Call to renegotiate

Press, 10 February 1986, Page 5

Call to renegotiate

PA Wellington The Government should renegotiate the Maui gas agreements and give a short-term allocation of gas to electricity generation in the New Plymouth and Huntly power stations, an environmentalist said yesterday. Ms Molly Melhuish, editor of “Energywatch,” said the Maui agreements were contrary to New Zealand’s interests.

During the term of the contract, to 2009, the Government was obliged to take gas at a fast rate. If it failed to do so, it had to pay any way, she said.

After the contract expired, the gas becomes the property of the Maui partners who might choose to sell it to foreigners or put it to other uses that did not benefit New Zealand or the national interest. “The extraordinary terms of the agreements

amount to an enforced rapid depletion of the gas during the term of the gas sales contract and no guarantee that the gas will be available at all after 2009. “This gives the oil companies a stranglehold on our long-term energy planning, and removes the Government’s ability to conserve gas for our children,” she said. The Government invited public discussion last year on what to do with the gas. “Most people who responded wanted the gas to be conserved rather than sold off for ‘think big’ style projects or used to generate power. Generating power from gas wastes two-thirds of the energy. It is a crazy thing to do.” Changes to the agreements could be done by negotiation or by unilateral action on the contract, the mining licence

or the controlling legislation.

It was internationally acknowledged that nations had a sovereign right to take control of their natural resources and there were many respectable precedents, she said. “In 1975, the United Kingdom unilaterally changed its petroleum legislation to give it control over production rates, because companies exploiting North Sea oil were depleting the fields too fast. The companies made no attempt to take the matter to court” Short-term use of gas for electricity generation was a concession environmentalists were prepared to make even though it was wasteful, Ms Melhuish said. “If the coal and other planners have a five-year ‘breathing space,’ energy can be supplied more rationally. The key ques-

tion is how much control do we have in the long term. The answer under the present contract is none at all.” There were other important elements of the energy jigsaw that were affected by what was done with Maui gas. “It does seem as though the Government acted in bad faith by inviting the public to comment on a discussion paper on Maui that did not make clear the importance of the contract. The public expressed a preference for conservation and explicitly rejected burning of gas for power. “They were told that the rational and preferred option is unavailable under the Maui contract Thus the Government seems to have acted in very bad faith and if Mr Tizard’s wishes prevail, the public wish will be ignored.”