Parliament's Environment Select Committee is backing proposed legislation to ban new offshore oil and gas exploration and limit onshore exploration to Taranaki.
Having received 2,249 submissions on the Crown Minerals (Petroleum) Amendment Bill in the two-week timeframe the public had to have their say, the Committee recommends by majority that it be passed with only a few minor tweaks.
Prime Minister Jacinda Ardern announced the Government’s plan to ban new offshore exploration on April 12. The Bill to make this possible was introduced to Parliament on September 24. Submissions closed on October 11. The Bill is now expected to have its second reading in Parliament on Thursday.
Asked in her post-Cabinet press conference on Monday why the consultation period was so short, Ardern reiterated this was to ensure Block Offer 2018 (which will offer onshore exploration permits in Taranaki) could go ahead this calendar year.
Had the Government tried to push on with the offshore ban under the current law it would’ve risked being challenged in court, as the Crown Minerals Act's purpose is to “promote prospecting for, exploration for, and mining of Crown owned minerals for the benefit of New Zealand”.
Asked by interest.co.nz whether she genuinely believed there’d be any interest in Block Offer 2018 in light of the current situation, Ardern said: “I think it needs to be put in the wider context.
“Last block offer had one successful offer, so I don’t think it would be fair to simply make that assumption based on the wider decision here, because there actually has been a change in the uptake in the last few years…”
Challenged whether it was a good idea to rush through legislation for the sake of a block offer that potentially wouldn't attract much interest due to investor uncertainty, Ardern said she’d personally told permit holders the commitments of their existing permits would be honoured – so there was certainty.
It is worth noting that the Government earlier this month showed this commitment to an existing permit holder; granting OMV a two-year extension on the conditions of its permit to explore in the Great South Basin.
Nonetheless Woodward Partners’ energy analyst John Kidd last month made the comment that uncertainty created by the offshore ban made bidding for onshore permits so unpalatable that Block Offer 2018 was pretty much redundant.
He said holding it up as the reason to fast-track a major legislative review was “disingenuous and serves only to mask the true objective of seeking to minimise public discussion and critique”.
Kidd suggested the Government would be better off canning Block Offer 2018 and taking time to get the legislation right, before pressing on again with Block Offer 2019.
By the time Block Offer 2018 (which was previously planned to be launched in April 2018) is ready to go in early/mid 2019, it will nearly be time for the launch of Block Offer 2019.
The Committee’s report
The Environment Committee acknowledged submitters were concerned about the lack of public consultation and insufficient time given to the select committee to consider the Bill.
However it said: “Many submitters expressed support for the Bill, noting it is an overdue first step away from reliance on fossil fuels.
“The majority of these submitters suggested that the Bill should go even further, and advocated a complete ban on all permits.”
Supporters of the Bill said it would help develop alternative energy sources, show leadership on the world stage, align with New Zealand’s international commitments, and support greater climate change action.
These submitters also commented that the Energy and Resources Minister’s discretion to extend the duration or area of existing permits should be limited.
“A number of submitters requested that petroleum permits should not be granted over national parks. The committee notes that new provisions around accessing Taranaki conservation land for new petroleum permits are intended to make access more restricted,” the Committee said.
It also noted that “many” submitters opposed the Bill.
“They commented that there are no viable low-emission energy alternatives to oil and gas, and that New Zealand’s existing natural gas reserves equate to only about 10 years of demand.
“Part of this concern was a view that there is no overarching plan to support New Zealand in its transition to a low-carbon economy.
“Likewise, submitters expressed concern that the Bill could affect the cost of living if future energy supplies are constrained or if reliance on international sources of energy increases.”
These submitters also commented that the impact on climate change wouldn’t be substantial.