Rurawhe Adrian; Court SimonGAS (INFORMATION DISCLOSURE AND PENALTIES) AMENDMENT BILLIn CommitteePart 1 Amendments to the Gas Act 1992CHAIRPERSON (Adrian Rurawhe): Members the House is in committee on the Gas (Information Disclosure and Penalties) Amendment Bill. Part 1: this is the debate on clauses 3 to 18 and the Schedule Amendments to the Gas Act 1992". The question is that Part 1 stand part. SIMON COURT (ACT): Thank you Mr Chair. The Government's actions since 2018 won't deliver more gas. It's not clear why the Government needs more information about the lack of gas but this is the Gas (Information Disclosure and Penalties) Amendment Bill which is designed to establish a regulatory framework around gas information: information about the market production consumption storage and whether there are risks to security of supply—risks that could come from planned outages from maintenance and from inspections. The Government was shocked back in 2018 when the Pohokura field was taken out of production and at the same time a regulatory compliance assessment on the Kapuni field resulted in a significant reduction in the supply available to industry and to generate electricity. We are seeing now significant energy shortages gas shortages that have flowed through to wholesale electricity prices gas shortages that have resulted in the importation of a million tonnes of coal more than normal in the last couple of years so that New Zealand is now reliant this winter on nearly 30 percent of its electricity being generated from coal at a time when the Prime Minister has declared a climate emergency and when every reasonable New Zealander could expect the Government to have made some progress towards a low-carbon future. But they've been paddling the boat backwards. They've got the paddle steamer—the coal-fired paddle steamer—in full reverse. It's going backwards down the river far far from the low-carbon future that New Zealanders have been promised and that we were told was in fact an emergency. So here we are to consider at committee stage this bill the Gas (Information Disclosure and Penalties) Amendment Bill. I want to give those watching what's going on in the House tonight and wondering what is it that this bill is designed to do and why we need this regulation an example of why it's really not needed and why it's simply an example of Government overreach and regulation. They are regulating a group of businesses that they don't trust which probably puts those businesses in the same category as all the other businesses in New Zealand. But I want to give for those watching at home who may not know much about the Gas Industry Co.—it's a private market manager. It's an example about how the private sector can manage its own risks. Actually if you compare it to the Transpower information disclosure about electricity generation it's far and away more detailed it's far and away more clear how much gas New Zealand has got in storage and when the outages are going to occur and it gives businesses plenty of information with which to plan their own activities—those gas users those energy users who depend on gas for their business. [Holds up graph] So what it shows you is outages here when they're planned. Some last for days; some for weeks. It shows you how much gas is in storage by month. As you can see on this far side of the graph New Zealand has been drawing down gas at a phenomenal rate over the past few weeks as dry conditions persist cold weather hits and we have no choice but to use thermal generation. So it's either gas or coal and I would suggest—as does Europe as does the United States and as does every developed economy in the world—that gas is a far preferable fuel to coal particularly imported coal. Now the ACT Party believes that businesses and industries and sectors should be able to demonstrate they can manage their own risks and that where there's a public good in having information about what those businesses do those businesses should be able to manage their own risks and there's no need for Government regulation unless there is a risk or a public good that can be adequately justified. That is why ACT proposes a number of amendments to this legislation. We propose two specific amendments that were asked for by the gas industry and their customers—firstly to establish a much higher test for whether regulation is needed. It shouldn't be on the whim of a Minister as to whether a regulation is imposed on an industry. When an industry is already adequately reporting its own risks for the public and for their customers that should be sufficient. That's why ACT believes—and our Supplementary Order Paper 41 sets out quite clearly—that the regulatory test for whether Government should regulate should be comparing the current voluntary scheme with hundreds of disclosures—hundreds of disclosures in fact—in great detail that looks something like this. [Holds up another graph] I'm not sure whether the Minister or the Minister's staff have gone on to the Gas Industry Co. website and looked at the quality of disclosures or looked at the way that the industry and the Gas Industry Co. investigate them and close them out. I'm not sure if they have looked—I'm not sure if they're interested. But if they were they might find that the job's already being done by the sector and there's no need for this regulation. That is why ACT proposes a very high strong test for the Government to impose further regulation and that it must be to compare any regulation against a successful voluntary scheme that's currently running whereas the current bill as proposed compares whether regulation is needed to a blank slate—an absence of reporting—as if there is no voluntary scheme. In that case what the Government is proposing sets up a fake regulatory test. It is not a valid way to approach whether regulation is needed. So what ACT proposes in Supplementary Order Paper 41 amends the bill so that any test of whether regulation is required is a much higher bar. We believe based on the investigation that we've done in looking into this problem and actually going and talking to stakeholders—the ACT Party believes that the system that they're currently providing information to the Government to the public to customers and to competitors is working fine and that no further regulation is needed. There is an additional amendment that ACT proposes and that is to establish a very high bar for Government to require if there is to be regulation a very high bar on any disclosure of commercially sensitive information. These businesses that produce gas and that supply gas to downstream producers of petrochemical products like Methanex and others that supply gas for electricity generation are very very concerned that disclosing information about their contracts about their future intentions and about negotiations with their customers or with each other as to how much gas could go where—they believe that that will put them in a very difficult and dangerous situation and it may in fact disadvantage them when compared to competitors in the electricity industry or each other. So ACT's tabled amendment inserts a new clause clause 11AA which sets a very high bar to protect disclosure of commercially sensitive information other than to the industry body or to a Government department. The industry rightly is very very nervous about further interference by the Government in the gas sector and in the energy sector. They're very very nervous about proposals to build large hydroelectric dams so large at a cost of billions of dollars—probably more than 10—abating carbon at a cost of maybe thousands of dollars a tonne rather than the emissions trading scheme's 50. They're so afraid of this interference that they're actually very reluctant to make any investments at the moment and in fact the security of supply that the Minister and the Government are so concerned about is likely to be far more precarious than any estimates they have made. The Gas Industry Co. is currently consulting with its stakeholder groups and with customers and more widely on ways to mitigate scarcity and security of supply issues. They have asked a number of questions like essentially what is the unintended cost of the Government's poor attempts at regulations already will they result essentially in a crashing out of gas supply to the market and is there a risk that the lights go off in New Zealand much sooner than the Government anticipated?"