Greenpeace is labelling a proposal to build a multi-billion dollar electricity, hydrogen and urea plant in Taranaki a “last gasp” effort by the oil and gas sector to prolong its life in New Zealand.

Steve Abel, campaign head for the environmental lobby group, said the project is using gas as a “Trojan horse” to keep the oil and gas sector alive.

Details of the Pouakai project, backed by the US company 8 Rivers, are emerging as part of an application for a Provincial Growth Fund loan of up to $20 million for a feasibility study using its novel Allam Cycle technology. The project would use super-critical carbon dioxide to drive turbines to produce electricity before pumping the CO2 underground into depleted oil and gas fields – so-called carbon capture and storage.

Regional Economic Development Minister Shane Jones is backing the proposal for PGF funding, but other Cabinet ministers may take some convincing. Even a zero-emissions gas-fired project would cut across the political symbolism of the decision in April not to issue any new offshore oil and gas exploration permits.

While the Pouakai project is promising ‘clean energy’ because it will have no CO2 emissions, Abel said Greenpeace considered carbon capture and storage a “highly questionable solution” which had yet to be proven effective internationally.

Abel said hydrogen as a fuel was 30 years away and that the Pouakai plan to produce urea for agricultural fertiliser was also unacceptable because urea emitted greenhouse gases when used.

“We should get rid of synthetic nitrates altogether,” he said, and praised the government for its decision to end new offshore oil and gas exploration.

“We hope they continue to do that and don’t get caught up in greenwash exercises such as this.”

Asked about the 8 Rivers proposal at her post-Cabinet press conference today, Prime Minister Jacinda Ardern said she could offer a “general comment” that there was “a huge amount of potential in hydrogen”.

“There’s a bit more work to do but we, as a whole I think, are demonstrating our support for that.”

Meanwhile, the Taxpayers’ Union lobby group, reacting to reports that the Pouakai project was seeking PGF backing as political insurance against unexpected regulatory changes, said the government should simply offer regulatory certainty.

“Instead of throwing money at a corporate heavy-hitter, the government should allow this project to proceed without taxpayer involvement by giving 8 Rivers assurance it won’t pull out the regulatory rug in pursuit of an anti-gas agenda.” 

A US$140 million, 50-megawatt power plant belonging to Net POWER, which is licenced by 8 Rivers to use the Allam Cycle, has been running since earlier this year in La Porte, Texas.

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