Decision on Maui gas field deferred 6 months

Press, 11 January 1986, Page 10

Decision on Maui gas field deferred 6 months

By OLIVER RIDDELL in Wellington A decision on allocating the balance of the Maui natural gas field has been deferred by the Government until the middle of this year.

The Minister of Energy, Mr Tizard, announced last September that he was seeking public comment on three options for the gas, and that a decision would be made before Christmas.

The options were to export the gas; make it available to the Ministry’s Electricity Division for electricity generation; or leave it in the ground until more was known about the size of the reserves.

This attracted protest from the conservation movement which said it had not been given enough time to make submissions and also that not enough was known about the reserves to decide on allocating them. These protests were rejected by Mr Tizard. He cited the report of international consultants that the reserves were as big as had first been estimated. He also cited the need for a decision at the start of the summer so that work could begin on the engineering to tap the reserves at once instead of having to wait another year. Mr Tizard’s dilemma was that the Electricity Division is not getting access to coal for power generation as quickly or as cheaply as had been assured by the Mines Division. Also, the openended coal supply contract with New Zealand Steel is placing pressure on coal field development.

However, circumstances have prevented Mr Tizard from making a decision on Maui gas as quickly as he would have liked. The political consequences of a rushed decision were too great. The six-month deferment will allow the Ministry of Energy to investigate the Maui field more thoroughly to estimate the actual quantity of gas there, and then to develop a package of measures that may bring a combination of shortmedium term allocation of gas to the Electricity Division along with measures to

increase the reticulation of gas to households. Burning gas "or electricity is most inefficient. Twothirds of the energy value of the gas is lost in, the process. It is more efficient to use the gas directly to households and in vehicles. But the pressure from the Electricity Division is still strong. It wants access to the gas instead of having to rely on State Coal Mines being able to mine enough coal to run the planned thermal power stations as well as supply New Zealand Steel. As this looks less and less

within the reach of State Coal, the hunt for other supplies of coal is on. If the Electricity Division is not allowed to use Maui gas, or not much of it, then there are three options — import substantial quantities, open new private mines, or take energy conservation programmes much more seriously. Coal surveys throughout the centre of the North Island are now proceeding apace. Private coal interests have the prospect of a bonanza unless the Electricity Division gets most the Maui gas it wants.