September 11, 2024 • 4 mins
A poor gas outlook is seen as the main suspect for further job losses in manufacturing.
The country's largest gas user Methanex is proposing to move from two plants to one for the foreseeable future.
It comes after Winstone pulp confirmed plans to shut two mills to more than 200 workers earlier this week.
Former president and CEO of Methanex, Bruce Aitken told Mike Hosking we lack a long term, coherent energy strategy.
He says if you want to build power stations or wind farms, they take many years in planning and construction.
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Speaker 1 (00:00):
In a week where regional New Zealand is getting whacked,
we now got method X proposing to downsize to a
one plant operation job set to go here. The company
puts the blame on the poor gas outlook. Former president
CEO of Methnex Corporation, Bruce aikins with us on all
of this. Bruce, very good morning to you.
Speaker 2 (00:14):
Good morning, Mike.
Speaker 1 (00:15):
That deal that was struck the other day between Methodics
and the power companies to help us out over this period,
is that tied in in any way, shape or form,
do you think or not?
Speaker 2 (00:25):
No, I don't think so. And let me emphasize I'm
not here speaking on behalf of Methods. I'm really I'm
just an interested citizen who knows something about the energy
Patricks and yoursel. I think what we've been observing in
the last few months is just short term fluctuations, and
they always happen in the market. So I don't think
I think there's much noise and much ado about nothing.
(00:48):
I think the big deal, Mike is we lack a
long term coherent energy strategy. And if you think about
where does our energy come from and what are supply
come from, they're all very very long term decisions. If
you want to build a new dam to create hydroelectricity,
if you want to build a gas house station, or
(01:11):
a geo thermal firestation or a wind farm, they take many,
many years in planning and construction and commissioning, and many
hundreds of millions of dollars. So they're very big long
term decisions. And I think when we decided to promote
renewable energy, which I think is an admirable thing to do,
(01:33):
something we should all support and it makes I think
economic and environmental sense, the mistake we made was to
not recognize as a very long transition and we should
have thought that through. What was the transitional fuel that
we wanted to use? And I think it should have
been natural gas. What did we do? We would and
(01:55):
ban the exploration of natural gas and basically poured old
water over the any opportunity we have to use natural
gas as a transition. Pure to me, that's the big
long term issue that this country faces.
Speaker 1 (02:08):
Couldn't agree more. Were you in charge of methodics when
that decision was made by jainda.
Speaker 2 (02:12):
Ad No, no, no, no, no, I've retired long since
along before that, unfortunately, so no, I had no, I
had no, no, any particular insight into that decision. What
I think it was it was it was an ideological
that it was uh. And you know, here we have
the irony that the rest of the world is improving
(02:32):
their emissions characteristics by shutting down coal fired power stations
and replacing them with natural gas burning power stations, and
here we're doing the opposite. We're shutting down whatever natural
gas capacity we had, and we're importing coal from Indonesia
to run to run the Hunting power station insane. And
(02:52):
you know, we need that, we need the coal that
is keeping us keeping the lights on. But it's it's
complete stupidity that we've allowed this to happen and we
didn't think through the consequences of of banning the exploration
of natural gas.
Speaker 1 (03:09):
To argument, well, one argument the Labor Party put forward
to that they say, it doesn't matter whether we're not looking.
When we were looking, there was nothing to find, true
or not.
Speaker 2 (03:18):
Oh that's no, that's that's just silly. Really, you know,
natural gas is not easy to find, so and the
first to acknowledge that, you know, you drill a lot
of dry wells and before before you find things, and
you know there've been you know, several very large discoveries
in the Taranaki basin over the last sixty or seventy years.
(03:40):
The biggest one was Maui of course, and then you
know Parkour is probably the second biggest, and so those
are two discoveries. And all that time and you you've
been drilling wells and spending you know, many many hundreds
of millions of dollars looking for natural gas. So it's
not easy to find. What you need is a committed
explorer who's prepared to bring the rigs to New Zelle
(04:03):
and spend the hundreds of millions of dollars, have a
very long term view, and then if you drill on
that wells, you'll find you'll find natural gas exactly right.
You know, there's a wonderful story out of the North
Sea that the when before they discovered natural gas there,
they drilled hundreds of wells and they were on the
verge of giving up. And then the very last world
(04:24):
that I think BP drilled, they had a pocket of
natural gas. And then of course the rest is history.
That North Sea has been a prolific producer ever since.
Speaker 1 (04:34):
Exactly, Bruce good Insight, I appreciate it very much nice
to talk to you, Bruce Akin, former president CEO of Methodics.
For more from the Mic Asking Breakfast, listen live to
news talks they'd be from six am weekdays, or follow
the podcast on iHeartRadio
In a week where regional New Zealand is getting whacked,
we now got method X proposing to downsize to a
one plant operation job set to go here. The company
puts the blame on the poor gas outlook. Former president
CEO of Methnex Corporation, Bruce aikins with us on all
of this. Bruce, very good morning to you.
Speaker 2 (00:14):
Good morning, Mike.
Speaker 1 (00:15):
That deal that was struck the other day between Methodics
and the power companies to help us out over this period,
is that tied in in any way, shape or form,
do you think or not?
Speaker 2 (00:25):
No, I don't think so. And let me emphasize I'm
not here speaking on behalf of Methods. I'm really I'm
just an interested citizen who knows something about the energy
Patricks and yoursel. I think what we've been observing in
the last few months is just short term fluctuations, and
they always happen in the market. So I don't think
I think there's much noise and much ado about nothing.
(00:48):
I think the big deal, Mike is we lack a
long term coherent energy strategy. And if you think about
where does our energy come from and what are supply
come from, they're all very very long term decisions. If
you want to build a new dam to create hydroelectricity,
if you want to build a gas house station, or
(01:11):
a geo thermal firestation or a wind farm, they take many,
many years in planning and construction and commissioning, and many
hundreds of millions of dollars. So they're very big long
term decisions. And I think when we decided to promote
renewable energy, which I think is an admirable thing to do,
(01:33):
something we should all support and it makes I think
economic and environmental sense, the mistake we made was to
not recognize as a very long transition and we should
have thought that through. What was the transitional fuel that
we wanted to use? And I think it should have
been natural gas. What did we do? We would and
(01:55):
ban the exploration of natural gas and basically poured old
water over the any opportunity we have to use natural
gas as a transition. Pure to me, that's the big
long term issue that this country faces.
Speaker 1 (02:08):
Couldn't agree more. Were you in charge of methodics when
that decision was made by jainda.
Speaker 2 (02:12):
Ad No, no, no, no, no, I've retired long since
along before that, unfortunately, so no, I had no, I
had no, no, any particular insight into that decision. What
I think it was it was it was an ideological
that it was uh. And you know, here we have
the irony that the rest of the world is improving
(02:32):
their emissions characteristics by shutting down coal fired power stations
and replacing them with natural gas burning power stations, and
here we're doing the opposite. We're shutting down whatever natural
gas capacity we had, and we're importing coal from Indonesia
to run to run the Hunting power station insane. And
(02:52):
you know, we need that, we need the coal that
is keeping us keeping the lights on. But it's it's
complete stupidity that we've allowed this to happen and we
didn't think through the consequences of of banning the exploration
of natural gas.
Speaker 1 (03:09):
To argument, well, one argument the Labor Party put forward
to that they say, it doesn't matter whether we're not looking.
When we were looking, there was nothing to find, true
or not.
Speaker 2 (03:18):
Oh that's no, that's that's just silly. Really, you know,
natural gas is not easy to find, so and the
first to acknowledge that, you know, you drill a lot
of dry wells and before before you find things, and
you know there've been you know, several very large discoveries
in the Taranaki basin over the last sixty or seventy years.
(03:40):
The biggest one was Maui of course, and then you
know Parkour is probably the second biggest, and so those
are two discoveries. And all that time and you you've
been drilling wells and spending you know, many many hundreds
of millions of dollars looking for natural gas. So it's
not easy to find. What you need is a committed
explorer who's prepared to bring the rigs to New Zelle
(04:03):
and spend the hundreds of millions of dollars, have a
very long term view, and then if you drill on
that wells, you'll find you'll find natural gas exactly right.
You know, there's a wonderful story out of the North
Sea that the when before they discovered natural gas there,
they drilled hundreds of wells and they were on the
verge of giving up. And then the very last world
(04:24):
that I think BP drilled, they had a pocket of
natural gas. And then of course the rest is history.
That North Sea has been a prolific producer ever since.
Speaker 1 (04:34):
Exactly, Bruce good Insight, I appreciate it very much nice
to talk to you, Bruce Akin, former president CEO of Methodics.
For more from the Mic Asking Breakfast, listen live to
news talks they'd be from six am weekdays, or follow
the podcast on iHeartRadio
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