The Climate Change Commission’s most controversial proposal might have a limited impact on emissions. So why did it recommend it?
While the Climate Change Commission’s draft advice to the Government was received across politics, the economy and society with enthusiasm, at least one of its proposals landed with a thud.
From 2025, the Commission suggested, there should be no new connections to the natural gas grid for commercial or residential buildings. The proposal raised alarm among plumbers and gasfitters, who said customers are already rethinking installing fossil fuel heating and cooking appliances.
Master Plumbers chief executive Greg Wallace said the ban would be “jumping the gun” if it were implemented.
“If it sticks to the proposed timeframe, we run the real risk of throwing the baby out with the bathwater. The proposal to ban gas in domestic use is jumping the gun without a tried and tested alternative,” he said.
And John Carnegie, chief executive of the Petroleum Exploration and Production Association of New Zealand, warned, “A ban on natural gas connections would be very expensive to households and cost jobs while only having a very limited impact on emissions. It could also upset carefully balanced gas market arrangements, further threatening our long-term supply.”
Wallace also emphasised that residential natural gas use represents just 3 percent of natural gas use in New Zealand.
Read more:
* Key takeaways from the Climate Change Commission’s advice
* Newsroom’s in-depth analysis of the Commission’s report
Stranded assets
Why then would the Commission recommend a ban on new natural gas infrastructure so early, and as one of the key ways to decarbonise buildings emissions?
For starters, the emissions impact of natural gas isn’t negligible. Residential natural gas use results in 362,000 tonnes of emissions every year. Commercial use is responsible for another 458,000 tonnes. For context, that’s just under 5 percent of non-transport energy emissions. Not massive, but not nothing either.
The real reason for the proposed ban, however, all comes down to stranded assets, Commission chair Rod Carr told Newsroom.
“The whole pathway for the Commission has focused on letting things reach the end of their natural life – so we’re not running around scrapping cars, we’re not running around pulling out pipes – but you do have to stop the capital investment that is justified on the basis that it’s going to be paid for over a 30-year life,” he said.
However, natural gas infrastructure installed in 2025 is unlikely to last for 30 years, particularly when we’re supposed to reach net zero long-lived gas emissions come 2050. Moreover, the cost of natural gas is likely to increase as renewable electricity becomes cheaper.
Dr Terrence Loomis of the Fossil Fuels Aotearoa Research Network said gas prices will spike in the coming years.
“The reality is that gas is going to get more expensive by 2035 and beyond, and demand is going to plummet as the country transitions to renewables,” he said.
Given this, Carr said, people investing in natural gas infrastructure in 2025 will be tied to using high-cost, high-emissions energy in a decade’s time.
“Because of the capital cost which is amortised over the use of the infrastructure – basically it’s charged to the end user in one form or another – it is misleading to continue to impose that capital cost when there are alternative technologies already available that are low or no emission options. On that basis, we’re saying you’ve got to stop doing the old infrastructure on the old tech to ensure that we are not leaving stranded assets,” he said.
“The way we think about natural gas connections is the same way we’re saying you should really stop the implementation of new coal-fired boilers.”
Sizzling a steak
Consumer NZ technical writer James le Page warned would-be renovators to think twice before installing new natural gas appliances in light of the Commission’s advice.
“Piped natural gas is currently the cheapest way to heat your water and it’s an efficient way to heat your home. However, these costs going forward are a complete unknown,” he said.
“It’s important to remember that the environmental cost of gas is unacceptable and the CCC recommendations are there to try put a stop to climate change. This is where electricity beats gas in New Zealand. Our electricity generation comes primarily from renewable sources while gas is a one-time deal that’s extracted from the ground and, in the process of you using it, pumps CO2 into the air.”
Carr also noted that the potential ban wouldn’t stop people from heating their water or cooking.
“We know that there are alternatives to space heating that are efficient, such as heat pumps. We know that there are alternatives to stovetop cooking, whether that’s electric or induction. And we know that there are alternatives to hot water. So it’s not as though any household that’s not connected to gas is going to be deprived of any of those things,” he said.
Claims from the fossil fuel industry that carbon capture and storage could solve the problem also fall flat, he said, because that technology wouldn’t be deployed to every home with a piped gas connection. While the tech could be used to keep the gas industry afloat, it would be applied to gas-fired power stations in Taranaki – the experience for the end user would be the same, as they’d still be relying on electric appliances.
Existing gas pipe infrastructure will also be difficult to use for low emissions fuels. A hydrogen blend of up to 15 percent can be deployed via the extant network – reducing emissions by about 15 percent – but pure hydrogen will require its own infrastructure.
Carr also wants to make clear that the Commission isn’t recommending people with existing gas infrastructure remove it, and hasn’t called for an end to gas-powered barbecues.
“This idea that somehow you’re not going to sizzle a steak in the backyard is unhelpful, misleading and probably worth correcting,” he said.
“The issue is about the capital cost, it’s not about the marginal gas that might be burnt. What we’re saying is, if you’ve got gas connections, keep them. Nobody anywhere in our advice is saying you need to turn it off or take it out.”
But if people invest in high-emitting infrastructure now, that means it will continue to emit for decades to come.
“Let’s stop spending our sparse capital on infrastructure that is embedding emissions for the future.”
