Simon Court ACT MP and Undersecretary to the Minister for RMA Reform and Infrastructure.
The energy shortage is biting regional economies hard, and on cold mornings we’re coming perilously close to blackouts.
Winstone Pulp has proposed responding to unsustainable energy prices by shutting mills and cutting hundreds of jobs, an outcome that would devastate livelihoods in the Ruapehu District. They’re currently paying more than five times as much for energy as their overseas competitors, and it’s not feasible to pass these costs to their customers.
Down south, Tiwai Point has confirmed yet another cut in production, in a deal to give energy back to the gentailers to service the rest of New Zealand. It mirrors a similar deal Methanex struck to shut down production until October and sell its gas to power companies.
Oji Fibre Solutions has also announced it is consulting with 75 staff at its Penrose mill on a proposal to close the site. Fonterra has said high energy prices and uncertainty in the gas market were impacting the competitiveness of NZ exporters.
The NZ Manufacturing Alliance has referred to the energy situation - caused by low hydro levels and gas constraints - as a crisis. In a first world country, we shouldn’t have to shut down productive enterprises just to keep the lights on at home, but that’s what we’re seeing.
We can’t go on like this – if it becomes an annual event we’ll see regional economies hollowed out from the inside as factories and smelters and mills become unviable.
There is a poorer, colder, and darker future for New Zealand unless we take urgent steps to restore confidence for energy companies to explore and invest in new supply.
We can’t rely on hydro alone. Usually in an energy crunch we could dip into stocks of natural gas, but the previous Government crashed that sector’s confidence to explore and invest in new supply, hence desperate deals like the one we’ve seen with Methanex.
New Zealand has been here before. In the 1990s a series of dry years caused an energy shortage which showed the need for new investment in reliable and affordable energy. There was opposition then to using natural gas because of concerns about “greenhouse gases”. But two combined cycle gas fired power stations were built by the private sector – around 400 MW at Stratford in Taranaki, and around 200MW at Southdown in Auckland.
The 30-year-old Southdown plant was recently demolished, and the 1996 Taranaki plant can’t have much life left. That’s leaving a big hole in supply, which means increased prices and risk of blackouts. Natural gas must be a part of New Zealand’s energy future.
This Government has committed to reverse the oil and gas ban, but the sector still looks at New Zealand in fear that a future government could shut them down.
I’ve written to Party Leaders from across Parliament calling for cross-party action to support the use of natural gas in our economy, and exploring for more.
If the likes of Chris Hipkins and Chloe Swarbrick can commit to allowing natural gas companies to operate, we’ll see more investment and ultimately more supply brought online.
I am also seeking support for natural gas from the unions because it is their members who are most at risk of losing their jobs.
They always had the most to lose from loony-uni-politics approach to energy and natural gas. ACT awaits their response to our call.
