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19th November 2018

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Consumers would pay for Napier Port expanson – industry head

A $350 million upgrade of Napier Port is being questioned by the shipping industry, which says the port’s recent growth could be short-lived.

Anna Lorck

Our Port Our Say petition founder Anna Lorck. Photo: www.alphapix.co.nz

But the position is being described by port owner Hawke’s Bay Regional Council chairperson Rex Graham as “nonsense”.

Public consultation has this week started on four options to pay for the port’s expansion, including the council’s preferred option of listing up to 49 percent of the business on the stock market.

Other options on the table were: finding an investment partner; a long-term leaseholder; or keeping 100 percent ownership and making ratepayers foot the bill by hiking rates by 53 percent next year.

But Councillor Paul Bailey believed none of those four were palatable and he was disappointed the public had not been told about a fifth option, he called “Option E”.

This option would see the Port take on more debt to pay for the upgrade and then charge its customers an extra fee to make up the cost, he said.

“The Port tells us that if their current debt was cleared then they would be able to pay for the wharf extension and capital works over the next 10 years from cash-flow and new debt….so Option E intends to isolate the debt on the Port’s balance sheet by guaranteeing it through the regional council’s assets, and users pay that off over a 10-year period.”

Paul Bailey says he tried, but failed, to get this option in the consultation document because he was told the port’s customers would not like it.

“It’s only about $35 per 20 foot container, that’s only the price of a leg of lamb or a carton of apples so it’s quite remarkable they say it’s too expensive,” he said.

Napier Port chief executive Todd Dawson said charging its customers more would “choke our thriving economy”.

“If we relied solely on customers alone to fund the significant infrastructure we need for the future; this would create a significantly detrimental delay while we waited to save enough and reduce our current debt levels to cover the cost of new assets,” Mr Dawson said.

Major shipping companies including Mainfreight, Maersk and Hamburg Sud declined to comment.

Consumers pay

But New Zealand Shipping Federation executive director Annabel Young said consumers would end up paying for any extra fees charged.

And she questioned the need for the Port to expand at all, as most of it was due to Napier taking business from Centreport following the Kaikoura earthquake.

“Centreport thinks it is going to claw back its trade and Napier thinks it’s going to hang on to it….my worry is if they expand and those large ships don’t come then it gets added to the pricing chain and you end up paying for it in your packet of biscuits.”

But regional council chairperson Rex Graham said that was “nonsense”.

“All our commodity prices are at all time highs,” he said.

“I’ve never seen the Hawke’s Bay economy as strong as this in my working life. We are planting a million apple trees a year, forestry doubling over the next five years and squash exports are booming.

“There are more luxury cars going to Havelock North than any other place in New Zealand… and it’s all got to go through that port.”

However, Rex Graham said Paul Bailey’s Option E was a valuable idea and worth considering.

“It is an option that some people want to talk about and that’s what this consultation is all about.”

Meanwhile, after promising a referendum would be held on the port’s future if 5 percent of ratepayers signed a petition calling for one, the regional council said it had no legal obliation to hold one after getting independent legal advice.

A petition Our Port Our Say was launched after the statement was made last week and founder Anna Lorck said the council’s U-turn was “very disappointing”.

She was still hopeful a referendum could be held, despite the council’s opposition to one.

“Nothing’s a lost cause. Back in 1885 the people of Hawke’s Bay petitioned and won the right to a public poll and raised 300,000 pounds and built the port where it is today,” he said.

“It was good enough for our forebearers then, it’s good enough for us now. I’m confident the council will act in good faith if there is an overwhelming number of people calling for a referendum,” Ms Lorck said

Council chief executive James Palmer said his earlier statement that a referendum could be triggered was wrong.

“There are provisions under the Local Electoral Act under which a petition of residents can require the council to hold a referendum on several matters.

“At the time there was some confusion about whether those provisions would apply to this issue.”

However, those provisions only applied to electoral representation matters, such as the creation of Maori seats, he said.

“So the thing we have clarified is there is no compulsion on the council to hold a referendum on this issue in the event we receive a petition. But it could choose to do so if it wished to,” he said.

Submissions close on 15 November.

NZ heading for gas supply gap, warns industry executive

New Zealand is heading into a gas supply gap and will need a new discovery to arrest the production decline it is on now, MPs heard yesterday.

The country has just seven years’ firm supply, and production is forecast to start falling away from 2021, according to Patrick Teagle, a New Zealand-based executive for Austrian oil and gas company OMV. Teagle was talking to Parliament’s environment select committee.

The company, soon to take over operatorship of the Maui and Pohokura gas fields, will work to mitigate the decline in production from those fields as a priority, he said. But that will only slow the decline.

What the country needs is a new discovery, just when the government’s proposed ban on new offshore exploration is “discouraging” the potential partners that OMV and other firms will need if they are to explore offshore, he said.

“It needs to be understood that demand will outstrip supply and we are heading towards a gas supply gap in New Zealand,” Teagle said.

“We have real concerns about our ability to maintain security of supply over the next decade.”

The committee is hearing submissions on legislation the government is pushing through to effect the ban on new offshore exploration it announced in April. The ban, intended to allow a managed transition away from fossil fuels as part of the country’s 2050 targets, also bars onshore exploration outside Taranaki but keeps intact all rights to develop discoveries made in existing permits.

The clash of viewpoints among the 12 submitters was stark. Government MPs didn’t appreciate being told the ban would increase emissions rather than reduce them, that the ban had already halted some investment, and that reduced domestic gas supplies would increase electricity costs for all consumers and sacrifice opportunities to reduce coal use and replace higher-emitting imports – like fertiliser – with lower-emission local production.

Supporters of the bill tended to want tougher action, with several seeking the immediate revocation of existing permits. They focused on the scale of global hydrocarbon reserves that can’t be burned in order to limit global warming, while largely ignoring domestic energy security and non-transport uses of oil and gas as industrial feed stocks.

The oil and gas sector was to blame for climate change – which governments had denied for too long – and for creating the societal “structures” that made individuals so reliant on their products for transport.

“Their time is finally up,” Low Carbon Kapiti chair Jake Roos told the committee.

“Adding to the pile of fossil fuels we plan to set on fire is madness.”

Committee chair Deborah Russell asked New Zealand Oil & Gas executives how they could claim to have been “caught by surprise” by a change that was always coming for the sector.

The Labour-led government has leaned heavily on its claims that the 100,000 square kilometres of existing exploration acreage is sufficient to ensure on-going gas supplies during a managed, 30-plus-year transition.

Official advice issued last month estimated the potential loss of Crown revenue at $1.2 billion to $23.5 billion out to 2050, and warned of a potential increase in global emissions if locally-made petrochemical production was replaced with product made offshore.

John Carnegie, responsible for climate change policy at BusinessNZ, told the committee the proposed legislation is “bad law” based on “scant evidence”. The impacts of the ban include higher emissions, increased energy costs, reduced competitiveness for New Zealand firms, and worsening balance of payments.

“Those are far wider than just the oil and gas sector per se.”

In a testy exchange with Labour MP Kiri Allan, he said the impact of the ban had been immediate. He cited the decision of Ballance Agri-Nutrients not to proceed with an expansion at its Kapuni plant due to the lack of certainty over long-term gas supplies.

“It’s not a 30-year transition,” he said.

“We are now in that transition.”

OMV’s Teagle told the committee the government’s transition timeframe appeared to be based on a fundamental misunderstanding of the exploration process.

Firms target the most attractive potential prospects. Acreage that does not show promise in early drilling – typically at the end of the first five years, or early in the second five years – will most likely be surrendered.

In the current environment “the chances of further exploration drilling in those permit areas is very, very low,” he said.

New Zealand Shipping Federation executive director Annabel Young silenced the committee with a detailed explanation of the challenge ship owners will face if they can’t access locally-made methanol – made from gas – to meet new international fuel pollution standards.

News that Methanex may start cutting production as soon as 2026 due to the tightening gas market had been a shock, she said. Refining NZ, operator of the Marsden Point oil refinery, is still not clear on whether it will be viable for it to make the ultra-low sulphur marine fuels the sector will need otherwise, she said.

Paul Goodeve, chief executive of pipeline operator First Gas, said the shipping issue illustrated the complexity of climate change policy and the risks of unintended consequences.

He said the gas sector has an important role to play in lowering emissions in New Zealand and longer-term, while options like hydrogen – either as a stand-alone fuel or blended with natural gas – are developed. Access to fast-start thermal back-up is also essential in a renewable generation sector increasingly reliant on solar and wind.

Goodeve said the “ad hoc” exploration ban – in an otherwise sensible policy framework – risks distracting from or slowing the major near-term opportunity to reduce emissions by electrifying transport, he said.

Trying to shut down gas, coal and fuel oil at the same time risks “sinking” the country under the cost of the new generation, distribution and transmission that would be required.

Forest & Bird climate advocate Adelia Hallett told the committee the strategy of using gas to replace higher emitting fuels may have worked 30 years ago. Inaction during that time means the world now needs to make significant reductions in the next 10 to 14 years.

“The cuts we need to make now are harder and faster.”

NZOG managing director Andrew Jefferies said the debate wasn’t about climate change, but over which are the best tools to address it.

Another billion people joining the world population need low-emission energy. New Zealand can help meet that directly with exports of gas or methanol, or by using gas locally to replace imports of fertiliser and other products made from higher-emission sources and then shipped here, adding further emissions.

If countries like New Zealand stop exploring for gas, higher emitting hydrocarbons like Canadian tar sand or Venezuelan bitumen, will continue to be extracted, he said.

“If you vote against gas you are voting for coal and bitumen and tar sands,” NZOG external relations manager John Pagani told the committee.

The hearings are scheduled to continue for the rest of the week.

– BusinessDesk

CMA CGM stake in Ceva ‘is no threat to the forwarders’

CMA CGM’s investment into Ceva Logistics is not a threat to forwarder-controlled ocean freight, according to Nicolas Sartini, CEO of subsidiary carrier APL.

Speaking prior to yesterday’s announcement that CMA had upped its stake in Ceva to 33%, Mr Sartini said the rationale of the investment was to provide integrated services to large shippers that want to do direct business with carriers.

“Some customers want to deal only with forwarders, some only carriers and some both,” he said at the TPM Asia conference in Shenzhen last week.

“And what we have discovered at CMA is that some customers are coming to carriers and saying ‘we want one-stop solutions, can you provide them?’

“This is why we have moved towards this investment in Ceva, to see if we can bundle some services for the customers.”

The investment has also been seen as part of a general business model shift by carriers into offering supply chain services usually provided by freight forwarders. Mr Sartini stressed, however, that CMA CGM was not preparing to pounce on forwarders’ ocean freight volumes.

“We are not going after the cargo carried by the forwarders, because the forwarders are 50% of our business today and we need their support. We are just answering the specific requirements of certain customers,” he explained.

He said these customers tended to be “very large BCOs” that wanted guaranteed space and support downstream with landside operations.

Thomas Knudsen, global forwarding president at Toll Group and former Asia-Pacific chief at Maersk Line, said he was unconcerned by carriers delving deeper into supply chain services.

“I’ve worked both on the carrier and forwarding sides and they have different mindsets. If you’re a shipping line with big assets, your perspective on what matters is very different to if you have no assets and your customers are close.

“The carriers will have to think about what an extended supply chain means to them, and whether they want to play there, and forwarders will have to react to that. But I don’t think there will be a big shift, even in the next two-to-five years.

“Forwarders are well-positioned because we provide a service which the carriers are having a tough time fulfilling, and we do things they did 25 years ago, and I think some of that will be hard for them to step back into. So I’m not overly worried,” said Mr Knudsen.

The French carrier’s investment in Ceva has been accompanied by a strategy of offering premium liner services on the transpacific. For example, Mr Sartini said, shippers were switching from air to ocean freight following the launch of APL’s expedited transpacific service Eagle Express X (EXX).

“What’s interesting is we are not taking cargo away from anyone [in ocean freight], we are creating new demand and seeing customers shifting cargo from air to ocean,” he claimed.

Launched in August, EXX is a weekly Shanghai-Los Angeles service that guarantees space and equipment, including access to APL’s pool of chassis and dedicated container yard and truck lanes for pick-up in the US.

“Air freight takes about seven days, our service is 11 and normal ocean freight is around 20, so we found an intermediate niche between air and ocean. It shows you can still come up with innovation. Ocean carriers can de-commoditise our businesses if we wage service war, not price war,” Mr Sartini said.

South Port positioning itself for carbon neutral future

South Port held its 2018 AGM on Thursday.
South Port held its 2018 AGM on Thursday.

South Port is reducing its carbon emissions in a bid to stay competitive as New Zealand moves towards a carbon neutral future.

At it’s annual general meeting, held on Thursday, South Port chairman Rex Chapman said to shareholders the ports geographical position put it closer to other import sources and it could be leveraged in terms of reduced carbon emissions.

Chapman believed the port would be in a good position as the country started to reduce its carbon emissions under the Paris Agreement.

New Zealand has agreed to reduce its carbon emissions by 30 per cent below 2005 levels by 2030.

The company had implemented a number of initiatives to reduce its carbon footprint like putting antifoul on the hull of tugboats and pilot vessels to reduce fuel use.

More cargo was being transported by rail to the intermodal freight centre in Invercargill, instead of on trucks, leading to a reduction in carbon emissions, Chapman said.

This year, South Port had an after-tax profit of $9.66 million, up from $8.45m in 2017.

Cargo flows had increased from roughly 3 million tonnes to more than 3.4 million tonnes, a record level for the port.

Bulk cargo continues to be the mainstay of the business, representing 85 per cent of cargo volumes coming through the port, Chapman said.

This year, logs and woodchips exceeded the one million tonne mark for the first time in the port’s history and is the largest contributor to the volume and profit, he said.

Because of the the drought during the summer, a record volume of stock feed was imported at 212,000 tonnes.

The replacement of ageing infrastructure was expected to make an impact on future profit, as maintenance expenditure has been lifted and will continue to increase over the next five years, Chapman said.

South Port chief executive Nigel Gear said it has been 58 years since Island Harbour was completed and several assets were nearing the end of their useful life.

Work was currently under way to replace some of the piles that supported the rail and road bridges that provide the only land access to the Island Harbour, Gear said

Estimates are that earnings in the next financial year will likely be 10 per cent lower than 2017/18.

South Port is working with Mataura Valley Milk see whether it can provide the purpose-built nutrition plant to see if it can provide a distribution channel for importing an exporting cargoes.

Another potential client was Plaman Global, who is looking to mine more than 30 million tonnes of a rare organic black diatomite near Middlemarch, Central Otago, Chapman said.

The mineral would be used as a natural and organic animal feed additive that could reduce antibiotic usage, stimulate growth and improve both feed quality and gastrointestinal health in animals.

Chapman noted that there was tension in the markets as a result of the tariff war between the United States and China.

However, trade forecasts for the port remain steady with forestry exporters predicting healthy export market conditions in China, India and Japan.

The board has said it plans to keep paying the current dividend of 26 cents.


Rolls-Royce and Intel announce autonomous ship collaboration

Rolls-Royce and Intel are intending to collaborate on designs for sophisticated intelligent shipping systems that will make commercial shipping safer, the parties announced yesterday.

This will advance smart, connected and data-centric systems for ship owners, operators, cargo owners and ports, bringing together the expertise in advanced ship technology from Rolls-Royce with components and systems engineering from Intel. With a focus on safety, new ships will have systems with the same technology found in smart cities, autonomous cars and drones.

The new shipping intelligence systems will have data centre and artificial intelligence capabilities as well as sophisticated edge computing throughout that independently manage navigation, obstacle detection and communications. The components embedded in these systems are dedicated to work load consolidation, edge computing, communications and storage, including:

  • Intel® Field Programmable Gate Array (FPGA) technology will solve design challenges associated with shipping intelligence by providing engineers with a flexible platform and the IP and components for edge operations such as obstacle detection and navigation
  • Intel® Xeon® Scalable Processors optimised for High Performance Computing (HPC) technology will manage complex modelling of ship functions, with future developments using learning models to support fully autonomous operations
  • Memory and storage, including Intel® Optane™ DC Persistent Memory and Intel® Optane™ SSD Intel® 3D NAND SSD will ensure ship intelligence systems are reliable, responsive and support extracting maximum value from the data generated through real-time analysis and systems modelling

Kevin Daffey, Rolls-Royce, Director, Engineering & Technology and Ship Intelligence said: “We’re delighted to sign this agreement with Intel, and look forward to working together on developing exciting new technologies and products, which will play a big part in enabling the safe operation of autonomous ships. This collaboration can help us to support ship owners in the automation of their navigation and operations, reducing the opportunity for human error and allowing crews to focus on more valuable tasks.

“Simply said, this project would not be possible without the leading-edge technology Intel brings to the table. Together, we’ll blend the best of the best, Intel and Rolls-Royce to change the world of shipping.”

Adrian Criddle, General Manager and SVP of Intel UK said: “Rolls-Royce is a key driver of innovation in the shipping industry we are proud to be working with them on smart, connected and data-centric systems that will be a foundation for safe shipping operations around the world in the future.”
Source: Rolls-Royce

Shipping Industry Stares Down New Fuel Restrictions

Tens of thousands of cargo ships, tankers, container ships and cruise liners belch noxious sulfuric gases and fine particles that drift over cities and cover them with smog.

It is not a pretty picture, but it is one that may change in January 2020 if a decision by the United Nations International Maritime Organization to strictly limit the amount of sulfur in maritime fuel is fully carried out.

That is a big if, because shippers have been slow either to make the switch to higher-quality fuels or install expensive equipment known as scrubbers to clean exhaust from what is known in the industry as “bunker fuel.” Oil companies are also watching and waiting, as few have upgraded their refineries to adapt to new regulations.

“It comes down to who is going to blink first,” said Neil Beveridge, an oil analyst at Sanford C. Bernstein, a research firm for investors. “So far, the shipping industry looks like it is sleepwalking into a disaster. Everyone is waiting for everyone else to make the first move.”

Methods of enforcement are also still an open question.

Billions of dollars in investments are potentially at stake, since the global demand for high-sulfur fuel amounts to more than three million barrels a day out of the 100-million-barrel-a-day market, according to industry experts.

Some economists say they believe that prices could be pushed higher when refiners reduce the production of diesel and jet fuel to produce greater quantities of cleaner marine fuel. Other analysts say the market disruption will be modest, in part because initial enforcement of the new rules may be weak.

It has been two years since the United Nations agency firmly established the 2020 deadline to reduce the sulfur content of maritime fuels to 0.5 percent from 3.5 percent, and all major global ports and shipping terminals have committed to using low-sulfur fuels.

The new regulation will not have a significant impact on carbon emissions, but public health experts say a reduction of sulfur gas emissions will reduce smog and avert millions of cases of childhood asthma. One big container ship can emit as much sulfur in a year as millions of vehicles.

Shipownerrs can switch to low-sulfur fuels, installing scrubbers that remove exhaust from high sulfur fuels or switch to cleaner liquefied natural gas. But all three options have disadvantages.

Cleaner maritime fuels can cost $250 a ton more than high-sulfur fuels, which can mean an additional annual expense of roughly $3 million for a large vessel, a significant added cost in the typically low-margin, low-profit shipping business, according to market reports.

A few shipowners, particularly cruise ship companies, are building ships that can run on cleaner liquefied natural gas.

But they represent only a tiny fraction of the industry, because installation is expensive and refueling infrastructure still needs to be built in many parts of the world. That is bound to change over the next two decades, analysts say, and the new regulations could be a catalyst.

“L.N.G. is going to be the future,” said Ram Vis, chief executive of Viswa Group, a company that tests maritime fuels and manufactures scrubbers.

Dr. Vis said in recent months he had noticed a jump in scrubber orders. But he added that it would take years for an estimated 30,000 to 40,000 ships to be outfitted with scrubbers because there are only about 30 manufacturers of the equipment worldwide.

Scrubbers can cost $5 million to $10 million apiece including installation, according to the Energy Intelligence group. Dr. Vis said they could take at least 15 days to install, requiring downtime for ships. So far, a small percentage of the global fleet has converted, industry experts said. Shippers may be reluctant to switch because they are concerned that international emissions regulations may be toughened again and that their investment will be wasted.

That leaves the refiners with challenges. The pitch-black and molasses-thick bunker fuel they produce comes from the dregs of refined products. The refiners are not technically included in the new regulations, but they will need to adjust to a new market.

Refining low-sulfur fuel requires additional processing, requiring expensive plant refitting in many operations.

American refineries, which are generally the most sophisticated, are in a strong position to refine more low-sulfur fuel. Chinese and Korean refiners will also be ready. In the meantime, Russian, European and Middle Eastern refiners may need to scramble and make expensive adjustments.

Refiners will be forced to accommodate the expected new demand for cleaner maritime fuel by transferring oil that otherwise would have gone to producing diesel, jet fuel and heating oil, tightening the market for those fuels and raising prices.

“You are going to have to borrow from Peter to pay Paul,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service. He said sophisticated American refiners, including Marathon Petroleum, Valero, Phillips 66 and Exxon Mobil, would profit from the market change. “It’s going to be a magical 2019 and a very profitable 2020,” he predicted.

There still remains the question of how the new regulations will be enforced, since the United Nations agency does not have enforcement powers.

That leaves the policing tasks to flag countries like Panama, which registers vessels but may not be aggressive about monitoring and enforcing rules far from their borders. Shippers may have to be careful about the loss of insurance coverage, reputational damage and stiff fines if they are caught.

Analysts predict that at least 5 percent to 10 percent of shippers will cheat.

“This will have to be a broad-based undertaking for this to be a truly effective global requirement,” said Jose L. Valera, an energy lawyer in the Houston office of Mayer Brown. “If nobody picks up the mantle and makes this a requirement it’s possible it won’t be implemented.”
Source: New York Times

Prospects for the multipurpose shipping sector are improving

Surging growth in renewable energy generation around the world and a construction boom in South East Asia that is expected to run for the next 10 years bode well for the once ailing multipurpose shipping fleet.

In the latest edition of Drewry’s Multipurpose Shipping Forecaster report we declare that we remain cautiously optimistic on the outlook for the sector. There are some caveats to this optimism as global general cargo demand is forecast to grow at a rate of just 2% per year to 2022, while the multipurpose and heavylift fleet is expected to contract at less than 1% per year over the same period. Meanwhile, the threat of a trade war continues to loom over the horizon and the competing sectors are not yet secure enough to move from this sector.

Multipurpose vessels benefit from the growth in demand for both breakbulk and project cargo and, while it is clear that both are effected by modal competition and trade tariffs, the latter has seen some renewal in certain sectors.

In BP’s latest energy outlook, global consumption of fuel in 2017 is compared to 2016 (see Figure 1). Although renewable energy consumption is still a minor part of the global mix, it is growing at a faster rate (almost 17% year-on-year) than any of the other fuel types.

Fig.1: Global consumption of primary energy by fuel type (million tonnes oil equivalent)

Source: Drewry Maritime Research

Wind energy provided more than half of that renewables growth, which is positive news for the multipurpose (MPV) sector. The equipment needed for a wind farm, including the blades and towers, is ideally suited to the MPV fleet. The equipment is large, unwieldy (project) cargo, which needs a vessel that can both lift and stow it correctly. Also the top two manufacturers are based in Europe, whilst the top regions for growing installed capacity are in Asia – a perfect trade route and a growing market for project carrier tonnage.

China reported a 25% increase in power generation from renewables in 2017, compared to 2016, to 106.7 million tonnes oil equivalent (mtoe), which is 22% of the global renewable power. Within that global increase, some regions have a much bigger share than others. Asia Pacific represents some 36% of renewable energy consumption (including China alone amounting to 22%). The EU is worth 33% and North America 23%. Asia Pacific is also the fastest growing region with 2017 consumption up almost 25% on 2016.

The other significant factor in our uplift for demand is a region-wide constriction boom for South East Asia that is expected to last the next ten years. It is largely fueled by China’s One Belt One Road (OBOR) initiative, which will link China to Europe through Central and South-East Asia. The latter is a pivotal element in the initiative and it is expected that China will develop these projects aggressively. India’s annual construction investment is also expected to increase by about a third over the next five years to an average $170 billion per year.

Fig.2 Development of dry cargo demand (million tonnes)

Source: Drewry Maritime Research

The outlook for the competing sectors, although mixed going into the final quarter of the year, remains positive for the medium term. It is true that the impact of US tariffs is more keenly felt by the container shipping lines, but here too there is still growth forecast, albeit at a slightly weaker rate than previously expected.

There may be trouble ahead but the green shoots of recovery appear weather-proofed to withstand the volatility expected to the end of 2018. Longer term, owners are more positive post 2020 when the true picture of the various environmental regulations will have become clearer. Maybe we should upgrade our forecast to reasonably optimistic?
Source: Drewry

NZ Transport Agency allocates $62m to upgrade Wairarapa rail line

rural railway line

The New Zealand Transport Agency (NZ Transport Agency) has allocated more than NZ$96m ($62.06m) to upgrade the Wairarapa rail line in a bid to improve transportation and tourism in the Wellington region.

The funding forms part of the government’s NZ$16.9bn ($10.93bn) transport investment under the National Land Transport Programme to bolster rail and road network across the country.

New Zealand Minister for Transport Phil Twyford opined that the Wairarapa investment will help to prevent further deterioration and service disruptions on the line.

Twyford said: “Passengers have a right to expect a safe and reliable service, and this investment will ensure the long-term future of this route.

“Passengers have a right to expect a safe and reliable service, and this investment will ensure the long-term future of this route.”

“It also highlights the importance our Government places on public transport.”

The total investment consists of NZ$50m ($32.3m) for track infrastructure works, and NZ$46.2m ($29.9m) for the rail line south of the Rimutaka Hill tunnel as well as for double-tracking works between Trentham and Upper Hutt.

New Zealand’s state-owned agency for rail operations KiwiRail also welcomed the investment.

KiwiRail acting chief executive David Gordon said: “The network is ageing and parts of it are nearing the end of their useful life, which means there have to be speed restrictions and more likelihood of delays.

“This funding will allow KiwiRail to get the network up to standard and make improvements that will allow for more and longer trains.”

Overall, New Zealand allocated a total of NZ$196m ($126.7m) to upgrade rail infrastructure across the Wellington region. Construction at the Wairarapa rail line forms part of this investment and is scheduled to begin in April next year.

Final call to save the world from ‘climate catastrophe’

It’s the final call, say scientists, the most extensive warning yet on the risks of rising global temperatures.

Their dramatic report on keeping that rise under 1.5 degrees C says the world is now completely off track, heading instead towards 3C.

Keeping to the preferred target of 1.5C above pre-industrial levels will mean “rapid, far-reaching and unprecedented changes in all aspects of society”.

It will be hugely expensive – but the window of opportunity remains open.

After three years of research and a week of haggling between scientists and government officials at a meeting in South Korea, the Intergovernmental Panel on Climate Change (IPCC) has issued a special report on the impact of global warming of 1.5C.

The critical 33-page Summary for Policymakers certainly bears the hallmarks of difficult negotiations between climate researchers determined to stick to what their studies have shown and political representatives more concerned with economies and living standards.

Despite the inevitable compromises, there are some key messages that come through loud and clear.

“The first is that limiting warming to 1.5C brings a lot of benefits compared with limiting it to two degrees. It really reduces the impacts of climate change in very important ways,” said Prof Jim Skea, who co-chairs the IPCC.

“The second is the unprecedented nature of the changes that are required if we are to limit warming to 1.5C – changes to energy systems, changes to the way we manage land, changes to the way we move around with transportation.”

What’s the one big takeaway?

Graphic showing what is likely to be affected by different rises in temperature
Presentational white space

“Scientists might want to write in capital letters, ‘ACT NOW, IDIOTS,’ but they need to say that with facts and numbers,” said Kaisa Kosonen, of Greenpeace, who was an observer at the negotiations. “And they have.”

The researchers have used these facts and numbers to paint a picture of the world with a dangerous fever, caused by humans. We used to think if we could keep warming below two degrees this century, then the changes we would experience would be manageable.

Not any more. This new study says that going past 1.5C is dicing with the planet’s liveability. And the 1.5C temperature “guard rail” could be exceeded in just 12 years, in 2030.

We can stay below it – but it will require urgent, large-scale changes from governments and individuals and we will have to invest a massive pile of cash every year, about 2.5% of global gross domestic product (GDP), the value of all goods and services produced, for two decades.

Even then, we will still need machines, trees and plants to capture carbon from the air that we can then store deep underground – forever.

What can I do?

The report says there must be rapid and significant changes in four big global systems:

  • energy • land use • cities • industry

But it adds that the world cannot meet its target without changes by individuals, urging people to:

  • buy less meat, milk, cheese and butter and more locally sourced seasonal food – and throw less of it away • drive electric cars but walk or cycle short distances • take trains and buses instead of planes • use videoconferencinginstead of business travel • use a washing line instead of a tumble dryer • insulate homes • demand low carbon in every consumer product

Lifestyle changes can make a big difference, said Dr Debra Roberts, the IPCC’s other co-chair.

“That’s a very empowering message for the individual,” she said. “This is not about remote science; it is about where we live and work, and it gives us a cue on how we might be able to contribute to that massive change, because everyone is going to have to be involved.”

“You might say you don’t have control over land use, but you do have control over what you eat and that determines land use.

“We can choose the way we move in cities and if we don’t have access to public transport – make sure you are electing politicians who provide options around public transport.”

The hottest that this location has ever been…

map showing where temperature records were broken across the world this summer

Tap or click to explore the data

Source: Robert A. Rohde/Berkeley Earth. Map built using Carto

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Five steps to 1.5

  1. Global emissions of CO2 need to decline by 45% from 2010 levels by 2030
  2. Renewables are estimated to provide up to 85% of global electricity by 2050
  3. Coal is expected to reduce to close to zero
  4. Up to seven million sq km of land will be needed for energy crops (a bit less than the size of Australia)
  5. Global net zero emissions by 2050
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How much will all this cost?

It won’t come cheap. The report says to limit warming to 1.5C, will involve “annual average investment needs in the energy system of around $2.4 trillion” between 2016 and 2035.

Experts believe this number needs to be put in context.

“There are costs and benefits you have to weigh up,” said Dr Stephen Cornelius, a former UK IPCC negotiator now with WWF. He says making big emissions cuts in the short term will cost money but be cheaper than paying for carbon dioxide removal later this century.

“The report also talks about the benefits as there is higher economic growth at 1.5 degrees than there is at 2C and you don’t have the higher risk of catastrophic impacts at 1.5 that you do at two.”

What happens if we don’t act?

The researchers say that if we fail to keep temperature rises below 1.5C, we are in for some significant and dangerous changes to our world.

You can kiss coral reefs goodbye, as the report says they would be essentially 100% wiped out at two degrees of warming.

Global sea-level will rise about 10cm (4in) more if we let warming go to 2C. That may not sound like much but keeping to 1.5C means that 10 million fewer people would be exposed to the risks of flooding.

There are also significant impacts on ocean temperatures and acidity, and the ability to grow crops such as rice, maize and wheat.

“We are already in the danger zone at one degree of warming,” said Kaisa Kosonen, from Greenpeace. “Both poles are melting at an accelerated rate; ancient trees that have been there for hundreds of years are suddenly dying; and the summer we’ve just experienced – basically, the whole world was on fire.”

In 1980, the minimum sea ice extent was 7.7 million square kilometres. This year it was at 4.7 million square kilometres.2012 was the lowest year on record, when it was down to 3.6 million square kilometres - less than half what it was in 1980.

Sea ice extent is much lower than in 1980. It reached its lowest level in 2012
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Is this plan at all feasible?

Analysis by David Shukman, BBC science editor

The countdown to the worst of global warming seems to have accelerated. Seriously damaging impacts are no longer on a distant horizon later this century but within a timeframe that appears uncomfortably close.

By the same token, the report’s “pathways” for keeping a lid on temperatures all mean that hard decisions cannot be delayed:

  • a shift away from fossil fuels by mid-century
  • coal phased out far sooner than previously suggested
  • vast tracts of land given over to forests

It’s mind-bending stuff and some will say it’s hopelessly unrealistic, a climate scientists’ fantasy. So is any of it plausible? On the one hand, the global economy relies on carbon and key activities depend on it. On the other, wind turbines and solar panels have tumbled in price and more and more countries and states such as California are setting ambitious green targets.

Ultimately, politicians will face a difficult choice: persuade their voters that the revolutionary change outlined in the report is urgently needed or ignore it and say the scientists have got it wrong.

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Is all this about saving small island states?

The idea of keeping the global temperature rise to 1.5 is something very close to the hearts and minds of small island and low-lying states, which fear being inundated with flooding if temperatures go to two degrees.

But over the three years that the report was in preparation, more and more scientific evidence has been published showing the benefits of staying close to 1.5C are not just for island nations in the Pacific.

“If you save a small island country, then you save the world,” said Dr Amjad Abdulla, an IPCC author, from the Maldives. “Because the report clearly states that no-one is going to be immune. It’s about morality – it’s about humanity.”

How long have we got?

Not long at all. But that issue is now in the hands of political leaders. The report says hard decisions can no longer be kicked down the road. If the nations of the world don’t act soon, they will have to rely even more on unproven technologies to take carbon out of the air – an expensive and uncertain road.

“They really need to start work immediately. The report is clear that if governments just fulfil the pledges they made in the Paris agreement for 2030, it is not good enough. It will make it very difficult to consider global warming of 1.5C,” said Prof Jim Skea.

“If they read the report and decide to increase their ambitions and act more immediately, then 1.5C stays within reach – that’s the nature of the choice they face.”

Campaigners and environmentalists, who have welcomed the report, say there is simply no time left for debate.

“This is the moment where we need to decide” said Kaisa Kosonen. “We want to move to clean energy, sustainable lifestyles. We want to protect our forests and species. This is the moment that we will remember; this is the year when the turning point happened.”