John Carnegie: Energy Resources Aotearoa CEO on gas supply dropping 27 percent in the last year

New Zealand’s gas supply is reducing faster and sooner than previously forecast, new reports from experts warn.

As of January 1, 2025, natural gas reserves have reduced 27 percent compared to last year, the Ministry of Business, Innovation and Employment (MBIE) said.

Energy Resources Aotearoa CEO John Carnegie says there's reason to be concerned.

"Put simply, with the rapidly reducing gas supply, our gas reserves are at historic low levels. New Zealand is facing higher energy prices, increased reliance on imported coal, uncertainty for industrial users."

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Episode Transcript

Speaker 1 (00:00):
Now the debate on the punishment for the Malori parties
has just closed. A bit of a surprise as to
how that happened.

Speaker 2 (00:07):
On is this You can't have a second speech? Are you?
Are you moving emotion? It is a point of water?
Hang on, I've just I am moving a point of
It's okay that the debate on this question now close.

Speaker 1 (00:24):
Nothing is straightforward about this?

Speaker 3 (00:26):
Is it?

Speaker 1 (00:26):
Eight past six?

Speaker 2 (00:27):
Hell? Due out?

Speaker 1 (00:28):
New Zealand's gas situation is even worse than we might
have fought. Natural gas reserves have fullen twenty seven percent
compared to last year. Previously, we thought that our annual
gas production would fall below one hundred peda jules in
twenty twenty nine, but it now looks like that's actually
gonna happen last year, which means running out of gas
faster than we thought. John Carnegie is the Chief executive
of Energy Resources AlSi at all? Hey John?

Speaker 3 (00:50):
Hey, here you doing im?

Speaker 2 (00:51):
Okay?

Speaker 1 (00:51):
Should we be alarmed?

Speaker 3 (00:54):
Well? Yep, but this is another sad chapter on the
diary of our energy sector crisis?

Speaker 1 (01:00):
Why should we be alarmed?

Speaker 3 (01:01):
What does this mean? Well? Look, put simply, with the
rapidly reducing gas supply, our gas reserves are at historic
low levels. New Zealand's facing high energy prices, increased reliance
on imported coal, uncertainty for industrial users, and flow on
potential impacts into the electricity security. So you know, without

(01:26):
rapid actually without rapid action to improve our gas supplies,
New Zealand will experience a collapse in our gas deliveries
before twenty thirty and actually experience what I can only
modestly describe as an energy shock.

Speaker 1 (01:41):
Okay, so what does it mean if we have a
collapse in our gas supplies?

Speaker 3 (01:46):
Oh, well, it means that we well will try and
use alternatives. So as we're seeing in the electricity sector
where we're using coal, can.

Speaker 1 (01:57):
We replace the level of gas that we would lose
in a lapse? Can we replace that with coal?

Speaker 3 (02:03):
No, we can use more coal in the electricity system,
But no we can't.

Speaker 1 (02:08):
We can't because John, there are times are there, not
in normal winters, where everything is running full bore, including coal,
and even then we're just making it. So if we
lose gas, then we're having blackouts, aren't we.

Speaker 3 (02:22):
Well that's a pretty grim prognosis, but the risk it
certainly increases of us having blackouts. But I guess the
other issue is that we will be seeing more renewables
come on stream, but you know, they're not at scale
and they're not affordable at the moment. So an absence
of gas points us to a rather rocky five to

(02:44):
ten years.

Speaker 1 (02:45):
Okay, what does an energy shock in New Zealand look like?

Speaker 3 (02:50):
Well, I guess it means that Carla stays will have
nothing on that. I mean it means we have factories
closing for periods, have periods where potentially we're without power.
But look, I don't particularly want to dwell on that,
because you know, ultimately the system will adjust and we

(03:10):
will get renewables or we will go without for a while.
But in terms of where we're at, we've got a
government that's increasingly and heavily engaged in the issue, as
you've seen with the two hundred million dollar fund, and
so the prospects we are hoping that these numbers are
at the lowest they will ever be and that we

(03:32):
will see a turnaround in condition.

Speaker 1 (03:34):
Is there a risk that if our supply keeps on
falling at the rate that it is, that actually it
gets to a point where it starts to also deter
investment because people look at it and go, jeesus, it's
just I mean, that industry is just so tiny. Now
we're not going to.

Speaker 3 (03:49):
Bother, yes, but that's not the point that we're at.
And as I said, with the two hundred changes that
the government's looking to do legislatively in terms of reversing
the band, ameliorating the worst excesses of the decommissioning rules
that was put on by the last government, and a
two hundred million dollar fund, you know, we're hopeful that investment,

(04:12):
the investment sentiment of the sectible change towards undertaking more
activity and actually growing our guess reserves.

Speaker 1 (04:20):
Yeah, here's hoping.

Speaker 3 (04:21):
John.

Speaker 1 (04:21):
Thank you very much to really appreciate it. John carn'tegie
Energy Resources outsiet or a chief executive

Speaker 2 (04:27):
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