March 2022
Industry update: what we're seeing
This is the first in a regular series of industry updates from Energy Resources chief executive John Carnegie.
These are challenging times for everyone with prices rising faster than wages, and the cost of energy in all forms (including petrol and electricity) hitting new highs.
The tragic war in Ukraine has added to these costs and raises issues of energy security and independence, given that much of Europe depends on Russian natural gas to literally keep people alive through cold winters.
Policy-makers around the world are struggling to balance the energy trilemma as the economic and environmental trade-offs become more and more stark. Nuclear and coal are back ‘on the table’.
While some wish to narrow the options to only renewable sources of energy, and even quicker, others stress the importance of keeping energy options open. This means having the right settings to allow new investment into fuels that are available, affordable, reliable and sustainable.
Inevitably, prices will signal where and in what fuels investments should be made, and a new balance between secure low emissions fuels and renewable sources will emerge. Energy system resilience will become the catch-cry.
Where ever in the world you may be, it’s time for level-headed, pragmatic policies – ones that engage with, rather than hide from the global realities that we all face.
Mobil joins Energy Resources Aotearoa
Energy Resources Aotearoa has proudly welcomed Mobil Oil New Zealand Limited (Mobil) as a ground-breaking new member, becoming the first downstream fuel wholesaler and retailer to join.
“This is another big step on our journey to represent the wider energy sector with a single voice,” says chief executive John Carnegie.
“It means we can speak with authority on the energy system at all levels, from production all the way through to usage."
Mobil is New Zealand’s oldest oil company, having operated here in various forms since 1896. It supplies a nationwide retail service station network of 170 Mobil branded sites and supplies a number of independent fuel retailers and operates six storage terminals.
“Mobil and Energy Resources Aotearoa are closely aligned in our commitment to responsibly meeting Aotearoa’s energy needs, while also reducing environmental impacts, including the risks of climate change,” says Mobil lead country manager Andrew McNaught.
New board members
Energy Resources Aotearoa is proud to welcome three new Board members following our recent AGM and board meeting:
Stuart McCall is Managing Director of Methanex New Zealand, representing Category 5 (Large Users).
Andrew McNaught is Mobil Oil NZ Ltd's lead country manager, representing Category 1 (Large Producers and Sellers).
Russell Petrie is General Manager of Atlas Professionals, and has been appointed as an additional board representative.
Additional climate policies could be pointless - report
A new report warns the Government could spend $4.5 billion on climate change policies that will do nothing to reduce emissions.
The report 'Pretence of Necessity' from the New Zealand Initiative explains how a capped Emissions Trading Scheme (ETS) means there is now a limit on total emissions allowed.
This means that policies like subsidies for electric cars may lower emissions within the transport sector, but cannot lower our overall total net emissions as those emissions units will be snapped by other sectors (like industrial use).
According to author Matt Burgess, "we are witnessing an historic public policy failure...existing policies already have New Zealand firmly on track to deliver statutory emissions targets."
National commits to overturning exploration ban
National Party Leader Christopher Luxon has re-affirmed his party's policy of repealing the 2018 ban on new oil and gas exploration.
"The loss of gas is a big problem for New Zealand at the moment," Luxon told the New Zealand Herald.
"We're bringing in at least two boatloads of Indonesian coal in each and every week to fire power stations," he said.
"When you talk about a transition, in the economy, gas was a really good product for us. It's not the perfect solution, you've got to think about how you do these things in a really staged and smart way. Right now, gas would be a really good fuel for the economy."
Energy Resources Aotearoa chief executive John Carnegie says the policy is “good common sense” .
“Natural gas makes sense as an option until renewable alternatives at scale are economic and can deliver the same characteristics. This will send a positive signal to current producers and hopefully encourage them to stay here in New Zealand and invest in new projects.”
Member profile: Methanex
Every month we'll be profiling different Energy Resources members, highlighting the range of skills and services in our local industry.
Based in Taranaki, Methanex is New Zealand's only producer of methanol and the largest user of energy.
Methanol is a biodegradable chemical that is an essential ingredient used to create hundreds of everyday industrial and consumer items, as well as being used as a clean-burning fuel.
Methanex owns and operates three plants in Taranaki and employs around 200 people, as well as additional contractors.
They are an important contributor to the local and national economy. According to an economic impact report from 2018, they generate $634 million for Taranaki's GDP and $834 million for the country's GDP each year and support 3,171 full time equivalent employees (FTEs) nationally.
