The importance of natural gas in lowering emissions has been well highlighted by the Climate Change Commission in their draft advice, says the Petroleum Exploration and Production Association of New Zealand (PEPANZ).

"While we don’t agree with every proposal, this is a thoughtful and nuanced report," says PEPANZ chief executive John Carnegie.

"The Commission has recognised the role of natural gas in keeping electricity prices down by providing a back-up for when demand is high and supply can’t keep up. This will become increasingly important as we become more reliant on electricity for transport and heating buildings.

"We need to travel at a similar pace to other countries, given we are a technology follower and price taker. If we try and go too fast ahead of others it will make the transition more expensive and painful while delivering perverse outcomes.

"A good example is the Commission highlighting a near-farcical scenario where we could end up importing gas in the form of LNG from Australia, instead of developing our own resources and enjoying the jobs and royalties created.

"To avoid this, we need to have the right investment and regulatory conditions in place for natural gas supply.

"A 60% target for renewable energy isn’t helpful because we need to be focusing on emissions rather than fuel sources. For example, geothermal provides 22% of New Zealand’s total energy but is not zero emissions. At the same time, natural gas could be used with carbon capture storage to have zero emissions.

"A ban on natural gas connections would be very expensive to households and cost jobs while only having a very limited impact on emissions. It could also upset carefully balanced gas market arrangements, further threatening our long-term supply.

"We all want to reduce our emissions in a joined up and holistic way. We also have to be responsive and adaptable as new information and technology and best practices emerge.

"It’s important we make good policy decisions in response because getting it wrong will be damaging and expensive to New Zealand.

"We look forward to working with the Commission as they prepare their final advice."

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