Shell's exit from exploration welcomed!
"Shell's exit from the New Zealand gas exploration scene will inevitably give a new impetus to the development of
renewable energy. The greatest risk to renewable energy businesses is that a new gas find will swamp the New Zealand
energy market, making their own myriads of small contributions uneconomic" said Mrs Molly Melhuish, for the Sustainable
Energy Forum.
Explorers will now be calling for even more government subsidy and more generous tax concessions, to fund them into the
market niche abandoned by Shell. This would be a waste of taxpayers’ money as Shell quit because of the exceptionally
high cost of finding gas in New Zealand.
Government should instead redirect the massive tax concessions for gas exploration, for use by small-scale energy
businesses who can deliver results. All that is needed is a tax policy that gives equal treatment to large-scale and
small-scale enterprises.
New Zealand can do without new giant gas fields. The Maui field will produce an average of 130 PJ per year over its
contract lifetime. Wood wastes alone will make available up to 50 PJ per year within four years, and up to 80 PJ
thereafter. Wind farms and solar water heat will readily make up any primary energy shortage in the medium term.
Sensible use of existing gas resources will provide a bridge to these and other fully renewable energy options.
The present gas exploration subsidies emphasise offshore concessions, in the hunt for new giant oil/gas fields. These
would be so costly to develop that any commercial exploitation would be based on new Think Big energy export schemes.
Government does not seem to have learned from the past Think Big disasters.
Government appears to be running with the TINA principle - "There Is No Alternative". Big industry sources responded to
Shell's anouncement saying "We need more gas!"
There ARE alternatives - we do not need to subsidise more gas. Government needs to implement policies that give
small-scale energy options an equal place in energy markets, and in the 'market' for tax concessions. These options are
invariably cheaper than the failed gas exploration programme. They give added benefits in reducing CO2 emissions from
the energy sector, and providing jobs throughout New Zealand - especially in the embattled rural districts.
Pre-eminent amongst these options is the improvement of household energy use - to reduce heat and electricity losses and
to use solar energy and firewood (re-invented as a convenience fuel, manufactured from waste wood) to reduce both energy
and peak demand for electricity. This could defer much of the planned investment of $4 billion dollars by State owned
enterprises over the next four years. These issues are highlighted on .
Major savings on the demand side are also possible, with most homes and businesses able to profitably save 20-30% of
their energy use. Solar hot water, wood stoves and home insulation are major options for domestic use. "More work is
needed to make sure these savings can be made," said Dr Blakeley. "Historically, New Zealand's cheap energy has led to
over-use, and we now need to kick the habit.
"Any tax concessions or government investment in a scheme to improve household energy use would have a faster pay back
rather than public investment in gas or coal supply, while improving the energy sector's environmental performance and
improving security of supply. Transport especially, is going to be very hard hit in only a few years, when oil
scarcities develop and the price goes much higher" concluded Mrs Melhuish.