The Week in Politics: No quick fix for the energy crisis

4:00 pm today
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The Pohokura platform off the coast of North Taranaki. Photo: Supplied

Analysis - The government had to do something about the energy crisis and explaining its solutions took up most of Monday's post-Cabinet press conference.

Prime Minister Christopher Luxon took Energy Minister Simeon Brown and RMA Reforms Minister Chris Bishop with him to help out.

In brief, Luxon said there was no reason New Zealand couldn't have secure, renewable energy supplies and his government had a plan to achieve that.

It's based on quickly ending the ban on oil and gas exploration, reviewing the rules around the electricity market, making it easier to build renewable energy projects, easing restrictions on electricity companies owning generation and, in the meantime, importing liquefied natural gas (LNG).

The current power shortage, which has pushed up prices for industry to levels which caused two North Island mills to say they couldn't keep going, has been caused by low hydro lake levels and falling gas production.

The electricity market is fiendishly complex and spot prices fluctuate wildly, which obviously isn't a good thing but there's no quick fix.

Brown said the government's focus would be the market's regulatory regime and whether it was delivering competitive, affordable prices.

There was no shortage of blame for the crisis.

"The reality is we didn't need to be here if we hadn't banned oil and gas," RNZ quoted Luxon as saying.

That was done by former prime minister Jacinda Ardern in her "nuclear moment" speech, which was a great surprise at the time.

Luxon said it was "bumper sticker policy" with no thought given to the consequences.

Brown said the ban had "a significant impact" on exploration and Luxon spoke of the "chilling effect" it had on anyone thinking about looking for gas deposits.

That all makes sense. Finding more gas would be great. But there's no guarantee it will be found and it's seriously long-term.

According to the Greens, it took 16 years before previous discoveries actually came on stream.

Labour didn't like being blamed and leader Chris Hipkins tried to turn that around.

"There is a lot of already consented renewable electricity that could be built right now in New Zealand that the large electricity generating retailers are choosing not to build because it's in their commercial interests to keep energy scarce and maximise profits," he said.

"If you want to really start to apportion blame you could go back to 2012 when the mixed ownership model was introduced."

RNZ/Reece Baker

Greens co-leader Chloe Swarbrick. Photo: RNZ / REECE BAKER

The Greens were appalled co-leader Chloe Swarbrick wrote an article published by the Herald.

In it she accused the government of "gaslighting the country" and "weaponising the current crisis" to justify perpetuating the use of fossil fuels.

"An energy system that runs on fossil fuels is wonderful for company profits and shareholder dividends," she said.

"There are currently 33 wind and solar projects already consented, waiting to be built. They aren't being built because the sky-high shareholder profits aren't in resilient renewables and lower energy bills for regular people."

Like Hipkins, Swarbrick said National created the crisis by privatising Contact Energy and then partially privatising Genesis, Mercury and Meridian.

"In the following 10 years those energy gentailers have paid out $11 billion in shareholder dividends, 2.5 times the amount they've spent on energy generation, infrastructure, maintenance and upgrades," she said.

Media focused on the plan to import LNG, because it's actually going to happen and Brown said the port facilities needed to bring it in would be ready before the winter of 2026.

It's much better than coal and creates less emissions, according to the ministers.

However, doubt has been cast on even that aspect of the plan.

"Is coal really 'twice as bad' as gas?" was the headline on a report by RNZ.

It quoted sustainable energy professor Ralph Sims of Massey University saying that by the time gas was extracted, cooled, stored and shipped in the form of LNG any climate benefits over burning coal would disappear.

The prime minister's assault on councils had interesting repercussions this week.

It was at the end of last week, at the Local Government New Zealand annual conference, that Luxon told mayors and councillors "the party's over".

"The central government focuses on must-haves, not nice-to-haves, and we expect local government to do the same," he said.

Luxon talked about "the laundry list of distractions and experiments" councils spent money on and told them to get back to basics - rubbish, pipes and potholes.

Local Government Minister Simeon Brown was there to put the boot in.

He warned them that unless they didn't get back to basics and stop spending money on pretty things they would suffer a similar fate as beneficiaries who didn't turn up for job interviews and have the amount they could spend on luxuries capped, according to the Herald.

The media saw this for what is was. Luxon was talking over the heads of the mayors and councillors, his real audience was ratepayers all over the country who are facing savage rates rises.

"It was very good politics," said the Herald's political editor Claire Trevett.

"Luxon did not bother to sugar-coat it because his audience was not the people in the room."

Trevett said the salt in the wound for Luxon had been headlines about the extent to which rates increases had eaten up the government's much-vaunted tax cuts.

Herald columnist Simon Wilson had a similar view of Luxon's comments.

"They're an easy target… for the PM it was like shooting fish in a barrel," he said.

Wilson noted Brown's comment that there was to be "no more siphoning of funds for unnecessary cycleways and speed bumps".

"I was at the conference and I witnessed some dismay," Wilson said.

"Right now, councils are reeling from the results of delayed infrastructure spending, especially in water and transport.

"Many are still struggling to overcome the last round of climate-related disasters and all are fearful of how they will cope with next year."

Wilson quoted the reaction of Central Hawke's Bay District Mayor Alex Walker: "There is a narrative of pretty easy soundbites that talks to the lowest common denominator."

Summing up the responses, Trevett said Luxon was called "rude" and "patronising".

"Labour leader Chris Hipkins went a bit personal in an apparent reference to Luxon's wealth, saying it was all well and good for people who could afford their own pools and books but not so great if they couldn't," she said.

In case anyone missed that point, Stuff published a cartoon showing Luxon lounging in a fenced private pool saying "nice-to-haves aren't for everybody" while outside the fence children were asking to use his pool because theirs had been closed down.

One commentator who didn't follow the popular path was Newstalk ZB's Heather du Plessis-Allan.

"Luxon only said what many ratepayers themselves said - councils should stick to doing the basics… they should cut out the weird fantasies and luxuries," she said.

"But what Luxon probably didn't bank on was how easily those mayors and councillors would hand him the win when they immediately started whinging like spoiled children stopped from helping themselves to the contents of Daddy's wallet unsupervised."

She said when Luxon went into the room he was in touch with the vibe of the country's ratepayers.

"He knew he was picking a fight he was odds-on to win. What's remarkable is how out of touch the mayors and councillors were. But that's not a surprise, is it?"

An independent report reveals Wellington Water staff took four months to tell the region's councils about an error in budgeting advice, which has left the councils with a bill of $51 million over three years.

Wellington mayor Tory Whanau. Photo: RNZ / Reece Baker

Wellington's mayor, Tory Whanau, made her views known in an article published by Stuff.

"More than just being offensive and wrong, what was signalled by the government would be a huge overreach in local decision-making, and the influence our communities will be able to have over future decisions they voted for," she said.

Whanau said she felt strongly the speech missed the opportunity to talk about how problem-solving could be shared. Instead, Luxon had "punched down".

"It's clear the prime minister wants to run our country like a business. But we're not a business, we're a community of people who have community-related needs," she said.

Chris Hipkins

Labour leader Chris Hipkins. Photo: RNZ / Samuel Rillstone

"Where is Chippy?" the Stuff headline asked, and the article showed an interesting side of the Labour leader.

He hasn't been high profile lately and the article by Kelly Dennett and Anna Whyte looked into that.

"While the party has very slowly ratcheted up its ripostes, there's a feeling Labour has lost its mojo with commentators alternatively describing Labour as losing its voice or needing to up the ante," it said.

Hipkins said he didn't criticise just for the sake of it.

"Generally I hate critiquing other politicians' personalities and styles and so on because that's just not who I am," he said.

"I tend to prefer to focus on being the best person, the best politician, best leader that I can be… I don't want us to criticise, I want us to be constructive and supportive."

He wouldn't be drawn on policy, which isn't likely to emerge until next year - especially tax policy.

"I think we need a different tax policy going into the next election," Hipkins said. "I'm not going to put my penny down on what that might look like."

The article also quoted politics professor Richard Shaw, who said Hipkins needed clear policy to offer because it was "very unclear" what Labour stood for.

Hipkins needed a story to tell - "both about himself and about the party that he leads that will distinguish itself from both the party he inherited from Ardern and the parties he'll be up against come 2026."

Shaw said that to some extent, Hipkins attitude was correct.

"There is a risk in trying to constantly insert yourself into the political narrative, that you start looking a little bit needy," he said.

"The structure of the present government has sufficient potential political fault lines that might be forced open by events and circumstances that Hipkins doesn't really need to be looking for chinks in the armour."

Stuff columnist Janet Wilson expressed some more forthright views on Hipkins.

"The party in opposition is pretty much the same one that governed last October," she said.

"Hipkins should know that politics is a game of risk and reward, that those who don't take risks are destined for obscurity, and that pinning your hopes on the failures of the other party, without making any relevant changes to your own, is a sure path to electoral defeat."

Wilson said Labour had time to make those changes before 2026 "but not with Hipkins at the helm, because as prime minister in 2023, he's the embodiment of its failure."

*Peter Wilson is a life member of Parliament's press gallery, 22 years as NZPA's political editor and seven as parliamentary bureau chief for NZ Newswire.

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