Gas could deliver big economic boost
Natural gas could be a gamechanger for Otago, writes Cameron Madgwick.
DEVELOPING natural gas off the coast of Otago should be welcomed by Greenpeace as a major step in tackling climate change, as well as for the enormous economic benefits it could bring.
While it’s still very early stages, there could be potential to develop natural gas as a major export earner.
By shipping it to growing markets in Asia we could help replace coal, which has twice the emissions, while also creating local jobs and investment.
It could be a winwin outcome for everyone.
Many New Zealanders don’t realise that natural gas is in huge demand around the world as a lowercarbon fuel. It’s helping deliver cleaner air and is fast becoming a big export earner for countries like Australia and the United States.
There is no guarantee of success from drilling, but a discovery would be a massive economic boost for Otago and New Zealand as a whole. It would create new jobs in the region, including new work for contractors, providers and small businesses.
Importantly, 42% of profits from any producing well go to the Government through royalties and taxes. This could mean billions extra to spend on schools, hospitals and roads.
Taranaki provides a great example of how the natural gas and oil industry has operated safely and successfully over 50 years.
They enjoy the highest incomes in the country and receive millions in sponsorship for community assets like museums, music festivals and local sports.
We are also an industry that takes safety incredibly seriously.
We are heavily regulated with many legal requirements to be met before any drilling and production can begin.
No activity takes place until any risk has been exhaustively identified, addressed and planned for, which is
why it usually takes years for any new projects to begin. Overall, we are one of the safest industries in the country.
The search for new natural gas is becoming increasingly important given we have less than 10 years left of supplies.
Without new discoveries, the cost of energy for New Zealanders will only go up.
This is because around a third of our natural gas is used to generate electricity, helping keep prices down when other sources like wind or hydro are low.
Its also very important for industrial heat (like milk and timber plants), which creates jobs and exports.
And of course, it helps heat our homes, cook our food and give us hot showers.
About 400,000 homes, schools, hospitals and businesses in New Zealand use natural gas or lpg.
Without our own locally produced natural gas, the most likely alternative is importing more coal or lng from Australia, at higher cost and with greater emissions.
Surely even Greenpeace would agree that’s an outcome we need to avoid!