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Gas Investment boost should extend to distribution

15 June 2004

Gas Investment boost should extend to distribution

The Government’s new plans to provide financial incentives for investment in gas exploration should be extended to include natural gas distribution, according to the Gas Association of New Zealand (GANZ).

GANZ Chairman Trevor Goodwin said the announcement was a constructive step in the right direction to encourage investment in the gas sector.

“The real challenge for New Zealand, however, is extending natural gas distribution networks so that gas is available to more domestic and small commercial users.

“Yesterday’s announcement seems to be designed to increase the amount of gas exploration to provide gas primarily for the generation of electricity. While securing the nation’s electricity supply is important, from an environmental and consumer choice perspective we should also be focusing on increasing New Zealand’s energy efficiency and the use of natural gas as a primary source of fuel.

“Using natural gas for electricity generation is not the most efficient use of this important energy source, as gas-fired electricity generation loses between 50 per cent and 75 per cent of the heat value of gas. It makes much more sense to use the natural gas as a direct fuel, as much as possible.

“There is also the additional benefit that providing natural gas to more homes reduces the demand for electricity and consequently the pressure on our nation’s electricity supply.”

Mr Goodwin noted that there was also benefit to consumers in extending the availability of reticulated natural gas.

“Consumers view natural gas as the best choice of fuel for space heating, water heating and cooking, while also being a competitive energy option from the price, efficiency and environmental points of view.” Mr Goodwin said that natural gas was currently only available to around 10 per cent of New Zealand households.

“We urgently need to extend the distribution of natural gas in this country, so more people are able to choose this superior energy source.

“This will only happen if the Government provides a suitable investment environment. The current focus on regulation will only achieve a stifling of investment – rather than the ultimate outcome of gas pipes being laid past as many potential consumers in New Zealand as possible.

“We are asking the Government to extend its package announced yesterday, to include incentives to encourage further investment in natural gas distribution.”


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