Young Jonathan: Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
Young Jonathan: Electricity (Renewable Preference) Repeal Bill — First Reading Second Reading In Committee Third Reading 
[Volume:651;Page:912] 
JONATHAN YOUNG (National—New Plymouth) 
: 
 The ban on new thermal baseload generators is part of the emissions trading scheme as members know and it has the intention of reducing carbon dioxide emissions in New Zealand. This ban has created a scenario that the designers of the policy may not have foreseen and had they foreseen it they may have thought twice. 
Members might quickly disregard the following statement because it comes from a stakeholder in the oil and gas industry: “The Government’s planned 10-year ban on gas-fired base-load power stations is ‘ill-conceived’ posing risks of much higher power prices and risks for the oil and gas sectors power security and the economy.” Todd Energy said that in March this year. Members might quickly disregard that statement but I believe that this policy has led not just to those weaknesses and concerns but also to an environmentally unsound outcome as well. I will explain this to members because they may find that to be a bewildering statement as well. I will tell members why it delivers a worse situation environmentally and socially and why it is an ill-conceived policy. 
The moratorium essentially says to those companies that explore and mine for oil and gas that there is now a diminishing market for their gas. Daily costs to explore for oil and gas are moving upwards towards $1 million per day. That is $1 million a day for helicopters support crews platform costs etc. If one suddenly finds oneself with a swiftly diminishing market then one has lost the serious motivation to invest that sort of money. So exploration and subsequently the supply of gas to the New Zealand market begin to be threatened. 
This of course is OK if one wants to stop the increase of thermal generation. But the problem is that around 50 percent of the plants built since 2000—plants built under the last Government’s oversight—are gas-fired thermal plants. The major players that this affects are Genesis and Contact Energy which have embarked on a project to now import liquefied natural gas (LNG) in order to secure their security of supply for electricity because nearly all of their power stations run on gas. 
The managing director of Todd Energy commented: “Damage to the gas sector will increase gas prices in the long term. Ironically this upward pressure could actually lead to a switch back to coal or other more GHG intensive sources of energy.” Such a greenhouse gas - intensive source of energy is LNG. The Contact Energy and Genesis consortium called Gasbridge is proposing to import LNG to New Plymouth to fuel its gas-fired plants as an insurance policy in case gas supplies run out. 
To produce LNG one has to refrigerate it to minus 162 degrees Celsius ship it in specifically designed tankers from a LNG production plant located in a different place on the planet offload it and through a heat process convert it to gas so that it expands to a volume 600 times greater than what it was stored at. Then one can use it to fire a power generation plant. This process creates a carbon footprint that is far higher than that of natural gas which we source from our own reserves. Indigenous natural gas produces 52 kilograms of carbon dioxide per gigajoule of energy. A full fuel cycle using coal produces 99 kilograms of carbon dioxide. The full fuel cycle analysis on gas through the LNG process showed that the overall emission was 73 kilograms of carbon dioxide per gigajoule of energy. That is a 40 percent increase in greenhouse gas emissions due to the process of production transportation and conversion to gas. This is what is happening in New Plymouth where a consortium wants to establish an LNG terminal because it cannot trust the gas supply as a result of the proposed ban on thermal base generation. 
This moratorium seeks to decrease greenhouse gas emissions but it is actually serving to create the need and opportunity for LNG to come to New Zealand and this will increase greenhouse gas emissions. Although it might not increase them from here it will increase them overseas at production plants and as tankers carry LNG across the planet. Thank you.