Report confirms risks to natural gas supply as we transition

A new report by the Gas Industry Co (GIC) has confirmed the need for new investment into natural gas to help us transition and avoid risks to energy security, according to Energy Resources Aotearoa.

“This confirms the importance of creating the right investment climate now, so that we can help keep the lights on and deliver a smoother transition to lower emissions,” says chief executive John Carnegie.

The report outlines how natural gas lessens demand for coal and helps keep electricity affordable and reliable during times when renewable sources can’t keep up with demand.

It also highlights the importance of major industrial users of natural gas in the wider system, as their demand makes gas production economically viable.

“Expensive and impractical policies like the 100% renewable electricity target by 2030, the Lake Onslow proposal, phasing out gas from process heat, and extreme decommissioning proposals have unsurprisingly created massive uncertainty for gas producers and users.

“If we keep undermining the natural gas industry then we shouldn’t be surprised that our energy security and affordability is also undermined.

“The power blackouts in August were a clear warning of the dangers in trying to phase out natural gas before realistic and affordable alternatives are ready.

“The best approach would use the ETS as the main policy tool for lowering emissions, because it is fuel and technology agnostic.

“We strongly support the recommendation for the industry and Government to work together to improve investment confidence. We have long advocated for an Energy Accord as the best way to achieve this.

“It’s vital this work happens now, because as the report notes “security of supply for both electricity generation and major users could therefore be compromised during the transition to 2030 and beyond.”

“It’s important we get this right because increases to the cost of living hurt the most vulnerable New Zealanders.

“This is highlighted in another new report today from the Gas Infrastructure Future Working Group which warns a transition away from natural gas could cost homes and businesses over $5 billion.”

The final report from the GIC Gas Market Settings Final Investigation Paper is available here.