Green party gangster deals do not develop new technologies

Credit: BoomSlang

Since our government announced that offshore hydrocarbons are off limits, I have found myself in a confused state due to the sheer enormity of this debacle and the breadth and depth of the short, medium and long-term impacts. I was flummoxed and speechless.

My brief history in this field is as follows: I have had a level of involvement in the oil and gas sector from 1987 to 2012. This has included being a supplier and contractor to New Zealand oil and gas projects such as Kupe, Waihapa, Kauri, Cheal, McKee, Radnor and Pohokura, as well as projects in Western Australia, Indonesia, Singapore, West Africa, Brazil and various renewable biogas projects in Europe.

I have always been enthusiastic about alternative fuels and part of our business from 1985 to 1988 was installing CNG and LPG stations in the North Island. I had several vehicles running on dedicated natural gas. As far as I am concerned a vehicle running on natural gas is as clean as we can currently get, including all of the hybrid and electric options with long tailpipes.

We also developed and built on existing technology for the purification of biogas from landfill gas, effluent gas and biomethane from digestors. In 2010 we were commissioning the largest plant of this type in the world in Germany. We also received the Air New Zealand export deal of the year award for building gas compressors for a Finnish company delivered to Brazil to convert three oil-fired power stations to natural gas. The majority shareholder of the company until 2012 was committed to the development of biogas above all else. He would openly say to me (and others) that the company would spend profits from oil and gas projects to further develop biogas technologies. It is with this type of dedication to a cause that new technologies are developed to better the world, and not by Green party gangster-style coalition deals. We walked the walk.

After some reflection I think that the single biggest issue here is that the international oil and gas business community and all the big players talk to each other even when in cut-throat competition. Individuals also move around the world to new jobs all the time, as well as joint venture partnerships etc. They will now see New Zealand as an unstable political environment and they will all stay well away, effective immediately.

Project spans of 25 years to life are normal. Fifteen-year operating and maintenance contracts are not unusual. One example is the 15-year Modec contract at Maari field in Taranaki, which started in 2013. If we were barely on the map before, we have now been erased for a long, long time. Thanks to the Green gangsters’ deal with the government, New Zealand is now off limits.

Some will say ‘but these companies do business all over the world.’  Sure, but long-term corrupt governments can be very stable. They can do business with these countries, pay royalties and all is well. It is very clear that our government are either hell-bent on destroying New Zealand businesses and capability or they are over a Green barrel. I suspect the latter.

I can think of some obvious immediate consequences.

Recent surveys for offshore prospects: this has all been paid for over a period of time and would have cost several million dollars. I seem to remember that the vessel was contracted from Petrobras, Brazil. Very competent in deep water. They will have been paid, but who is out of pocket? That money is now a loss, not an investment. This will be known worldwide by now. The data will be on file but will be irrelevant with new technology whenever someone goes back for another look.

This is a technology game and Moores law applies at all levels of this game. Any project that gets the green light after test wells have been flow tested to get gas and oil composition data will be another five to seven years away before first oil on or first gas on for production.

As far as I am aware there are no projects getting close to this stage; there is no current offshore drilling. If there was an instruction from the government to ‘get some oil and gas now’ the answer would be ‘Sure, we will turn the tap on in approximately ten years all going well.’

New Zealand no longer has security of energy supply. Even to build import terminals for LNG would take five years. Forget on shore: there is nothing substantial that could replace Kapuni and Maui Engineering companies in Taranaki.

All of the directly involved companies have always lived in a very volatile business environment. They have done well to stay in business at all since international exploration stopped in 2008. When things started again in around 2012 it did not really translate to much work for New Zealand companies. They continue to exist on local upgrade work and some overseas consulting. I am not sure how much metal bashing is going on, but it will be subsistence work to keep the doors open and the crews employed. There will be no profit.  That can only last so long and now another kick in the guts will see staff heading overseas. And guess what? The best ones go first and they are the last ones to come back, for obvious reasons. We will lose a generation of productive workers in that region.

Our government come out with suggestions like redeploy, retrain and move into new business areas. Private companies like the clever bastards in Taranaki are good at this already and they don’t need condescending fools in Wellington to tell them. One example is Fitzroy Engineering. Some years ago they opened a division building aluminium superyachts. The staff could be welding coded steel pipes one week and then be welding aluminium hulls the next. Very different, but it could be done. The same for instrument fitters, electricians – you name it. It’s another very volatile business area with long project gestation periods, but they built some fabulous boats.

My conclusion is that this policy from our government is an unmitigated disaster. We could all list out dozens of knock-on effects and consequences. The sad fact is that they have just disembowelled a whole region for the Greens that live in a fantasy world. This will then affect the whole country in a negative way.

I am no longer involved in oil and gas so do not have any vested interests (apart from many friends) but I can now say that this coalition government have just shown an unprecedented level of stupidity. If they weren’t so pathetically stupid it would be treason. They clearly have no knowledge of what they have done. The list of knock-on effects and unintended consequences would take a week to list, let alone expand on and explain. This is a new era of stupid. My head is still spinning.

 

by Stacey Hoggard

 


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A guest post submitted to Whaleoil and edited by Whaleoil staff.

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