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2/11/2018 — Oil and Gas
Government asked to pause ban legislation
By Ross Louthean

There were no surprises when the petroleum industry lobby Petroleum Exploration & Production Association of NZ (PEPANZ) called on the Government to pause legislation ending new offshore oil and gas exploration permits until serious economic and environmental concerns have been investigated.

PEPANZ chief executive Cameron Madgwick said legislation was expected to be “rammed through Parliament” after a “blisteringly short select committee process.”

Madgwick pointed out that expert evidence from those hearings raised serious questions that deserve proper scrutiny. (One issue noted by NZResources was the guarantee of long-term gas supply to NZ markets, and another potential sovereign risk for investment).

“Independent analysis on the economic impacts should be commissioned. The Government dismissed their own advice saying it could cost the Crown around $7.9 billion in lost tax and royalties, but if anything this was an underestimate as it doesn’t consider the wider impacts on the economy.

“The Interim Climate Change Committee should be asked to investigate what impacts, if any, this will have on emissions. Finally, the Electricity Authority should also be asked to consider what impact this could have on our electricity supply and costs to households.”

Senior writer Hamish Rutherford reported on the Stuff website earlier this week that Jacinda Ardern's decision to ban new offshore exploration permits was once celebrated with fanfare; now it seems she dare not speak its name.

Rutherford said that at the start of the year, Ardern was delaying attending state visits in order for her to personally receive petitions calling for an end to oil exploration. On the eve of her first trip to Europe as Prime Minister, Ardern planned a celebratory announcement of the ban in front of a sympathetic university audience.

Rutherford said that by Monday this week, days before the legislation comes back to Parliament for its final votes, it was almost as if the ban was forgotten.

Asked about the lack of public consultation on the law change which enforces the changes, Ardern appeared to believe the Government was rushing through legislation for the benefit of the oil industry, to allow the annual process of offering new exploration permits to be progressed “this calendar year.”

Rutherford said that leaving aside the fact the Block Offer will not happen until next year, the PM did not mention the ban once and went so far as to suggest the law change provided “absolute certainty” to the industry.

In reality, Rutherford said, the decision on the oil industry appears to have left NZ's boardrooms concerned that sectors of the economy may be subject to intervention from a Government with good and honest intention, but willing to act without taking time or getting good advice.

This is not the first time the Government has claimed that it was rushing the changes for the benefit of the industry.

Back in September Energy Minister Megan Woods' office acknowledged consultation would be truncated to speed the process of offering new permits.

At the time this was drowned out by alarming official advice on the ban, and attempts by the Government to discredit it.

Stuff reported that the advice from the Ministry of Business, Innovation and Employment (MBIE) claimed the move represented a multi-billion-dollar hit to the Crown, with no evidence it would lower carbon emissions.

Woods compared that advice to crystal-ball gazing. Acting Prime Minister Winston Peters said anyone who came up with the advice would leave people thinking that “you just don't know what you're talking about.”

Rutherford concluded the real reason for the rush – it is just over a month since Woods announced the law changes – appears to be to try to minimise the scope for debate on the legislation.

In contrast to the view of the petroleum sector and business, several environmental activists claimed the measure should go further with an immediate end to fossil fuel extraction.

Stuff pointed out that some submissions got to the real heart of the matter. The Legislation Design and Advisory Committee – a quasi-official group of technocrats tasked by the attorney-general with helping to improve legislation –warned that rushing the legislation could hit “confidence in the legislative process.”

Sources: stuff.co.nz; nzresources.com; pepanz.com

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PEPANZ’s chief executive Cameron Madgwick.