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5/10/2018 — Oil and Gas
Submissions support varying role for gas

Submitters on the Coalition Government’s Carbon Zero Bill favour an all gases target but many were split on what that should look like.

About 58% of roughly 3,000 unique submitters – excluding templates from groups including anti-oil and anti-mining groups Greenpeace, Generation Zero and Forest & Bird – backed a target that would potentially include all greenhouse gases, including methane and nitrous oxide.

The website Sharechat reported yesterday that about 22% favoured a target that was net-zero by 2050 for long-lived gases - like carbon dioxide – but aimed to stabilise shorter-lived gases like methane.

However, about 8% of submitters suggested alternative options. And some firms, including Z Energy Ltd (NZX & ASX: ZEL) and Air New Zealand, backed an all-gases target but suggested a more granular approach within that.

Z Energy said it recognises the complexity of including short-lived gases in the target straight away.

“We would suggest a cap on short-lived gases with a re-concerted effort on innovative solutions - such as biological methane inhibitors - that would not only address these highly destructive gases, but offer an innovative commercial opportunity for the NZ agricultural sector,” Z said.

“The discussion paper does not identify these possible solutions, however, and far more clarity would be needed on what constitutes first-principle considerations as how these gases might be dealt with effectively.”

Sharechat said Air NZ said the all-gases target was needed to ensure fairness and meaningful reductions. It cited modelling by the New Zealand Institute of Economic Research suggesting the cost to the economy was little different from a target that also aimed to stabilise short-lived gases by 2050.

Sharechat, utilising a report by BusinessDesk, said while the Ministry for the Environment’s consultation process in June and July was exhaustive, the 36-page summary shows the limits of ‘tick-box’ surveys when it comes to more complex issues.

The Ministry also convened public meetings, workshops and hui.

The results will be combined with advice the Government has already received from the Parliamentary Commissioner for the Environment and the Productivity Commission. There will be further talks with other political parties before the bill is introduced next year, according to Climate Change Minister James Shaw.

Sharechat said more than 15,000 submissions were received, including templates and three-question forms filled in online and at public meetings. Among the other survey results, there was strong backing for an independent Climate Change Commission from obvious parties who would have dominated the submission numbers.

Trustpower, which operates 19 hydro schemes and buys the output from Tilt Renewables’ NZ wind farms, supported the call for long-term climate goals.

But it said it was important that the core elements of such a scheme have bipartisan support, that it be internationally linked, and that the Government recognise the potential risk of carbon leakage if emissions are effectively “exported” abroad to less efficient producers and countries.

It said there needs to be an early cost-benefit study undertaken before the government commits to its proposed target for 100 percent renewable power generation by 2035.

Trustpower said such a target risks over-building of renewable plants that would sit idle during ‘wet years’ and may discourage further investment.

It said access to flexible, gas-fired generation – with relatively low emissions – would also be important in ensuring security of supply at least possible cost to consumers during the transition.

Trustpower said the Interim Climate Change Committee needs to consider whether the marginal investment in renewable generation is more effective in reducing emissions than the marginal investment in reducing transport, agriculture or industrial emissions.

Sources: sharechat.co.nz; businessdesk.co.nz

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