The Press TUESDAY, SEPTEMBER 14, 1965. Using Kapuni Gas

Press, Volume CIV, Issue 30855, 14 September 1965, Page 16

The Press TUESDAY, SEPTEMBER 14, 1965. Using Kapuni Gas

The differences of opinion between the Government’s consultants and the owners of the wells about how best to use Kapuni gas are so marked that the Government must be in grave doubt about how to proceed. The consultants’ view (repeated in the recent Shattuck report) is that the gas should be used as a premium fuel by nine North Island gas undertakings. Using the gas for electricity generation, they say, would be wasteful. As a premium fuel the gas would be distributed by a pipeline system built with Government financial help and worked tax-free. The owners (Shell, B.P. and Todd Oil Services, Ltd.) contend that the cost of gas distributed in this way would be prohibitive. They say that the only economic use of the gas is electricity generation from a power station close to the wellhead. The electricity would be cheap—which is acknowledged by the inclusion of a gas-fuelled electricity station in the last three annual reports of the Power Planning Committee —and there would be no need for an expensive purification plant to remove carbon dioxide from the raw gas. The large amount of condensate immediately available would permit earlier savings of overseas exchange. The owners contend that working the field on the restrictive programme implied in the Shattuck report would be contrary to good development practice and might prevent some of the condensate being recovered. The Government’s problem is to decide what is best in the long-term national interest. Unfortunately, the facts and figures on which the conclusions and recommendations of the Shattuck report are based have not been made public. The oil company seems to make a strong point when it says that the Shattuck report, according to its title, was intended to deal only with the utilisation of the natural gas. The natural gas is less than half the energy available from the Kapuni field. The report also appears to take no account of the delayed saving of overseas exchange—about £1,750,000 a year—because of the restricted condensate production. It is a pity that this report was commissioned in such restrictive terms. The Government might have been wiser to rest content with the recommendations of the oil company, based on extensive investigations by teams of acknowledged experts. Having sought a second opinion, the Government can hardly now avoid seeking a third. This might come best from round-table consultations among all the parties interested—the Government, the gas undertakings, the State Electricity Department, and, by no means least, the owners of the gas wells. An aspect of the question that appears to have received astonishingly little consideration from anyone, but which bears strongly on the national interest, was belatedly mentioned in Parliament on September 3 by the Minister of Mines (Mr Shand). “If we are to treat the oil consortium “ other than fairly and honourably over the prices for “ the gas ”, Mr Shand said, “ we may pay very dearly ” for their future attitudes towards exploration and “ exploitation of the considerable potential underseas “ reserves of oil ”,

West German Elections The West German elections next Sunday will be a contest primarily between the Christian Democrats, who have been in power for 16 years, and the Social Democrats, who have their first considerable chance of regaining power since the collapse of the Weimar Republic in 1932. Voters are finding little difference between their programmes; and arguments on foreign policy have done more to expose friction among the Christian Democrats than differences between the parties. Much emphasis is therefore being placed on leadership. The Chancellor, Dr. Erhard, leader of the Christian Democrats, is a man of stature: architect of Germany’s post-war economic reconstruction and symbol of its present prosperity. The Social Democrat leader, Mr Willy Brandt, Mayor of West Berlin, is a younger, possibly more dynamic, man. He is credited with purging the Social Democrat policy of doctrinaire socialism to such a degree that even German industrialists have been reconciled to the possibility of socialist rule.

Dr. Erhard has rejected the idea—favoured by the left wing of his party—of a coalition with the Social Democrats in the event of a close poll. Yet the possibility of a coalition Government cannot be ruled out. Germans want a strong Government because they want a firmer line in foreign affairs. In domestic affairs the next Government may have to make some serious adjustments. For all the evidence of prosperity, there are signs of “over-heating” in the economy. Labour is scarce, the rise in imports far outstrips the rise in exports, wage increases have run ahead of productivity, and consumer prices have been rising. A coalition might inspire the confidence required to grapple with these problems more readily than either the return of the Christian Democrats, a party said to be running out of ideas and divided over its leadership, or a Social Democrat Government with a slim majority. In the mid-stream of prosperity the voters may be reluctant to change horses. Both parties are committed to support for N.A.T.O. and a free West Berlin. The main difference in foreign policy is on German reunification. Mr Brandt favours a flexible line which would allow “ small steps ” to be taken as opportunities arise. He opposes the “all-or-nothing” approach of the right wing of the Christian Democrats, who demand a peace treaty with Russia and the fixing of Germany’s disputed frontiers.

The chairman of the Christian Democratic Union, Dr. Adenauer, supported by a contender for the party leadership, Mr Strauss, spoke out last month against the American disarmament proposals aimed at preventing the spread of nuelear weapons. The left wing of the party, led by the Foreign Minister (Mr Schroeder), expressed confidence that the proposals would not exclude Germany from a share in the nuclear defence of Europe. This may prove to have been a minor issue in the campaign; but it has been sufficient to show that many Germans are eager to play a more active part in the affairs of Europe. Mr Brandt probably summed up a growing feeling in the country when he said that West Germany, economically a giant, had behaved politically like a dwarf. Either party, or both in coalition, may be expected to show something of this spirit in the next Government.