The doubled sword of Crown Minerals Act change


It has been presented in the media as a double edged sword. On one hand we have the well publicized statement by Prime Minister Jacinda Ardern with full support of the Green Party that by 2050 oil and gas will be banned in New Zealand. On the other the more pro-development New Zealand First Member of Parliament and Minister for Regional Development Shane Jones is touting a $1 billion hydrogen gas development in Taranaki.

Taranaki in the 1980’s had a very large energy projects underway. These were part of the Robert Muldoon Government’s “Think Big” scheme which called for large industrial projects that would create hundreds of thousands of jobs, boost the New Zealand economy and address significant energy shortages. They included a methanol plant at Waitara and a synthetic fuel plant at nearby Motunui.

Now in 2018, Mr Jones is talking about the possibility of an American consortium developing a multi-billion dollar emissions free plant based on existing technology. 8 Rivers have announced a project in which they build a plant using Allam Cycle technology that they developed in the United States and which is used at a plant in Texas.

Whilst I am interested to see how the technology will be used and what any Government feasibility study will show, I have some concerns on both sides of the fence. Notably:

  1. It might be emissions free technology, but how will the gas be extracted. If it is fracking one can expect significant resistance from the Greens/Greenpeace over potential damage to groundwater, and other parts of the environment – one can also expect resistance purely based on ideology as well
  2. Who would fund it? My parents generation will be wary of anything that looks like another “Think Big” project on the grounds of the parlous financial state that the original ones left New Zealand in
  3. How would the American consortium construct the project and would New Zealand communities nearby receive due benefits for hosting it

Not surprisingly, especially with the Government’s statement on ending oil and gas by 2050, there is excitement among local businesses and Mayors, keen on getting some confidence back into a region heavily reliant on energy projects.

Back in 1979 when the Muldoon Government was pushing for energy independence, New Zealand was probably not ready for such ambitious projects and their costs. Despite worsening Middle East tensions and the rises in the price of oil caused by the fall of the Shah in Iran and the Arab oil shock of 1973 following the Yom Kippur War, compared with the price of petroleum today, it was even then quite low. Our transport system, energy market and infrastructure was not ready for something that then was probably a couple decades ahead of its time.

But 40 years later with concerns about the impact of fossil fuels now widely advertized and concerns about energy dependence in the future justified, this debate rears its head once again. The sword being wield though, depending on which side of the blade strikes you, is another thing all together.

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