It began as politics in its crudest guise – no more oil and gas, said the new Prime Minister 11 months ago. The Opposition response was just as unrefined: Yes, there will be, if you vote for us next time. The reality is complex beyond belief.
The government’s refusal to issue new permits to look for hydrocarbons off Taranaki’s coast and elsewhere has tapped a robust reservoir of politicking – largely unseen by most people in the energy province – within which there is endless analysis, debate, lobbying, and voluminous reports.
There are secret negotiations in and with Wellington that will have far-reaching impact on one of Taranaki’s two biggest sources of income.
Looming above like a wobbly oil derrick is global acceptance, more or less, that if we don’t all do something about carbon emissions – to which fossil fuels are the biggest contributor – the world’s climate will soon be broken.
Live found the energy industry and most Taranaki public leaders eager to talk about what some agree is our biggest economic challenge since Roger Douglas abolished farm subsidies in 1984…or even the Great Depression.
It was one of those moments when most of us felt proud to be Kiwi, the sight of the world’s foremost environmentalist, Sir David Attenborough, applauding our Prime Minister.
She was on TV in January, telling a World Economic Forum discussion panel what she’s doing to save the planet. For those of us old enough to recall, it was like David Lange at the Oxford Union nukes debate in 1985, warning US evangelist Jerry Falwell he could smell the uranium on his breath.
For a small country like New Zealand, global prominence is usually confined to All Black and Olympic feats and that great streak of basketball virtuosity, Steven Adams.
In both cases of prime ministerial luminance, the moral ground was as high as Hillary’s Everest – and just as treacherous. Lange spent much of the rest of his troubled premiership coping with the fallout of his ban on nukes.
Jacinda Ardern now faces something just as tricky, except her stance has offended something even more vengeful than world’s most powerful country. Her transgression is against global big business.
Even in today’s world dominated by digital heavyweights like Google, Facebook and Amazon, the oil industry reigns supreme.
Which is why it’s unnerving to be told we’re now on its “black list”.
That’s the term used without hesitation by Cameron Madgwick, an urbane Wellington public relations operative whose job as chief executive of PEPANZ (Petroleum Exploration & Production New Zealand) is to marshall public awareness of the downsides of the PM’s ban on future oil and gas exploration, with its implication that long term, New Zealand wants to move away forever from the climate-destroying effect of burning hydrocarbons.
It means most of the world’s oil companies – so long enamoured of New Zealand as a friendly, stable, accessible, skilled and English-speaking haven – have changed their minds about coming here again.
While some people say the Taranaki Basin geology is entering “sunset” phase anyway, Madgwick and others in the oil industry think that’s nonsense, and say the pause in exploration (apart from a perverse current spurt) brought on by the 2008 oil price crash ($US147 to $US32; then in 2014, $US115 down to $US28 early 2016) is the result of normal cyclic behaviour in commodity markets.
Shell complicated things by selling up and moving out, but although the company ignored our polite request for an explanation, others within the industry say the mega-giant long ago signalled its intentions to sell still-viable New Zealand assets to fund purchases in large gas enterprises (like the former British Gas, for which it shelled out $70 billion).
There’s still gas to be found in and off Taranaki, says Madgwick. He and his industry naturally hope for another big find soon, an eventuality that would complicate even further the government’s stance.
In the coalition government, Ardern and her Green Party colleagues already face multiple challenges getting the ban to work, while NZ First’s view is opaque, but possibly signalled by Regional Economic Development Minister Shane Jones holding his head in his hands when the Prime Minister announced the ban on April 12, 2018.
The Taranaki reaction has undergone rapid transformation, starting with horror, moving to controlled rage, and settling into determination to do something quickly to secure the province’s economic future.
Which raises the obvious question – is there nothing positive on which to fasten as Taranaki already notices the effects of oil’s supposedly temporary slow patch, a decade during which the province’s average individual income has slipped from first place (around $80,000) to third ($60,000)? The answer is yes, most definitely.
Peter Jannings and his colleagues at New Plymouth-based EHL Group began in business in New Plymouth making standard hydraulic systems for industry and transport – and along the way invented a world-first device that makes electricity from waves.
Subject to required consents, their creation – envy of the renewable energy world – is now ready to be trialled in full size about 2km off Cape Egmont in Taranaki.
Before that can happen, EHL needs another $6 million to pay its share of an international joint venture with a US firm that could introduce a proven mass power generation system, a method suited to almost anywhere with an exposed coastline.
It’s envisaged that small arrays of the devices sited off remote coastlines would contribute significantly to the power needs of cities.
With further development, a single device will produce as much power as a wind turbine, but consistently and predictably, which is where its advantage lies.
Jannings is part-owner boss of EHLSolutions, now expanding rapidly on a site off Corbett Rd in Bell Block, a few kilometres from central New Plymouth.
He and his key people (project group and operations manager Armin Howard, and lead design engineer Derek Shotbolt) feel they’ve reached a crucial point in wave power development at a prescient moment in history, given the government’s decision.
One of their main concerns is helping retain Taranaki’s engineering infrastructure and expertise. “There are a lot of clever engineering companies in Taranaki,” he says.
“People don’t realise the petro-chemical industry we’ve all grown up in is hard work, and it’s difficult, and you’ve got to have clever people to survive in that industry. We want to hang on to those people.
“A successful wave energy industry has the potential to generate significant income and provide increased employment for Taranaki.”
“The problem is that a lot of countries (including New Zealand and the US) give grants for that startup, that initial look, and then they don’t want to support taking it to the next level, to commercialising it.”
When interviewed for this story, he and his company were awaiting news from Wellington that the Provincial Growth Fund – Shane Jones’ three billion dollars over three years – will fund wave power’s next stage.
The device Shotbolt is designing (it improves constantly) has the beauty of apparent simplicity and comparatively few moving parts, ideal in a tough environment like the sea.
It sits atop a 20-metre-long tank, and the assembly is towed into place a kilometre or so offshore, the tank flooded so the whole thing swings upright, and heavy weighted anchors are lowered to the sea floor (no concrete needs to be poured).
Hydraulic power comes from waves striking a paddle-like float sitting at sea level. They will project about 15 metres above sea level and sit in rows, possibly visible from land if close in. Testing by the University of Hawaii over two years has shown effects on marine life from the smaller (four metres high) prototypes were virtually non-existent, although those from an array of full-sized machines can only be estimated at this stage. That’s one reason for further trials.
The fuel cell was unknown to Cathy Clennett until one day in 1988, when it came up in her chemistry class at high school in Hobart, Tasmania. “I remember thinking: ‘This is amazing’.
“We can make energy for a car from hydrogen that we’ve made from water, and it’ll produce water vapour as its emissions. What a fantastic technology. So why are we not using this? Why are the car companies not using this? It planted that seed.”
Cathy and husband Andrew Clennett — experienced and qualified energy experts who originally came to Taranaki to work for Todd Energy — lead a New Plymouth-based company called Hiringa Energy, which has a $950,000 government grant (Provincial Growth Fund) to develop supply infrastructure.
They are looking at ways to convert the country’s long-haul transport industry to hydrogen fuel cell technology, and save the country billions in diesel imports (current about $5 billion) as well as prevent significant carbon emissions.
The company explains itself on its website with a couple of sentences: “Hiringa Energy is here to bring zero-emission hydrogen fuel to New Zealand businesses, regional and city councils (and eventually also to individuals).”
Andrew Clennett says fuel cells and hydrogen production are already proven, and with New Zealand now due to run out of natural gas within a decade, there is urgency.
“You look at renewable electricity and we have a very high percentage (80 percent), but that’s only part of our energy picture – it’s only 40 percent of our total energy.
“We’ve got to work out how do we fill that 60 percent of our energy needs gap. And at the moment it’s all fossil fuels, and if we don’t get cracking at it … we’ll be importing more fossil fuels like coal.”
Andrew: “The government is backing us to do design work around a pilot facility…a pilot and network: how would you come up with a good solution to being able to generate hydrogen, being able to refuel with a network – not just a stand-alone demonstration project.
“And we also need to demonstrate (getting the fuel) from where we’re generating to where we’re filling from.
“In some cases, hydrogen may be generated on site where we’re using it (such as industrial parks that use a lot of forklift vehicles and heavy transport), and in some cases it may be generated or produced at another location and moved to where the refuelling station is.
“Transport is a primary focus for us because there’s a lot of gains to be made. It’s going to be very difficult to de-carbonise heavy transport, and hydrogen is looking very promising for it.
“But we need to create that demand, so we need the willingness of business and heavy transport operators, whether they be public transport operators or shipping transport like ferries, trucks, buses, trains.”
Andrew says they are already getting an excellent reception, including a Taranaki trucking firm with 1000 vehicles.
Cathy: “Operators who are running businesses get our proposition; they’re looking for an alternative. They’re looking at clean technologies, and when we talk about hydrogen and what it means for their fleets, they get it because it has some really big advantages over a pure battery-electric technology.”
On the question of more general acceptance of fuel cells for the public to use in their cars, the Clennetts are circumspect. “I think small city vehicles where you’ve got a plug-in in a garage, then a battery-power electric vehicle is probably better,” says Andrew.
“It’s great tech for small vehicles. But as soon as you try to shove a square peg in a round hole and say the solution to long transport is heavy batteries, then the next thing you know is you’re carrying batteries not load. Making bigger batteries also has a big carbon load.”
The Clennetts’ plans focus on making what’s called “green” hydrogen, the cleanest method. It uses a lot of electricity to create hydrogen through a process called electrolysis – hydrogen molecules are split away from the oxygen one in water (H2O).
And there lies the rub: do we have enough electricity to feed such an approach? They speak of many small operations, as opposed to a few giant ones like Huntly Power Station, for example, which means more flexibility.
However, they recognise we need to develop more renewable sources, like wind, solar, run-of-river (a lowish weir through which the water runs), tidal (in undersea devices in places like Cook Strait, rather than harbours like Kaipara), and the wave energy technology being developed by EHL.
Non-renewable electricity generation (oil/gas/diesel) makes up about 20 percent of the total and is due to drop to 15 percent if all the consented-planned-proposed renewable projects actually go ahead.
Hydro makes up 55 percent at present, a proportion expected to drop to 40 percent as projected geothermal, wind and tidal contributions ramp up over the coming decade. Geothermal (now 15 percent) will grow, but its share is expected to drop to 11 percent.
Tidal may contribute four percent. The big mover is wind. If all the proposed schemes go ahead, its current share of only five percent could grow to 32 percent of all electricity generated in New Zealand.
But let’s not forget about natural gas, which is currently as significant an energy source as electricity.
It’s currently coming out of offshore fields like Pohokura and powering electricity generators like Huntly (in normal times) and peaker stations like Todd Energy’s one in North Taranaki and another being built closer to New Plymouth, as well as providing industrial, commercial and home heat throughout the North Island.
Some (from Kapuni) feeds the Ballance ammonia-urea fertiliser plant in South Taranaki, while 45 percent of all gas is used by Methanex to make valuable methanol for export.
Its method discharges carbon, but the operations at Motunui and Waitara Valley also generate $634 million of Taranaki’s GDP, and $834 million for the country’s. It employs 270 people and hundreds of contractors. And now there may be a new, cleaner use for Taranaki’s gas, one that has no polluting emissions.
At first glance, the $4 billion proposal by fast-growing US green energy company 8 Rivers to build a plant in Taranaki to make hydrogen from natural gas without affecting the atmosphere looks like a terrific part-solution to Jacinda Ardern’s net zero carbon target.
Then, on second glance it looks highly doubtful – where would they get the gas? Supposedly, we have only a decade or so of proven natural gas reserves, with nearly half of those already committed to methanol-producer Methanex for that theoretical decade (which assumes no more big gas finds from existing exploration).
However, a third glance shows the decade-long reserves estimate has been a stable number every year for about 10 years, according to industry sources, and until the government’s ban on new exploration it was expected to stay stable. In other words, there’s enough gas there, if as-yet undiscovered, says 8 Rivers representative (and former Kiwi) Cam Hosie from New York.
Significantly, hydrocarbons suppliers put a lot of emphasis on guaranteed buyers. In other words, he says, if there are big customers keen to take gas finds, there is greater confidence about coming here to look for them and even more significantly verifying reserves by drilling and developing them.
The 8 Rivers project would use about half as much gas again as Methanex, and rather than compete for the Methanex share it could be expected to encourage more exploration.
It should be remembered that when the Prime Minister came to reassure Taranaki last July, she said exploration could continue under existing permit rights for up to 30 more years.
While the ban might now have put exploration companies off coming here, the prospect of another big client might change that, since the big raft of little clients – individual companies, industries and home users – who take a little over half the current gas supply are an uncertain proposition.
After making headlines by announcing its interest in November, Pouakai NZ (the local 8 Rivers offshoot headed by Hosie that is pitching the project) has been quietly awaiting the outcome of intensive government analysis and planning that’s meant to accommodate the ban.
All going well, its hydrogen plant could be operating in five years and give a much-needed boost to the Taranaki economy. Its construction would employ about 4500 people directly or indirectly and make use of the extensive oil industry engineering knowhow and capability of the region. Routine operation after 2024 would pay 2500 every year.
It would produce hydrogen for use in long-haul transportation and other hydrogen-based products, saving millions in diesel imports and carbon emissions.
Carbon dioxide greenhouse gas produced by the plant would be injected into spent wells in Taranaki, whose joint capacities are large enough to take and store CO2 from Pouakai for something like 400 years. The spent parts of Maui alone could take carbon for 350 years.
Why would a big US firm currently exploring its options throughout the world pick on little old Taranaki, whose hydrocarbons fields no longer rate on a global scale (Maui was considered the world’s eighth biggest when it was discovered in 1969)?
First, because our gas supply is still considered stable (if as yet not fully developed), says Hosie. Second, the country has a well-established legal and regulatory regime. There would be a good market for the hydrogen and its products. Taranaki has a highly skilled English-speaking workforce and 40 years of engineering infrastructure already experienced at this kind of project.
The company is understood to agree with the government’s broad intent to reduce emissions and thinks its carbon emissions-free operation would fit with that. It is also attracted to our size, our connectedness, the open access to leaders and New Zealanders’ pragmatism.
That makes the country an ideal place to build a full-scale example of its process for display to the rest of the world.
On the horizon off Fitzroy Beach, beyond the array of various surfers, sits a familiar sight: a solitary oil tanker that rides year-round on standby, in case it’s needed at invisible locations further out – the half dozen or so offshore oil and gas platforms.
Apart from the Pohokura installation further north, the tanker is the lone reminder of the offshore energy industry. Some onshore well sites are obvious, but you have to go looking for most of them.
Unlike its rapacious 20th century behaviour in some undeveloped countries, the oil industry has treated Taranaki kindly, and not just with skilled jobs, high pay and a dramatic boost to the engineering and infrastructure economy.
Nobody seems to know for sure how many millions the industry has donated to local causes and projects like the Govett-Brewster & Len Lye Gallery, Puke Ariki, the city’s aquatic centre and many others, but it runs to tens of millions of dollars over the past half century.
There have been other contributions, too, such as energetic involvement with school boards, the arts, sport, and recreation.
What Taranaki must contemplate is that soon, those oil industry influences could be gone forever. However, before that happens there are a number of local leaders who have responded quickly to the threat.
They are determined to meet it with rational ideas aimed at preserving what we’ve got, if not with oil and gas, then certainly with renewable or non-polluting energy potential like that described above.
Prominent in that movement is New Plymouth District councillor Stacey Hitchcock, who joined a Taranaki group in October to visit a key future energy centre in Scotland, Aberdeen, which like New Plymouth here has been a UK base for North Sea offshore fields.
Her full technical report on what she saw of hydrogen-fuelled public vehicles and tidal/wave renewable energy generation there and on nearby Orkney Islands is comprehensive.
She says the net zero carbon emissions target by 2050 presents problems generally. While New Zealand is well-placed with renewable energy electricity generation (85 percent), efforts to get to 100 will require big investment, since many renewable energy options will have to be built to 150 percent capacity because of their intermittent nature (for example, wind and solar).
“Take away your gas and coal peaker plants, take away the times there is a drop in electricity, the hydro isn’t performing, the wind isn’t going, and you need to produce more renewable for those times and you need to be able to store it.”
From what she saw in Scotland and has learned from research, she can see that hydrogen can meet that need because it can be stored more easily than electricity, which requires expensive and inefficient batteries.
“At times when there is plenty of power, you can use that excess to make hydrogen. The only downside of the hydrogen option – green hydrogen, that is, whose production doesn’t mean more carbon emissions – is you have to use electricity first to make it.
“The thing with this whole future thing is there isn’t a silver bullet, a single answer. It’s going to have to be multiple answers for a renewable future.”
One thing that worries her is that many people focus on electricity when discussing renewables, but in the equation dealing with all energy, renewables account for only 40 percent.
“The basic question we need to ask the government is do they want to get rid of fossil fuels or do they want a low emissions future? The two are quite different.”
She believes (like much of the developed world) that we can continue to use lower carbon emissions gas (or nil with carbon storage as proposed by 8 Rivers) for an intermediary stage.
“That was probably one of the biggest takeaways we got from the trip to Aberdeen (on which she was accompanied by Andrew Clennett and John Haylock from Venture Taranaki).
“There is virtually no-one else in the world that’s pulling gas like we are. It’s about what we are all really trying to do – which is lower emissions and achieve a cap on global warming of 1.5 to 2 percent since the industrial age began.
“You need to think of the exponential cost of trying to achieve net zero carbon by not using any fossil fuels; there is the cost in land, and the cost to consumers.
“The biggest users of energy are industrial, transport and industrial agriculture, but there’s also the domestic market (heating, water-heating, cooking). The UK looked at heat pumps to replace gas in homes, but it was too expensive, so now they’re looking at hydrogen for heating. And if that’s an option for New Zealand, that would be great for Taranaki.”
New Plymouth Mayor Neil Holdom is the other strong local body voice on this. “There is a group of us going to Wellington that represents tangata whenua, the Taranaki mayoral forum, business, and Venture Taranaki,” he says.
“We go as a group and lobby. We’ve put our hand up and said we believe we’ve got the intellectual capability here to collaborate with you to help solve the problem.
“At the moment, what’s there (renewable and gas) is supplying us well in a normal hydrological year. But if we need to replace the non-renewable we’ll have to double the renewable energy generation. The cost of that shift is in the billions.”
He notes National leader Simon Bridges has said he’ll not back out of the ban, “but I think there’s work going on that shows he’s committed to the net zero carbon emissions target.
“I think the political ground has moved. National may make changes to the Crown Minerals Act (if it gets back in) and allow further offshore exploration, but they’re committed to this low-carbon economy.
“I think most New Zealanders want to get there, so it’s good that we’ve got this bi-partisan talk so it won’t be backed away from if there’s a change of government.”
That’s a point New Plymouth’s National MP, Jonathan Young, agrees with – that it would not be satisfactory to have the exploration law changed every time the government changes.
Holdom says everyone is awaiting a couple of critical government reports from the Interim Climate Change Committee, whose transition into a proposed Climate Change Commission has been delayed by Green Party leader and Climate Change Minister James Shaw until attempts to gain cross-party agreement have concluded.
“One is about how we get to 100 percent renewable energy in a normal hydrological year. The aim is by 2035. The second is on how we’re going to deal with agricultural emissions and bring them into the emissions trading scheme. They’ve basically got to say if it’s doable and how.”
Holdom’s reference to agricultural missions is explained in a 2018 report by the Productivity Commission, after it was commissioned by the National government to investigate.
It found New Zealand is almost unique, because unlike other countries – whose emissions are mostly carbon dioxide from burning fossil fuels – nearly half ours come in the form of methane expelled by cows.
The commission says the latter is more powerful in its effects on climate, but dissipates quickly (within 12 years), whereas CO2 stays in the atmosphere forever. That makes it the immediate prime target, hence the government’s move on fossil fuels. What’s to happen with cow farts has yet to be addressed (but is sure to be under this government).
Holdom says the government has got to get on with it if they want to do it. “James Shaw is talking about changing this curve of climate emissions, but where’s the money? (The government has) given the committee a one-off $100 million for a clean energy investment fund, but that’s peanuts.
“Shaw has said none of that money is going to the energy sector for any large-scale projects, because they’ve got to fund their own stuff.
In his view, the government has already backed off a lot from where it was when the ban policy was announced last April. “They’ve said they’re extending existing permits on a case-by-case basis. Because they’ve realised they were painting themselves into a corner – they’ve ignored the scientific base evidence of their own Crown Minerals team, which has said this is not going to work.”
He agrees the government must put its money where its mouth is, “and on a scale that has some risk for them. The traditional model was the locals pitching in a dollar and the government putting in 80c to $1. And it took five years.
“Our long-term planning process budget was all but complete in March – and then they dropped this on us.”
The only thing NPDC has been able to do is take its cash surplus from last year ($330,000) and set it aside for economic development activities so the council can support the efforts being made.
“But our question to Wellington is: ‘where’s your cash?’ To ask our region to come up with millions and millions of dollars to co-invest with government to help achieve a policy we were never given the chance to make any input into – you just dropped it on us. It’s a struggle, and we’re going to forge into new territory.”
“Some people say, ‘well, let’s get into tourism’, but there is a big difference between the earnings of an energy geologist and someone who washes dishes or waits on tables.
“Some people are saying it’s inevitable, so let it go, but I think, no, there’s an opportunity here for us to do something quite awesome. The new national energy centre we want established here is a good example.
“Because the problem that is much more critical for Taranaki to solve than the rest of the country, is a problem the whole world is trying to solve.
Venture Taranaki (VT) head Stuart Trundle – whose organisation has the job of investigating what might be done in the energy realm – agrees the government’s announcement in April was destabilising.
“In fact, the transitional journey had been well sign-posted globally, although NZ Inc is probably running one to two years behind several other jurisdictions. This isn’t about subtle change – this is about an organic change of direction for the economy.”
VT economy and sector development manager Anne Probert: “To be fair, this (VT’s work) isn’t just a knee-jerk to a policy change. The market is changing, and the signs were there anyway. Companies are responding. It’s about retooling and extending to tap into new opportunities as much as retaining our traditional industries.”
Trundle sees the siting of the proposed national energy centre here as vital to the region’s future, and he awaits a report that will set out Taranaki’s case. Other reports are due soon on an innovation precinct and related Tapuae Roa areas like “future foods”.
He says energy has been providing about 7500 jobs in the region, something that was acknowledged by the Prime Minister when she visited last May and agreed to help VT fund a strategy called ‘Just Transition’.
It now sits with the Ministry of Business, Innovation and Employment (MBIE) and will be the focus of an international conference VT will host in New Plymouth in May. Prime Minister Ardern is expected to attend, as will global experts on energy.
Probert and other VT staff are working on hydrogen research alongside Hiringa Energy and liaising with companies like EHL via the Taranaki Energy Industrial Group and others keen to contribute solutions.
The Energy Industrial Group includes 20 mostly Taranaki-owned companies that specialise in technologies and operational support, with strong relationships within the oil and gas sector (O&G).
“We network, share knowledge and experiences, and help each other where and when required,” says chair Brian Crockett.
The transition beyond a straight O&G mix was happening well before the government’s announcement and was largely why the group rebranded from its previous title, “oil and gas specialist technologies”, about 18 months ago.
Although their skills and capabilities have been built on O&G, he says they are wanted and transferable to a wide range of industries such as all forms of energy, geothermal and hydro power, and the dairy and food sectors.
They believe gas in particular has a medium-term future as a transition fuel, with carbon offsets available from CO2 capture and tree planting.
“But we are also pragmatic and future-focused. The energy industry is changing. There are new technologies and a real emphasis on developing low emission solutions.”
Unsurprisingly, the sentiments Crockett expresses are complemented by the big energy companies like Methanex, Todd Energy (which took over some of Shell’s assets on land) and OMV (which took over Mauī, Pohokura and other land ones), and by their Wellington advocate, Cam Madgwick.
OMV’s senior vice-president for Asia-Pacific, Gabriel Selischi, says companies like his are poised to invest here further, but support from the government is also needed.
He believes about half a billion dollars will be required to ensure ongoing production from Mauī and Pohokura, about the same amount as OMV spent acquiring the assets from Shell. Work on Pohokura was due to kick off last month, marking the beginning of extra spending by OMV.
Madgwick: “Natural gas provides nearly a quarter of our energy, so if we don’t have a replacement it will drive up the cost of homes and business. It will mean job losses, and the government’s average revenue of $500 million a year from the sector will inevitably go down.
“At the same time, it will probably be worse for climate change as we use more coal and/or import more fuel from overseas.”
A number of people interviewed by Live are worried about coal, with good reason.
Earlier this summer, gas supplies were interrupted while repairs were made to the Pohokura gas field operation and maintenance done at the 400-megawatt gas-fired power station in Stratford, meaning government-owned power generator Genesis was forced to buy carbon-polluting coal from Indonesia to use at its Huntly station.
It imported 120,000 tonnes at a cost of more than $20 million, and this year all power prices are expected to rise so Genesis (which ignored Live’s requests for information) can recover its expenses.
Madgwick: “One thing that has mystified our industry is the lack of prior consultation by the government. If they had come to us and advised what they were contemplating and said: ‘what would your contribution be?’ we would have been happy to oblige. Why wouldn’t you do that?”
Energy Minister Megan Woods states that Transpower’s 2018 report into possible energy futures for New Zealand makes clear that we can meet the expected roughly 50 terawatt hours a year needed of new generation by 2050 through renewables. “It also notes that a renewables-based future is likely to be the most affordable option.
“It’s worth noting that renewable energy projects tend to have lower environmental impacts than fossil fuel plants, and certainly are much better for the precious natural environment that supports New Zealand’s tourism industry and our brand around the world.”
What do Taranaki’s “greens” think of all this?
“While we support the transition to a zero carbon and methane economy, the time goal of 2050 is really far too late,” says Climate Justice Taranaki’s Emily Bailey. “Even the Inter-government Panel on Climate Change goal is a best scenario which says we only have 12 years left to turn the tide, given we have already pumped out enough emissions to secure a two-degree temperature-rise.
“Focusing on electricity is also avoiding the fact that even if we convert transport to electric-power, half our emissions still come from unsustainable agriculture.
“Our suggestion would be to seriously move away from gas-based urea fertiliser and milk factories towards effluent pond biogas-powered milk sheds and decentralising our infrastructure to solar, wind and micro-hydro-powered small milk factories, as our ancestors once had.
“We can also shift to compost-making from effluent, old hay and silage to feed the soil, and diversify with orchards, market gardens, small animals and crafts. Once-a-day milking also reduces costs and stress while maintaining profits.
“All this would increase the mental health of workers, increase jobs, reduce transportation and rebuild our rural communities, while reducing emissions across the board. That’s the future we see.
“Not short-lived, expensive and false solutions that continue the extraction of depleting fossil-fuels and harm to the environment, where those earning big bucks in oil and gas continue to earn big bucks on so-called think-big projects propped up by tax payer money.
“This just compounds the class divide and unsustainable lifestyle that fossil fuels aided. Why not support lots of workers and communities in local agriculture, production and retail rather than just a few multi-million-dollar energy companies?”
From the other end of the political firmament sits National’s energy spokesperson and possible future Minister of Energy, Jonathan Young.
“Our economy and way of life is very dependent on energy. When the Maui pipeline went out of commission for 138 hours in 2011, it cost the upper North Island economy $200 million.
“The International Energy Agency in Paris says global demand for energy will increase by 40 percent over the next two decades as populations increase and people connect to electricity to ward off poverty.
“Over those decades gas is projected to increase, coal and oil decrease and the share of renewables, excluding traditional biomass, is projected to soar from 10 percent to 24 percent.
“Yet despite these powerful transitions already underway, the Labour-led government went a step further and banned all new exploration outside Taranaki. It was a ban without consultation, research or strategy.
“Transition is already effectively happening around the world, but the government wants to be a world leader, by banning new exploration by a very small industry in New Zealand.
“How small are we? Taranaki has four offshore platforms. Compare this to the 240 platforms owned by the Malaysian state oil and gas company Petronas, or the 184 platforms in the North Sea, and the 175 platforms in the Gulf of Mexico.
“Not one of those platforms has closed because of Jacinda Ardern’s nuclear-free moment. But Kiwis have lost jobs.
“It is dubious whether we get to change much at all, especially as all our liquid fuel comes from imported crude, meaning that no matter what happens to our domestic industry, liquid fuel emissions will continue at the current level.
“Added to that, if the 132,000 barrels of New Zealand oil that are exported today completely disappeared, the hole it would leave would soon be filled by OPEC’s daily over-production of two million barrels a day.
“Net result for the planet – no change. Net result for New Zealand – long-term loss of 11,000 jobs. A loss of $2.5 billion a year export. A loss of more than $500 million a year in royalties and taxes to the government. So where do you shift 11,000 people to for their next job?
“New Zealand becomes poorer, and emissions don’t reduce here or in the markets we sell to. That’s a slam dunk in our own goal.
“When companies like Fonterra say they could not afford today’s electricity to dry their milk, you can imagine what would occur if they had to pay three times today’s power price.
“The company could not be globally competitive. Not only would Fonterra fail, but the whole dairy industry would collapse.
“When companies like Fonterra say they would struggle to afford today’s electricity to dry their milk, you can imagine what would occur if they had to pay three times today’s power price. The company could not be globally competitive. Not only would Fonterra fail, but the whole dairy industry would collapse.
“Yes let’s engage in reducing emissions and press toward a low emission economy, but let transition happen at a natural pace, a pace that carries people with it on the journey of growth, innovation and change.
“Recognise that banning new exploration isn’t going to reduce emissions in the New Zealand context and have some healthy scepticism about buying-in to the government’s promotion of a ‘Just Transition’, when transition is constantly happening – it has always happened. It’s called progress. It’s called innovation and inventiveness.”