Today's business section of the New Zealand Herald features contrasting views on the serious energy supply shortfall already affecting New Zealanders.
In separate stories, Associate Energy Minister Harry Duynhoven says oil and gas exploration prospects are bright, while Indo-Pacific Energy chief executive Dave Bennett says further immediate incentives are needed.
Duynhoven almost dismisses the poor response, a single bid, to the recent Deepwater Taranaki blocks offer - "it needs to be realised that the country's deepwater basins are not going to play a role in addressing short-term gas supply concerns".
He says the government's marketing is more about long-term incremental increases in exploration and the opening up of new exploration regions.
However, Bennett says the glaring omissions of the government's energy policy are its lack of understanding of the intimate link between gas and electricity and there being no specific support for gas exploration.
"Unless major commitments are made, we can expect electricity supply to falter in the face of demand around 2005. Auckland is particularly vulnerable to such disruption. Even if electricity demand was to slacken, and there is no reason to suppose it will, there is no available alternative source of supply large enough to take up that critical role if gas supplies falter."
Bennett says fostering gas exploration represents the best and most cost-effective approach to meeting electricity demand as the alternatives - nuclear, coal, wind and LNG - all face social, political, environmental, time and scale problems.
He further suggests a separate royalty regime for gas (something methanol manufacturer Methanex raised almost eight years ago), accelerated tax deductibility of development expenditure and gas pre-purchase agreements.
"Until the government recognises the underlying realities of gas exploration, we and others will continue to focus on drilling for oil," Bennett concludes.
Duynhoven, however, believes this country's petroleum exploration industry has "turned the corner" and that there are already significant exploration incentives.
"Only a year ago we had our most successful bidding round ever, with over 40 applications being received for 26 areas (in onshore and offshore Taranaki).
"I am very positive that there has never been a better time for achieving a significant increase in exploration . . . I am confident that with the ongoing support of the government, the New Zealand petroleum exploration industry will find additional commercial quantities of oil and gas for the benefit of future generations."
However, Duynhoven concedes the government is seeking an independent review of its permit allocation and royalty regime, as well as discussing with the Petroleum Exploration Association of New Zealand and other explorers further fiscal changes that might increase petroleum investment.
