PEPANZ welcomes Productivity Commission report

The Petroleum Exploration and Production Association of New Zealand (PEPANZ) has welcomed the Productivity Commission’s report into a low emissions economy, but say the focus needs to be on lowering net emissions rather than favouring certain energy sources.

“It also shows there are potentially very large costs to New Zealanders which reinforces the need to carefully weigh up the costs and benefits of policies, and who will bear those costs,” says PEPANZ CEO Cameron Madgwick.

“The report warns that moving away from natural gas for the electricity system could see ‘greatly increasing wholesale electricity prices’.

“However, we disagree that the move to a low emissions economy will require a complete shift away from oil and gas. Not all fossil fuels are the same, and natural gas will have an important ongoing role by replacing coal around the world.

“Not all oil and gas products are burnt, and new technologies are being developed to greatly reduce or even eliminate the emissions from natural gas-fired power plants. This is why the International Energy Agency predicts that natural gas will grow 45% by 2040 to become potentially the world’s largest single energy source.

“We support the inclusion of agriculture in the ETS, the need to plant many more new trees and that carbon capture and storage (CCS) has great potential. We also strongly support the calls for political consensus and long-term transparency so that businesses and households can plan for the future with certainty.

“It’s very telling that once again, in nearly 600 pages there is no mention of ending offshore exploration for oil and gas as having any impact on emissions.”