It’s a dark day for the energy sector now that the Government has rammed through its ban on new offshore exploration, a ban National will reverse, National’s Energy and Resources spokesperson Jonathan Young says.
“The ban was poorly planned and won’t achieve the carbon emission reductions claimed by the Government and may increase emissions. It was made in a policy vacuum, ignoring the advice of officials and industry.
“The next National Government will consult widely on a planned, effective and smooth reduction of emissions to agreed levels. The transition will embrace new technologies and have measurable environmental and economic outcomes.
“We will support advanced low or zero-emission fuels as part of the energy mix of transport and industry in New Zealand. In areas where technology like batteries aren’t immediately suitable, natural gas is likely to be an important fuel during our energy transition.
“We will reach out to build linkages with significant countries and companies who are leading research & development in advanced fuels to ensure we are pursuing best practice and support further R&D in New Zealand.
“We will work to advance reform to enable Carbon Capture and Storage, that will significantly reduce emissions, alongside the industry’s commitment to move towards a low emissions future.
“We will collaborate to develop a cross-sector Energy Strategy aimed at increasing renewables, reducing emissions, managing energy costs, and maintaining energy security.
“We will strive to protect the economy, firm investment certainty, retain skilled people and minimise social disruption. And we will work to diversify the Taranaki economy alongside supporting the petrochemical industry.”
The Government’s rush to ban new offshore oil and gas exploration is hurting the economy and doing nothing for global carbon emissions, while Australia stands ready to top up our energy needs, National’s Energy and Resources spokesperson Jonathan Young says.
“The Prime Minister may be hoping to boast about the ban when she meets other APEC leaders next month. But our nearest neighbour is more likely to see it as an opportunity to add New Zealand as a customer for its liquified natural gas (LNG).
“Australia’s LNG exports reached a record high in 2017 and are forecast to exceed that this year on its way to becoming the world’s biggest exporter of the fuel. By contrast, New Zealand’s gas supply may fall below demand as soon as 2021 – well before there are enough alternative fuel options to fill the gap.
“Rather than reduce global emissions, the Government’s muddle-headed ban may increase them through carbon leakage, where New Zealand-based production falls away and other internationally based production replaces it with a dirtier carbon footprint. It’s a form of Nimby syndrome that only makes it worse for the planet.
“The Crown Minerals (Petroleum) Amendment Bill is such a notable example of bad law it would make a good case study for students of politics. The ban was announced without consultation, against the recommendations of officials and then the public and industry were given a tiny window to make their views known.
“As a result, the Bill achieves none of its objectives while inflicting damage on our economy that may run into the tens of billions of dollars. The lack of certainty about gas supply as a result of the ban has already scared off investment and will result in more coal being burned. The ban reduces our energy security and will stoke electricity prices.
“There’s a good reason carpenters have a saying ‘measure twice, cut once’. New Zealand’s complex energy needs also require careful measuring and thorough analysis, as we prepare to transition to a low-carbon economy. The Government’s approach amounts to ignorance and negligence.
“A National Government will reverse the ban. It is essential to reduce emissions but the best route will include innovation from the hydrocarbon sector, with new technologies, new energy sources, and consultation with all stakeholders including iwi, and with proper regard for New Zealand’s economic prosperity.
Megan Woods has underlined just how indefensible the decision to axe oil and gas exploration is by failing to provide any evidence to back up her claim it will reduce carbon emissions, National’s Energy and Resources spokesperson Jonathan Young says.
“The Energy and Resources Minister embarrassed herself this morning by claiming it was a ‘widely held’ fact that the ban will reduce carbon emissions but failing to back that up with any evidence. That’s because there isn’t any.
“Her own officials have advised her the ban will lead to less efficient production overseas, for example in China where methanol is manufactured from coal which has three to four times the greenhouse gas emissions as methanol produced from gas, but she says they’re wrong.
“Ms Woods went on to claim China’s carbon trading system would prevent production being sent there but she’s not even sought official advice on that and she’s wrong. As independent experts have said the Chinese scheme currently only includes the power generation sector and not the industrial sector, methanol manufacture included.
“You have to ask what the point of this Government establishing 180 working groups costing hundreds of millions of dollars is when it is routinely going to dismiss expert advice?
“What makes it worse is the Government has rushed the process, axing exploration without consultation or seeking advice, and cutting short the timeframe for submissions on the Bill to make it harder for people to have their say.
“The whole process has been a damaging farce overseen by Ms Woods who is trying to defend the indefensible in the face of more and more evidence her Government got it wrong.
“All this also comes after her undoubted role in helping produce the discredited numbers used by the Prime Minister to understate the impact of the Government’s petrol taxes on record fuel prices and to justify her decision not to axe those taxes.
“Megan Woods’ credibility is expiring as quickly as New Zealand’s oil and gas opportunities. Meanwhile her decisions are having a serious impact on the lives of New Zealanders.”
Energy and Resources Minister Megan Woods should have listened to her officials’ advice that banning new offshore exploration could mean that New Zealand’s emissions actually go up, instead of down, National’s spokesperson Energy and Resources Jonathan Young says.
“Genesis Energy has released a statement this week that an uncertain future for gas may mean that coal is used as an energy source for much longer in New Zealand. This would cause higher emissions and more pollution.
“National raised this issue but the Government has refused to acknowledge or address it.
“The Minister must to take her head out of the sand and listen to some sound advice, instead of trying to ram the changes through Parliament in such a short period of time as to minimise public input and scrutiny.
“This is now the new norm for the Labour-led Government. It refuses to listen to reason and instead has to placate its confidence and supply Party, the Greens and Greenpeace.
“The Government’s own projections for future gas reserves show a significant depletion occurring from 2021 onwards and, by 2030, reserves will only be a quarter of what they are today. With industry’s current demand triple that, there will be no natural gas left for electricity generation.
“Bridging that gap will require the importation of liquefied natural gas, at a significantly higher cost and with significantly higher greenhouse gas emissions than New Zealand’s domestic natural gas. Failing that, a significant overbuild of renewable generation will also mean higher electricity costs for New Zealand businesses and families.
“The Government is already increasing the cost of living by hiking fuel taxes and causing higher rents. Increases to the cost of electricity will have a huge impact on families, particularly those on lower incomes. This is unacceptable.
“This Government is putting New Zealand’s energy security and electricity affordability at risk through their blinkered view of the hydrocarbon industry. It’s time the Government stopped and listened.”
Official advice released today confirms the Government’s arrogant decision to axe offshore oil and gas exploration will cost billions of dollars and lead to an increase in greenhouse gas emissions, National’s Energy and Resources spokesperson Jonathan Young says.
“The advice released today shows just how arrogant and reckless the decision was, and all so the Prime Minister could go offshore and brag about being a leader in the fight against climate change.
“Instead the ban – implemented against official advice - will cost New Zealand tens of billions of dollars, and that’s before you take into account the loss of jobs and economic impact in Taranaki communities in particular.
“MBIE also believes that the decision may increase the price of gas and electricity and that the change may actually increase global greenhouse gas emissions, as we just shift to importing gas from overseas.
“This is an appalling decision made with no consultation or investigation into the real impact it would have. Now we know even the Government’s own advisors say it’s going to cost New Zealand dearly and the Government is going to try and ram the legislation through to avoid the necessary scrutiny.
“The Government must own the mistake, admit to New Zealanders it got it badly wrong and reverse its decision.”
Megan Woods, the Minister of Energy and Resources, wouldn’t give a guarantee in Parliament today to cut power price rises but will wait and see what the Electricity Price Review finds, National’s Energy and Resources spokesperson Jonathan Young says.
“What we are seeing is a Minister who has raised expectations over bringing electricity prices down but has now passed the buck to the review, shirking any responsibility for her promises.
“This is yet another example of how the Labour-led Government are mismanaging energy costs for New Zealanders which will make it harder for Kiwi households to get by. It’s clear that we either need less talk or more walk from the Minister.
“They have previously promised but failed to deliver an inquiry on the Refinery to Auckland pipeline leak, and talked tough on petrol companies, yet we have only seen the price of petrol continue to rise. They have also mismanaged their Winter Energy Payment scheme, by giving money away to people who don’t need it.
“From the massive increases in petrol prices, largely driven by new fuel taxes, to banning offshore exploration, these policies and decisions will only result in gas becoming scarcer and will mean higher energy costs.
“While the review panel found that residential electricity prices have risen 79 per cent in the past 28 years, it should be noted that in the past three years power prices have actually dropped.
“If the Minister wants to see power prices come down, she needs to say how. Either she wants to shift costs away from residences to businesses or give power companies a haircut.
“The Minister should be upfront with her plans and intentions for the energy and resources sectors lest she continues steamrolling industry with bad policy and writing cheques that end up costing hard working New Zealanders.”
The Electricity Price Review shows the market is operating effectively and the focus should now be the Government’s propensity to drive up energy costs, National’s Energy and Resources spokesperson Jonathan Young says.
“While the review panel found that residential electricity prices have risen 79 per cent in the past 28 years, in the past four years prices have actually edged up less than one per cent thanks to the competitive market established under the so-called Brownlee reforms.
The International Energy Agency in their 2017 review of New Zealand, described our electricity market as “a world leading example of a well-functioning electricity market, which continues to work effectively.
“But this Government’s track record is very poor in managing costs of energy, with increased petrol tax, and banning offshore exploration which will translate into higher energy costs for those reliant on natural gas.
“With business confidence at a new low ebb, the Government must be very cautious not to interfere or unnecessarily regulate the electricity industry which is being effectively honed by innovation and competition.
“The Government can’t credibly stand on the side of lower electricity prices when everything they are doing is pushing up costs on New Zealand households, including for energy.”
“Anyone who turns up to see the Rainbow Warrior III on its NZ coastal tour might be surprised to find out what is under the hood. The Greenpeace vessel sensibly sports an ancillary turbocharged diesel engine, National’s Energy and Resources Spokesman Jonathan Young says.
Greenpeace has organised a victory lap around New Zealand for its flagship vessel, claiming credit for the ban on new offshore exploration. However, the Rainbow Warrior can carry up to 90 tonnes of diesel to fuel the 1,850 horsepower V16 Volvo Penta engine.
“It is eminently sensible for the Rainbow Warrior III to have a diesel engine to ensure that when the wind isn’t blowing the vessel isn’t compromised,” says Jonathan Young.
“If Greenpeace took their blinkers off, they’d see that firing up the Volvo Penta is no different to utilising a gas peaker power station when the wind isn’t blowing and the sun isn’t shining.
“New Zealanders need to rightfully take a cynical view to Greenpeace’s propaganda, as a lot is at stake for our economy, and consequently our ability to effectively advance a sensible pathway of transition, says Young.
Russell Norman should stop demonising the hydrocarbon industry by saying that they are enemies and even likening them to the bombers of the first Rainbow Warrior. The hydrocarbon industries in Taranaki are made up of hard-working, law-abiding citizens who positively contribute to Taranaki’s and New Zealand’s economic success.
“The National Party does not support the Government’s oil & gas exploration ban. It fails to make any reduction to New Zealand’s emissions, as most of our liquid fuels are either imported into Tauranga or refined at Marsden Point from imported crude.
“The ban has negativity impacted investors’ confidence in New Zealand as a stable country in which to invest and the perception is now New Zealand is an outlier nation.
“New Zealand has enjoyed decades of natural gas reticulated through the North Island from Taranaki, providing heat and cooking fuel for homes, driving electricity turbines and supplying fuel source and feedstock for industry. Homes, schools, hospitals and industry are dependent on natural gas for energy. We will need natural gas for decades to come. It is hailed globally as a transition fuel.
“But government data shows that without new discoveries, natural gas reserves will fall short of demand in the next couple of years. Exploration should be encouraged, not discouraged.”
The Productivity Commission report on how to transition to a low-emissions economy makes a key recommendation that appears lost on this Government – technological advances will be critical to success, National’s Energy and Resources spokesperson Jonathan Young says.
“The report underlines how existing energy sources such as hydrocarbons have an important place in both the transition process and beyond through the adoption of technologies such as carbon capture and storage (CCS).
“Similar technology is already in use at sites in Taranaki and CCS offers even greater opportunities for New Zealand. Carbon capture involves isolating, purifying and compressing carbon dioxide to a supercritical state, where it behaves like a liquid that can be sequestered in geological formations deep underground.
“It is technology that is within reach today but instead of innovating, this Government chose to ban new offshore exploration for oil and gas.
“That short-sighted decision doesn’t take into account the contribution natural gas makes in reducing emissions as a substitute for fuels such as coal, heavily used in Asia, and the huge contribution gas plays in the world’s food production.
“It is estimated that without nitrogen fertiliser, produced mainly from natural gas, world food production would be 40 - 60 per cent lower. It’s naïve to think the global agricultural system can function without nitrogen fertiliser.
“The Commission recommends new legislation be prepared to regulate CCS activities and the emissions trading scheme be amended to allow CCS to earn credits. Energy Minister Megan Woods has told us we have to stop using gas if we want to achieve a low-emissions economy, but this report is saying that is not the case.
“New Zealand produces fertiliser at Kapuni and we use fertiliser in all our agricultural sectors - CCS could be the technology that allows us to continue to produce and use nitrogen fertiliser.
“CCS is not a solution in all cases – it is hard to capture the carbon from a tail pipe – but in the case of big sources of emissions like urea production at Kapuni or NZ Steel – CCS may be needed to allow the world to continue to enjoy the quality of life we do today.
“It is notable the Commission’s comments don’t mention the Government’s ban on new offshore exploration as a recommendation to reduce emissions. Bans stifle innovation, rather than encourage it.
“The Government banned new exploration without consultation or analysis to meet the coalition’s political objectives. It needs to take on board the message that innovation and technological advances are the way forward for New Zealand and the globe.”
Further evidence shows that the Government’s sudden change in approach to offshore exploration opens it up to the risk of legal challenge, National’s Energy and Resources spokesperson Jonathan Young says.
“At a time of already plummeting business confidence it’s becoming more and more clear that the Prime Minister’s hasty decision to end new offshore permitting was not only ill-thought through but was also inconsistent with the law.
“That was confirmed in Parliament today when Energy and Resources Minister Megan Woods confirmed that she did not make a statutory decision before the Prime Minister sprung this backwards decision on New Zealanders.
“It knew this was an issue before the announcement because the Ministry of Business, Innovation and Employment had told the Government was at risk of a legal challenge, and we know these avenues are now being actively explored by the businesses unfairly affected.
“That’s because around $150 million had been committed in good faith to seismic surveying of offshore areas in the months ahead of the exploration ban announcement, activity which was signed off by Ms Woods, only for this bad decision to be dumped on them out of nowhere.
“The announcement has created real uncertainty around whether these firms will now be able to secure a return on their significant investments. How can businesses have any confidence to invest here when the Government acts in this way?
“What’s more, the Government knows its announcement was inconsistent with the Crown Minerals Act, which is why it is undergoing the charade of creating a statutory framework for a decision it made months ago. The Government knows it got it wrong.
“This is an unacceptable way of doing business with a sector that contributes hundreds of millions of dollars to the New Zealand economy and employs thousands of New Zealanders.
“Now New Zealand will have to bear the financial and reputational costs associated with a third world way of doing businesses – all because the Prime Minister wanted to time the announcement for her trip to Europe.
“It’s little wonder business confidence in New Zealand is plummeting.”