‘Natural Gas Use Economics Matter’

Press, Volume CIV, Issue 30901, 6 November 1965, Page 1

‘Natural Gas Use Economics Matter’

(New Zealand Press Association)

WELLINGTON, Nov. 5.

The Government must make its decision on the use of natural gas on economic grounds, according to the president of the Electrical Supply Authorities’ Association (Mr A. W. Gooder).

He said the Government should not be influenced by political pressures, “whether these pressures come from the Gas Association or elsewhere.”

Mr Gooder said today that electrical supply authorities realised that the Government was in the midst of negotiations and investigations “on this difficult problem.” The authorities were keen to assist the Government to arrive at the right answer. “However, the position is not assisted by the assertion of the chairman of the Gas Association that the use of

natural gas as a premium fuel will benefit users of electricity,” he said.

“There is evidence to show that the domestic price for electricity could rise quite appreciably in areas where natural gas was distributed if the gas prices were as low as the Gas Association hopes. This hardly supports the claim that electricity consumers will benefit,” said Mr Gooder. Premature Anticipation "As negotiations are proceeding at present between the Government and the owners of the gas, it seems premature to anticipate the Government’s decision. “It would seem obvious that the Government has much more investigation before firm decisions can be made as to what use of the gas will assist best the country’s economy.

“The Electrical Supply Authorities’ Association wants to see natural gas used in a manner which will be of most benefit to the economy of New Zealand, and the decision is not made easier by the statement that use as gas will be equivalent to running Benmore at full load for 25 years.

“There are no proven facts to support this claim. However, figures available show conclusively that converted to electricity, this gas could produce considerably more electricity than ‘little Karapiiro.’

“There is concern that if the natural gas is used as a premium fuel rather than for electricity generation there could be a shortage of electricity within a few years. “To avert such a shortage would probably require imported fuel oil at a time when the country’s overseas reserves are already hard pressed. Such a course does not seem to be in the best interests of New Zealand's economy.

“The use of natural gas as a premium fuel would lead to duplication of services with consequent higher capital costs to New Zealand consumers. The use as gas would not appreciably reduce the distribution costs of electricity supply. “Too many at present unknown factors require careful investigation before this country is irrevocably committed to what could prove to be a costly error,” said Mr Gooder.