Security of energy supply at risk in approach to climate change

Senior executives of many companies active in the New Zealand oil and gas industry believe that the climate change initiatives announced by the Government today pose significant risks to the investments required to achieve energy security.

Commenting today on the Government's announcement that it proposes to introduce an emissions trading scheme, Executive Officer of the Petroleum Exploration and Production Association, John Pfahlert, said care will need to be taken that the proposed scheme does not discourage investment in oil and gas exploration and production.

"Dependable, economic and environmentally efficient electricity supply is essential to our economy and the industry's efforts to provide an ongoing supply of natural gas is a cornerstone of future supply.

"We need to take care that the imposition of a carbon charge on electricity generated from gas does not unduly impact on future exploration and production levels so that base energy supply for future industry and household needs is secure."

Mr Pfahlert said the structure of the proposed system meant it was likely that suppliers of electricity generated from other fuels would make windfall profits, among them government-owned state enterprises.

He said the scheme would also inevitably cause rises in electricity prices, as acknowledged by the Government.

ENDS

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