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21/12/2018 — Oil and Gas
NZ’s finite gas supply a serious issue

In a comment piece in the Otago Daily Times, the chief executive of Petroleum Exploration & Production Association of NZ (PEPANZ), Cameron Madgwick warned there was a real issue of New Zealand running out of gas.

Madgwick said many won't realise NZ only has about seven years of gas supply left, and that within a couple of years supply won't be able to keep up with demand, meaning higher prices in a whole range of areas.

“Because it's not just barbecues either. About a third of the natural gas we produce goes to producing electricity, helping keep prices down when other sources such as wind or hydro are low.”

He said it was also important for industrial heat - such as for milk and timber plants - which creates jobs and exports.

Magwick said about 400,000 homes, schools, hospitals and businesses use natural gas or LPG.

“The Government's end to new exploration permits beyond onshore Taranaki has put all of this at risk. Luckily, some exploration work is happening soon, but if we don't strike it lucky, the costs for New Zealanders will be very serious,” he said.

He said the irony is that while New Zealand is turning its back on natural gas, the rest of the world is ramping up efforts to make the most of this clean-burning fuel.

Global demand for natural gas is expected to grow 45% by 2040 and the world population is expected to reach nine billion in that year. It will be an increasingly wealthy, urbanised and energy-hungry world.

Magwick said there is no way renewable energy can meet even half of this new demand, so it is no surprise the world is turning to natural gas. Not only is it affordable and abundant, it is relatively easy to transport and clean-burning with half the emissions of coal.

“This is how the UK and the US have managed to lower their emissions so much in recent years - by switching away from coal to natural gas. Both those countries are now gearing up to become exporters of LNG to meet global demand.”

The PEPANZ chief said what a ridiculous outcome it would be if NZ ends up having to import more expensive and higher-emitting Australian LNG when the country is “so blessed with our own supplies of natural gas.

“Turning our back on natural gas doesn't make us a global leader. It makes us a foolish outlier, and New Zealand businesses and households will pay the price.”

Source: odt.co.nz

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Cooking with New Zealand gas. Photo Genesis Energy.