John MacDonald: Import gas or cross our fingers and hope?

Canterbury Mornings with John MacDonald

Not as straightforward as it sounds.

That’s pretty much the message coming through loud and clear in this new report which says importing liquified natural gas to make up for our dwindling local supplies is do-able. But.

You’ll remember how, last year, when we had factories closing and people paying through the nose for their electricity, talk turned to what could be done, especially given we are at-risk of not having the gas needed to generate power.

So the Government brought up the idea of importing liquified natural gas.

Fast-forward a few months and four of the big companies have put their heads together, looking into the practicalities of importing gas. The outcome is this report out today effectively saying we could do it, but there are a few things to think about.

The main ones being the price tag and how long it would take to get it happening.

First up, the cost. Up to $1 billion. That’s to get the infrastructure needed so that we can bring the gas in and store it.

It could be done cheaper, but the gas would be 25% more expensive.

Secondly, if we’re up for that kind of spend, it wouldn’t be an overnight fix. It would be about four years before we started to see the benefits.

Another main point in this report is that we could spend the money and wait for it all to come online, but there could be years when we don’t even need the extra gas.

That’s because power generation in New Zealand uses a combination of hydro, gas, and wind.

And in the years when we have plenty of rain and the hydro lakes are full, for example, we might not need to import gas.

So we could go down the route of spending all this money over the next four years —setting ourselves up— and the demand for gas that we might have now not being the same down the track.

But that’s a bit like pouring money into a fire alarm and sprinkler system and not using it, you know it's there and give it gives you security.

That’s how I see this gas importation business – it would be a back-up. And so-what if it wasn’t needed all the time?

The question facing us now is what do we do now that we have a better idea about the complexities and the cost?

Paul Goodeve, chief executive of the Clarus energy company, thinks we need to ask ourselves whether it’s worth doing without getting obsessed about the cost.

Because as I said earlier, it could be done cheaper —at around $200 million— but that would mean the gas would be 25% more expensive.

I’m no doubt that we have to bite the bullet and press go, and press go on the expensive option.

Because if you or I, or the Greens or whoever, think that this is nuts and we shouldn’t be importing gas and we should all have solar panels on the roof, that’s la-la land.

If you listen to the likes of Greenpeace, they’ll say that importing gas shouldn’t even be an option and we should be going full-bore with solar and wind power generation.

Again, la-la land. Because the reality is, we need a mix of generation options.

And even though it looks like importing liquified gas might not be as straightforward as we might have thought when the government started talking about it last year, what are the alternatives?

Crossing our fingers and hoping for the best? No thanks.

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