Len Houwers: Major Gas Users Group spokesperson on businesses struggling with high gas prices

Major gas users are looking to the Government for help, with many struggling with high prices. 

A survey by energy management company Optima and Business NZ reveals gas prices have risen by more than 100% on average in the past five years. 

Nearly half of industrial and commercial users have had to make cuts as a result. 

Resources Minister Shane Jones is seeking advice whether rationing gas supplies is possible. 

Major Gas Users Group spokesperson Len Houwers told Andrew Dickens Jones has proposed a triage-like system. 

He says Jones is exploring reserving gas for industrial users instead of electricity companies. 

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Episode Transcript

Speaker 1 (00:00):
So there is a core for the government to take
immediate action in the gas sector supplies reaching a crisis point.
The Business New Zealand Energy Council and Optimal Energy Management
Solutions have joined forces to urge Minister Shane Jones to
save manufacturing jobs. So to talk about this, I'm joined
by Len Howis, who's the Major Gas Users Group spokesperson.

Speaker 2 (00:18):
Good onding to you, Len, Yes, good morning, How are you?

Speaker 1 (00:21):
I'm good. This is a problem that's been brewing up
for twenty years and we've never done anything about it.
So how bad is it?

Speaker 2 (00:27):
I think it's getting pretty bad. You know. The propery
is in the industrial secret at the moment where a
lot of these companies are coming up for new contract
when you're suddenly finding that the expectations for pricing is
beyond their means to actually pay for it. Yeah.

Speaker 1 (00:44):
And like I said, we've been saying this for twenty years.
You know, we've got to find more gas. We didn't
have enough. We stopped looking for gas. Some were saying
we should have started the decarbonization process earlier. Was that
dream thinking?

Speaker 2 (00:57):
No, I think the basic problem was. I think carbonization
certainly at the root of this, and in fact, you
know that's made the government policy to effectively create an
energy transition. What the government then failed to do I
think did actually provide a pathway that was sustainable and
ordered to get there. So that effectively left business to

(01:21):
cope with rising carbon prices and putting them on a
path to transition without the technology of the economics able
there to support that transition to happen.

Speaker 1 (01:33):
So now this is all landed on Shane jones desk.
And you were at the meeting with Shane Jones. What
did he say and did it alleviate any concerns you had?

Speaker 2 (01:41):
Well? I think Shane Jones obviously is a champion I
think for industry in New Zealand, and he's going to
try and do what he can, but he's also going
to get it past his colleagues and so forth as well.
One of the ideas he had on the table I
think was two reserve gas industry rather than for electricity generation.
It's an idea that's being explored at the moment by

(02:04):
him and cabinet. I take it.

Speaker 1 (02:07):
And as the thought of rationing which has come out
of Shane's mouth, is that actually a good idea? Will
that only make the situation worse and be a tragedy
for our economy.

Speaker 2 (02:18):
Yeah, well that's the dynamic, isn't it. I mean, in
the first place, if he does nothing, your risk of
the industrialization. If you then decide instead to intervene and effectively,
well it might be seen as workably competitive markets. You
get accused of being heavy handed and stepping in on
property rights and so forth, which is not going to

(02:39):
do our international reputation that's good either. So that's that's
the dream I've got at the moment, to try and
find some way to tread that thin line between doing
nothing and intervening in a way that's going to be
more destructive in the long run.

Speaker 1 (02:56):
And there's no sign of any gas on the horizon.
So how many businesses are at risk of collapse due
to where we're at.

Speaker 2 (03:04):
It's difficult to say, you know, roughly, broughly about I
would say about five and a half thousand gas connections
that we'll be classed as large commercial or industrial. Clearly
a number of them have been successful in acquiring gas
at a price that at least they can carry on with.

(03:24):
But just based on the number in the room on Friday,
you have to say that the reasonable percentage of firms
are going to be struggling to get past the next
couple of years.

Speaker 1 (03:40):
All right, lenn All the best going forward. Lehnn Hower's
is from the Major Gas Users Group spokesperson.

Speaker 2 (03:47):
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