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7/11/2018 — Oil and Gas
Greens hard line as gas shortage looms
By Ross Louthean

The intractable status of the Green Party on hydrocarbons has continued with MP Gareth Hughes pushing for Government pressure on holders of existing permits.

This comes at a time when industry and business leader presentations to Government on the legislation to ban future offshore exploration permits have warned domestic gas supply could run out within a decade.

This scenario was exacerbated by current production restrictions at the major Pohokura gasfield.

The website Newsroom said yesterday that a supplementary order paper (SOP) from Green MP Gareth Hughes threatens to rip the scab off the Government’s contentious ban on new offshore oil and gas exploration.

The ban on new permits does not impact existing permit holders, who were free to continue extracting oil and gas and Newsroom said as a backlash mounted against the ban, the Government granted a significant concession to exploration companies.

Under the existing “use it or lose it” rules, companies that held an exploration permit would see their permit expire after four years if they had not started drilling. But in September, Energy Minister Megan Woods removed this requirement, meaning the 28 companies with unused exploration permits face no pressure to begin exploring.

Newsroom said Hughes used a SOP to try to overturn Woods’ decision. An SOP allows MPs to amend legislation that is currently before the House.

The website said a perfect storm of catastrophes has exposed just how reliant NZ is on gas. Cold weather and low water levels at the South Island’s hydro-lakes has meant electricity generators had to use gas and coal. Amplifying this, two outages at the Pohokura gas field and essential maintenance on the Maui pipeline, have meant NZ’s gas resources haven’t been ready to pick up the slack left by depleted hydro-lakes.

This sent wholesale electricity prices soaring .The average wholesale price for most of October was $300 per MWh. Last October, Newsroom said, the average was just $102 per MWh.

“This brief glimpse at what a life without gas holds for New Zealand means the Government is likely to continue treading softly when it comes to phasing out oil and gas,” Newsroom said.

The SOP is unlikely to get support from Labour and New Zealand First when it comes up for debate on Tuesday.

Hughes claimed the “loophole” means offshore drilling could continue indefinitely, defeating the purpose of the ban. He has called on Labour and New Zealand First to back him.

“The whole point of ending future offshore permits was to ensure a smooth transition away from fossil fuels. To extend existing permits defeats the purpose," he said.

Perhaps the Greens and Hughes in particular should look at how often in recent years the gas and coal-fired have had to provide critical back-up power for virtually every energy provider in NZ whenever there is a lack of rain or wind to power renewable energy.

The swaption deals that Genesis provides the energy companies in these regular situations fails to get mentioned by the current Government, and indicates New Zealand may never be totally renewable energy powered as the left demands.

Since becoming part of the Government the Greens have pushed to halt any new resource projects on conservation land (which takes in all non-private land holdings) and have been at the forefront of blocking a vital new export coal project near Westport and disallowed Bathurst Resources from gaining the dormant Sullivan coal mine in the Buller coalfield.

No doubt most Green MPs and their key supporters still drive petrol or diesel cars and cook and warm their homes with gas. The change they advocate is a long way off but the actions taken are damaging the economy and financial interest in resource development – still a billion dollar income for government.

After measures initiated in Australia by the Greens when part of a Labor coalition government in Tasmania, it was said by one cynical business leader that the Greens would take Australia to cave-like living conditions.

Without gas in 10 years’ time the Greens may achieve a touch of that scenario in NZ, but fortunately there are still many pragmatists in the Beehive.

Source: newsroom.co.nz; nzresources.com

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