KAPUNI GAS USE Opposition Wants Select Committee

Press, Volume CIV, Issue 30847, 4 September 1965, Page 3

KAPUNI GAS USE Opposition Wants Select Committee

(From Our Parliamentary Reporter) WELLINGTON, Sept. 3. The Minister of Mines (Mr Shand) today promised to give sympathetic consideration to Opposition proposals for a Parliamentary Select Committee on the use of natural gas.

Dlr Shand told Parliament that such a move might be time-consuming. It might be difficult to brief members adequately on complex technical matters involved, he said.

“Otherwise, there could well be misunderstanding over whether the Government is doing the right thing or not.”

The Deputy-Leader of the Opposition (Mr Watt), who made the proposal, said technical officers should be available to members to explain and interpret the issues. “Even as a layman, I find some things in the recent Shattuck report from American consultants on gas use very difficult to believe. REPORT QUESTIONED

“Would anyone consider, for example, that by 1968 people of the North Island will be using three times as much gas as the whole of New Zealand does now? Yet that is what the report says.” Mr Shand: I would be sceptical about that date. too. But it was based on certain assumptions as to when the programme would roll. Mr Shand said experts had reported that liquefaction for temporary or long-term supply would be more expensive than pipeline distribution. The Shattuck proposal was to make the main pipelines a

Government operation, on the same tax-free, non-profit basis as major electricity installations. Sufficient margin would be earned on them to pay off interest and capital costs over the estimated life of the gas field.

“If we are to treat the oil consortium other than fairly and honourably over prices for the gas we may pay very dearly for their future attitudes toward exploration and exploitation of the considerable potential undersea reserves of oil. “Implementation of the Shattuck report really depends on someone in Auckland, Wellington and the Hutt Valley getting out and selling gas,” Mr Shand said. Mr Watt asked whether the ShelLB.P.-Todd consortium had given the Government a price for the gas as a premium fuel. He understood the consortium had informed the Government that a gas-powered electricity station could be built for £5.9 million, which would produce 180 megawatts of electricity at a unit cost of 0.45 d. “Is the Minister prepared to set up a special committee of the House to study the pro-

posals for the use of the gas?” Mr Watt said. “It is a matter of importance that the gas is used to the best advantage. EFFECT ON MINERS “The effect on other fuels and the people producing them must be noted. The committee should be able to invite depositions from coalminers and others affected by the marketing of this fuel.” Mr W. E. Rowling (Opp., Buller) said a select committee was essential. A great deal of differing information and opinion had been given out. and there was a great deal of confusion about the subject.

The earlier Shattuck report had mentioned that if the gas replaced coal-gas, it would mean loss of employment to 350 miners, Mr Rowling said. The Bryant report on the West Coast said that one West Coast miner represented eight people, so this meant a considerable loss to the area. “Not the least problem to be considered by the select committee is whether the short duration of the supply of natural gas would justify the expenditure and displacement involved,” Mr Rowling said.

NOT GIVEN PRICE Mr Shand said the consortium had not given the Government a price for the gas at this stage—nor would it have been expected to. Three years ago, before the Government sought a consultant, the consortium had asked the then Minister of Electricity (Sir Stanley Goosman) whether the Government proposed to buy the gas, and at what price. It was then laid down by the Government in what order the use of the gas would be considered, Mr Shand said.

The order adopted, which still applied, was:—

1. As a basis for a petrochemical industry; 2. As a premium fuel; 3. As a producer of elec-

tricity; 4. As a replacement for coal in major industry.

The consortium had said the gas could not be piped to Auckland and Wellington at a profit. The Government then decided to obtain an independent report. The report of Mr Shattuck was that the gas could be piped and sold at a profit if the Government built the pipelines on the same basis a? it built power lines.