June 2021
New decommissioning law introduced
A new law to strengthen the requirements around decommissioning oil and gas fields has been introduced to Parliament by the Goverment.
Energy Resources Aotearoa supports the intent but has some significant concerns around over-reach.
“We totally support operators taking responsibility and paying the costs for decommissioning. This is what all good operators do,” says chief executive John Carnegie.
“However, holding operators liable many years later for a field they sell or decommission now has worrying implications. This could be a fundamental change to the nature of business law, creating unlimited perpetual liability.
“It’s like holding a factory owner responsible for an unforeseeable issue in a factory they sold many years ago. No other industry is subject to this, even those with much greater risks and direct impacts on safety and the environment.
“It adds even further to an unhelpful investment climate at a time we really need more local natural gas developed to fill the energy gap we're facing."
Energy Crisis: Fact or fiction?
Energy Resources Aotearoa was proud to host a very topical panel this month on whether New Zealand is facing an energy crisis.
A large audience took part in the discussion on high electricity and gas prices, including the impacts on business and potential solutions.
Thank you to our host at KPMG Greg Bishop and our excellent panelists:
- Henrik Mosser (General Manager - OMV)
- Vince Hawksworth (Chief Executive - Mercury)
- Terry Skiffington (Chief Operating Officer - Oji Fibre Solutions)
- Phil O’Reilly (Managing Director - Iron Duke Partners)
Meet the CE - Marc England
Our next Meet the Chief Executive event features Genesis Energy CEO Marc England on Wednesday 7th July in Wellington.
How does he see the future of New Zealand's energy and electricity systems as we transition to net zero emissions? What are the challenges and opportunities for Genesis (and the wider sector) in providing energy that's affordable, reliable and sustainable?
This exclusive event is kindly hosted by PwC New Zealand. A short presentation will be followed by questions and discussion from the floor.
Tickets are essential and free for Energy Resources Aotearoa members.
Coal usage doubles
New figures showing a near doubling of coal-fired electricity generation highlight New Zealand’s energy shortage and the need for natural gas as a lower carbon alternative, according to Energy Resources Aotearoa.
Quarterly figures from the Ministry of Business, Innovation and Employment (MBIE) show in the March 2021 quarter there was a nearly twice the coal-fired generation compared to the same period a year earlier.
This is due to low hydro lake levels and low wind, together with a temporarily reduced supply from the Pohokura gas field.
“It doesn’t seem right we are importing boatloads of imported coal when local natural gas has half the emissions,” says chief executive John Carnegie.
“Natural gas is crucial in providing a back-up to renewable energy sources when the weather isn’t co-operating.
“We agree with both the Gas Industry Company and the Climate Change Commission that more investment will be needed into natural gas production. Otherwise we’ll end up even more dependent on imported, expensive and high emitting sources like coal in the future.”
Climate Change Commission's final advice
The Climate Change Commission’s final advice is still proposing a more expensive and ineffective pathway than we need to reach net zero emissions, according to Energy Resources Aotearoa.
“We all support the end goal but deliberately avoiding a ‘least cost approach’ means unnecessary costs, destroying jobs and wellbeing in our communities,” says chief executive John Carnegie.
“The Commission is still focussing on gross emissions instead of net emissions. This means stopping emissions at their source, and under-using crucial tools such as planting trees and international units to offset emissions.
"It’s pleasing to see a firm date for ending new gas connections has been abandoned. But the lack of faith in the ETS is disappointing, given it is the most efficient and cost-effective way of reducing emissions.
"Instead of trusting the ETS to put a price on emissions and letting people make their own decisions, the Commission is still taking too much of a central-planning paternalistic approach.”
New solar farm in Taranaki
New Zealand's largest solar power plant has been opened in South Taranaki by one of our members.
The Kapuni Solar Power Plant was developed by Todd Corporation's Sunergise brand and has 5,800 solar photovoltaic (PV) panels, enough to power 520 homes.
Sunergise general manager Paul Makumbe told media that while “I think solar and renewables are the future. I don't see it as a departure from gas per se.
“Gas is complimentary to the roll-out of renewables. There will come a time when all of our energy will come from renewables, but I don’t think we’re there yet.”
This investment once again shows the ETS working by encouraging investment into new lower emissions technologies.
