The LNG Gamble: When Short-Term Thinking Meets Long-Term Risk
There’s something deeply unsettling about the way governments approach energy policy, and New Zealand’s recent LNG terminal saga is a perfect case study. On the surface, it’s a story about numbers, models, and energy security. But if you dig deeper—and trust me, you should—it’s a cautionary tale about the perils of short-term thinking in a world defined by volatility.
The Plan: A Billion-Dollar Bet on LNG
Let’s start with the basics. The New Zealand government announced plans for a liquefied natural gas (LNG) import terminal in Taranaki, a project costing over a billion dollars, funded by an electricity levy. The goal? To ensure energy security during dry years when hydropower falters. Sounds reasonable, right? Except, as is often the case with grand infrastructure projects, the devil is in the details—or, in this case, what the details omit.
The Oversight: Ignoring the Elephant in the Room
Here’s where things get interesting. The modelling done for this project—a critical tool for decision-making—did not account for international price spikes in LNG. Personally, I think this is less of an oversight and more of a deliberate blind spot. Why? Because acknowledging price volatility would force uncomfortable questions about the project’s viability. And in politics, uncomfortable questions are often swept under the rug.
What makes this particularly fascinating is how this omission aligns with a broader trend in energy policy: the tendency to prioritize short-term stability over long-term resilience. The model tested LNG prices at $20 and $25 per gigajoule—figures that seem quaint in today’s market. With the Strait of Hormuz closure and geopolitical tensions driving prices through the roof, these assumptions feel like wishful thinking at best, and reckless at worst.
The Broader Context: A World in Flux
If you take a step back and think about it, this isn’t just a New Zealand problem. It’s a global one. Energy markets are inherently volatile, yet policymakers often act as if they’re not. Russia’s invasion of Ukraine, Iran’s actions in the Middle East—these aren’t isolated incidents. They’re reminders that energy security is a moving target, and betting on a single solution (like LNG) is a risky gamble.
One thing that immediately stands out is the assumption that LNG supply will be unlimited and uninterrupted. This isn’t just naive; it’s dangerous. As Jessica Palairet from Lawyers for Climate Action pointed out, this assumption is already being tested by current events. What this really suggests is that the model was built on a foundation of hope, not reality.
The Redactions: What Are They Hiding?
A detail that I find especially interesting is the redaction of key sections in the modelling documents. Why redact the executive summary and the consultants’ conclusions? Officially, it’s to protect the “free and frank exchange of opinions.” But let’s be real: it smells like damage control. If the consultants’ findings were rosy, why hide them?
This raises a deeper question: How can the public trust a decision when the evidence is partially concealed? In my opinion, transparency should be non-negotiable when it comes to projects of this scale. The fact that organizations like Lawyers for Climate Action are challenging these redactions with the Ombudsman is a testament to the public’s hunger for accountability.
The Alternatives: What’s Missing from the Conversation?
What many people don’t realize is that LNG is far from the only option on the table. The Ministry of Business, Innovation and Employment (MBIE) shortlisted five options, yet LNG won out. Why? Was it the most cost-effective? The most sustainable? Or was it the most politically expedient?
From my perspective, the focus on LNG feels like a missed opportunity to invest in renewable energy and energy storage solutions. The Tariki gas storage project, for example, could have been a game-changer if fully realized. Instead, it’s been relegated to a footnote, with no clear timeline for completion.
The Future: A Fork in the Road
If we’re honest with ourselves, the LNG terminal is a symptom of a larger issue: the reluctance to embrace a future without fossil fuels. Yes, renewables aren’t perfect—they’re intermittent, and storage is a challenge. But they’re also getting cheaper, more efficient, and more reliable every year.
What this really suggests is that the LNG terminal isn’t just a bad bet; it’s a step backward. It locks New Zealand into a fossil fuel-dependent future at a time when the world is moving in the opposite direction. Personally, I think this is a mistake that future generations will pay for—literally, through higher energy costs and environmental degradation.
Final Thoughts: The Cost of Short-Termism
As I reflect on this saga, one thing is clear: the LNG terminal is more than just a policy decision. It’s a reflection of our values, our priorities, and our willingness to confront hard truths. Are we willing to invest in a sustainable future, or are we content to patch over problems with billion-dollar band-aids?
In my opinion, the answer should be obvious. But as long as short-term thinking dominates the conversation, we’ll keep making the same mistakes. The LNG terminal isn’t just a project—it’s a warning. And if we don’t heed it, we’ll be paying the price for years to come.
