‘No justification’ for gas price control

Press, 28 February 1987, Page 40

‘No justification’ for gas price control

PA Gisborne There was no justification for the view that gas must be under price control because consumers were “locked in” to the energy, said the president of the Gas Association of New Zealand, Mr Jack McDowell, at the association’s conference. He said that the evidence provided by the Association of competition in the retail energy market had not been refuted in detail by the Government but there was still talk of consumers being locked in once they had opted for gas. Removal of price controls had been a contentious issue for the association for the last two years.

“The market-forces Government tossed it to an inter-departmental committee that is now examining alleged barriers to deregulation.” There was already sufficient competition to support retail price deregulation, he said. “Why do we have to wait for every conceivable barrier to be removed?” He hoped there

would be positive news on the subject when the Minister of Energy, Mr Tizard, addressed the conference. Mr McDowell said the hitherto fragmented approach by a number of separately controlled bodies was no longer appropriate and the time for the C.N.G. industry to get into gear and control its own destiny was overdue. The industry was trying to complete planning for a unified promotion through one industry-controlled body.

The Gas Development > Centre was supporting C.N.G. technology development with 1986 a year of establishment. “From now on we expect results, but financial support must come from all in the industry. “The withdrawal of Government subsidies to the C.N.G. industry is accepted. In turn we must expect the Government to withdraw the Energy Resources Levy. Any justification it had no longer exists,” Mr McDowell said. While he would feel

safer if there. was a second Maui platform and pipeline he had little concern for some time about the Maui field reserve estimates. “It has often been said that conservation can in time be as effective as finding a new gas field. But some of the people saying that think nothing of using natural gas for power generation and wasting two thirds of it,” Mr McDowell said.

One of the important jobs for the association was the negotiation of new natural gas supply contract for the North Island, a task that was already under way. Mr McDowell suggested the whole country should now be considering supply options likely to result from deregulation. “Maybe we should be consulting our Japanese friends on how to negotiate an L.N.G. contract,” he said.

The conference will run for three days and is being attended by more than 120 delegates, including a number from overseas.