John Carnegie: Energy Resources Aotearoa CEO 'unsurprised' by Genesis Energy slowing down gas production

Genesis Energy has confirmed it plans to shift its focus over to coal, as gas production declines and no other suitable sources have been found.

Genesis has made clear it sees a declining role for gas in electricity generation - despite the Government's attempts to get offshore oil and gas exploration going properly. 

Energy Resources Aotearoa CEO John Carnegie isn't surprised by this - given the associated challenges. 

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
Genesis Energy has announced it's just going to give up
on the gas. They give it another five years. The
chief executive, Malcolm John's told of Parliamentary Select Committee he
no longer sees gas as a transition fuel and they're
just going to hit the coal instead. John Carnegie is
the chief executive of Energy Resources AULT here or and
with us now.

Speaker 3 (00:32):
Hey John, Hey, how you doing.

Speaker 2 (00:34):
I'm very well, thank you. This is a reflection that
we're running out of gas, right, That's the problem here,
isn't it.

Speaker 4 (00:40):
Oh well, look, unfortunately what's been said isn't a great
surprise to us. And actually it's not that gas isn't
a viable transition fuel. It said, it's simply not coming
available to the market and the quantity is wanted and
Genesis is are saying that out loud, so you know,
these comments aren't actually anything more than a practical reflection

(01:01):
of the reality that major gas uses a facing right
across the economy. And I've been saying this for some time,
that we've got an energy shortage, and unfortunately this is
what an energy shortage looks like. When one of our
largest gas users says there's not enough gas for them
and we need to turn to coal to make electricity.

Speaker 2 (01:18):
I mean they've gone to a deadline of twenty thirty,
which is alarmingly close. Is that realistic?

Speaker 3 (01:25):
Well realistic in terms of what gus.

Speaker 2 (01:29):
Like they're really going to stop doing gas in five
years time?

Speaker 3 (01:33):
Well?

Speaker 4 (01:33):
Look, you know, I think the frustrating thing about this
is that New Zealand actually has abundant natural gas that
can be harnessed to ensure a thriving economy and fueling
our manufacturers and exporters to deliver key wei jobs and prosperity.
It's just that, through a variety of policy decisions, gas

(01:53):
isn't coming to market, and you know, as you'd expect,
you know, Genesis is responding to those market signals.

Speaker 1 (02:02):
What does this?

Speaker 3 (02:03):
So?

Speaker 2 (02:04):
Genesis is my provider, and I pay them for electricity,
and I also pay them for gas because the old
stove runs on gas. You know, cook on gas. What
does that mean? Am I not going to be able
to cook on gas in five years?

Speaker 3 (02:14):
Oh?

Speaker 4 (02:14):
No, Look, I think there's plenty of gas. New Zealand
has lots of gas we just need.

Speaker 2 (02:21):
Is Genesis going to continue to be my company then,
or are they not going to provide my gas?

Speaker 4 (02:27):
Well, love, I mean you need to. They'll be engaging
with you as one of their customers. But we do
have plenty of gas.

Speaker 3 (02:35):
We just need the right conditions to get it out
of it.

Speaker 2 (02:36):
So you don't know what this practically means about them
saying that they're going to give up on the gas
in five years, as to whether everybody who's got gas
provided by Genesis suddenly needs to find a new provider.

Speaker 4 (02:46):
In terms of electricity generation, they are signaling that they
are going to rely on Colon. Good on them, You
know they are doing what they can. But I can
assure you that everyone would prefer to see domestic natural
gas filling the gap when we have low lake levels.
But it seem to be we seem to be doing
the reverse of what the rest of the world are doing.

Speaker 3 (03:07):
We're going from the coal, not coal to gas.

Speaker 2 (03:10):
That's pretty meantal Now they're talking about eventually converting Huntley
to instead of burning the coal, burning the wood waste.
Is this just pie in the sky nonsense that they
say to make us feel good? About it or is
that realistic?

Speaker 3 (03:24):
No?

Speaker 4 (03:24):
I no, that's some There are active, active plans to
have that happen, and they've they've said they're going to
work at pace to get three hundred thousand tons of
domestically produced by mass in place by twenty twenty eight. Yeah,
but you know it is a budding market in New Zealand.

Speaker 2 (03:42):
But did you say three hundred tons or three hundred
thousand tons?

Speaker 3 (03:45):
Three hundred thousand tons.

Speaker 2 (03:47):
I mean that's still nothing, is it?

Speaker 3 (03:48):
Right?

Speaker 2 (03:49):
Though, They've got five hundred thousand tons of coal there
and they're ordering seven hundred and seventy thousand tons of coal,
So three hundred thousand tons of wood is sort of
just a tiny fraction.

Speaker 3 (03:58):
Isn't it.

Speaker 4 (03:59):
Well to put it into perspective, hither, it could in
a normal year, whatever a normal year now means in
an electricity market, it could a normal average year avoid
the use of coal. But in a dry year, of course,
Genesis could use three times.

Speaker 2 (04:15):
I see what you mean?

Speaker 4 (04:16):
Yeah that much. So you know the answer to that
question is you know, it depends.

Speaker 3 (04:21):
Yeah.

Speaker 2 (04:22):
Hey, John, thank you very much. I really appreciate you
talking us through it. As John Carnegie, the Energy Resources
out here at All Chief Executive.

Speaker 1 (04:28):
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