however virtually all the coal is used in a direct reduction process to remove oxygen from iron sand and not as a fuel. Emissions are therefore included in the industrial processes sector.

In the CRF tables, disaggregated activity data according to fuel types and corresponding CO2 emissions have been provided for the “iron and steel” and “chemicals” subcategories only. This is because detailed energy-use statistics by industries (according to complete Australia New Zealand Standard Industrial Classification (ANZSIC) codes, similar to the International Standard Industrial Classification of All Economic Activities (ISIC) codes) are collected and reported in New Zealand for electricity consumption only. For the other energy/fuel types such as gas, liquid fuel and coal, data are collected and reported at a much more aggregated level. This is a reflection of the historical needs and practices of energy statistics collection in New Zealand. Gas use statistics by industries according to ANZSIC codes have been collected since 2001 and will be incorporated when they have been adequately verified. The subcategory “chemicals” relates to gas used by the methanol production company, Methanex New Zealand Limited.

The worksheets used for calculating emissions from the “manufacturing industries and construction” category are shown in the Excel spreadsheets in Annex 8.

3.2.2.3 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).

3.2.2.4 Source-specific QA/QC and verification

In preparation of this inventory, the data for CO2 emissions from stationary combustion (manufacturing industries and construction) underwent Tier 1 quality checks.

3.2.2.5 Source-specific recalculations

The CO2 emission factors for “stationary gas combustion” have been updated by the Ministry of Economic Development (refer to section 3.2.1.5). This has resulted in recalculations of CO2 emissions from gaseous fuels for 1990 to 2005.

There were also minor recalculations of CO2 and CH4 emissions in the “manufacturing industries and construction” category due to increased precision in data entry into the CRF Reporter.

3.2.3 Fuel combustion: transport (CRF 1A3)

3.2.3.1 Description

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

Emissions from the “transport” category totalled 14,207.5 Gg CO2-e in 2005. Emissions have increased 5,429.4 Gg CO2-e (61.9 per cent) from the 8,778.2 Gg CO2-e emitted in 1990. The emissions profile in 2005 is dominated by emissions from the “road transportation” subcategory which accounted for 88.9 per cent of total transport emissions. 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).

3.2.3.2 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.

Activity data on the consumption of fuel by the transport sector are extracted from the “Deliveries 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 (MED, 2006b).

Road transport

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

Before this inventory submission, New Zealand used country-specific emission factors for CH4 emissions from “road transportation”. Following the initial review in February 2007, New Zealand agreed to revert to the IPCC default CH4 emission factor for gasoline and diesel oil until more work is done to substantiate the country-specific values. 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. Before the 2002 inventory, 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 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.

The worksheets used for calculating emissions from the “transport” category are shown in Annex 8.

3.2.3.3 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).

3.2.3.4 Source-specific QA/QC and verification

Carbon dioxide emissions from “road transportation” (level and trend assessment) and “civil aviation” (level assessment) are identified as key categories for New Zealand in the 2005 inventory. In preparation of this inventory, the data for these emissions underwent Tier 1 quality checks.

3.2.3.5 Source-specific recalculations

The CH4 emission factors for gasoline and diesel oil from “road transportation” have been revised. The country-specific emission factors used in previous inventory reports could not be substantiated during the Kyoto Protocol Initial Review (19 to 24 February 2007). New Zealand has adopted the IPCC default emission factors for the 1990 to2005 time-series and recalculated the data accordingly.

There were also minor recalculations of CO2 and CH4 emissions in the “transport” category due to increased precision in data entry into the CRF Reporter.

3.2.4 Fuel combustion: other sectors (CRF 1A4)

3.2.4.1 Description

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

Emissions from fuel combustion of the “other sectors” category totalled 3,437.0 Gg CO2-e in 2005 and are 507.1 Gg CO2-e (17.3 per cent) above the 1990 value of 2,929.9 Gg CO2-e. The emissions contribution in 2005 is divided between the “commercial and institutional” subcategory (42.9 per cent) and the “agriculture, forestry and fisheries” subcategory (38.9 per cent), with the “residential” subcategory comprising the remaining 18.2 per cent of emissions.

3.2.4.2 Methodological issues

The energy activity data are obtained from the same sources as other energy categories (Annex 2). Accurately partitioning energy use between the categories is difficult. Emissions from the “agriculture, forestry and fisheries” subcategory may be underestimated (MED, 2006a). This is because there are no separate estimates of fuel use by this group. The exception is liquid fuels and coal used in agriculture. However, these emissions have been included in other sectors such as industry and transport and are therefore included in New Zealand’s total emissions.

The worksheets used for calculating emissions from the “other sectors” category are shown in Annex 8.

3.2.4.3 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).

3.2.4.4 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.

3.2.4.5 Source-specific recalculations

The CO2 emission factors for “stationary gas combustion” have been updated by the Ministry of Economic Development (refer to section 3.2.1.5). This has resulted in recalculations of CO2 emissions from gaseous fuels for 1990 to 2005.

There were also minor recalculations of CO2 and CH4 emissions in the “other sectors” category due to increased precision in data entry into the CRF Reporter.

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.

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

3.3.1.1 Description

Fugitive emissions from the “solid fuels” category produced 306.0 Gg CO2-e in 2005. This is an increase of 33.9 Gg CO2-e (12.4 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. Surface mines are assumed to emit relatively little CH4 compared with underground mines. In 2005, 75 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.

3.3.1.2 Methodological issues

Good practice in methodology choice for estimating fugitive emissions from coal mining is to focus on the sub-source category that dominates the emissions. New Zealand therefore focuses on estimating emissions from underground mining. The current New Zealand methodology is a Tier 1 approach using the top end of the IPCC default range in emission factors (table 3.3.1). New Zealand continues to use a New Zealand-specific emission factor for underground mining of sub-bituminous coal (Beamish and Vance, 1992). The calculation worksheets used for fugitive emissions are shown in Annex 8.

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.

3.3.1.3 Uncertainties and time-series consistency

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

3.3.1.4 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.

3.3.1.5 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)

3.3.2.1 Description

Fugitive emissions from the “oil and natural gas” category comprised 1,323.1 Gg CO2-e in 2005. This is an increase of 391.1 Gg CO2-e (35.7 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 confidentiality concerns. The large increase in CO2 emissions for this source between 2003 and 2004 (from 367 to 601 Gg CO2-e) and 2004 to 2005 (601 to 647 Gg CO2-e) is related to a drop in methanol production. As discussed earlier, methanol production has dropped significantly since 2002. 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 (MED, 2006a), 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. This is 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.

3.3.2.2 Methodological issues

The methodologies for natural gas are based on data from field operators or calculated from supplied energy data and country-specific emission factors. The major categories are discussed further in this section. The calculations used for fugitive emissions are shown in the Excel spreadsheets in Annex 8.

Venting and flaring from oil and gas production

Data on the amount of CO2 released through flaring is either supplied directly by field operators or calculated from the supplied energy data using emission factors from Baines (1993). Vector Limited supplies estimates of CO2 released during processing. These values are aggregated to derive annual emissions.

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 2005 from transmission pipelines, provided by Vector Limited, are less than 10 tonnes of CO2 and approximately 130 tonnes of CH4 (MED, 2006a). Therefore, the gas quantity shown in the Excel spreadsheets (Annex 8) excludes gas used in electricity generation and by others that take their gas directly from the transmission network. In consultation with the Gas Association of New Zealand, the Ministry for the Environment estimates that around 3.5 per cent of the gas entering the distribution system is unaccounted for and that around half of this (1.75 per cent) is actually lost through leakage, whereas 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 (MED, 2006b), 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, whereas 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.

3.3.2.3 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.

3.3.2.4 Source-specific QA/QC and verification

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

3.3.2.5 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 2005.

The majority of the CO2 emission factors for the reference approach are New Zealand specific (Annex 2: table A2.1). The natural gas emission factors used, which change from year to year are estimated based on a production-derived weighted average of emission factors for each of New Zealand’s 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 2005 shows the sectoral total of CO2 emissions is 0.38 per cent less than the reference total (table 3.4.1). 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 for the Environment or by the Ministry for the Environment itself. The differences between “calculated” and “observed” figures are reported as statistical differences in the energy-balance tables contained in the Energy Data File (MED, 2006b).

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.

Table 3.4.1 percentage difference between the reference and sectoral approach for New Zealand’s inventory and the International Energy Agency (IEA) reference and sectoral comparison

Year Difference between New Zealand’s reference and sectoral approach (%) Difference between the IEA reference and sectoral approach (%) Difference between CRF 2004 and IEA sectoral approaches (%)

1990

–4.98

4.80

–1.20

1991

–2.81

   

1992

–6.39

   

1993

–5.01

   

1994

–7.40

   

1995

–3.40

8.45

–8.08

1996

1.96

   

1997

2.46

   

1998

–0.21

7.09

–11.56

1999

2.69

1.05

–12.61

2000

–0.03

3.44

–13.23

2001

0.68

2.94

–12.64

2002

–0.90

–2.53

–14.26

2003

–0.40

1.30

–6.40

2004

1.46

   

2005

0.38

   

3.4.2 International bunker fuels

The data on fuel use by international transportation come from the Energy Data File (MED, 2006b). This uses information from oil company 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. An example of the calculation for methanol is shown in Box 3.1 (section 3.2.2.2). A considerable amount of coal is used in the production of steel, however virtually all of the coal is used in a direct reduction process to remove oxygen from ironsand and not as a fuel. The emissions from coal use in steel production are reported in the “industrial processes” sector.

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 Good Practice Guidance methodologies (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 reporting tables 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 (Annex 8).

  • The activity data shown in the CO2 worksheets (Annex 8) under the sectoral approach exclude energy sources containing carbon that is later stored in manufactured products (rather than emitted during combustion), specifically methanol. This means that there is no subsequent downward adjustment required in carbon emissions. This is necessary to preserve the confidentiality of the gas usage data mentioned above.

  • An additional worksheet is included to cover fugitive emissions of CO2 and CH4 from geothermal fields where electricity or heat generation plants are in operation.

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 2005 energy supply and demand balance for New Zealand is included in Annex 2 of this report.