Good
morning and thank you for the opportunity to address this year's New Zealand
Minerals Conference.

As
you have already heard from the Associate Minister of Energy, the Government
believes that the minerals industry is an important part of our economy. In
particular, our coal and lignite resources have the potential to play an
important role in New
Zealand's energy sector as both a primary fuel
and as a means to produce electricity.

The
Government has taken a keen interest in the primary fuel sector given the
declining reserves of natural gas sector. The energy sector is a key driver of
economic growth and it is therefore critical that we have a reliable supply of
primary fuel as part of the energy mix.

In
a global sense, New
Zealand is like many other countries regarding
the need to secure energy for the future. Natural gas will be a key bridging
fuel in the transition from an energy market based on fossil fuels to one based
on renewables over the next century.

However,
natural gas as a solution to this energy transition has some pragmatic
limitations for New
Zealand. There is uncertainty as to when new
domestic reserves of gas can be discovered and developed. And the alternative of
imported LNG poses a number of costs and risks to the economy.

New Zealand's
coal resources are vast-estimated to be enough to last hundreds of years at the
current rate of extraction. The main question is can extraction be increased and
sustained to meet the demand of domestic power producers and at the same time
meet commitments to lucrative international markets?

At
this point it is appropriate for me to place coal into context with Governments
overarching policy objectives for energy. The Government has stated objectives
for the energy sector emphasising energy efficiency and an increased focus of
renewable energy, while still ensuring security of supply and certainty as to
energy costs and risk. Coal certainly can make a contribution to these
objectives going forward.