John MacDonald: Import gas or cross our fingers and hope?

Not as straightforward as it sounds. 

That’s pretty much the message coming through loud and clear in this new report which says importing liquified natural gas to make up for our dwindling local supplies is do-able. But.  

You’ll remember how, last year, when we had factories closing and people paying through the nose for their electricity, talk turned to what could be done, especially given we are at-risk of not having the gas needed to generate power.  

So the Government brought up the idea of importing liquified natural gas.  

Fast-forward a few months and four of the big companies have put their heads together, looking into the practicalities of importing gas. The outcome is this report out today effectively saying we could do it, but there are a few things to think about.    

The main ones being the price tag and how long it would take to get it happening.   

First up, the cost. Up to $1 billion. That’s to get the infrastructure needed so that we can bring the gas in and store it.  

It could be done cheaper, but the gas would be 25% more expensive.  

Secondly, if we’re up for that kind of spend, it wouldn’t be an overnight fix. It would be about four years before we started to see the benefits.  

Another main point in this report is that we could spend the money and wait for it all to come online, but there could be years when we don’t even need the extra gas.  

That’s because power generation in New Zealand uses a combination of hydro, gas, and wind.  

And in the years when we have plenty of rain and the hydro lakes are full, for example, we might not need to import gas.  

So we could go down the route of spending all this money over the next four years —setting ourselves up— and the demand for gas that we might have now not being the same down the track.  

But that’s a bit like pouring money into a fire alarm and sprinkler system and not using it, you know it's there and give it gives you security.  

That’s how I see this gas importation business – it would be a back-up. And so-what if it wasn’t needed all the time? 

The question facing us now is what do we do now that we have a better idea about the complexities and the cost?  

Paul Goodeve, chief executive of the Clarus energy company, thinks we need to ask ourselves whether it’s worth doing without getting obsessed about the cost.  

Because as I said earlier, it could be done cheaper —at around $200 million— but that would mean the gas would be 25% more expensive.  

I’m no doubt that we have to bite the bullet and press go, and press go on the expensive option.  

Because if you or I, or the Greens or whoever, think that this is nuts and we shouldn’t be importing gas and we should all have solar panels on the roof, that’s la-la land.   

If you listen to the likes of Greenpeace, they’ll say that importing gas shouldn’t even be an option and we should be going full-bore with solar and wind power generation.  

Again, la-la land. Because the reality is, we need a mix of generation options.  

And even though it looks like importing liquified gas might not be as straightforward as we might have thought when the government started talking about it last year, what are the alternatives?  

Crossing our fingers and hoping for the best? No thanks.   

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Morning's Podcast with John McDonald
from News Talk ZB.

Speaker 2 (00:13):
Not as straightforward as it sounds. That's pretty much the
message coming through loud and clear in this new report
out this morning, which says importing liquefied natural gas to
make up for our dwindling local supplies. It's doable. Yeah,
it's doable, but there are a few butts. Now you

(00:34):
remember how last year when we had factories closing and
people paying through the nose for their electricity, which is
nothing new, but it compounded last year, didn't it. We
had all that coming on, talk turned to what could
be done, especially given we are at risk of not
having the gas needed to generate power or to be
part of the power generation mix, and so the government

(00:59):
brought up the idea of importing liquefied natural gas. Remember that.
So fast forward few months and four of the big
companies have put their heads together. They've looked into the
practicalities of importing gas and the outcome is this report
out today effectively saying yep, we could do it. That

(01:20):
there are a few things we need to think about,
the main ones being the price tag and how long
it would take to get the whole thing happening. First up,
the cost up to one billion dollars one billion. That's
to get the infrastructure needed so that we can bring
the gas in and store. It could be done cheaper.

(01:43):
See this is why it's not as straightforward as we
first thought. Could be done cheaper than that, but the
gas would be twenty five percent more expensive. Second thing
to think about from this report, if we're up for
that kind of spend, it wouldn't be an overnight fix.
It'd be about four years away before we started to
see the benefits, before we started to see the gas

(02:04):
coming into New Zealand. Actually, another main point in this
report is that we could we could spend the money
and we could wait four years for it to come online,
but then there could be years when we don't even
need the gas. The extra gas I'm talking about. That's because,
as I say, power generation in New Zealand is done
in different ways, using a combination of hydro gas and wind.

(02:29):
In the years when we have plenty of rain and
the hydro links are full, we might not need to
import gas. So spend all the money, but we might
not need it all the time, so we could go
down the route of doing all that waiting spending, setting
ourselves up, and the demand for gas that we might
have now might not be the same down the track.

(02:52):
But I see it as the same as pouring money
into a fire alarm and sprinkler system and not using it.
You know it's there and it gives you security. And
that's how I see this gas importation business. It would
be a backup. It looks if it wasn't needed all
the time. So what have we spent the money? So
what if we waited four years? And so what if we.

Speaker 3 (03:12):
Could do it but we didn't need to do it? It
would give us security. Questions facing us now, though, is
what do we do now that we have a better
idea regarding the complexities and the cost of doing it?
Now you might have heard Paul Goodeve. He's chief executive
of an outfit called Claris, and he was saying to

(03:34):
Heather this morning that we need to ask ourselves whether
it's worth doing without getting obsessed about the costs, because
as I said earlier, it could be done cheaper. We
could spend two hundred million dollars on infrastructure, but that
would mean the gas would be twenty five percent more expensive.
I'll take the billion dollar option, thank you. And I'm
in no.

Speaker 2 (03:54):
Doubt that we have to bite the bullet and press
go and press go on the expensive option, because whether
you or I or the Greens or however, I think
that this is nuts. And you know, we shouldn't be
important and we should all have solar panels on the roof.
You know, we can think that, But that's la la land.
That's that's dreaming. If you listen to the likes of Greenpeace,
for example, they'll say that important gas shouldn't it shouldn't

(04:16):
even be an option, we shouldn't be talking about it
shouldn't even be up for consideration. And green Peace they're
saying we should be going full boar with soul or
and win powered generation. But again, la la land, though,
that's you know, it sounds great, but it's not the reality,
because the reality is we need a mix of power

(04:36):
generation options, don't we. And even even though it looks
like importing liquefied gas might not be as straightforward as
we might have thought when the government started talking about
it last year, even though it might not be as
easy as it sounds, what are the alternatives? Crossing our
fingers and hoping for the best. No thanks

Speaker 1 (04:57):
For more from Caterbory Mornings with John McDonald, Listen live
to news talks It'd be christ Church from nine am weekdays,
or follow the podcast on iHeartRadio