New Zealanders will end up poorer as a result of the Government’s ban on new oil and gas exploration, but they’ll have nothing to show for it in terms of slowing climate change, National’s Energy & Resources spokesperson Jonathan Young says.
“NZIER has done the analysis that the Government ought to have done before recklessly banning new oil and gas exploration. The ban may read as a step toward a low-carbon economy but this report says its biggest achievement will be to wipe $28 billion off GDP.
“As expected, the Taranaki region fares the worst. The ban will reduce the region’s economy by almost 50 per cent. That’s $21,000 a year in real purchasing power per household wiped out in Taranaki between now and 2050. Nothing the Government has announced goes anywhere near making up for that loss.
“The report makes clear the Government rushed in, without an audit on the economic costs to New Zealand. Now the industry has funded the work itself from NZIER – work that Minister Megan Woods should have ensured was done.
“So incomes are down, unlike emissions and New Zealand’s options to transition to low emissions have been reduced and will come with greater cost. Ordinary Kiwis and New Zealand businesses will feel it in rising electricity costs.
“Natural gas is a lower emission energy source than coal for significant industries that need high process heat.
“Dr Woods says the Government wants a shift to electricity or hydrogen but the transition to hydrogen as a fuel source could cost up to ten times more than natural gas, making some industries uneconomic and driving up power prices for families already having to stretch each dollar further.
“We all agree on the need to reduce emissions but drawing a roadmap to 2050 after you’ve made a wrong turn down a no exit road won’t get us there. National would repeal the ban and ensure all options are on the table to combat climate change and safeguard our economy.”
It is a sad irony that in the first year of a Government that talks a big game on climate change, New Zealand burned the most coal in five years to keep the lights on, National’s Energy and Resources spokesperson Jonathan Young says.
“It’s a foretaste of the imbalances to come. New Zealand only has certainty of supplies of natural gas to generate electricity for the next six years. Beyond that Energy Minister Megan Woods has no way of knowing how soon new technologies and energy sources can fill the gap.
“Genesis Energy, which burns coal as the generator of last resort with 80 per cent of that going to other power retailers, is already stockpiling the fuel in preparation for next winter. While coal use jumped in the fourth quarter due to low lake levels and the Pohokura gas outage, increased use will become an ongoing theme as gas supplies deplete.
“That’s because Dr Woods doesn’t have a feasible plan to ensure new technology and energy sources will arrive soon enough and with enough scale to make up for the loss of gas.
Her answer in Parliament that New Zealand needs 4.5 new windfarms a year, but couldn’t say how much electricity that represented, shows us that she has no idea on New Zealand’s needs for electricity, and how to meet the growing demand.
“It isn’t good enough that Dr Woods talks up the promise of fuels such as hydrogen when her officials aren’t confident they will be in place in time. As a result, the outcome will be higher electricity prices and more greenhouse gas emissions – from imported coal.
“Dr Woods track record of refusing to listen to her officials means her decisions on New Zealand’s energy supply will put New Zealand’s economy and Kiwi jobs at risk.
“National would repeal the ban on new offshore exploration for hydrocarbons, and engage with all stakeholders in New Zealand’s energy sector to devise a rational and economically prudent path to low emissions.
“We absolutely believe the country has to respond to climate change but we need a solution that will work for New Zealand.”
Despite funding a new Garnet mine, the Government’s wider mining policy is still of significant concern for the people and economy of the West Coast, National’s Energy and Resources spokesperson Jonathan Young says.
“The Prime Minister and the Regional Development Minister may have got their photo op this week by doling out some cash but people living on the West Coast know that $140 million of grants and soft loans don’t go anywhere insulating the West Coast from potential damage the Government’s policies will bring.
The existing mining footprint on the West Coast has been described as putting a single ink dot on a piece of A4 paper.
“Mining is one of New Zealand’s most productive industries and it generates jobs for West Coast communities often feel they get a rough deal from Wellington. They don’t deserve to be fobbed off with some cash from Shane Jones’ provincial slush fund.
“Shutting down new mining opportunities on the West Coast puts hundreds of jobs at risk and is a tardy way to treat law-abiding businesses that have strong rehabilitation and conservation commitments, often enhancing the land mining companies work. New Zealanders expect a lot and the mining industry respects and responds to that.
“The previous National government had determined to open up low-value Crown land, streamlining permits and consents, through establishing a one-stop-shop for permitting and consents.
“Our policy is that access to Crown land will be decided on a case by case basis and we do not support blanket bans.”
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.”