Even more doubt is being cast on the likelihood of the government's proposed $1 billion plus LNG terminal actually going ahead, but the Minister previously in charge is still confident it will happen.
Prime Minister Christopher Luxon announced on Thursday Simeon Brown is replacing Simon Watts as Energy Minister. Luxon said this was due to the last few weeks underscoring; “how important energy security is, and as such I will be elevating the energy portfolio to senior minister Simeon Brown.”
In his first press conference since becoming Energy Minister, Brown told reporters; “the reality is that the world has changed since that initial decision was made”.
“The conflict in Iran has changed everything. We will be looking at all of the information and evidence in relation to that decision before proceeding to the next steps.”
Cracks were already appearing on the recently announced import terminal plan, after a push and pull of unaligned commitment between Luxon and Watts over the last week.
In February the Government announced its planned LNG import facility which was anticipated to be operating as soon as 2027 to remove the risk associated with dry years. Meanwhile, among other things, conflict in the Middle East has seen Qatar's Ras Laffan Industrial City - the site of the largest LNG production terminal in the world - hit by missile strikes.
Luxon this week cast doubt on the plan, telling Newstalk ZB, “for me, it’s coming down to the commercial business case …I’m just brutally going to make a decision on the commercial case. If it doesn’t stack up, we won’t be doing it”.
In addition, Finance Minister Nicola Willis said it was; “obvious to everyone that the world has changed since that proposal first progressed through Cabinet".
Shortly after Brown’s comments were made on Thursday, Watts said he did not think Brown’s support for a LNG terminal had decreased.
“Minister Brown equally understands energy as I do, and we both understand that the key issue and problem with the sector is we don't have dry year cover. The only solution that will fix that is an LNG importation terminal.”
If he would be disappointed if the Government chose not to proceed with the LNG plan, Watts said; “Cabinet has made a decision in regards to the LNG terminal, and that's the decision in which, as Minister, I've been executing.”
“... the reality is that we've got a cabinet agreement to get on and do that. Why? Because it fixes our ongoing problem with our energy system. The context of the environment in the Middle East doesn't have any impact on the LNG terminal, and I've got advice that confirms that.
“The reality is, is that that terminal is required because we don't have gas. Cabinet has made a decision, and cabinet hasn't made any other decision other than to support LNG.”
7 Comments
No the world hasn't changed. Geopolitics is still about the rich robbing the poor, might is right, global heating still crashing climate stability and ultimately fossil fuels are finite, as evidenced by the speed we chose to burn through or own national resource. Nothing has changed. Not even the 19th century politicians making outdated decisions.
No.
But something which had been conveniently covered-over, is now in stark view.
Clearly the terminal idea was well named - this is the mechanism whereby ideology wriggles away in the face of physics.
The LNG terminal was a dumb idea idea before "the world changed ". Recent developments just go to show that two wrongs can make a right.
“The reality is, is that that terminal is required because we don't have gas."
And there you have it....not dry year.
More strategically sited storage irrgatition dams with generation - power generated supports power input to fill an Onslow style reservoir?
Aye - best we can do (while the diggers still have fuel...)
This statement by Simon Watts is false"...the key issue and problem with the sector is we don't have dry year cover. The only solution that will fix that is an LNG importation terminal.”
There are a large number of solutions to dry year cover other than imported LNG. Greater stockpiles of coal or biomass (waste wood, wood pellets...) for Huntly to run at full throttle during dry year events, increasing hydro storage (raising the existing Pukaki dam, building Onslow pumped hydro), negotiate industrial curtailment (pay large electricity users to temporary shut down). There are probably other options.
Some of these options would require a joint or portfolio approach.
NZ had a team examining the costs and viability of these various options. It was called the NZ Battery Project.
The Luxon administration as soon as it got into government closed down this project before it could report its findings. This was a culture war nonsense action. It destroyed knowledge - in effect, it was a burning the books act.
This act has set NZ back at least 3 years on knowing what to do about the dry year challenge.
I have long championed Onslow because I assume that NZ will electrify a greater part of its economy and in this future it will be even more important not to lose 10-20% of our energy supply once or twice a decade when dry years occur. The current closing of the Hormuz Straight and the loss of 20% of the worlds oil and gas supply shows how significant losing energy supply can be.
NZ if it wants to survive in an unstable world cannot afford going down this populist culture war nonsense. We need to keep our heads even if the rest of the world seems to losing their heads.
P.S. I am clearly calling out right-wing culture war crap here but the left also need to back track on their culture war nonsense too. The Democrats in the US seem to have largely rejected identity politics, whereas there doesn't seem to be any change here in NZ.
The LNG proposal was always an extremely short sighted decision. Don & Benji's Iran adventure just made that short sightedness starkly visible much sooner than it would otherwise have been. For that at least, we can thank them
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.