The Productivity Commission report on how to transition to a low-emissions economy makes a key recommendation that appears lost on this Government – technological advances will be critical to success, National’s Energy and Resources spokesperson Jonathan Young says.
“The report underlines how existing energy sources such as hydrocarbons have an important place in both the transition process and beyond through the adoption of technologies such as carbon capture and storage (CCS).
“Similar technology is already in use at sites in Taranaki and CCS offers even greater opportunities for New Zealand. Carbon capture involves isolating, purifying and compressing carbon dioxide to a supercritical state, where it behaves like a liquid that can be sequestered in geological formations deep underground.
“It is technology that is within reach today but instead of innovating, this Government chose to ban new offshore exploration for oil and gas.
“That short-sighted decision doesn’t take into account the contribution natural gas makes in reducing emissions as a substitute for fuels such as coal, heavily used in Asia, and the huge contribution gas plays in the world’s food production.
“It is estimated that without nitrogen fertiliser, produced mainly from natural gas, world food production would be 40 - 60 per cent lower. It’s naïve to think the global agricultural system can function without nitrogen fertiliser.
“The Commission recommends new legislation be prepared to regulate CCS activities and the emissions trading scheme be amended to allow CCS to earn credits. Energy Minister Megan Woods has told us we have to stop using gas if we want to achieve a low-emissions economy, but this report is saying that is not the case.
“New Zealand produces fertiliser at Kapuni and we use fertiliser in all our agricultural sectors - CCS could be the technology that allows us to continue to produce and use nitrogen fertiliser.
“CCS is not a solution in all cases – it is hard to capture the carbon from a tail pipe – but in the case of big sources of emissions like urea production at Kapuni or NZ Steel – CCS may be needed to allow the world to continue to enjoy the quality of life we do today.
“It is notable the Commission’s comments don’t mention the Government’s ban on new offshore exploration as a recommendation to reduce emissions. Bans stifle innovation, rather than encourage it.
“The Government banned new exploration without consultation or analysis to meet the coalition’s political objectives. It needs to take on board the message that innovation and technological advances are the way forward for New Zealand and the globe.”