Megan Woods: Financial impact of oil/gas ban 'impossible to know'

Business

Energy & Resources Minister disregards MBIE advice putting cost of oil & gas exploration ban at between $1.2 bln & $23.5 bln; Pledges to give existing permit holders breathing space

25th Sep 18, 11:02am by Jenée Tibshraeny

Energy and Resources Minster Megan Woods says it’s “impossible to know" the real impact of the offshore oil and gas exploration ban, with Government officials estimating it could cost the Crown anywhere between $1.2 billion and $23.5 billion.

Interviewed on Radio New Zealand on Tuesday morning, Woods highlighted the breadth of this range, clarifying how she disagreed with the advice she received from the Ministry of Business, Innovation and Employment (MBIE) on the ban.

The Government late on Monday introduced the Crown Minerals (Petroleum) Amendment Bill to Parliament. The Bill seeks to exclude offshore exploration permits from future Block Offers.

The accompanying Regulatory Impact Statement prepared by MBIE put the midpoint of the cost of the policy to the Crown at $7.9 billion.

Rather than banning new exploration altogether, it advised the Government to create a new provision under the Crown Minerals Act to allow the Minister to exclude certain areas from exploration.

Yet Woods said, “This is advice, not instruction. I think that people want to know that their Minister is going to ask questions around advice that they receive. This isn’t the first time that a government has disagreed with advice.”

Contrary to MBIE’s advice, she also said the ban would lower greenhouse gas emissions both in New Zealand and globally.

In a statement, Woods explained her intentions for the Bill to be passed under urgency: “Given the need to proceed with Block Offer 2018 under these new settings in a prompt manner, we propose that this Bill will have a four-week select committee process to enable the public and industry to have their say on the changes and ensuring that tender documents for the offer will be made available in early 2019...

“This Bill is the first tranche of a review of the Crown Minerals Act and is only to give effect to the Government’s decision about oil and gas permits. Tranche two will be a much wider review of the Act that will enable stakeholders to take part in future proofing the Crown Minerals Act.”

Breathing space for existing permit holders not a new concession

While up in arms over the Bill, the Petroleum Exploration and Production Association of New Zealand said Woods has given the industry a bit of breathing space, pledging to consider reviewing some of the timeframes and acreage covered by existing permits.

While a "welcome signal", CEO Cameron Madgwick said it wasn't a "new concession" as this discretion is already allowed for by law.

He had previously asked for a change to the Petroleum Programme rules to formally provide this flexibility instead of just relying on ministerial discretion.

The industry group wasn't sure how far the Minister was willing to bend to enable oil and gas companies to take more time to consider whether to drill or drop their permits, or extend the areas they explored in, should they request this.

The Green Party doesn't support the Minister's supposed flexibility on the matter.

Its energy spokesperson Gareth Hughes said: “I struggle to see the point in banning offshore exploration for oil and gas if existing companies with huge blocks can hold off from exploring until way later down the track."

Meanwhile Greenpeace executive director Russel Norman said oil and gas companies didn't deserve special treatment: “When ordinary New Zealand companies sign a contract with the Government they don’t expect to be allowed to vary the terms of the contract just by a bit of public whinging."

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84 Comments

by Uninterested | 25th Sep 18, 11:36am 1537832193

National is going to have a huge war chest of funds for the next election.

by Jock Silver | 25th Sep 18, 11:58am 1537833505

Not if there are no proven resources to exploit.

by rastus1 | 25th Sep 18, 12:00pm 1537833659

'need' not have.

In spite of the msm attack dogs led by Hosking, Hooton, Soper etc I still see plenty of support for the COL.

Some of what they is not what they are doing I would go for either, but I would not yet swing back to Nat based on either party performance to date.

Still waiting for Winston to deliver on immigration....

by Foyle | 25th Sep 18, 12:03pm 1537833783

"Still waiting for Winston to deliver on immigration....". LOL, you forgot the /sarc tag.

by rastus1 | 25th Sep 18, 12:06pm 1537833993

..goes without saying. ..why TOP got my vote, not winnie.

by Shoreman | 25th Sep 18, 11:44am 1537832645

Dumb dumb dumb. I'm all for improving the envoirment but surely the Oil and Gas exploration ban needs more thought ? Why not use our resourses rather than importing it from China while the Government invests in new infrastructure to covert NZ to a greener future. I think Megan Woods is a great candidate to be the next minister to get the chop !

by powerdownkiwi | 25th Sep 18, 11:53am 1537833219

That's dumb, Shoreman.

Using finite resources (as you suggest) is temporary, and you're not suggesting mitigation of the burning of them - you're not mitigating now.

On behalf of future generations - get thee gone. Time we had a more mature approach.

The problem here is that we still, apparently, are measuring the useful (energy) in the tokens (which are worthless without the energy). Yet everyone - from Guyon Espiner this morning, to you, to the industry, to----- everyone - thinks that adding more digital tokens is the goal.

Here:

$1,000,000,000,000,000,000,000,000,000,000,000. Feel richer? It's just digits - give me a petajoule anytime.

And we need to get away from the platitudes, eh? Invest in a greener future? Spare me. All we have to do is stop what we're doing, and the future will be greener. It's the chasing of tokens is the problem.

by Withay | 25th Sep 18, 1:03pm 1537837418

Powerdown - if we stop what we’re doing now, the future will be greener. As in the Stone Age was greener. As Delboy said a planned transition would be better for everyone and missing out on royalties for no net benefit is counter productive.

by powerdownkiwi | 26th Sep 18, 7:54am 1537905255

Wrong, Withay. Jack, family cow, magic beans. The beans required a fairy-story to justify their worth. So do the ones you advocate accumulating.

I've come across folk making comments like yours, for decades. Usually the Stone Age comment is the tired one about not running out of stones. Always delivered by people who don't understand the essentialness of energy - it was actually the Firewood Age.

As for transition - the problem is that the alternative energy options don't support the current rate of extraxtion/depletion/consumption - so your system will crash/reduce drastically. Trying to save the system is the wrong approach, therefore, but getting onto the renewable regime before society collapses would seem valid - regardless of 'cost' .

But that needs Govt - and that's what we're seeing the start of. The dinosaurs probably complained too.....

by Withay | 26th Sep 18, 10:57am 1537916229

I am advocating transitioning to a renewable energy regime and using the royalties from our current system to assist with that. Sheesh, stop making giant leaps in logic and accusing people of things based on a short comment. My Stone Age comment was about less energy equals lower living standards and as your advocating stopping our current energy use while there’s no alternative that’s why I said it, no magic beans involved.

by Stev-O | 25th Sep 18, 1:47pm 1537840033

If this is what the majority of NZers are thinking then NZ is basically fked :) Single dimensional thinking, no regard for unintended consequences, buzz words, feel-good self righteous dribble with absolutely no plan and economic sense... maybe Gareth Morgan was right basically saying too many people in NZ belly full of food, content and complacent... just looking for something to complain about :)

by delboy | 25th Sep 18, 12:18pm 1537834701

We all know the ban had nothing to do with climate change and was just knee jerk virtue signalling from our PM to impress the world and the UN.

A properly implemented transition away from fossil fuels wouldn’t have got the attention and adoration our PM so craves. Much better to have banners and slogans and media opportunities.

by rastus1 | 25th Sep 18, 12:35pm 1537835736

Climate change needs action ...to call it knee jerk is ludicrous. What is it you do not understand about global warming and the need to change urgently?

by Withay | 25th Sep 18, 1:06pm 1537837573

Hi Rastus. If you believe the report then this decision is a net negative. I agree climate change needs to be dealt with but let’s try and do it smarter not harder. This isn’t the action climate change needs.

by Foyle | 25th Sep 18, 1:09pm 1537837764

The problem is that scientifically educated people who do look hard at "the problem" often do not agree that there is a significant problem.

The millennialist narrative of catastrophic global warming is mainly spread by a technically illiterate hoi polloi of tribally left wing ardent believers listening only to sermons delivered by academic and political beneficiaries to the promulgation of said catastrophist scare. But they are generally unaware of just how weak the evidence is.

Globally the political tide is swinging against thermaggedonists as we get ever longer accurate temperature data series from atmosphere and ocean that clearly indicate how slow the warming really is (0.3°C per century upper ocean, 1.3°C per century atmosphere over last 40 years - which will ultimately be clamped by the upper ocean) and how slow the sea level rise (~2mm/year, of which just ~1mm/year is 'dangerous' icecap melt) is and thus how weak the warming effect of increasing CO2 really is. The beginning of a technological transition away from fossil fuels that is occurring due to attractive economics of PV and batteries is the final nail in the coffin for the whole climate scare industry, but there is so much political and social inertia to it now that it will take decades for it to fully abate.

by Foyle | 25th Sep 18, 3:12pm 1537845145

But Ardern is really looking like the weak link. Ms "Captain's Call" dumped this exploration ban idiot policy on Woods to defend. Also appears Ardern had a hand in Curren's troubles and scapegoating regarding appointment of Derek Handley as CTO (who was Ardern's acquaintance and seemingly suggested by her for the role), there is going to be serious fall out from that over next week or two as it appears Ardern may not have been truthful in her responses to questions in Parliament.

by Pietro | 26th Sep 18, 11:44am 1537919088

We could always burn Woods rather than gas. Ooops, there's plenty of that coming from Labour so the minister's probably safe. As to fossils, NZF?

by xingmowang | 25th Sep 18, 11:59am 1537833554

NZ has the world 4th largest land and exclusive economic zone (EEZ) area altogether.

And under the EEZ area, there are enormous oil and gas potentials.

Exactly, why did this government ban NZ from the potential to become a real rich country?

by powerdownkiwi | 25th Sep 18, 12:15pm 1537834542

Xing - can you read? Try reading what I wrote.

Rich is not a collection of tokens. For a temporary while, tokens could have been swapped for real stuff, we are beyond that point now. Rich is actually having what you expected to trade your tokens for. This is Jack swapping the family cow for magic beans - possibly why it's advocated by bean counters.

by Pietro | 25th Sep 18, 1:35pm 1537839308

Surely oil is real stuff. It has a myriad of uses, other than as a means to power vehicles. And everything is finite. Solar energy needs something to capture it with - silicon, rare metals, plastic, all of which are finite and will become even more so as we use more solar, which will be a good thing. Eventually, we will consume all of our resources, no matter how careful we are. In reality, asteroids, pandemics or apocalyptic war will see our race off before then. I think the point you are missing, pdk, is that we should taper, not drive off the cliff. A carbon free future is certainly desirable but has the potential to create other problems if we don't think it through and plan carefully.

by powerdownkiwi | 26th Sep 18, 7:57am 1537905473

Pietro - ten years ago I'd have agreed. Now I think we're already 'too late' - which means we can't change fast enough. We have no time to taper - we squandered it equivocating.

by rastus1 | 25th Sep 18, 12:38pm 1537835896

Climate change/1080/fluoridation/vaccination.

Pretty much covers one and the same group.

A change from the one issue days of past - when the type maintained the world was flat.

by Pragmatist | 25th Sep 18, 12:59pm 1537837167

by Foyle | 25th Sep 18, 12:08pm 1537834080

Wow.
-Cost to taxpayers 1.2-23.5Billion (median estimate 8).
-Increases global CO2 emissions.
Quelle surprise the no-consultation, ill-considered, seat-of-the-pants Captain's Call done in a rush to provide Jacinda with a few column inches in foreign papers during her european tour turns out to be the most pointless and expensive piece of virtue signalling in NZ history.

"Financial impact of oil and gas ban impossible to know" Do not ask, do not investigate and do not contradict the dear leader!

by powerdownkiwi | 25th Sep 18, 12:18pm 1537834729

Hmmmm, same comment. Rich in dollar terms is irrelevant in a 2-degree warmer world, as it is in a resource depleted world, as it is in an overpopulated world - unless you are presuming that the system which lets you out-bid others without shooting them, continues.

by NoFax | 25th Sep 18, 12:42pm 1537836125

Why do you, powerdownkiwi, completely ignore MBIE's advice? - The ban will not repeat not reduce CO2 levels. MBIE says it will increase emissions and costs us money (those tokens pay my rent by the way). On the rationale advanced by the Minister to justify the ban, her own ministry is saying that will fail. Why would any believe Ms. Woods?

by Ms de Meanour | 25th Sep 18, 12:58pm 1537837123

Now you've done it.

by nymad | 25th Sep 18, 1:12pm 1537837943

NoFax is about to learn how PDK is never wrong.

by powerdownkiwi | 25th Sep 18, 4:09pm 1537848562

Two cars are tootlin' down the road. PDK drives one - 3 wheels, 100psi tyres, low drag coefficient. Nymad and Co drive the other - an SUV. We've done what you have to do from a standing start - we've accelerated. In the back seat of Nymad's SUV, the kids are playing Monopoly. They notice that every time they pass go, the car is going faster. They formulate a theory - that passing go causes acceleration. They prove it ten times. End of discussion, economic theory proven.

But up ahead a jack-knifed truck blocks the whole road. PDK applies the brakes - turning forward motion into heat, slowing momentum the old-fashioned physics way.

Over in the SUV, though, they've done no such thing. They haven;'t hit a truck so far, so they're just going to accelerate. The kids will make sure it happens too - playing Monopoly faster and faster so they get to go past go in ever-shorter time periods. If asked how they will stop, they point out that they'd only have to go backwards round the board, pay back a series of 200's and bingo - they'd roll to a halt.

Me, I'll put my faith in brakes. And the precautionary approach.

Soddy understood the difference.....
https://www.resilience.org/stories/2018-09-24/peak-oil-review-24-septem…

by nymad | 25th Sep 18, 4:43pm 1537850616

Two cars are tootlin' down the road.
Nymad is driving the Kremer SUV with the kids in the back watching the launch of the newest RocketLab/SpaceX rocket. Unwittingly inspiring higher levels of future human capital. Nymad's Kremer SUV has benefitted from understanding that technology advances the occupant's standard of living.

PDK is driving the Malthusian SUV with the kids simply existing as a burden on resource in the back. As he has done for decades. This ignorance of technology has meant that his SUV doesn't have advanced safety mechanisms like the Kremer SUV.

A truck pulls out in front of both vehicles, the Kremer wagon actively recognises the danger through it's onboard technology and assists the Nymad family in avoiding a costly collision and ultimate obliteration.

Poor old PDK's Malthusian wagon doesn't have any advanced safety features. The only thing stopping the poor family is PDK's right foot strength on the brake peddle and inefficient kinetic energy conversion system.

If only PDK had a better understanding of the limitations of his understanding of the vehicle he believed would save him and his family and embraced the fact that the Kremer wagon actually makes more sense in prolonging the life of his family.

by powerdownkiwi | 26th Sep 18, 9:30am 1537911047

Nice comeback in a literary sense - I enjoyed it :)

But do you see the common thread? In both you are typecast as having unsubstantiated faith.

In this case, the number of Joules (I'm old, I learned in BTU's) required to decelerate x tons in y time over z distance, is fixed. (That's the difference between physics and economics). Technology can dissipate the required heat-transfer away better, but it can't change the amount of heat needing dissipated. It's am important point.

Read Tainter's 'Collapse of complex societies'. Reliance on specialists, inability to change.

by nymad | 26th Sep 18, 8:43am 1537908235

Technology can dissipate the required heat-transfer away better, but it can't change the amount of heat needing dissipated.

Ahh, that's the point.
We only die out when return to human capital is decreasing, not resource per capita.
Unless you can put forward an argument that human capital growth is negative, we haven't reached peak resource.

As I have said before, those who say economics isn't cohesive with physics only show that they misunderstand the economic theory.

by powerdownkiwi | 26th Sep 18, 9:29am 1537910990

I know they won at Agincourt, but that was too long a bow.

Your statement is just plain wrong. Prima facie wrong.

If it was right, we wouldn't need to go underground at all - no need for monoculrural agriculture to the horizon, and CO2 would never have become an issue. We'd be infinitely rich just by being human. What, exactly, would we be doing, again? Remind me. No travel as we know it, no tourism, no dairying, no ....... what would you be trading ex resources, exactly?

The state of the planet says otherwise. It is physical resources we need, desire, extract. We are in biological overshoot, with two options - carry on over the cliff or pull back to a sustainable level of activity. We're trashing the place in every measure - except money. Spot to odd one out.

Human capital is either labour or it's thinking. Labour is less than 1% of work done - mere noise. Thinking can only be applied to energy-use (indeed, to any physical activity) in terms of coming up with efficiencies. They are a 'diminishing regime' in physics terms. Sorry about that. Thermodynamics kinda intervenes.

http://www.brembo.com/en/company/news/24hours-le-mans-2016-circuit-brak…
See? No mention of human capital, no mention of money.

Economics cut loose completely from physics when Nixon dropped the Gold Standard - although Kissinger had the sense to link the USD to oil..... Since then it's been blind forward bets (the Dow wouldn't move 1% a day if it was linked to something more than a bet). Mind you, if you want to trade virtual constructs at ever-increasing 'prices', I have no objection. Just don't go buying anything physical with the proceeds - the divorce from reality would obviously get too wide too fast for that.

You just ended up where religion did when it ran into Gallileo/Darwin, Disproven. Are there perforated lines along two edges of that PhD? Could be a good use....

https://www.theguardian.com/global-development-professionals-network/20…

"Economists decided, by and large, that they could ignore nature – take it “as given” – and instead focus on market-based finance, saving, and business investment. Mainstream economists derided the claims of “limits to growth.”
Of course this was never correct; economies have always depended on what we now call “natural capital.”

by nymad | 27th Sep 18, 9:30am 1537997402

You really can ramble on, can't you.

Excellent links, as always.
Can't beat the guardian for excellent economic intution.

Thanks for the Brembo link - Sort of reiterates my point and not yours, right?
So, Brembo considers this race the ideal test bench for technical solution developments; once these developments pass the test here, they can be transferred to street cars.
The technical solutions aren't derived of human capital or money?
Interesting perspective.
I'd like to know how in Murray Grimwald's world we went from drum brakes to carbon ceramic braking systems in 30 years without the aid of human capital and money.

Again, I reiterate. No one is denying the existence of physical laws. You really need to understand this, because you won't get any traction by failing to recognise this.
The argument in economics is firmly that those laws are respected, but over time our rate of approach towards them is geometrically degenerative. An asymptotic approach to finite limits, if you will - coincidentally a phenonemon that gives definition to many testable physical properties that obey the laws you hold so dear.

P.S. The tall poppy crap is crass.

by ham n eggs | 26th Sep 18, 10:08am 1537913331

Nymad - your car is running on DEBT ... not Tech. (just like anything Musk touches...)

Greater complexity is just making the system more brittle.
Again you need to explain why the ramp up in debt is so necessary if TECH is indeed leading to all this living standard advances?

But maths says you cant.

by nymad | 27th Sep 18, 9:31am 1537997491

Sure. It's very simple - Debt is underpinned by productivity. Increasing technology results in increased productivity.

by ham n eggs | 27th Sep 18, 10:02am 1537999329

So the FACT that productivity measures are being left in the dust by debt growth shows Tech is failing.

by nymad | 27th Sep 18, 10:12am 1537999949

Not at all. That's an impossibility.

Who is going to loan money that they don't believe can be repaid through productivity?
Seems like a stupid idea to me.

But hey, if you wear a tin foil hat it might make sense.

by delboy | 25th Sep 18, 3:29pm 1537846191

What you’ve done here is state inconvenient facts and that’s unacceptable.

by Pietro | 26th Sep 18, 7:34am 1537904043

It's freezing today. Two degrees warmer would be nice... PDK, I don't think there is any answer to global/cooling cycles. If we do mitigate 'man-made' climate change, and there is real debate around that, we will still be at the mercy of 'natural' warming, ice ages, asteroid strikes, pandemics and so on. They do happen. The vast majority of the world's population, and the sector that is growing fastest, will still need to burn fossil fuel, clear forests, farm inefficiently, and pollute via poor infrastructure just to survive. We city folk are very arrogant in our ideology.

by ngakonui gold | 25th Sep 18, 12:33pm 1537835608

How many Syrian and Yemen people are worried about climate change ? None.

by Carlos67 | 25th Sep 18, 12:35pm 1537835731

Basically hardly anyone cares about climate change. Is it happening, yes are we really getting serious about change ? no.

by scarfie | 26th Sep 18, 10:12am 1537913539

As I understand it the root cause if immigrants flooding Europe is an exodus from Syria after sequential years of drought forced them from the land. That combined with Syria turning into a net importer of energy. Loss of lifestyle. They gone elsewhere looking for a better one, or gone to war. Whether the drought is caused by climate change is of course up for question, but the main point is the population grew beyond the natural resources available.

by Carlos67 | 25th Sep 18, 12:33pm 1537835611

While there will be electric cars and smaller engine petrol driven turbo cars to stretch out the life of fossil fuels, its still required for the foreseeable future. Its a move way too early from this government, still does it really matter ? the stuff sits in the ground until National get back in.

by RickStrauss | 25th Sep 18, 1:05pm 1537837552

Other comments on here recently suggested Labour's ban is poor PR but ultimately inconsequential because there was likely to be waning demand for further exploration permits. I.e. reflecting a growing consensus there's nothing there to extract.

If true...that suggests the ban wasn't much of an issue in terms of real consequences, but was just very bad politics in terms of message management.

by Roger Witherspoon | 25th Sep 18, 1:09pm 1537837772

Silly as. At least Stalin knew he was going to starve a few million Ukrainians to death when he nationalised the bread basket of Europe. Likewise, Mao presumably knew he was going to starve 100 million or so Chinese people to death when he continued to export the rice crop in the Great Leap Forward. It seems our silly minister doesn't care that young children and pensioners will die early because their houses are too expensive to heat with electricity. This is where these policies lead. It is the most vulnerable who suffer the consequences.

by Foyle | 25th Sep 18, 1:20pm 1537838427

About 32000 people die as consequence of winter cold in UK every year. Estimated to be about 1600 in NZ. Assuming about 2billion live in temperate or cold climates where it has an impact then that would suggest up to about 1million per year dying from effects of cold.

Globally about 20x as many people die from effects of cold as from heat: https://www.usatoday.com/story/weather/2015/05/20/cold-weather-deaths/2…

Suggests more global warming would be great!

by Pragmatist | 25th Sep 18, 1:59pm 1537840794

Or we could keep making better quality buildings so the only ones that die from cold are the foolish ones that end up trapped on a mountain in a storm.

by Foyle | 25th Sep 18, 4:03pm 1537848180

I agree, improving housing stock in NZ would be a huge boon to the standard of living in NZ, and would reduce our energy consumption considerably. Government could help by reducing the regulatory overhead of building work - things like consenting, inspections and health and safety contribute to it being ruinously expensive, adding a room to a house can easily cost $50-100k these days.

by RickStrauss | 25th Sep 18, 3:13pm 1537845196

It seems our silly minister doesn't care that young children and pensioners will die early because their houses are too expensive to heat with electricity.

Well...thank goodness the previous government worked so hard to make sure these people could be sleeping in their cars, rather than in cold houses. Sure headed that issue off at the pass.

by Roger Witherspoon | 25th Sep 18, 4:15pm 1537848958

I agree. National deserved The Boot. Hopefully they will learn from it. Do politicians only listen to the party members when in opposition, I wonder? Bringing in 70,000 a year and building 355 houses doesn't cause homelessness! (sarc) Doubling house prices shows how clever we are (at bringing in more money from overseas and encouraging rampant bank friendly "credit growth" and a debt serf economy). Sigh.

Mrs T, as an opposition MP put it thus:
One of the most hackneyed of political quotations is Disraeli's dictum that theTory party “is a national party or it is nothing.” Yet it means more than the obvious truths that Conservatives must put the interests of the whole nation first and must seek their electoral support among all classes and sections of the community.
It means also that the party cannot long survive unless its policies are in tune with the deepest and best instincts of the British people.

by RickStrauss | 25th Sep 18, 6:18pm 1537856281

Good quote. Indeed, National do need to reconnect with more New Zealanders, and not simply be the party of property investors, old folks and Jian Yang. They need to rediscover their name.

by Roger Witherspoon | 26th Sep 18, 8:25am 1537907113

Ta. It seems both parties have rather lost their way. Labour and the Greens are still largely captive to a bunch of control based, anti-democratic ideas, neglecting their wonderful heritage in the freedom seeking self help and cooperative movements that made Britain the most literate nation in the world, thus enabling the industrial revolution and the modern world. Our political system is an evolved one, so it can be intellectually difficult to make sense of. Thinking based on the control of others, while necessary at times, tends to lead you down dark roads.

by scarfie | 26th Sep 18, 10:21am 1537914095

I think you know I don't bother voting, but I have rubbed shoulders a bit with my local National MP and now an ex colleague is in his first term with the National Party. I dislike their politics, but I can see they do believe they are doing the best for the country. So I really related to the book AndrewJ posted about, "Voltaires Bastards" in explaining the rise of the technocrat.

Try this video. Within it lies gem that explains why democracy doesn't work. Peoples opinions and ideas are not stress tested. https://www.ted.com/talks/ray_dalio_how_to_build_a_company_where_the_be…

I will post that at the 90@9 one day, unless David puts it up in an article.

by solardb | 25th Sep 18, 1:15pm 1537838101

So where's the $ 23 billion from the last few years ???

by Foyle | 25th Sep 18, 1:31pm 1537839090

The upstream oil and gas sector contributes over $2.5 billion to New Zealand’s Gross Domestic Product (GDP), the Government collects approximately $500 million in royalties and income tax from the sector annually, and oil exports are worth approximately $1.5 billion per annum.

But lets chuck it all away so Jacinda can get her name in the paper (the only demonstrated benefit).

by solardb | 25th Sep 18, 1:49pm 1537840142

so $ 500 million a year , we are talking 46 years???.The article says the cost to the crown of up to $ 23 billion. .

by Ms de Meanour | 25th Sep 18, 3:44pm 1537847070

Look up "net present value".

by Pragmatist | 25th Sep 18, 3:55pm 1537847724

Umm, so since teh NPV of future income is lower, you are saying that there is more than 46years of oill/gas? mmm, nope.

by Boatman | 25th Sep 18, 1:50pm 1537840259

Just went past a petrol station with the price of 91 at $2.40 ............. needless to say the forecourt was empty

by rastus1 | 25th Sep 18, 4:27pm 1537849651

..when I biked in this am I passed thousands in cars one up. That suggest petrol is waaaaay too cheap to me.

Petrol will never be cheaper...the idea behind carbon tax is to change behavior and as yet, the taxes are not high enough to do so. But it will happen.

Most in NZ remain blind to it, preferring to believe we are not going to be forced into it by the global shift.

But such a view is common when change is scary. So stand you ground if you wish...but the ground will shift beneath you.

get used to it.

by Roger Witherspoon | 26th Sep 18, 8:32am 1537907542

That is a good point. It may be that petrol is too cheap, it may be a really good thing to tax if it reduces wastage and redirects resources to better uses. It is a different point though, about the best use of precious resources. The Green Minister is reducing the amount of precious resources we have available to fight over.

by profile | 25th Sep 18, 2:25pm 1537842330

Winne was on Hosking this morning saying he was trying to make NZ more like the Nordic economies. Someone needs to clue him in on the Norwegian pension fund.

Incredible how dopey Winston, and for that matter Hosking, is.

by Nic Johnson | 25th Sep 18, 2:36pm 1537842970

So he wants NZ to have household debt levels as high as Norway's - superb idea Winston.

by rastus1 | 25th Sep 18, 3:33pm 1537846388

I guess he will also be a fan of their social policy, tax rates and publicly available individual tax returns then? .

and we could go whaling as well...now there's another wasted resource eh mike.

by waymad | 25th Sep 18, 2:28pm 1537842513

Consider the number of users, along the 'Naki to Awkland pipeline, who have based their business, home, and other energy configurations on a continued supply of ~~Gaia farts~~ Natural Gas.

Now consider the work (and energy!) needed to substitute that with imports:

A full LNG import facility somewhere along the line
Shipping, burning bunker fuel, to transport the stuff
Buying the stuff (from whom, at what cost?)
Downstream configuration changes if our Hallowed MP's decide that actually, it's all too hard, and everyone affected has to swap out Gas uses and substitute electric:
- Every appliance, heat source, etc is a stranded asset, worth zilch, and immediate replacement is needed
- Rise in electricity demand, needing more bird-choppers, geothermal (cooling Gaia), dams (the horror, the horror...), solar PV (except for the night....), or biomass (those billion trees...)
- More cement, metals, transport (cargo bicycles?) to effect the changeover - all imported
- Immediate capex hit for everyone concerned, compromising savings, retirement pots, and life plans

The MBIE report considers only the Gubmint-side fiscal hit. It does not begin to consider the private hits.....

Whatever one thinks of the Gubmint's Energiewende, it most certainly cannot be termed 'Planning'.....

by RickStrauss | 25th Sep 18, 3:12pm 1537845173

temporary comment storage

by Foyle | 25th Sep 18, 4:03pm 1537848236

pithy reply placeholder.

by waymad | 25th Sep 18, 5:31pm 1537853501

Inevitable reply placeholder for Them As Knows Best:

Hair shirt

Sandwich board, reading 'The End Is Nigh'

by Jock Silver | 25th Sep 18, 10:40pm 1537872054

Reservation for typically ham-fisted, foot-in-mouth attempt at riposte.

by profile | 25th Sep 18, 3:15pm 1537845322

Maybe Socialist Cindy could talk to The Donald about buying some US gas while she is at the UN this week?

"In 2005, the Energy Information Administration (EIA) estimated that the U.S. would be importing the LNG equivalent of nearly 12 Bcf/d by 2015 and 18 Bcf/d by 2025, and a number of LNG import terminals were built to handle the expected inflow. It became clear by 2010-11, however, that the Shale Revolution — and the resulting boom in U.S. gas production — had eliminated the need for LNG imports. In a flash, many of the companies that had just finished building LNG import terminals started exploring the possibility of adding liquefaction plants at those sites to export LNG instead. Since then, six liquefaction/LNG export projects advanced to FID and construction with a combined capacity of more than 23 million tonnes per annum (MMtpa) are up and running."

by profile | 25th Sep 18, 3:15pm 1537845344

"Shale gas developer Cuadrilla will start fracking at its Preston New Road site in northwest England in the next few weeks, it said on Wednesday as it announced government approval for a second well.

The British Geological Survey estimates shale gas resources in northern England alone could amount to 1,300 trillion cubic feet (tcf) of gas, 10 percent of which could meet the country’s demand for almost 40 years."
https://uk.reuters.com/article/uk-britain-fracking/cuadrilla-to-start-f…

by kiwi_overseas | 25th Sep 18, 3:37pm 1537846637

The government should back down and simply let the carbon price determine whether exploration proceeds.

by profile | 25th Sep 18, 3:40pm 1537846844

The government should back down and simply let the market price determine whether exploration proceeds.

by Pragmatist | 25th Sep 18, 4:00pm 1537848003

Sure, with a nice hefty tariff on all extracted product that goes to funding clean infrastructure.

by Foyle | 25th Sep 18, 4:19pm 1537849157

They already take a huge cut in royalties, their call what they want to spend it on.

I'd like to see large scale PV put in around NZ, prices have come down so much that should not require subsidy. It would be far more cost efficient than the home solar subsidy currently being promoted by the (typically stupid) Greens. Domestic solar costs about 3x as much as utility scale installations.

by Pragmatist | 25th Sep 18, 4:39pm 1537850348

No, i mean a real tariff, not this 5+20 rubbish.. 10+30 sounds a lot better.

by profile | 25th Sep 18, 4:36pm 1537850181

-Had Germany spent $580 billion on nuclear instead of renewables, and the fossil plant upgrades and grid expansions they require, it would have had enough energy to both replace all fossil fuels and biomass in its electricity sector and replace all of the petroleum it uses for cars and light trucks.

-Had California spent an estimated $100 billion on nuclear instead of on wind and solar, it would have had enough energy to replace all fossil fuels in its in-state electricity mix.

https://www.forbes.com/sites/michaelshellenberger/2018/09/11/had-they-b…

by waymad | 25th Sep 18, 5:36pm 1537853812

And the sad truth about Germany's Energiewende is that it has propelled them straight into the arms of King Lignite, to the tune of 1/3rd of electricity generated....

by powerdownkiwi | 25th Sep 18, 3:51pm 1537847517

HAha - they're all coming out of the fractured rock today.

Neither a carbon nor a market 'price' will work - simply because both are artificial, both will be 'gamed', both are blind (in terms of being proactive). Only a cap-and-trade would work - and then only if the 'pollies are staunch enough screwing the cap down.

There are a lot of stupid, short-sighted, short-termist, people around, many in power. It always happens like that - those who win in a system don't want to change the system they're winning in. That includes those who see themselves as part of it too - as we're seeing.

But I have three simple questions. First, If your neighbour is committing suicide, do you commit suicide too? Wouldn't it be a tad more intelligent to help your neighbour? Wouldn't one of the ways you could do that be to set an example - demonstrate a life worth living, say?

Second, we're already committed to 1.5 degrees, are we stupid enough to go charging willingly past 2 degrees?

And third, will our grandchildren thank us? We'll be giving them a pile of digits, a trashed planet and a heap of disintegrating ticky-tacky. Seems like a bad deal to me - I'd almost call it intergenerational fraud.

But the biggest joke is that offshore extraction round NZ was never going to take place - but the time they got around to it the global faith in tokens will be well past - goodbye Capex.

https://www.resilience.org/stories/2018-09-24/peak-oil-review-24-septem…

by Ludwig | 25th Sep 18, 9:44pm 1537868693

If you’re deluded enough to believe that man has the power to alter the world’s climate then the next 10-20yrs are going to be very interesting as we enter a global cooling cycle. No doubt, when this fact dawns on everyone you will still blame mankind for that too. Very amusing...

by scarfie | 26th Sep 18, 10:24am 1537914297

Can you point to where in PDK's first post in this thread that he mentions climate change? He keeps talking about physics, everyone else keeps bringing up the weather.

by Boatman | 26th Sep 18, 10:30am 1537914642

Why on earth did the Peters-led Government not engage with the public before arbitrarily banning a whole industry ?

Apart from the costs being "unknown " The unintended consequences are far -reaching and damaging to our future well being

by powerdownkiwi | 27th Sep 18, 8:45am 1537994701

You sit on the Opposition Benches Boatman? Or just a hanger-on?

Maybe you could step up and define wellbeing. How about we start with the well-being of, say, five generations of Kiwis hence? What will they thank us for? Not the current use of one-off fossil fuels, not the piling up of digital 'wealth', not the pollution. You got some ideas?