If you can now buy a house (thanks to the govt’s policies) you may balk at your power bill (thanks to the govt’s policies)

As  the  Ardern government grapples  with  the  housing  crisis  it inherited — and which  it compounded in its 3 ½  years in office — it looks like it  will have  another  on  its hands in  the  energy  sector.

When   it  sought the  plaudits  of the  climate  change  warriors   and   other  Greenies  by placing a   ban   on exploration   for  natural gas,  it did not  appear to  realise that supplies of   natural gas already were running down fast.

Prime Minister Jacinda Ardern was quoted at the time  as  saying “I don’t think  they  (the petroleum exploration industry)  was blindsided”.

She  insisted  the  country  knew  the  Labour Party  wanted to  move away  from fossil  fuels.

So  what  have been  the consequences?

NZ  imported more  coal  in 2020  than in  2017  and 2018  combined.

Methanex   is  closing down  one of its two plants in Taranaki, producing methanol for export  with a consequent loss  of  jobs  and export revenue.

New Zealand Oil and Gas has relinquished its Toroa and Clipper permits – the last deep sea oil and gas exploration permits off the coast of the South Island. It  had been  working  on developing the  Barque prospect  in the Clipper permit  which  it  regarded  as a potentially significant  gas producer.

Genesis  is bringing a 240 megawatt coal-fired unit out of storage at Huntly to provide backup electricity generation.

Energy and Resources Minister Megan Woods has asked for reports on whether NZ will soon need to import LNG.

NZ  needs about $100m  of  investment each  year in existing wells  to  sustain output but this has become harder to  attract since the ban.  Production at Pohokura, the   biggest gas producer, has  fallen by  more  than a  quarter.

The Parliamentary Commissioner for the Environment says the ban on offshore gas exploration will impose massive costs on the economy but is unlikely to reduce domestic emissions.

The ACT  party argues:

“The Prime Minister needs to show that her ‘nuclear-free moment’ wasn’t just a line in a speech by reversing the ban on exploration for natural gas so New Zealand can begin to make meaningful long-term reductions in our emissions.”

Energy  industry  experts  contend NZ’s gas is a cleaner-burning fuel which could allow a transition away from coal.

Last  year half  of  the gas produced in NZ was converted to  methanol  for export,  mainly  to  China,  earning  the  country  more than $500m in foreign exchange.

The  Green lobby  doesn’t  regard the  drop in methanol exports as a result of the Methanex plant closure as an issue of  any  great significance, but it should  be concerned. More methanol is produced  and used in China  than any other country, and  much of it is made from coal:  this emits nearly three times as  much CO2  as methanol produced  from gas.

Gas  exported from NZ as  methanol  reduces global  CO2 emissions and improves global environmental  outcomes.

The  Climate Change Commission  has  further  confused  the  picture: it  proposes methanol  production in NZ  should  be  shut  down, a switch from coal, diesel and gas to electricity,  and  no  further natural  gas connections to  the grid, or   bottled LPG.  At  the  same  time it proposes  phasing out  imports of light internal combustion vehicles, presumably  to replace them  with vehicles powered   by electricity.

Yet an expert  tells  us that if  we  are to  continue  with  motoring as usual in NZ,  the  country  will  need  to install extra  capacity  equal  to  120%  of total hydroelectricity usage today  just to  power  transport!

And  if  that extra capacity  isn’t   built  New Zealanders  may  find electricity will be in  short supply  and  their  power  bills  skyrocketing.

Given  the  government’s  performance in tackling the  housing  crisis (the Minister of Housing is Megan Woods),  can anyone   be  confident  it  will  do  better   in  the energy sector, where Woods is Minister of Energy and Resources – or, for that  matter, on  finding  practical solutions  on climate  change?

2 thoughts on “If you can now buy a house (thanks to the govt’s policies) you may balk at your power bill (thanks to the govt’s policies)

  1. There was never any “plan” in place to replace fossil fuels in an orderly transition. New Zealand will suffer greatly for Ardern’s folly and her vanity.


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