Uses for fossil fuels
Our coal, oil and gas resources are significant contributors to the NZ economy. If there is a significant shift away from fossil fuels there will be a risk that this value will be lost. This shift may not just occur because of concerns over GHG emissions, new technologies such as EVs may substitute for traditional motive power, more efficient engines could reduce fuel demand, as could more efficient use of the fleet (e.g. ride sharing). Alternatives to travel may reduce the extent of vehicle use.
The most likely response from the exploration industry will be that future investments in NZ will simply dry up.
The Chemicals sector in particular transforms fossil fuels into other products, and if the carbon in these could be fixed throughout their life cycle we could continue to exploit our fossil fuel resource, rather than write it off. Carbon is a material that has increasing value in a range of structural and functional applications. Hydrogen, the other major constituent of gas and oil, has value including as a fuel.
The fossil fuel industries are global and as these risks emerge they will be looking for alternative opportunities, but research that looks particularly at the New Zealand context will be of value. Illustrated by way of example is a pre-pilot plant developed by HazerGroup in Australia that is targeting low emissions, low cost production of hydrogen and graphite from natural gas and iron ore. New Zealand's iron sands could be the source for the iron, giving a potentially valuable alternative use for our natural gas.
Local medium-term research to demonstrate uses of our fossil fuel resources that reduce adverse emissions will be of value. This could include risk reduction around carbon capture and storage; although the economics of this in fuel production (for example) suggests this won’t be a significant opportunity for 20-30 years. More likely in the short-term will be opportunities to find alternative uses for our hydrocarbons.