‘The State Returns’: Public ownership is back in the New Zealand energy sector (but it could be done better).

CICTAR Researcher, Ed Miller writes in New Zealand publication, The Post, with an analysis of the latest government announcement on a new Liquid Natural Gas (LNG) terminal which, he says, shows an acceptance by the government that it – not the market – is the ultimate guarantor of energy security.

Once this reality is accepted, the next question must be what the best form of intervention might be to provide that security in the most sustainable and cost effective way?

Miller explores various options, one of which would be for the state to acquire some major energy-demand assets and operate them for the public good.

An obvious candidate identified for state acquisition is the Canadian-owned methanol manufacturer Methanex, the subject of a 2024 CICTAR report. The public acquisition of such facilities would allow for operating the plant as is until a dry-year risk emerges, whereupon gas would be diverted and workers off on a mid-winter Bali holiday.

This is already happening to some extent, but letting the private sector set the terms of these deals is a recipe for maximum profiteering, not just for Methanex but also the gentailers.

It might not be as sexy as a new shiny LNG terminal, but managing demand for the public good may end up being a cheaper and more effective way of managing the renewable transition.

‘The LNG decision proves that even right-wing governments can and will act to guarantee energy security’.