Election panel discusses the future for gas in New Zealand
Responding to uncertainty and investment were key themes at the July political panel of party energy spokespeople brought together by New Zealand’s energy and mining associations.
Opinions differed as to the possibility of a looming shortage and what that meant for New Zealand.
Energy and Resources Minister Megan Woods said the recent projection from MBIE as to the approximately 10 years remaining in the life of the Taranaki natural gas fields was based on an average consumption of 200 Pj per year.
But consumption has been falling and is now around 145 Pj per year, further extending the life of the reserves.
National’s energy spokesperson Stuart Smith said people assumed that Methanex, which currently consumes around 45 percent of the national gas supply, would wind back its production to mitigate against any shortfall, but he didn’t see that as a good thing.
“Methanol is a vital ingredient for manufacturing and creates export dollars and jobs.
“I don’t think shutting things down is the right way to go.
“What we need are regulatory settings that allow planning with confidence in the sector.”
ACT’s Simon Court said that we not only have a security of supply issue, “we’ve also got a security of regulation problem”.
“We’ve got a Government that has pitched Onslow [as a solution to dry years for hydro generation] which is the scariest thing that anyone could show to an investor in New Zealand.”
Speaking two weeks before the announcement of the $2 billion Black Rock renewable energy investment deal, Megan Woods said she saw a “steady stream of investors wanting to invest in New Zealand because of the opportunities we have here around renewable energy.”
“New Zealand is a really attractive destination for people who want to invest in terms of energy at the moment.”
The Greens’ energy spokesperson Julie Anne Genter said that “every policy has to be a climate policy”.
The most important thing for ensuring investor confidence was a clear direction forward, she said.
In terms of developing a renewable gas market, Genter said we needed to make it easier for entrepreneurs to access funding.
Jessica Hammond from The Opportunity Party (TOP) blamed politics for undermining investor confidence.
“We don’t need political bickering – we need some sort of cross-party agreement on what we should do.”
And importantly, we need regulatory certainty, she said. “And not to “go barking after every car”.
On this, NZ First’s Shane Jones seemed to agree. “We need a regulatory framework that is fit for purpose.” He blamed much of the reluctance of investors on an unworkable Resource Management Act. “The level of delay is extraordinary.”
He said a “lucid distillation of and energy policy and strategy” was needed.
The market needed to be enabled to solve as many of these problems as possible “without stigmatising gas, without stigmatising coal to the point where we turn a blind eye” and import all the coal needed to keep the energy system and industry running.
“But at the same time are unwilling to open up opportunities for energy and mineral investors in New Zealand.”
National’s Stuart Smith said it’s all very well to say we’re in a transitional phase for gas, but “gas will be with us until 2050”.
“The industrial processes that are being underpinned by gas are quite valuable to New Zealand.”
Megan Woods said we needed to be working with industries using gas for process heat, and under-scored that “decarbonisation does not mean de-industrialisation of New Zealand”.
As to the future of gas, ACT’s Simon Court said there will always be opportunities for new gases, such as from the waste industry, recovering methane from landfills and hydrogen etcetera. But we need to restore investor confidence, he said.
The panel was organised by a consortium comprising:
BusinessNZ Energy Council
Electricity Networks Aotearoa
Electricity Retailers’ Association of New Zealand
Energy Resources Aotearoa
GasNZ
Major Electricity Users’ Group
Straterra
Young Energy Professionals Network