Parker David: Electricity (Renewable Preference) Repeal Bill — First Reading 
Parker David: Electricity (Renewable Preference) Repeal Bill — First Reading 
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Hon DAVID PARKER (Labour) 
: 
 I rise to oppose Electricity (Renewable Preference) Repeal Bill. It is bad legislation. We have already seen a bill thrust through under urgency that reverses the mandatory sales obligation for oil companies to start to include a small proportion of renewable fuels in the fuels they sell through the pump. 
Moana Mackey 
: Bad couple of weeks for the planet. 
Hon DAVID PARKER 
: It has been a bad couple of weeks for the planet as my colleague says. 
I will reflect again on something I mentioned earlier when we were debating the last bill. Both National and Labour agree that human-induced climate change is real. We are not alone in that view; the Governments of the United States China Australia and the whole of Europe have reached the same conclusion. Although it is true that some scientists disagree with that viewpoint the vast majority of them think that human-induced climate change is a real and serious problem. We have freedom of speech. Sceptics will always be able to have their say and they get more press coverage than they deserve because they are expressing a sometimes radical viewpoint in somewhat intemperate language and are willing to criticise other people who do not agree with their minority viewpoint as being dogmatic. None the less they have freedom of speech. 
If this Government has reached the view—as it says it has—that climate change is real then it is incumbent upon Governments like those I mentioned and the previous Labour-led Government to actually do something to reduce emissions. That is the only way to deal with climate change. We have to reduce emissions so that they do not get worse. 
In New Zealand’s case half of our emissions come from agriculture and are quite hard to reduce. There are some emission-reduction technologies that are already economic like nitrification inhibitors and the various ways in which we can be more prudent in the use of nitrogenous fertiliser. There are various other things that those in dairying can do to reduce emissions like using stand-off pads in winter etc. But by and large it is true that ruminants will still produce some greenhouse gas emissions so it is difficult for New Zealand to control and reduce its agricultural emissions compared with how easy it is to do in some other sectors. 
As we have said the way to reduce emissions resulting from transport is a combination of improved efficiency of vehicle fleets a modal shift into more efficient modes of transport so that again the fuel used goes further—for example putting freight on to rail using bigger trucks or having more passenger transport etc.—and then there is fuel substitution be it electricity or biofuels both of which will be important. Biofuels of course have been set back by the legislation the House has just unwisely pushed through on the votes of National and ACT 
Outside transport the other area that is the main source of energy-related emissions is electricity production. As the Hon Gerry Brownlee rightly said about one-third of our emissions come from thermal electricity and as the Hon Nick Smith will no doubt say when he stands until recently thermal electricity emissions have been going up in New Zealand. That has been a problem. That problem needs to be reversed by stopping those emissions from growing and getting them going in a different direction. 
We heard Gerry Brownlee talk about the existing provision in the legislation. It does not ban new thermal power stations; it restricts them. I will come back to that in a second. That was again his exaggeration. One would think that there were no exemptions for security of supply but there are. One would think from listening to him that one could not retire the Huntly power station and replace it with more carbon-efficient gas-fired power plants. That can be done under the existing legislation. What he said though was that it was unnecessary because this would be controlled through emissions pricing. This is the Government that has thrown the carbon market into disarray because it has said— 
Hon Dr Nick Smith 
: No it hasn’t. 
Hon DAVID PARKER 
: Dr Smith says it has not. There has been a loss of $300 million to $400 million of inward investment in the forest industry as reported widely— 
Hon Dr Nick Smith 
: Dream on! Where’s the proof? 
Hon DAVID PARKER 
: The proof is in the publications that have been put to the member by the investors who said they were going to invest the money and are now not going to. 
In addition to that the carbon service industry one of the world’s biggest players was about to open an office in New Zealand— 
Hon Dr Nick Smith 
: Yeah right! 
Hon DAVID PARKER 
: It was; people from the industry were here to open it. They had come to New Zealand then when National came out and said that it would suspend the operation of the emissions trading scheme they packed their bags left New Zealand and did not do it. That too is on the record. The member might like to deny it but it is true. The carbon market that the Government is saying will control the building of new gas-fired and coal-fired power stations does not yet exist. It is in disarray because of what that Government has already done. The Business Roundtable is out there saying that it wants a carbon tax. The National-led Government has said that it will look at that in the select committee. The Business Roundtable wanted the price of carbon at $5 a tonne—it would not make one iota of difference to that. 
Another reason why a price on carbon itself will not cut the mustard is that gas in the ground is not worth anything to people. It has to be burnt to be of value. The price of gas in recent years has more than doubled. The gas companies could prune back the price of gas a little bit—it would not drop the price of electricity because we know our renewable generators are already competitive with it—but they could undercut the costs of those renewable generators very easily build a couple of gas-fired power stations and close out the future of our renewable generation. They would close out the future of renewable generation in New Zealand the country that has the most cost-competitive renewable electricity choices in the world—in the world! 
New Zealand is turning its back on making that a reality. It leaves open the possibility that gas companies will come along—these guys have very big pockets—and decide to build their own gas-fired power station as quickly as we could blink. They can make the decision to do it as quickly as we can blink because they have the money to do it if they are allowed to. They could drop the price of gas so that it comes in at just under the cost of new renewable generation and they would close out those renewable generators. Those renewable generators are already cost competitive. 
In terms of the renewable projects that are consented to again Mr Brownlee is right. There is a big build going on in renewable generation at the moment. We have more than 5 years’ forward supply already consented to under the Resource Management Act. Geothermal generation capacity is being built. Geothermal is the most reliable source of baseload in New Zealand. It runs at higher reliability factors than gas coal or any other source of generation. It is more reliable than hydro because of course we do not have the water inflow risk. It is less susceptible to breakdown and there are fewer outages for maintenance than there are with gas and coal-fired power stations. Do not pretend we are doing this for security of supply reasons. We do not need to do it for those reasons. If we did the legislation already allows us to get an exemption to the restrictions on new geothermal generation and we can build it anyway. 
This is another example of where the National Government is turning its back on doing the right thing. The idea that New Zealand will not have the demand for gas just because it is not burnt for electricity is another nonsense. We know that the biggest consumer of gas in New Zealand is now Methanex. Methanex uses it for producing methanol. It has reopened two of its very large methanol production facilities in New Zealand and as a consequence demand for gas in New Zealand is going up already because of Methanex. Do not tell me that a growing market for gas somehow will not cause exploration for gas. The market of yesteryear was smaller and gas companies still explored for more gas. The market this year is bigger than it was in those prior years and I am being told that despite the fact that the market is growing there will not be any exploration for gas in New Zealand. That is just another nonsensical argument. 
The reality is that the world has very serious environmental problems of which the most serious at the moment is climate change. If a country as wealthy as New Zealand with our environmental ethic with our richness in renewable resources and with our system of democratic government cannot do the right thing and reduce emissions then the reality is that the world will not. It is a sad reality but it is a truth. 
If New Zealand with all of those attributes that I spoke about does not reduce its energy-related emissions then the reality is that the world will not. It is a very very sad thing to conclude and it is something that the previous Labour-led Government was not willing to accept. We were not willing to accept that future for our children for our grandchildren and for the hundreds of millions—and it is literally hundreds of millions—of people in poor developing countries whose lives will be made absolutely miserable through climate change. But this National Government is willing to accept that conclusion. It is willing to abrogate its responsibilities. It is willing to see climate change emissions grow in electricity because that is what this bill will cause.