Resources Minister and Associate Minister for Energy Shane Jones is requesting guidance on areas where the electricity system could increase coal usage as companies deal with a gas shortage.
Last week, Jones held discussions with major industrial gas consumers in Auckland to address the challenges of obtaining an affordable supply.
“From their perspective, the Crown needs to contemplate a triage system so that the gentailers don’t drive businesses and manufacturers out of existence,” Jones said.
“The gentailers, due to the profiteering, always have more money to outbid everyone else.”
Jones said he has requested guidance on areas where the electricity system could increase coal usage to lessen dependence on gas.
“I am a politician that is pro-coal. I’m a politician that’s pro-fossil fuels because I don’t believe in these indulgences and luxury beliefs any longer.”
“Unless we pace ourselves on the decarbonisation journey, we are going to hallow out the manufacturing sector, and no one is going to thank me, as a politician, for mass unemployment. There is so much fiction associated with the costs and period of time it is going to take for decarbonisation.”
Kapuni fertiliser plant shuts down due to gas shortage
Ballance Agri-Nutrients, one of New Zealand’s largest fertiliser manufacturers, announced last week that it may need to temporarily shut down its Kapuni plant due to a shortage of affordable gas.
The company is planning for a potential shutdown of up to four months if it cannot secure a reliable and cost-effective gas supply by the end of September, when its current contract expires.
Meanwhile, Jones is optimistic about the short-term gas supply following his meeting with several gas extraction companies on Friday morning. He said they are confident in their ability to accelerate gas delivery over the next nine to 12 months and beyond.
“But let’s not pretend that this isn’t a very gruelling time for a lot of gas users,” Jones said.
Business NZ Energy Council warns of gas shortage risks to businesses
The Business NZ Energy Council has been issuing long-standing warnings that a gas shortage might cause businesses to shut down.
Business NZ Energy Council executive director Tina Schirr said that, over the past couple of years, the main concern for gas-using businesses has been obtaining long-term contracts and coping with rising gas prices.
As a result, some companies might consider switching to “dirtier substitutes” or shutting down altogether, leading to job losses.
“The long-term problem is we need more energy in the system, and in this case, more gas. There were a few users in the room today that could switch to electricity, for example, or biogas, but obviously the short-term problem is the same – you’ve got to build infrastructure around it,” Schirr said.
She said the concept of prioritising certain businesses for gas contracts was suggested, but it would only serve as a short-term emergency measure.
According to Schirr, programmes are being introduced to potentially assist businesses capable of switching energy sources, and there is discussion about the government offering cheaper or interest-free loans.