Connell Brian: Urgent Debates — Energy—Project Aqua Cancellation 
Connell Brian: Urgent Debates — Energy—Project Aqua Cancellation 
[Volume:616;Page:12068] 
BRIAN CONNELL (National—Rakaia) 
: 
 This is a project that was never going to fly. We have all heard the different price tags. As little as 6 months ago it was reported that Project Aqua was to be built for about $0.9 billion and now the last report has said there is a price tag of about $1.2 billion. When I quizzed Mr Turner about this at the select committee a couple of weeks ago he confirmed that it would not be built for $1.2 billion. He had no confidence that it would be built for that price tag at all. He did not say it but my best guess is it would be more like $2 billion - plus. The project was not even tendered internationally and the reasons are either that it could not be built for $1.2 billion and the Government knew it or—and this is probably more likely—that no international bidder would look at it for that type of money in particular under the types of constraints that Meridian Energy would be putting them under through this Government. Much has been made of the fact that Project Aqua would provide cheap power. But I put it to the House that if the cost model was wrong then the price model must also have been wrong because the cost of capital must flow through into the price model. What that suggests to me is that at $1.2 billion this project was so marginally priced that in the end not only could it not be built for that figure but Meridian Energy just said “No way!”. 
There is absolutely no doubt that this country needs more electricity generation. That has never been in doubt and the National Party has never argued that Project Aqua was not worth its merits on the basis of generating more electricity. What we were concerned about was the way it was being cherry-picked by this Government to rush through legislation because it would not address the real issue of the Resource Management Act. In my view Project Aqua notwithstanding the fact that it would have solved a short-term problem was not going to be a long-term solution and there is no doubt that it would have done damage to one of our last great rivers. One year in three there would still have been a crisis given that that is when there would be dry years. Given that the project would have taken at least 5 years to build—if it ever got consent in the first place—demand would have already outgrown supply by then and the question would be: “What do we do now—dam another river?”. Well I for one was not keen on that nor was the Government despite the fact that there was a reasonable alternative on the West Coast. 
 The Minister took a call before and told us that Dobson was not a goer because it was a pristine environment. The reality is that what has been protected is not a pristine environment but is gorse scrub and lupin. That is what the Minister is trying to protect and that is why he would not even look at this area. 
Hon Brian Donnelly 
: Wouldn’t even look at it. 
BRIAN CONNELL 
: Would not even look at it—would not even go there. He did not even leave his Wellington office. He is just too petty to consider this even on a commercial basis. What are the alternatives? Wind? Mr Shirley has already addressed that issue and exposed some of the shortcomings. I would add that some of the technology is still to be proven. Gas? The supplies of gas are limited. Coal? It is really the only other alternative. The Minister knows that which is why he tried to steer the conversation away from coal in the first instance. 
New Zealand has over 1000 years of coal reserves and we will simply have to use them. Burning coal using new technology is doable. Yes there are some emissions but we can reduce those dramatically. If we want a secure profitable cohesive nation then we must guarantee generation supply and this is the only way we can do it. Better still if we burn coal we can site the constructions exactly where we need them and we will not lose huge amounts of coal from transmission losses. For example the Christchurch to West Coast railway line—and we have huge amounts of coal on the West Coast—is only 36 percent utilised. The infrastructure for getting coal where we need it is already in place in some places. Coal is affordable. If we backed out of the stupidity of the carbon tax that this Government imposed on us by rushing in to sign and ratify the Kyoto Protocol then coal would be affordable and more important would guarantee a constant supply of generation. 
Let us be clear. The real reason besides the cost that Project Aqua fell over is the Resource Management Act. Meridian Energy said in its own press release that one of the reasons it walked away from this project was uncertainty concerning resource consents—in particular whether Meridian Energy could secure a consent what the conditions of any consent might be when the consent might be available and how much water the consent would provide. Meridian Energy had absolutely no surety that the Resource Management Act would deliver this project for it. The Government has belatedly accepted that it has to do something about it. At least I thought it would do something about it. It transpired that the Government put Mr Benson-Pope in charge of this. People will stop in their tracks when they hear that press release. When that goes over the sound waves of New Zealand people will stop think about it and say: “Wow electricity issues are solved now. Bring it on!”. I can tell members that this Government has suddenly lost all semblance of credibility. 
The other person in the House who has been a big winner today the person who is most relieved is—wait for it—Mr Parker. He has showed absolutely no leadership whatsoever on this issue. In fact people in the Waitaki valley can never find him to take on a leadership role or to ask his opinion on this. They have actually coined a nickname for him. They call him the “Parker pimpernel”. That is what they call him. They search for him here they search for him there but they can never find that dastardly “Parker pimpernel”. That is what they are saying about him down there. I am relieved because he is in the House and I know that he will get up take a call and tell us exactly what we need to do now in this country to guarantee a constant supply of electricity generation. If we believe his press releases we know he is the one with all the answers. I cannot wait to see this guy get on his feet to take a call. 
The other reason that Project Aqua fell over was the attitude that Meridian Energy displayed toward the local community. It really adopted a “bull in a china shop” mentality and in particular its attitude towards local farmers was nothing less than appalling. Meridian Energy wanted all the water for itself. That should have told us something in the first place about how marginal this project was. Meridian Energy would have us believe that of the 73 percent of water that needed to be diverted down those canals it needed at least 95 to 97 percent to make the project fly. The local farming community had news for Meridian Energy. By Order in Council the community protected 15 cumecs of water that were guaranteed for irrigation. 
Meridian Energy thought it could thumb its nose at those folk so the people got coordinated. They got organised. They got a legal opinion from one of the leading legal firms in the country which said: “You guys have a very strong position.” Meridian Energy was essentially outmanoeuvred. In the end Meridian Energy because of the costs the Resource Management Act and its attitude to the local farming community around Kurow—the community said it had to be more reasonable—threw up its hands and said it was all too hard. 
That we must secure a supply of energy is not in doubt. It is absolutely essential but we need to plan for it long term. We need to use a strategic approach and look at the resources we have in abundance—which is coal. I cannot abide the fact that we will continue to dam rivers willy-nilly. We need to use a strategic approach use our resources and use the technologies available to us if the electricity crisis that we are now facing is to be avoided.