Shane Jones' warning was clear and concise. As of 2029, if no new gas fields are found or an alternative energy source is not found, there will be no gas available for industrial, commercial, and domestic use.
“In simple terms, what's going to happen in 2029-2030 in the event that we either don't import gas, or we don't find a major find, is that the demand will still be there, but the supply will be below the demand. And there'll be a fraction of gas available, but for those big users, and quite frankly, the energy companies use quite a lot of gas and they can pay because they hand it on to you and I, that's what the crisis will be. There will be too many businesses in New Zealand still dependent on gas and the supply of the gas will be below their need for gas.”
Shane Jones, as other commentators have noted, does talk a big game and is prone to hyperbole to make his point – should have been a journo. Gas NZ Chief Executive Jeffrey Clarke says homes and small businesses accounted for less than 13% of gas demand last year and are likely to have gas for longer than 2029, if only because other bigger customers will find alternatives, and because domestic and small business are profitable.
But there's no doubt that the brutal reality is that we don't have as much gas in our gas fields as we thought we did, and that existing fields are going to run out sooner rather than later. Worse, according to an explainer story in The Post, gas industry sources believe that the aging Maui gas field will require expensive maintenance work in the middle of next year, raising the very real possibility that its overseas operator OMV could simply look at the bill for the maintenance, look at the life of the gas field and say, you know what? Don't worry about it. We'll shut it up early. Close the field.
And some businesses won't survive that. In Shane Jones' report to Winston Peters, where he made the dire warnings, Jones says without profound action, the die is cast. There'll be a rust belt decline in New Zealand with a widening gap in societal well-being.
We're already seeing it. Carter Holt Harvey shuttering its Eves Valley sawmill near Nelson, Kinleith closing and Tokoroa, and now Carter Holt Harvey closing the plywood plant there. Timaru's meatworks gone, Winston Pulp closing its factory in Ōhakune - small town New Zealand is once again fighting for its very survival.
What are the options? What are the alternatives?
According to Gas NZ, homes and small businesses account for less than 13% of gas demand. It doesn't mean that they are going to be really struggling to find alternatives to keep themselves going. The small manufacturing plants, we've already seen it, it's the cost of energy that is closing them, the manufacturing plants around New Zealand.
Can you find alternatives to gas before 2029? If you are living in a small town where your major employer is owned by a multinational, the answer is they'll probably just shut up shop, as we've seen happen in other small towns. They'll look at the cost of finding an alternative energy source and go you know what? No.
If you're a small town locally owned business, you might think differently. There might be more skin in the game for you. You might be willing to make a huge capital investment in resourcing the power supply to keep the plant open. But ultimately, once you do the sums on the back of an envelope, it just comes down to whether you can afford to or not.
And in that case, what is the future of small-town New Zealand? Is the die cast? Are we looking at a rust belt decline and a widening gap in societal well-being unless we can find alternative fuel or simply another way of keeping small town New Zealand alive?
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7 min