When NZ Hothouse built its tomato growing operation 25 years ago in South Auckland, hooking up to the nearby Maui pipeline was a key factor.

Article Source – RNZ

Sharon Brettkelly, for The Detail

In an area where most growers were using the dirtier, less efficient coal, natural gas was cutting edge and the company brought in the latest technology from The Netherlands.

“It was the best in show in the world at the time,” said managing director Simon Watson.

The gas was abundant and inexpensive, and they were told it would last forever.

“Gas was incredibly cheap. Probably about a third of what we’re currently paying and obviously a fraction of what we’re going to be paying when the price goes up,” said Watson.

But the very lifeblood of the operation – the thing that keeps the plants warm through winter and feeds them much-needed carbon dioxide – is dying.

Natural gas supplies are running out and as the shortage bites, the rising cost of it is threatening the future of some businesses.

It is likely to uproot NZ Hothouse’s operation and disrupt hundreds of workers.

Watson said it is the toughest problem he’s faced in his 31-year career there. But he had no idea of the widespread impact of it until a business leaders’ meeting a couple of weeks ago.

“Until we started looking into the depth of this crisis we had no idea how extensive this is and how far reaching it is. It’s going to have a massive effect on our society unless we can make some changes pretty quick,” he says.

He thinks most people are unaware of how many different industries depend on natural gas as their energy source.

“If New Zealanders walk through a supermarket and all the regular things that they buy, basically 80, maybe 90 percent of that product in a supermarket has some gas content.

“Your meat industry, your dairy industry, your drinks industry, anything with sugar in it, your liquor industry, the breweries utilise a lot of gas. And then you look to the building industry, the glass industry, the aluminium industry, the timber industry and then you look beyond that to old people’s residential homes, schools, hospitals, local bodies, heating swimming pools.”

Today, Watson takes The Detail on a tour of its 10-hectare hothouse packing and distribution operation in Drury, where it grows nearly half a million tomatoes every year.

His company first got an inkling of a shortage about three years ago when the gas producers said the supply had become more unstable.

“At that time it was a short term issue which they fixed. But it was a bit of a heads up as to what was going on,” he said.

But this year it was revealed that gas reserves had more than halved in just four years. And the news keeps getting worse. Just last week the Ministry of Business, Innovation and Employment (MBIE) warned that gas supply may be falling faster than previously expected.

Watson said it has forced his company to look urgently at alternative energy sources and it will probably relocate to a site where it can tap into geothermal energy, such as Taupō.

He thought the company would have five to 10 years more at the current site, now he thinks it will be three years.

But much of the industry is in the same boat, with glasshouses or covered crop operations all around 25 years old, he said. NZ Hothouse’s two plants make up 19 hectares of the 200-hectare covered crop sector in the upper North Island, and he predicts that many will have to cut back or close down because they can’t afford to pay for the gas.

Watson said the government and the energy industry have nine months to come up with a solution, before the high energy demands of next winter

Article Source https://www.rnz.co.nz/news/business/571148/the-industry-killing-crisis