Latest / Early Edition with Ryan Bridge / Len Houwers: Major Gas Users Group spokesperson on businesses struggling with high gas prices

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Len Houwers: Major Gas Users Group spokesperson on businesses struggling with high gas prices · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: So there is a core for the government to take
• 0:01
  Speaker 1: immediate action in the gas sector supplies reaching a crisis point.
• 0:05
  Speaker 1: The Business New Zealand Energy Council and Optimal Energy Management
• 0:09
  Speaker 1: Solutions have joined forces to urge Minister Shane Jones to
• 0:12
  Speaker 1: save manufacturing jobs. So to talk about this, I'm joined
• 0:15
  Speaker 1: by Len Howis, who's the Major Gas Users Group spokesperson.
• 0:18
  Speaker 2: Good onding to you, Len, Yes, good morning, How are you?
• 0:21
  Speaker 1: I'm good. This is a problem that's been brewing up
• 0:23
  Speaker 1: for twenty years and we've never done anything about it.
• 0:25
  Speaker 1: So how bad is it?
• 0:27
  Speaker 2: I think it's getting pretty bad. You know. The propery
• 0:31
  Speaker 2: is in the industrial secret at the moment where a
• 0:33
  Speaker 2: lot of these companies are coming up for new contract
• 0:36
  Speaker 2: when you're suddenly finding that the expectations for pricing is
• 0:40
  Speaker 2: beyond their means to actually pay for it. Yeah.
• 0:44
  Speaker 1: And like I said, we've been saying this for twenty years.
• 0:46
  Speaker 1: You know, we've got to find more gas. We didn't
• 0:48
  Speaker 1: have enough. We stopped looking for gas. Some were saying
• 0:52
  Speaker 1: we should have started the decarbonization process earlier. Was that
• 0:55
  Speaker 1: dream thinking?
• 0:57
  Speaker 2: No, I think the basic problem was. I think carbonization
• 1:01
  Speaker 2: certainly at the root of this, and in fact, you
• 1:04
  Speaker 2: know that's made the government policy to effectively create an
• 1:08
  Speaker 2: energy transition. What the government then failed to do I
• 1:11
  Speaker 2: think did actually provide a pathway that was sustainable and
• 1:16
  Speaker 2: ordered to get there. So that effectively left business to
• 1:21
  Speaker 2: cope with rising carbon prices and putting them on a
• 1:26
  Speaker 2: path to transition without the technology of the economics able
• 1:30
  Speaker 2: there to support that transition to happen.
• 1:33
  Speaker 1: So now this is all landed on Shane jones desk.
• 1:35
  Speaker 1: And you were at the meeting with Shane Jones. What
• 1:37
  Speaker 1: did he say and did it alleviate any concerns you had?
• 1:41
  Speaker 2: Well? I think Shane Jones obviously is a champion I
• 1:44
  Speaker 2: think for industry in New Zealand, and he's going to
• 1:48
  Speaker 2: try and do what he can, but he's also going
• 1:50
  Speaker 2: to get it past his colleagues and so forth as well.
• 1:52
  Speaker 2: One of the ideas he had on the table I
• 1:54
  Speaker 2: think was two reserve gas industry rather than for electricity generation.
• 2:00
  Speaker 2: It's an idea that's being explored at the moment by
• 2:04
  Speaker 2: him and cabinet. I take it.
• 2:07
  Speaker 1: And as the thought of rationing which has come out
• 2:09
  Speaker 1: of Shane's mouth, is that actually a good idea? Will
• 2:12
  Speaker 1: that only make the situation worse and be a tragedy
• 2:16
  Speaker 1: for our economy.
• 2:18
  Speaker 2: Yeah, well that's the dynamic, isn't it. I mean, in
• 2:20
  Speaker 2: the first place, if he does nothing, your risk of
• 2:22
  Speaker 2: the industrialization. If you then decide instead to intervene and effectively,
• 2:28
  Speaker 2: well it might be seen as workably competitive markets. You
• 2:32
  Speaker 2: get accused of being heavy handed and stepping in on
• 2:37
  Speaker 2: property rights and so forth, which is not going to
• 2:39
  Speaker 2: do our international reputation that's good either. So that's that's
• 2:44
  Speaker 2: the dream I've got at the moment, to try and
• 2:45
  Speaker 2: find some way to tread that thin line between doing
• 2:50
  Speaker 2: nothing and intervening in a way that's going to be
• 2:54
  Speaker 2: more destructive in the long run.
• 2:56
  Speaker 1: And there's no sign of any gas on the horizon.
• 2:58
  Speaker 1: So how many businesses are at risk of collapse due
• 3:01
  Speaker 1: to where we're at.
• 3:04
  Speaker 2: It's difficult to say, you know, roughly, broughly about I
• 3:08
  Speaker 2: would say about five and a half thousand gas connections
• 3:12
  Speaker 2: that we'll be classed as large commercial or industrial. Clearly
• 3:16
  Speaker 2: a number of them have been successful in acquiring gas
• 3:20
  Speaker 2: at a price that at least they can carry on with.
• 3:24
  Speaker 2: But just based on the number in the room on Friday,
• 3:31
  Speaker 2: you have to say that the reasonable percentage of firms
• 3:34
  Speaker 2: are going to be struggling to get past the next
• 3:38
  Speaker 2: couple of years.
• 3:40
  Speaker 1: All right, lenn All the best going forward. Lehnn Hower's
• 3:43
  Speaker 1: is from the Major Gas Users Group spokesperson.
• 3:47
  Speaker 2: For more from Earlily Edition with Ryan Bridge, listen live
• 3:50
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• 3:53
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