NZ heading for gas supply gap

by Christie on October 20, 2018 at 10:00am

I cannot tell you how much I wish National was not going through a meltdown at the moment. The things that are going on in the background are the stuff of nightmares, but there is no cut through – because everyone is talking about Jami-Lee Ross. Since Ross has clearly had instructions to act like a slow release grenade, it will go on for a long time. The damage being done to the country in the meantime is considerable.

A newspaper reports: quote.

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. end quote.


Last week, Energy Minister Megan Woods swatted this information away as scaremongering. Now it seems that it is all absolutely true. quote.

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. end quote.

Now this is awkward. Didn’t the government announce that there were to be no new permits for oil and gas exploration? So, if there is no gas to be found in areas covered by existing permits – there will be no new discovery? quote

“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.” end quote.

This train wreck of a government would have seen this coming if only they had done some basic consultation with the industry, rather than just blindside them because they felt like it. So, you know what will happen? We will end up importing gas, even though we probably have years more of supplies in our own economic zone. That, of course, is no use to us if we are not allowed to go and find it. Let’s just pay a fortune to other countries instead. There is great economic management for you. quote.

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. end quote.

If they had done some basic consultation with the industry, all of these scenarios would have become clear. They could then have moved forward with their plans to reduce emissions, fully aware of the economic as well as the environmental impacts of their policies. But no. Only a responsible government, with the best interests of its country at heart, would do that. Nobody in their right mind could describe this bunch of charlatans as ‘responsible’. quote.

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. end quote.

Particularly as we may end up buying the product from ‘rogue’ countries that have poor human rights records and even worse processing procedures from an environmental perspective. At least if we produce the stuff ourselves we are in control of how it is done, of the treatment of the labour forces and we get revenue from it as well. I cannot see a downside to this.

But this government knows best. It always has. As the Jami-Lee Ross trainwreck rolls on, nobody is paying any attention to some serious issues for our country.