Officials were wrong to black out the conclusions of the modelling sitting underneath the government’s plan for a liquefied natural gas import terminal at Port Taranaki, the chief ombudsman has ruled, and the unredacted document released as a result undercuts one of the main arguments the government has used to sell the project.
Chief Ombudsman John Allen found the reasons the Ministry of Business, Innovation and Employment gave for withholding the document were not valid, and that even if they had been, the public interest in releasing it was “very high”, RNZ reported on Friday. He noted the strength of that interest was greater because the country is in an election year.
“The government’s plans for an LNG import facility in Taranaki has proven divisive,” Allen wrote in his decision. He added that there was accountability at stake in the spending of public money, and that “the plan is estimated to cost upwards of $1 billion”.
The document in question is a set of slides summarising work by Concept Consulting, which MBIE commissioned to model what building the facility would actually achieve. A version was released in April with the sections that appeared to contain the executive summary, the conclusions and the recommendations removed under the “free and frank opinions” withholding ground of the Official Information Act 1982.
The ministry has consistently played down what the consultants found, describing the slides as a draft of an informal working document and saying that because of that status officials did not bother correcting the parts they disagreed with. Allen did not accept the characterisation. The document was “fairly advanced” rather than a rough draft, he found, and it gave “important context and limitations” for the advice and modelling that followed.
“MBIE had already engaged in back and forth with Concept and had the chance to improve on and refine its earlier drafts,” he wrote.
With the redactions lifted, the summary slide, headed Key insights, says access to LNG “shouldn’t materially affect average electricity prices”. The consultants found LNG should pull prices down in the most extreme dry years, but only if several things went wrong at once, namely renewable generation failing to keep pace with demand growth, domestic gas supply falling faster than projected, or a black swan event in which every coal-burning unit at Huntly Power Station was out of action at the same time.
“Other resources can provide a similar system security service to LNG,” the document concluded. The alternatives modelled included burning coal at Huntly, building extra underground gas storage such as the proposal at the Tariki field, and simply building more geothermal, wind and solar capacity.
That matters because the government has argued the terminal would save households $265 million a year, on the basis that the security it provides would drag down forward prices in the wholesale electricity market. Ministers have since pointed to a fall in those forward prices as evidence the announcement is working. The Electricity Authority, along with others in the sector, has put the same fall down to the volume of new renewable generation coming online, with more consented and under construction.
Lawyers for Climate Action, which laid the complaint with the ombudsman, said a promised reduction in power prices had been “a key justification” for the terminal and the newly released material weakened it. Spokesperson Laura MacKay told RNZ the withholding itself was the part she could not get past.
“The absolute key point for me is why have these particular conclusions been withheld?” she said. “It’s confusing, and I do honestly find the lack of transparency really concerning.”
Her organisation first asked for a complete copy in February. “If LNG is such a good idea, why has it been so difficult to access this kind of relevant and important information?” she said.
A letter from MBIE released alongside the document adds a further wrinkle. Both the ministry and ministers have criticised the modelling since the first tranche of redactions was lifted in June, saying it leaned on optimistic assumptions about how much gas New Zealand would produce. The full slides show the consultants had thought about exactly that and considered their assumptions, which used MBIE’s own low-end projections, to be conservative.
MBIE energy markets policy director Rebecca Heerdegen wrote that the ministry held newer reserves data at the time and did not pass it on. “That data showed that gas reserves had dropped by 23 percent relative to the previous year’s estimates,” she wrote. “At the time, rather than revealing commercially sensitive information, we did not correct or engage with Concept’s opinion that the gas assumptions are conservative.” Because what the ministry had bought was the modelling output itself, she wrote, officials “did not seek to correct Concept on opinions they expressed in the slide pack where we disagreed or held additional information that Concept was not privy to”.
Newswire reported that 23 percent slide in reserves when the figures were published in May.
Concept has since run the numbers again independently, and in a further report prepared last month for the four big generator retailers it reached much the same conclusions. Many of the conditions that produced the price spikes of 2024 no longer apply, it said. “The dry-year problem is not getting worse – indeed the overbuild of renewables is reducing the need for flexibility resources from thermals or demand response.”
The ruling lands in the middle of a widening fight over the project. On 10 August a group of 11 climate and consumer organisations, among them Consumer NZ, the Sustainable Business Network, Rewiring Aotearoa and three Taranaki community groups, wrote to Auditor-General Grant Taylor asking him to open an inquiry into the procurement, arguing the process is being rushed towards an artificial deadline and that value for money has not been demonstrated. By the government’s own assessment the project could cost as much as $2.7 billion. Taylor turned down an earlier request from Labour but said his office would watch the process closely.
The government confirmed in June that it was proceeding with the terminal, having dropped an earlier plan to fund it through a levy on power bills. It intends to sign contracts before the November election so the facility can be running by the winter of 2028. Energy Minister Simeon Brown has argued repeatedly that no other option can be stood up in that timeframe. RNZ asked his office whether the government still intends to sign before polling day and was told a response could not be provided before publication.
Energy policy is shaping up as one of the sharper dividing lines of this campaign, with the parties well apart on gas, renewables and who should carry the cost of keeping the lights on in a dry year. If you are still working out where you sit, our voting tool compares the parties across the policies that matter to you.
What do you make of it? Should the government sign contracts for the terminal before the election, or wait until voters have had their say? Leave a comment below and tell us what you think.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job π
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