Lignite to Diesel - NZ's Shelved Project

New Zealand should start making lignite to diesel and urea (fertilizer). The feasibility studies have been done, and the resource exists in limitless quantities. 

The following report is available on a NZ government department website. Make it happen NZ.

https://www.mbie.govt.nz/assets/8fb7b2c240/liquid-fuels-from-lignite.pdf

Internationally, the demand for crude oil is increasing, at a time when many experts are predicting that the peak in oil production will occur sometime over the next 20 years. This combined with concerns about the security of oil supply, particularly with the current political instability in several oil producing regions, means that the price of oil has the potential to rise to unprecedented levels over the next two decades. New Zealand depends on imported oil for 99% [MED 2006] of its transportation fuels. If the cost of crude oil rises as predicted and the possibility of serious supply interruptions becomes more pressing, then alternatives need to be sought now to avoid serious transportation fuel shortages in the future. 

Who to Blame?

I always say that given long enough to think about it, the US, all of Europe and Israel will come to the conclusion that it is China's fault. Convince me I'm wrong.

WWIII Now Probable

It looks like WWIII is about to start. Military strikes on Iran's oil and gas facilities may force China and India to join the conflict on the side of Iran. They need to do this, especially India, as they're already experiencing shortages and India, in particular, has a large population that needs gas to cook their food with.

Russia and North Korea could then follow. South Korea are now in dire peril. North Korean artillery can easily bombard Seoul, the capital of South Korea. I don't see how South Korea could hold out.

With China and India involved, they'll be able to get their supplies out of the Gulf, and they'd take effective control of all oil and gas coming out of the Gulf. 

Targeting oil and gas complexes is a massive escalation and an act of utter stupidity.

Australia's Fuel Crisis

Australia are looking at rationing food as their supply of diesel starts to dry up.

What Now for Iran?

It appears Iran is settling in for a long war of attrition. Their drone and missile strikes have fallen away, but they're still continuing, albeit at a lower tempo. What I think they're now doing is setting out to cause enough disruption to effectively destroy the Gulf states, and humble Israel.

The Strait of Hormuz appears to be operating like a toll road. Iran are allowing through only those they approve of. Then, they have overland routes from China and Russia for resupplying its arms industry.

No uprising occurred amongst the people of Iran. This looks to have been a minority protesting, such as students, with no widespread support. That's disappointing and there appears no viable strategy for going in on the ground. 

Another angle relates to Iraq. Various militias aligned with Iran may now rise up. Thus, the US and Israel may have made a rod for their own backs.

All said, oil prices are likely to stay high for the foreseeable future.

Netanyahu's Disappearing Ring

OK, something is definitely up with Netanyahu:

Where is Netanyahu?

I've been ignoring the whole Netanyahu is dead or injured thing, but this video got my attention. I'm prepared to now accept that something is off when it comes to the leader of Israel. Proof of life is required.

Tax-Free Downunder

Here's an idea, New Zealand should move to mop up all the money that will be fleeing the United Arab Emirates right now. All those seeking the tax-free life, don't like receiving messages on their phone telling them their friendly neighbourhood missile will be arriving shortly.

A few years ago I suggested NZ set up a tax-free zone in the East Cape. Let's do this now. For people from overseas, we could take part of the coast and designate it tax-free so long as they stay resident for 120+ days of the year (or something). 

https://kenhorlor.blogspot.com/2017/07/make-east-cape-monaco.html

https://kenhorlor.blogspot.com/2018/06/making-east-cape-monaco.html

Australia on Edge of Cliff

 Australia is in a bad position at the onset of the oil crisis.

Ground Troops to the Middle East?

Oh no, going in on the ground in Iran? Iran is mountainous and contains 90 million people. This won't end well. And Afghanistan will be itching to get involved.

Make Your Own Diesel

This video shows how an American bloke has his diesel engine running on any oil, check it out. I'm placing this here to motivate my fellow Kiwis to get in touch with their elected representatives, insisting they stop messing about, and treat the current fuel situation as the real crisis that it is.

Here's how the government can do this:

1. Get the mechanical and chemical engineering departments of New Zealand universities together to sort out what works best, quickest, ignoring environmental, health and safety, just how to get enough diesel to power emergency response, trains, ferries, farms, hospitals and key transport and agriculture;
2. Mobilise the NZ Army engineers;
3. Using existing emergency legislation, grab all those elements needed to feed NZ's own set-up; 
4. Cease exporting oil in the immediate sense.
5. As a side project look at all wood waste and how much of it can be quickly turned to ethanol;
6. Treat LPG as like 4 and 5 above;
7. Then roll this out; what is created is a system of liquid fuels which can all run engines of differing types whether it be fuel oil, diesel, petrol etc.,
8. You've got 60 days.

Oil Crisis

Iran has clearly prepared for this and are setting about blocking the Strait of Hormuz. They're being successful at it, and are now attacking tankers and oil transfer facilities in the region.

For Australia and New Zealand, this is becoming an existential crisis. Already, farms in remote rural locations in Australia are finding they cannot obtain diesel. Hardware stores have sold out of jerry cans as people stock up. 

New Zealand is steadfastly blundering onward, their heads firmly in the sand. The country's leaders are woefully incompetent, it's like leaving a bunch of ten year-olds in charge. Here are some things to think about, diesel is essential to the nation, thus:

• Fuel oil is required for ships and all of NZ's fuel oil comes out of the Persian Gulf. If fuel oil runs out, there will be no Cook Strait ferries running, and no coastal shipping either. Forget imports and exports, as ships will not visit if they cannot fill up when they arrive.
• People will die as hospital back-up generators will have no fuel to run.
• Trains will not run, apart from electric commuter rail (the main trunk line in the North Island is partly electric).
• Farms will stop working.
• Mines will stop working and so no coal as a substitute.
• No trucks delivering goods to supermarkets.
• No factories processing food as parts of all operations require something diesel powered - we all start to starve in a country containing enough food to feed 50 million people. Crops will rot in the field.
• Natural disasters, how are we going to clear roads blocked by landslips?

Can you ride a horse? I can, but I guess they'll be in strong demand, so will be hard to find.

What is worse is that NZ does have oil, gas and coal, but it threw its refining capacity away - literally. EV's are not the answer either as the Gulf is the source of 90%+ of the industrial supplies of sulphur required to produce batteries - oh dear - rainbow hugs and moonbeams won't do it.

Instead of talking about it, get on with powering up some ability to produce diesel, bio-diesel, anything. 

Coal to the Rescue

As a result of the disruption to LNG shipments from the Persian Gulf, Asia, in particular, is moving to energy security through coal.

Coal is the giant on the block, and always has been.

https://tradingeconomics.com/commodity/coal/news/531727

Coal prices climbed above $140 per ton, hitting their highest levels since November 2024 as the escalating conflict in the Middle East and resulting disruptions significantly heightened global energy supply risks.

Oil also surged above $100 for the first time since 2022 after major Middle Eastern producers curtailed output as the Strait of Hormuz remains effectively shut.

In addition, the shutdown of Qatar’s massive liquefied natural gas production has boosted demand for fuel switching in the power sector.

Australia and New Zealand Fertiliser and Hormuz

New Zealand and Australia rely on fertiliser coming out of the Persian Gulf through the Strait of Hormuz. If the conflict goes on much longer, their respective economies will be severely impacted.

Australia Joins War

Is this a wise move? China obtains most of its imported crude from Iran, while Australia relies on China to buy its output from its mines. Won't this aggressive act by Australia result in backlash from China?

Message - Don't Panic

Here's a rational explanation as to why the closing of the Strait of Hormuz is NOT an apocalyptic crisis. Although I'd add that some regions will be far more seriously impacted than others. The Far East, South-east Asia and Oceania being top of that list. China has stopped exporting fuels, which further restricts supply to the region.

Fuel Oil Supply Strangled

Something I overlooked is that fuel oil supplies for ships are being affected by the war in the Persian Gulf. The Middle East is a major supplier of the fuel oil required for ships, and Singapore is a major refueling point which imports its fuel oil from the Middle East. Fuel oil prices have therefore surged 30-40%, and supplies will run out toward the end of March.

The cost of goods will rise worldwide as shipping costs adjust upward, and some countries that rely on exports for their income may simply be unable to ship to their customers. Likewise, energy imports will be choked off.

Australia and New Zealand are two countries impacted, and the rest of the Far East as well.

https://oilprice.com/Latest-Energy-News/World-News/HSFO-Prices-Jump-40-as-War-Chokes-Key-Singapore-Bunkering-Hub.html

The price of fuel oil has surged this week as the stalled tanker traffic at the Strait of Hormuz is tightening supplies of the fuel in Asia, the key bunkering hub for fuel oil used in ships. 

The Middle East is a major global supplier of fuel oil, especially of high-sulfur fuel oil (HSFO). But the Iran war has all but halted traffic via the Strait of Hormuz, stranding supplies for Asia and its key bunkering hub of Singapore. 

As a result, prices have soared and are set to continue rising, traders and analysts told Reuters on Friday.  

Strait of Hormuz

Commentators predicting an oil crisis following Iran's closing of the Strait of Hormuz are well wide of the mark. That is because Saudi Aramco has started shipping more oil out of its Red Sea facilities (see link). Furthermore, Egypt is offering its pipeline to move Saudi oil to the Med.

https://www.hellenicshippingnews.com/egypt-offers-sumed-pipeline-to-facilitate-saudi-oil-exports-amid-hormuz-closure/

I've also seen predictions that some of the people in the Gulf states will starve. But anyone looking at a map will see that there is a land corridor to these states, and so food can get in to feed stranded tourists. The same land corridor could be used to evacuate people from Dubai, Doha and the like. Buses are starting to look mighty useful.

However, there are some serious issues regarding the viability of the United Arab Emirates long term. Dubai as an airport hub could be lost. Ethiopia has been promoting Addis Ababa as a useful mid-point stopover, and they've commenced building a new international airport there. 

Dubai's status as a tax haven sanctuary may be over, too. The rich don't like adding bombs to the risk assessment. It'll also be interesting to see how the large sovereign wealth funds based in the Persian Gulf fare now that their economies are toast. This will massively impact the United Kingdom. Interesting times ahead indeed.

Iran appears to have lost its navy and air force, and this war will end when it runs out of ordnance. I give it another three weeks at this rate. Will China and Russia come to their aid? I doubt it, as Russia has its own issues, plus it'll be selling more oil right now. China tends to be all talk; they've never won a war, and if they enter the fray, they too will lose their entire navy.

South Korea, Japan, South-East Asia and Oceania may experience the rapid onset of an energy crisis, and in Australia and New Zealand, there seems to be little urgency. The latter two really do have useless leaders. 

How Much in the Tank?

Australia has less than a month of fuel in reserve. Watch as it implodes as the conflict in the Middle East worsens. I made only one prediction for this year and that was - Australia will collapse in 2026.

Fuel Prices Set to Spike

The utter stupidity of the New Zealand government is now on full display as the price of fuel is set to rise following the outbreak of war in the Middle East.

New Zealand has its own oil, but no ability to refine it. That's because the NZ government allowed its one refinery to close down. 

Get working now you cockwomble NZ government. Get that refinery up and running again, pronto.