Neil Holdom: Govt should support gas for power generation

The arrival of 8 Rivers has created a significant dilemma for our Government. Photo / Getty Images

COMMENT: The change in Government policy on the Crown Minerals Act represents both a threat and an opportunity for the Taranaki economy, and the work done over the next few years will determine the level of growth or decline in a decade.

This month a United States clean tech innovator, 8 Rivers, went public with plans to develop a multi-billion-dollar industrial facility in Taranaki, seeking Government support for a detailed feasibility study. The company has developed a prototype plant in Texas using its Allam Cycle technology to produce emissions-free electricity from natural gas. And it works.

The outputs of the plant are electricity and pressurised CO2, which is then available for either other industrial uses such as the production of methanol, or carbon sequestration, where CO2 is injected into old oil and gas wells.

The arrival of 8 Rivers has created a significant dilemma for our Coalition Government, which has committed to achieving net zero carbon emissions by 2050.

The Allam Cycle technology is working. It is competitive with existing gas-fired generation and it ticks all the boxes on emissions outputs and our national energy sovereignty. But it will flush out the ideological battles going on in Wellington. Is the Government's policy about getting to net carbon zero in 2050 or is it about ending the oil and gas industry in New Zealand?

I recently spent an evening on board the Rainbow Warrior III discussing New Zealand's energy future with a range of key stakeholders including Greenpeace's Russell Norman, Greens co-leader James Shaw, Greenpeace climate campaigner Amanda Larsson and Transpower Chief Executive Alison Andrew.

One thing I asked Greenpeace was, if we could find a way to ensure carbon dioxide from natural-gas-fired power stations didn't enter the atmosphere, would they be comfortable with continuing to use this extremely cost-effective source of energy?

The answer from Larsson was a flat out no. She made it clear Greenpeace wants to end all oil and gas activity in New Zealand regardless of the science.

The issue within the Government is, what is its overall view of this question?

On a scientific basis, if the goal is to remove 60 million tonnes of carbon per annum from New Zealand's emissions to achieve net carbon zero by 2050 then technologies like 8 Rivers' Allam Cycle should not just be acceptable, we should be actively encouraging their uptake.

Why? Because one of the major reasons we use natural gas to underpin the stability of our electricity system and provide major industrial process heat is that it is relatively inexpensive.

If the powers that be in Wellington decide to reject technology like 8 Rivers it will be a clear sign our Government has chosen ideology over science and technology and that doesn't bode well for the security of our electricity supply or household energy bills in the long term.

If, on the other hand, the Government is prepared to be guided by science and economics, the development of a major clean industrial facility in Taranaki will signal we are on a new track to transform our economy using the cutting edge in technologies and leveraging our unique national mix of resources to do our bit to make a difference around the world.

The facility proposed by 8 Rivers will be capable of producing emissions-free electricity when hydro-lake levels are low and the wind isn't blowing, and the rest of the time the plant will produce emissions-free urea for our agricultural sector, replacing imported fertiliser.

The fact that it would be a major employer and likely drive a new clean-energy ecosystem in Taranaki would be an added bonus.

Right now the senior ministers in Wellington have a serious dilemma. They know their policy decisions clearly signal their intentions to a region which currently delivers an annual cash surplus to Government bank accounts of between $350 million and $500 million.

As a region we are ready to roll our sleeves up and do the hard work to keep the lights on around the country, contribute more than we receive and develop a long-term plan for a just transition. But we are going to need some significant Government investment early to make things happen.

A delegation from Taranaki is meeting senior ministers in Wellington this week to discuss the future of the Taranaki economy and get a feel for the Government's intention, offering to help them as we strive for a net carbon zero 2050 guided by science and economics.

• Neil Holdom is Mayor of New Plymouth District.