Review fails to address projected gas shortage

National’s welcoming the review of the New Zealand gas sector but warns that it fails to address projected power shortages in a little more than a decade.

“It seems appropriate to proceed in an environment of co-operation between the industry and Government, but there’s quite some way to go,” says National’s Energy spokesman Gerry Brownlee.

“We’re disappointed the gas review didn’t cover the crucial area of exploration, when the industry’s own figures show there’ll be a big gap between demand and supply by 2015,” says Mr Brownlee.

Shell Oil says by 2015 the country will need about 180 peta joules of gas each year when New Zealand will only be producing around 120 peta joules.

Even the Centre for Advance Engineering at Canterbury University warns of a similar scenario in its October review of New Zealand’s future electricity needs.

“Therefore, we disagree with the suggestion that gas fired electricity generation is likely to be the most cost-effective large scale energy source for medium term new generation capacity.

“The industry’s still projecting those big gas shortages even after adding in supplies from 10 unproven fields,” says Mr Brownlee.

“Of course basic economics will also apply - the gas price is expected to more than triple and that’s bound to have an impact on the price of electricity.

“And, perhaps most disturbing of all, is that none of these reports take into account the prospect of a ‘dry year’, with little or no rain, when our hydro generators can’t operate at full capacity,” Mr Brownlee says.

© Scoop Media