(IV) The Gas Market Vapourises

We have already seen  how electricity demands fell below projected requirements in the mid-1970’s. Despite this, the majority group on the Committee to Review Power Requirements (the NZED, the Ministry of Works, and the Power Supply Authorities) conditioned by decades of 7% per year growth continued to project a high growth rate.



In 1977 a "minority" view of expected future demand was expressed by Treasury, the Ministry of Energy Resources and the Statistics Department, and in 1978 the Power Planning Committee recommended deletion from the Power Plan of the two large gas burning stations which had been projected for the Auckland region.

Meanwhile in the sea off Taranaki, after an 8,400 kilometre tow from Japan, a platform was in place, wells were being drilled off-shore and gas and condensate were soon to flow; a $650 million dollar technical achievement which created a number of firsts in offshore technology. (ref: "The story of Maui – from mythology to reality – the story of the development of the Maui offshore gas field", Maui Development Limited, Wellington 1977.)

Thus large quantities of gas were due to come ashore from the Maui A Platform for which no major (near term) use existed. A new Ministry of Energy, taking in the Ministry of Energy Resources, the Electricity Department and the Mines Division, was in the process of formation and it was left to the Treasury to take an initiative on this surplus gas.

Liquid Fuels from Gas?

Together with the Department of Trade and Industry, it developed the idea of an independently funded interdepartmental committee to look at the liquid fuels aspects of utilising natural gas. This emphasis was in contrast to the earlier investigation that was primarily looking at possible industrial development.

The Minister of Energy, Mr. George Gair, favoured the idea and its involving Dr Colin Maiden, Vice Chancellor of the University of Auckland, who was chairman of the New Zealand Energy Research and Development Committee (NZERDC). The proposal saw the light of day in the 1978 Budget, in which the work already done on a 15% methanol blend with motor spirits was acknowledged and a decision to conduct further market feasibility studies and large scale trials was announced.

A Liquid Fuels Trust account was to be established to finance the investigations, which would be funded by a 0.1 cent per litre levy on transport fuels, giving an annual income of about $3 million. Legislation was drafted to establish the organisation.  As a result of the intervention of Ian Dick, by then Deputy Secretary of the newly formed Planning Division of the Ministry of Energy, who had in mind his experience on the Board of the NZ Steel Investigating Company, the Trust Board would have representation from the private sector as well as the Government. 

Dr Basil Walker who had made his mark as leader of the Petrochemicals Project Group became Technical Director and the legislation giving the Board a wide field of activity was passed.

In the words of the Act:  "The primary function of the Board shall be to promote, encourage, finance, undertake, and co-operate in any activity that has as its purpose, or one of its purposes, the reduction of the use of imported fuels for transport purposes in New Zealand."