Role of gas in a nett-zero carbon world
Who are the main gas users in New Zealand?
A breakdown of the natural gas market.
A breakdown of the LPG market.
What about the Government’s ban on new off-shore drilling? Won’t that affect gas supply?
Although future gas reserves are a concern for the wider gas industry, residential and light commercial/industrial consumers can continue to use gas while being confident there will be plenty of this important energy source in New Zealand for years to come.
While the government may have banned new off-shore permits, there are still plenty of existing off-and on-shore prospects, and there is no ban on new on-shore permits.
So, it’s likely we will find more gas. But if supply doesn’t keep up with demand, market dynamics will mean that Kiwi homeowners and business owners, that represent less than 10% of total gas use, will continue to have access to gas well beyond the next 10 years.
Why is the Government banning new off-shore drilling?
It’s part of the Government’s plans to ‘decarbonise’ our energy supply and energy use and to make New Zealand a carbon-neutral country. Gas NZ supports these moves because they are good for the environment, but we still see an essential role for gas in the short and medium term, and maybe even longer if low carbon gas (biogas and hydrogen) is adopted.
How much does the direct use of gas contribute to New Zealand’s CO2 emissions profile?
Natural gas and LPG are used by over 400,000 residential and commercial customers in both Islands. LPG is also used by a massive number of gas BBQs, cooktops and cabinet heaters throughout the country. Despite its significant market penetration, the direct use of gas by the residential sector produces only 0.75 percent of New Zealand’s total greenhouse gas emissions, and only 4.6 percent of emissions attributable to households and private individuals.
Wouldn’t it be more sensible to switch now from gas to solar or wind power?
Good question but be patient – this is a longish answer. For starters, we don’t see them as mutually exclusive. In terms of the broader energy supply sector, solar and wind are not always reliable, and climate change means we could have more dry rainfall years which, in turn, means we may have more hydro shortages. So, gas provides a very valuable and inexpensive back-up. And think about – with the increasing use of electricity to power everything from cell phones to electric vehicles and industrial engines, we are going to need much more electricity – some commentators say as much as double what we generate now. Where is that coming from? Gas can fill in the gaps. From the perspective of a homeowner who uses gas for cooking and space and water heating, the answer is simpler. Gas is a clean option and more cost-effective than many others (hyperlink to Concept report), and this Government has already indicated it has no intention to curtail the direct use of gas by homeowners and small business people. Also, having gas in your home provides a useful back-up if you do want to go the solar route and the sun doesn’t shine for a couple of days.
Is the Government going to ban the use of gas by Kiwi households and business as part of decarbonisation?
That’s a question for the Government. But representatives from Gas NZ met recently with Climate Change Minister, James Shaw, who largely alleviated those concerns, saying the direct use of natural gas and LPG was not something this Government wanted to curtail. He suggested strongly that there are other priorities - much lower hanging fruit - when it comes to how fossil fuels will be treated on the path to decarbonisation.