The government will hike hard mineral mining royalties, and wants to increase oil, gas and mineral exploration by 50%, in a bid to lift its revenue stream from the resources sector from NZ$4 billion to NZ$12 billion a year.
Minister for Energy and Resources Phil Heatley told TV One's Q&A programme on Sunday that an expansion of activity in the sector did not have to come at the expense of New Zealand's 'clean, green' image.
Heatley took over the Energy and Resources portfolio this Parliamentary term from Hekia Parata, who announced last year the desire to treble the government's resources royalty income.
Oil and gas extraction in Taranaki had operated for decades alongside other sectors such as tourism and dairy, which could be the case in all of the 17 other regions around the country with recognised petroleum basins, Heatley said.
The oil and gas sector was New Zealand's fourth-largest export industry, and tended to operate under the radar.
"Most of it’s out of Taranaki. The safety and the environmental track record over the decades has been pretty good. They’ve been operating for about 50 years, discovered oil about a hundred years ago, and New Zealanders don’t know a lot about it," Heatley said.
"But the amazing thing is, as I say, it’s all out of Taranaki, it works beautifully [and] neatly beside one of our best dairy industry areas in the country and also tourism in Taranaki," he said.
Oil and gas operations in Taranaki contributed to about 3,500 jobs in the region, while dairying was worth about 2,500 jobs, and tourism about 2,000 jobs.
"Now, what we’re saying is, look, there are other regions in the country where oil and gas reserves are. We’re very sure of that. If Taranaki over all these years can environmentally and in a safety-conscious way have a big oil industry sitting neatly beside dairying and sitting neatly beside tourism, there’s no reason why other regions can’t do that," Heatley said.
Asked specifically whether New Zealand would have to sacrifice some of its 'clean, green' image for more activity in the sector, Heatley relied:
"No, I don’t think we do. We’ve got a very strict environmental regime. Health and safety we’re working on pretty hard. Taranaki’s got a great track record. Dairy industry, oil and gas, tourism – why can’t it happen elsewhere in the country?"
Hiking mineral royalties, but not for oil and gas
Heatley said the government was looking to increase mining royalties for hard minerals, but not oil and gas.
"We’re looking at the royalty regime at the moment. We think oil and gas is pitched about right, and the reason is because we’re so isolated and need to attract investment into New Zealand. For example, an oil rig offshore [costs] about a million dollars a day [to run]. We’ve got to be a bit careful that we don’t pitch it so high that they won’t come," Heatley said.
"On the other hand, minerals, for example, coal, gold, silver, all those – we think those royalties are the ones that need to be shifted upward, and we’re looking at that," he said.
The government was consulting on how much to raise those royalties.
"I’m not going to pick a figure, but I do know under minerals, those types of minerals, we’re pitching a bit low," Heatley said.
"The reality is if we are going to do more mining, more oil and gas exploration, and we are saying that we want to put that into schools and hospitals and all these other things New Zealand wants to, you know, keep up, catch up with Australia, then we do need to make sure that we are getting our pound of flesh," he said.