John Carnegie: Energy Resources Aotearoa CEO on the concerns commercial gas users will be impacted by higher prices

Commercial users of gas are likely to be hit hard by 'unsustainable' prices this year, according to sector regulators.

The Gas Industry Company’s latest quarterly report said average spot prices rose sharply in the first three months of 2025 as production continued to decline and demand remained relatively constant. 

Energy Resources Aotearoa CEO John Carnegie explains what this could mean for the sector.

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Episode Transcript

Speaker 1 (00:00):
Commercial gas users are likely to face unsustainable prices this year.
According to the gas sector regulator, Gas industry companies laters
quarterly reports their supply of gases falling, but demand are
staying constant, and that means customers with contracts expiring are
either not being offered new contracts at all or just
having to pay a hell of a lot more for
their gas. John Carnegie is the chief executive of Energy

(00:21):
Resources ultier Or Hey.

Speaker 2 (00:23):
John, heyya there you doing.

Speaker 1 (00:25):
I'm very well, thank you. Like what kind of an
increase in prices are we talking?

Speaker 2 (00:30):
Oh, look at it. It depends on the volume that's
being demanded by the specific businesses. So it's a bit
hard to pick a number, but they are sizeable percentage increases.

Speaker 1 (00:44):
Like enough to basically not be able to afford it.

Speaker 2 (00:48):
Well. Again, that's businesses are under a lot of cost pressures.
But you know, again that's up to the economics of
the particular business. But it's certainly at a time when
costs are using across the board becoming more and more
difficult for our business community. Who are using who using gas?

Speaker 1 (01:07):
What options do gas users have them? If they're in
the commercial game, it's gas or electricity isn't as simple
as that.

Speaker 2 (01:15):
Well, look it kind of is. But first I'd actually
like to actually just acknowledge the really tough position these
businesses are in and also say that it's one they
actually should never have had to face given the abundance
of our natural resources. So against that backdrop, look, you're
basically right, it's they've got a choice. Well there's there's

(01:37):
LPG could solve some of their problems, so bottled bottled gas.
Depending on how much they use. They could of course
pay the higher gas prices if it's commercial for them
to do so. But other than that, it's electrification or
actually the worst possible outcome closure.

Speaker 1 (01:57):
Yeah, And do you expect that we will see any
business is closed because of this?

Speaker 2 (02:03):
I would hope not. I mean, I think this is
the business community is looking to the government for some
solutions around this, and hopefully those solutions are going to
be forthcoming.

Speaker 1 (02:18):
So what solutions, I mean, apart from subsidizing, what else
can we do?

Speaker 2 (02:23):
Well, we can encourage the government could encourage for the
expiration of more natural gas. Natural gas is.

Speaker 1 (02:32):
This government has listened. This government has been in for
eighteen months and absolutely diddly squat has happened on the
gas gas front, and I am starting to very reluctantly
come around to the idea that maybe Megan Woods isn't
the problem. We are just running out of gas, because
if we had gas out there, and if there were
all of these these viable gas fields, surely by now

(02:53):
somebody would have tapped them.

Speaker 2 (02:55):
No. Well, I mean that completely belies the fact that
the twenty eighteen decision smashed investor confidence, and so investors
in the upstream are reluctant to put their money on
the line. When we've got a prospect, particularly of a

(03:16):
government that will come in in let's say, three, six,
nine years time and flip the switch on its head.
That is an untenable risk for explorers to take, and
they cannot take it without the government helping d risk
that proposition. So, you know, if we don't, you're you're right, We,

(03:36):
like you, have been waiting for eighteen months for a
signal from government that they are going to a step
in and d risk. The issue is if they do not,
we have a very very bumpy decade or so.

Speaker 1 (03:52):
It doesn't the government just do it itself.

Speaker 2 (03:58):
Well, they tried that in the eighties wasn't a raving success,
I have to admit.

Speaker 1 (04:04):
So if you think the gas is there, and if
it one hundred percent is there and we one hundred
percent needed, then it's a no brainer, isn't it. If
nobody else is going to do it, they need to
do it.

Speaker 2 (04:17):
Well. Well, I mean our preference is that the government
puts in place the right conditions to encourage the private
sector to invest, just like in any other business here.

Speaker 1 (04:27):
But I mean it's clearly not happening, is it.

Speaker 2 (04:30):
Well, it's not happening because we don't have those right
regulatory and commercial conditions yet. That's the thing. So we're
kind of round and round on this and waiting waiting
for the government. Are no, I don't. I don't. I
don't think. I don't think we are who they done
for them? Well, it's a collective government decision. So it's

(04:54):
for the all of the coalition of partners to make
a decision as to whether or not they want to
put their money into the film industry or the oil
and guests.

Speaker 1 (05:04):
John, thank you, I appreciate it. John Carnegie, Chief Executive
Energy Resources. How we'll see it. I'm starting to get
very suspicious about this whole situation. We'll talk about it
at some stage. For more from Hither Duplessy Allen Drive
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