SpeechJONATHAN YOUNG (National—New Plymouth): I so wish thank you Madam Speaker. Look I'm very pleased to stand and speak on this bill the Gas (Information Disclosure and Penalties) Amendment Bill. The purpose of this bill is to amend the framework of the Gas Act in order to do a number of things: to expand the scope of regulation-making powers relating to data and information pertaining to planned or potential outages and other security supply contingencies in any markets for gas and the bill also increases maximum penalties able to be imposed by the gas rulings panel from $20000 to $200000 where consumers can be adversely affected by potential breaches.I think everybody that I have heard of who has commentated on this bill agrees that increased information would be helpful. But not everyone agrees with what that information should be. Information flows are very helpful for industrial consumers as they can adequately plan if there's going to be a plant outage or maintenance programme from a gas producer. At the same time they can do their own maintenance and so therefore not interrupt their production as greatly as might otherwise be.However there are still significant issues in the security of supply that the bill cannot address. One producer OMV said that they support greater disclosure of outages in the gas sector but they are concerned that some players may have unrealistic expectations of new rules intended to make that happen. They went on to say that any information disclosure regime will not address the underlying supply position in the market. And I have to say that that comment and comments like that have been repeated from a number of different sources. Because what they are identifying is that you can actually make disclosures about an outage you can make disclosures about when you are going to do some maintenance or when a piece of equipment has failed as they did but the underlying issue is that there's a shortage of natural gas and a disclosure regime will not change that. They went on to say that the major impacts from the Pohokura outage is related to shortage of gas itself rather than any information disparity. So in the departmental disclosure statement by MBIE the Ministry of Business Innovation and Employment—what they did to identify the problem this bill is trying to address is they said this: Prolonged natural gas supply outages at the Pohokura production station in [September] 2018 combined with planned outages at other production stations and [combined with] dry spring conditions [that is low lake levels] led to record gas spot market prices and high electricity wholesale prices." Indeed that's the case and I have produced a graph that shows that. In fact this is not including that period but after that period from 1 January 2019 to 23 September; so a kind of nine-month period. What that did to the electricity wholesale market is it increased it by an average 60 percent through that period of time of nine months. That's quite substantial. So instead of the average of around about $80 a megawatt hour it went up to on average $133 per megawatt hour. And the cost of that was worn by many commercial and industrial users. This is where people started to say "Look we just need more information so we can plan and we can do some demand response mechanisms."However what MBIE said in that department disclosure statement was not the full picture. They did express the full picture later on in their regulatory impact statement. They said: "There is an ongoing decline of reserves at New Zealand's offshore gas production fields." So it's talking about Kupe. It's talking about Māui. It's talking about Pohokura. "These fields have provided the historical flex in supply capability for the gas market—particularly the Māui field." I was just a school kid when that was discovered. This will be in the other interesting graph that was presented by Concept Consulting which shows that flex. What that means when it talks about flex is the ability of a gas field to ramp up their production when other fields have to ramp down because they have an outage or they have a maintenance programme where they cannot produce. And what we see on this graph is the Māui fields yes exclude that red printing. But the red is all bad news because what it's showing is that over the number of years the ability of the Māui field to ramp up to be flexed up to be able to fill the gap has diminished considerably and significantly. So this is what actually happened back in 2018. Yes there was some equipment failure some infrastructure failure. And there were you know obviously maintenance issues. They had to ramp down the Pohokura field. And at the same time there were other fields that needed to be under maintenance and there were low lake levels and all of those converged. Ordinarily in the past what would happen is the Māui field would come in as back up and supply to the market and everything would be fine. In this case they couldn't. And so what happened was that we had a significant security of supply issue in the country. Now most consumers household consumers wouldn't know that because they'd already signed two-year agreements with their retailer but there were some that did: those consumers in New Zealand who were purchasing off the spot market. You know what they did? They exited those companies. And some of those companies one of them in Dunedin collapsed—one retailer that was relying on the wholesale market of electricity to sell to their consumers. Ordinarily you would think that that would be the cheapest way to purchase electricity until something goes wrong. And something here has gone wrong. So we've got to understand that this bill will only address one aspect of the problem that New Zealand faces and that is how to respond to low supply of natural gas through demand response mechanisms through more information through people dialling down their demand. But it will not address the underlying issue which is actually lack of gas supply. And in fact in the midst of all this—and it's going to be interesting as our committee takes on this bill and we receive submissions in just to hear from the different elements of the energy sector electricity generators and retailers and also gas producers. Because I think the smart commentators out there are saying that actually this bill only really addresses part of the problem. The other part of the problem is exacerbated because we actually have diminishing reserves of gas supply. And of course we know on 12 April 2018 the Government announced their ban on new exploration. So that exacerbates the issue even more. So we have a situation where we have a bill here that's going to address demand response. That's basically going to mean that people have to dial down their demand. But we don't have a real issue to effectively shore up security supply issues and I look forward to the select committee being able to have a look at this issue and hearing from submitters. Thank you very much."