John MacDonald: Importing gas isn't great - but it has to happen

Labour leader Chris Hipkins has fallen into the trap that I could very easily find myself falling into if I didn’t think a little bit more carefully about this plan by the Government to set-up a new shipping terminal in Taranaki to import liquified natural gas. This is the gas that’s needed to generate power, alongside the other ways we generate power in this country - hydro, coal and wind. It’s going to cost somewhere north of $1 billion, and the Government reckons it will be up-and-running in one-to-two years’ time. I think it’s dreaming on the timeline front. I also think Chris Hipkins is dreaming when he says $1 billion would buy a lot of solar panels. Because even though Energy Minister Simon Watts banging-on about us paying less for our electricity - or more to the point, not paying a truckload more for electricity - this isn’t actually about you and me.  Unless you run a big manufacturing or processing plant - in particular one of these big plants or factories that have been struggling with power prices. This is about industrial electricity supplies. This talk about importing gas first surfaced a couple of years ago when factories were actually closing because of high power prices. The big power companies looked into it, and they wrote a report for the Government which essentially said that it wasn’t as straightforward as it sounded. They looked into the practicalities of importing gas and they said we could do it, but there are a few things to think about.   The main ones being the price tag and how long it would take to get it happening.  They said last year that it could be done cheaper than $1 billion - for around $200 million - but the gas would be 25 percent more expensive, because the cheaper option would use existing facilities. However, there wouldn’t be the same amount of storage and so we couldn’t buy as much in one hit and so we’d pay more for it. They also said it wouldn’t be an overnight fix. It would be about four years before we started to see the benefits. Another main point in this report was that we could spend the money and wait for it all to come online, but there could be years when we don’t even need the extra gas. But that’s a bit like pouring money into a fire alarm and sprinkler system and not using it. You know it’s there and it gives you security. That’s how I see this gas importation business. It’s a back-up. And so, what if it isn’t needed all the time? LISTEN ABOVESee omnystudio.com/listener for privacy information.