In its latest Energy Outlook, published last Friday, the ministry says oil and natural gas will continue to contribute more than 50% of primary energy supply to 2030 in all three scenarios it portrays for the New Zealand economy.

Last year, crude oil contributed about 52% of the country’s primary energy, gas about 8%, electricity about 25%, coal 7% and renewables 8%.

In 2005, the ageing Maui field last year still contributed about 65% of all gas used, which was almost 150 petajoules, and about half of that total was used in gas-fired power stations to produce electricity. Methanol and ammonia urea consumed about 30PJ, said the report.

The report’s forecast base case – which assumes GDP growth of 2-2.5% per annum and an average world oil price of about $US60 per barrel – oil remains the largest single energy source and its supply grows by an estimated 35%, primarily because of increasing usage in the transport and aviation sectors.

“The bulk of this oil will be imported as it is now,” the ministry said.

Under the base case, gas supply also increases by about 35% and even with new gas discoveries averaging 60PJ per year, there will still be a gas supply shortfall by or before 2025 that will have to be met by imported liquefied natural gas or compressed natural gas.

Total capacity of gas-fired power plants will increase by about 65%. Domestic gas prices will rise from their present $NZ5.50-6.50 per gigajoule to about $8/GJ by 2015 and $10/GJ by 2020, reflecting the tight domestic market.

In the ministry’s high-growth scenario, with GDP exceeding 2.5% per annum, oil, gas and coal would still be the major sources of energy supply, although renewables would grow.

A low-growth scenario assumes delays to any LNG/CNG importation until 2024-25 and delays in the construction of new gas-fired power stations. But oil and gas would still be crucial energy supplies.

Crude oil currently provides about 99% of New Zealand’s transport energy through its high energy density, convenient liquid form and historically low relative cost.

“It’s hard to beat as a transport fuel,” the ministry said.

Given the uncertainties surrounding future gas supply, neither liquefied petroleum gas nor CNG is likely to be adopted on a wide scale as transport fuels.

Should there be no new major gas discoveries, it was likely that lignite would be used to provide an alternative liquid fuel, according to the ministry.

The ministry also assumes Maui field production will continue until about 2016, and McKee-Mangahewa until 2021. But the Tariki, Ahuroa, Waihapa, Ngaere (Tawn) fields are expected to cease production around 2011.