The Government’s decision to scrap a proposed levy on power bills has taken some of the heat out of its LNG terminal proposal.
However, with less than five months until the election, another question remains: What happens if Labour wins?
Talking to Richard Martin on The Front Page, NZ Herald senior correspondent Katie Bradford says Labour has strongly opposed the idea of an LNG terminal.
“The Government is likely to be trying to push this through as quickly as possible, because then they know it locks Labour into it.”
The challenge for Labour is that major infrastructure projects become increasingly difficult to unwind once contracts are signed.
“[Labour] have told me that depending on where a contract was at, they would still look to rip it up if they could get out of it,” says Bradford.
The debate is unfolding as critics question whether the terminal will even be needed by the time it is completed.
A recent report from Rewiring Aotearoa and Sapere argued LNG is an expensive option and may be overtaken by renewable energy projects already under development.
" The reason they’re saying that is because the gentailers and other companies are actually doing a lot of work to build more renewables. We’re actually building at pace," says Bradford.
“The problem is a lot of that needed to be happening a lot earlier. We’re behind, we’re catching up, we’re going to get there. It’s just that we need more of it now.”
Bradford says the LNG terminal debate also highlights a broader issue that has dogged New Zealand governments for decades.
“We have a real problem in New Zealand – with infrastructure in general – of political parties stopping and starting and changing projects and costing the country a lot of money by doing so,” she says.
If Labour win the election come November, Bradford says they would have to consider advice on LNG terminal contracts very carefully.
“For Labour, it is going to be ‘where is the point of no return?’ ... They don’t want a situation where it’s going to cost them more to pay penalties for trying to get out of a contract and then having to pay for a replacement anyway,” she says.
“They may just have to suck it up if they were in government, basically.”
Listen to the full episode to hear more on:
- Why the Government says New Zealand’s electricity system isn’t resilient enough to cope with dry years.
- The impact soaring energy costs are having on manufacturers and large employers.
- Why some in the energy sector believe New Zealand needs every available option, including LNG and renewables, to avoid future shortages.
The Front Page is a daily news podcast from the New Zealand Herald , available to listen to every weekday from 5pm. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
You can follow the podcast at iHeartRadio , Apple Podcasts , Spotify or wherever you get your podcasts.
