The best editorials in The Economist are timeless. Traditionally they germinate in a Monday morning editorial conference run on the lines of an Oxbridge tutorial; Tuesday for a sometimes leisurely write up; Wednesday for editing; last minute tweaks on Thursday; giving a quality product with a life span longer than yesterday’s fish.
The latest on the global energy shock fits the bill. Structured on the classical editorial tripos of “ … three problems loom[ing] large”. Magisterial, incisive, combining sound economics with a global sweep of history.
But perhaps ten years too late.
Continue reading “Economist is always right”
Here’s a bit of good news on the energy front to mitigate some of the gloom created by soaring costs, potential black-outs and rising carbon emissions.
Genesis Energy reported this week New Zealand’s gas supply has been boosted after a $72m project at the Kupe gas production station near New Plymouth has been finished.
The inlet compression project, undertaken by Genesis and its Kupe Joint Venture partners, operator Beach Energy and NZ Oil & Gas, increases production back to the plant’s full capacity of 77TJs a day, the equivalent of supplying around 15% of NZ’s natural gas demand.
Genesis’ group manager Kupe JV Craig Brown said despite some Covid-19 supply chain delays, the project was delivered within budget and with no lost-time injuries from 170,000 person-hours on site – a testament to the strong safety focus of the team on the ground. Continue reading “Big boost for NZ’s gas supply – and a setback for the climate-change warriors”
Soaring energy bills are a problem for firms, households, and the government. This was a headline in The Economist last week – but it can’t happen here, can it?
After all, NZ has plenty of energy. Unlike Europe, 80% of its electricity is from renewable sources. And according to oil industry authorities, NZ is surrounded by a massive continental shelf — the fifth largest in the world, beneath which lie vast quantities of undiscovered natural gas and, probably, some light oil.
So surely NZ can face the future with confidence?
Well, no: let’s not forget Prime Minister Jacinda Ardern had her “non-nuclear” moment and placed a ban on new offshore exploration permits for oil and gas. Since then, as international oil explorers gave up their offshore exploration licences, supplies from existing producing wells have begun to diminish for several reasons.
Higher costs are starting to flow into household and business gas bills. Vector is increasing Ongas LPG cylinders from $115.026 to $125.82. Continue reading “Emergency measures introduced in UK as energy bills soar – and NZ should brace for rising prices, too, thanks to exploration ban”
In Germany that is.
Age before beauty they say. But after last week’s inconclusive election in Germany it’s the forty-something leader of the Green party, Annalena Baerbock, and her generational compatriot, Christian Lindner of the market liberal Free Democrats (FDP), who are making the running in coalition negotiations, leaving the sexagenarians who head the Christian and Social Democrats out in the cold – for now.
Continue reading “The Greens may never have a better opportunity to tackle climate change”
Remember the 1970s? We were going to run out of oil and everything revolved around energy prices.
America got into wars because of it and built an enormous strategic stockpile; NZ had carless days and the hydrocarbon developments of Think Big, the last of the great state-directed development projects (well … until the renewables project, national fibre broadband and the distortions of the Resource Management Act that is).
Europe’s natural gas crisis has the potential to head in a similarly dominating direction.
Continue reading “Correction: Britain’s gas crisis means Europe’s gas crisis”
If the great Russian novelist, Leo Tolstoy, had been an economist he might have written: “All happy market outcomes are alike, but each policy error is disastrous in its own way”.
Certainly the implosion of the UK’s energy market manages to combine many familiar bad policy interventions, while nonetheless contriving its own unique set of outcomes.
Continue reading “Energy chaos – coming to a market near you”
Recriminations flew after the power blackout on Monday, one of the coldest nights in New Zealand.
Energy Minister Megan Woods blamed a market failure and “commercial decisions”. According to the Dominion-Post, she pointed the finger at Genesis Energy, which had not turned on one of the Huntly power station’s units.
The government is said to be demanding answers from the industry.
Genesis chief executive Mark England said the company had been made a scapegoat and he will be asking the minister why.
Transpower has apologised after it asked lines companies to cut power in some areas to handle all-time-high demand for electricity, combined with insufficient generation, on one of the coldest nights of the year.
Transpower CEO Alison Andrew said there was enough generation to cover predicted demand on Monday evening. Continue reading “If recriminations could be turned into energy and stored, maybe the next power blackout could be avoided”
New Zealand has been facing some of the most challenging energy market conditions in over a decade, with simultaneous shortages in natural gas and hydro-electric generation. The consequence has been sustained high wholesale electricity prices, creating issues for electricity retailers without their own generating capacity, to the point where Electric Kiwi – for example – says it is turning to focus on the Australian market.
Some market-watchers contend the problems trace back to the decision of the Ardern government to ban any further offshore exploration for oil and gas. That drove away not only oil exploration companies but also the offshore rigs needed to complete planned drilling programmes.
Whether that is the case or not, some of the big generators like Contact Energy and Genesis are said by critics to be creaming it – but from their point of view, they are doing their utmost to meet the high demand for electricity. Their shareholders certainly should be happy with the healthy margins they are reporting while wholesale prices remain very high. Continue reading “How the govt’s ban on oil and gas exploration has tightened supplies – and resulted in NZ importing 2m tonnes of coal”
Radio NZ is reporting that climate change warriors have low expectations the budget will deliver what is needed. Climate lobby groups say that while the need for action to lower emissions and tackle climate change has never been greater, they doubt the government will step up.
It is being pitched as a Covid-19 recovery budget, as the world starts to emerge from 16 months focussed on battling the virus.
Radio NZ quoted Victoria University climate scientist James Renwick as saying the window for climate action was closing fast.
“Forget 10 years to sort emissions it’s really only 18 months. It’s this period last year and this year where governments are making investments, we’ve got to get that right – the pressure is on.” Continue reading “Climate change crusaders press for a Budgetary assault on emissions and pests (but this might stall the Covid recovery)”
The latest cohort of school students took to the streets last week to demand climate change action. In Wellington, several thousand strikers marched to Parliament.
Izzy Cook, one of the organisers, said they had their own list of demands.
“Investing in a just transition to a sustainable future, reducing agricultural emissions, prohibiting the use of fossil fuels nationwide so phasing them out, getting climate education [and] honouring our neighbours in the Pacific Islands.”
The demands were handed over to Climate Change Minister James Shaw.
But he said it’s not just him who needs to be listening. Continue reading “Young eco-warriors press for change – if they get what they demand, they should brace for a lower standard of living”