He told the Hampden Energy Forum in Otago last night that peak oil and energy security issues were concerns.

But “the more serious and immediate problem” was climate change.

Parker said as Energy Minister, he was responsible for ensuring New Zealand had adequate supplies of reliable energy at affordable prices, but as Minister Responsible for Climate Issues, he needed to minimise the country’s greenhouse gas emissions.

“That’s where biofuels come in,” he said.

“Although imported biofuels could be used, there is enough domestic feedstock from within the agricultural sector to produce the amount of biofuels needed to meet the minimum obligation.”

New Zealand had sufficient tallow, a by-product of the meat industry, to produce about 5% of the country’s diesel needs and it currently produces sufficient bioethanol from whey, a by-product of the dairy industry, to meet around 0.3% of its petrol needs.

Diversifying into these renewable transport fuels would reduce New Zealand’s dependence on imported oil and improve air quality, he claimed.

In September, the Government said it would require oil companies to sell a minimum percentage of biofuels in transport fuels, beginning with 0.25% of sales in 2008, rising to 2.25% by 2012.

“We can expect biofuels to make up a greater proportion of our transport fuel than these mandated minimum levels,” Parker said.

Higher prices and other technologies would also cause liquid fuels to be extracted from fossil fuel sources such as lignite (brown coal), of which New Zealand has enormous reserves, according to Parker.

The South Island’s brown coal reserves contain some 100,000 petajoules, or about 30 times the original energy content of the offshore Taranaki Maui gas field, he said.

In late September, Associate Energy Minister Harry Duynhoven told the 2006 Gas Summit conference in Wellington that the South Island lignite reserves offered hope for the manufacture of liquid fuels, despite likely development costs being several billion dollars.

“I think lignite’s time is coming and rapidly,” Duynhoven told the conference.

The Government’s Solid Energy and privately owned L&M Group are both investigating the feasibility of various lignite-to-liquid fuels projects. L&M Group is more advanced with its studies, hoping to have completed these by late this year or early 2007.