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Speaker 1: Now, electricity prices are threatening two mills near or Hakune.

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Speaker 1: Winston Pulp International has paused operations at the mills for

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Speaker 1: a couple of weeks because the power price is simply

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Speaker 1: too high to profitably run the mills. Now, if they

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Speaker 1: shut down completely, it means up to three hundred people

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Speaker 1: could lose their jobs. Shane Jones is the Minister for

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Speaker 1: Regional Development also the Associate Energy Minister and with us now,

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Speaker 1: hey Shane, hey, killer folks, what do we do about this?

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Speaker 2: Oh hideous news? Obviously, I'm hopeful that the gent tailors,

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Speaker 2: the big energy companies start to offer our big forestry producers,

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Speaker 2: manufacturers and other related industrial players a deal that's not

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Speaker 2: dissimilar from what they offered Rio Tinto down there in

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Speaker 2: the cargo.

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Speaker 1: Are they going to though? Is that realistic?

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Speaker 2: Well? The difficulty is that ministers can't command Mercury, Meridian,

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Speaker 2: Genesis contact to do anything. They only listen to the

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Speaker 2: managers and the directors of those companies. But my problem

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Speaker 2: is that if they don't start to engage and actually

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Speaker 2: look after New Zealand firms, New Zealand employers, then quite frankly,

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Speaker 2: I fear and the industrialization.

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Speaker 1: Yeah, I think that is obviously happening right at the moment.

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Speaker 1: I mean, do you have any indication that the power

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Speaker 1: companies are going to offer sweetheart deals?

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Speaker 2: Well, look the precedents there the Rio Tinto. Whether or

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Speaker 2: not you call it a sweetheart deal, I mean, it's

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Speaker 2: over what period of time power is made available to

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Speaker 2: these factories. And now, sadly I'm not running any of

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Speaker 2: those forestry manufacturers, but they seem to be saying, and

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Speaker 2: we have to take them at their word, that the

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Speaker 2: costs associated with access to electricity makes their operations marginal

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Speaker 2: in New Zealand, which is an indictment on you and

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Speaker 2: I as New Zealanders, because a historic advantage of doing

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Speaker 2: business in Kiwiland was affordable energy.

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Speaker 1: But Shane, you know what you're saying, right, if they

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Speaker 1: offer deals like they offered to Riot, you and I

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Speaker 1: as households are going to pay for that, because we

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Speaker 1: pay for Rio Tinto.

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Speaker 2: Well, the reality is that if you offer a deal

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Speaker 2: over a long period of time, then it's no different

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Speaker 2: than a long term interest or a long term currency fix.

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Speaker 2: Then the price comes down. It doesn't necessarily mean that

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Speaker 2: you and I have to pay more prices. What is

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Speaker 2: bedeviling you and I as Garden variety key eases is

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Speaker 2: not enough energy in the company, and that takes us

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Speaker 2: to whether or not the regulatory settings are such that

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Speaker 2: it's encouraging competition. And that's why I've been working on

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Speaker 2: some ideas which I shall submit to my fellow ministers,

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Speaker 2: in particular the senior Energy Minister. And maybe it's a

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Speaker 2: time to have a deep dive and ensure that we've

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Speaker 2: got the right regulatory settings for competition and new investment

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Speaker 2: if we haven't, and what do we need to do

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Speaker 2: to expedite that new investment. What are you thinking, Well,

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Speaker 2: we're looking at obviously there's an interest offshore, wouldn't but

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Speaker 2: that's going to take a while. I'm told by the

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Speaker 2: existing investors in the gas industry that there are things

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Speaker 2: that can be done in the short term to incentivize

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Speaker 2: them to do more work, and officials are giving us

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Speaker 2: advice about that. And as much as it pains me

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Speaker 2: to say, Meridian, I am told are interested in moving

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Speaker 2: towards the importation of aling and New Zealand that would

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Speaker 2: supply gas fire power stations, and of course this will

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Speaker 2: enrage the Greens who want a cure. Well, that will

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Speaker 2: depend on what sort of contract you can strike. I mean,

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Speaker 2: the Aussies have found that the spot price and globally

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Speaker 2: has been very expensive for them. And I'm not promoting it,

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Speaker 2: but I have to acknowledge that this is what Meridian

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Speaker 2: and others apparently are interested in.

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Speaker 1: Is anybody using the word crisis, electricity crisis, energy crisis

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Speaker 1: with you?

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Speaker 2: Oh? I think that the people that have spoken to us.

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Speaker 2: I mean, obviously I had a meeting with Breakfast with

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Speaker 2: Winston's a while ago and they explain this situation to me.

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Speaker 2: I understand the Forest Minister, they're certainly using the word crisis.

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Speaker 2: I mean, the difficulty is if we have a continually

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Speaker 2: rising cost of electricity and the only way to deal

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Speaker 2: with that problem is to rapidly expand supply. And that's

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Speaker 2: why the fast track legislation, no doubt in my mind,

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Speaker 2: will prove to be incredibly useful, so we can accelerate

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Speaker 2: the development of wood palms, solar farms, hopefully some more hydro.

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Speaker 2: And you know, we have an inordinately rich resource in

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Speaker 2: New Zealand, which is the geothermal energy, and geothermal energy

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Speaker 2: drilling in other countries goes down five or six kilometers

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Speaker 2: into the earth and you tap into what's called hot rock,

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Speaker 2: not quite at the magma, and that is a profound

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Speaker 2: geothermal resource, but it will probably require the Crown and

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Speaker 2: the Science Institute owned by the Crown to do the

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Speaker 2: exploratory work.

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Speaker 1: Well, it's some best of like getting that paper before

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Speaker 1: the other ministers and look forward to you coming up

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Speaker 1: with some solutions. Shane appreciated that. Shane Jones, Minister for

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Speaker 1: Regional Development. For more from Hither Duplessy Allen Drive, listen

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Speaker 1: live to News Talk Set B from four pm weekdays,

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