KEY POINTS:
Solid Energy brought its upbeat message on the future of coal to Auckland yesterday in what could be the first of regular annual public meetings involving state-owned enterprises.
New Energy Minister Gerry Brownlee said the company should be congratulated for engaging with the public.
"I take my hat
off to [chairman] John Palmer and Solid Energy for this very bold move and we'd hope that other SOEs have a look at it and see what they might be able to do to get their message out there as well."
Solid Energy paid the Government a $34 million dividend in the past year which was a poor year and has forecast a $100 million payment in the coming year in spite of collapsing world coal prices.
Brownlee said there was a lack of understanding of the contribution state owned enterprises made to revenue and the Government was keen to encourage more public interaction.
"Whether you agree with the story or not this is a significant New Zealand business, a very sizeable asset. We think it's a story that's not well understood."
Solid Energy said yesterday that even with just mid-range future energy prices its existing operations, including new developments about to start, would generate nearly $2 billion of future value. This was the existing core base value and would increase to $4 billion within 20 years.
The meeting at The Langham, Auckland attracted about 160 people, mainly from the energy and mining industries.
There had been some speculation at the time of the election about possible SOE privatisation.
Palmer said in opening remarks that while using a standard public company reporting format "it should not be implied that we have an expectation about the privatisation or partial privatisation of SOEs in general or Solid Energy in particular".
Brownlee reiterated his party's position on asset sales after the meeting. "You're always going to have conspiracy theorists but it is a locktight policy that the new National Government not to sell any assets without first going to the public in a general election making it clear what our intentions are. It's not a question for us."
The presence of Brownlee and SOE Minister Simon Power at the meeting was symbolic of the more favourable hearing chief executive Don Elder will have within the Government after public clashes with former Energy Minister David Parker made headlines.
Elder was a critic of the emissions trading scheme, a system he said yesterday was inevitable in some form but not how it was passed into law near the end of the last Government's term.
He said New Zealand was now "the lucky country" in a world of constrained supply of energy and food.
Solid Energy's lowest cost resources were the Southland lignite fields which could provide energy at 10 per cent the cost of present electricity generation. But capturing and storing the carbon byproduct was still up to a decade away and would require investment by governments around the world. A coal-to-transport fuel plant was about 10 years away and would cost about $10 billion.
Coal seam gas is closer to becoming commercially viable. The company said its pilot wells near Huntly were now feeding the national grid and were capable of supplying up to 800 homes. A decision on commercial development of the project will be made next year.
NZ: THE LUCKY COUNTRY
* Solid Energy says at current use we have coal for thousands of years.
* New Zealand coal could fuel all energy growth, industrial, residential, electricity, transport, for hundreds of years.
* Solid already owns or has access to the equivalent of 15 Maui gas fields - 150 years of energy use.
