Greenpeace argues that oil and gas drillers will stay away – so there’s no good reason to grouch against the govt’s legislation

Buzz from the Beehive

The announcement about renewed oil and gas exploration from Resources Minister Shane Jones – one of three new posts on the government’s official website – is the most likely to generate political rancour.

Tempers are unlikely to be enflamed by  news that people who were displaced by severe weather events in 2022 and 2023 will be supported by the extension of Temporary Accommodation Assistance through to 30 June 2025.

Nor will there be much agitation – if any –against New Zealand and Malaysia intending to intensify their long-standing, relationship

But Jones has reiterated that the Government will be reversing the previous government’s oil and gas exploration ban.

Environmentalists are bound to be outraged, although – according to Greenpeace – they shouldn’t get too hot and bothered.

They don’t have to be concerned about drilling because no one will want to come here to do the drilling.

That reasoning is reflected in a Te Ao Māori News  headline: –  ‘Dreaming’: Greenpeace labels Govt plans to reverse oil and gas exploration ban a ‘pipe dream’

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 Explaining the Government’s position on petroleum exploration, Shane Jones said:

“Natural gas is critical to keeping our lights on and our economy running, especially during peak electricity demand and when generation dips because of more intermittent sources like wind, solar and hydro.”

The exploration ban – introduced by the previous government in 2018 –  not only halted the exploration needed to identify new sources, but it also shrank investment in further development of our known gas fields which sustain our current levels of use, he said..

Without this investment, annual natural gas production is expected to peak this year and undergo a sustained decline.

This means “we have a security of supply issue barrelling towards us.”

Rebuilding investor confidence in New Zealand’s petroleum sector will require more than removing the ban, Jones said.

The Coalition Government is proposing further changes, agreed by Cabinet, to re-establish New Zealand as an attractive and secure destination for international investment. These changes were agreed in the New Zealand First and Act coalition agreements with the National Party.

“Our job as the Government is to provide the right policy settings to enable the sector to get to work, and that’s exactly what we are aiming to achieve through these amendments,” Mr Jones says.

Our petroleum and minerals sectors contributed $1.9 billion to GDP in 2020-21 and $236 million in Crown revenue in 2022-23.

In 2023 mining employed around 6000 people, the majority of which are based in regional communities.

“I want a considered discussion about how we use our natural resources to improve the security and affordability of energy and resources supplies, stimulate regional economic development opportunities, and increase New Zealand’s self-sufficiency to protect against volatile international markets.”

The Crown Minerals Amendment Bill will be the latest piece of legislative reform introduced by the Government aimed at cutting red tape to enable crucial resources and infrastructure projects across New Zealand, and benefits to flow to communities. The Bill will be introduced to Parliament in the second half of 2024.

For more information, visit 2024 Proposed amendments to the Crown Minerals Act 1991 | Ministry of Business, Innovation & Employment (mbie.govt.nz)

The Crown Minerals Act Amendment Bill proposes:

• Reversing the 2018 ban on new petroleum exploration outside onshore Taranaki.
• Removing the 2018 restriction preventing new petroleum permit-holders from accessing some Taranaki conservation land for petroleum activities other than minimum impact activities. Conservation land protected by Schedule 4 of the CMA, including Mount Taranaki, would still have the same protections in place. This change ensures conservation land across New Zealand is treated consistently.
• Changes to how petroleum exploration permits are allocated. Currently permits are allocated through a competitive tender process. The bill proposes allowing for a choice between a tender and a non-tender (called priority in time) method.
• Changes to the petroleum decommissioning requirements to align with international best practice, and better balance regulatory burden and risk. Specifically:
  • Technical changes to financial securities requirements, the primary tool to manage the risk of a permit-holder failing to carry out or fund decommissioning. These changes will make financial securities more flexible to allow industry to set aside this money in a way that is cost-efficient and best suit the circumstances.
  • Changes to trailing liability which allows the Crown to go back to previous permit-holders and make them decommission or recover the money for decommissioning. It is not proposed to remove trailing liability but limiting it to the most recent transferor, providing greater certainty to previous permit-holders.
  • Post-decommissioning liability remains on a permit-holder who decommissioned if something goes wrong after they have plugged and abandoned a well or left infrastructure in situ. This is a change from the current requirement to provide a payment or financial security for post-decommissioning liabilities, which sought to quantify the likely risk and cost in the future.
• Other changes to provide important signals to the industry that New Zealand is open for business, including reintroducing the term ‘promote’ into the purpose statement of the Act, giving the Government the mandate to actively promote prospecting, exploration and mining of minerals.
• Introducing a new tier of mineral permitting that will make it easier for people to undertake small-scale non-commercial gold mining activity, and
• Other technical legislative changes to ensure processes are working as intended, including fixing inconsistencies of terms and drafting errors.

In its report on this development, Te Ao Maori News noted  that Shane Jones is one of three ministers with decision-making power in the proposed Fast Track legislation.

But it highlighted Greenpeace’s  dismissed  of Jones’ plans as a “pipe dream”.

“Shane Jones is dreaming. The oil exploration industry won’t risk coming back to Aotearoa because they know that it’s not worth coming all this way to fail again,” Greenpeace’s Niamh O’Flynn said Sunday.

O’Flynn said, together with iwi and hapū, “we fought tirelessly to push oil company after oil company out of the country and we succeeded.”

She singled out “OMV, Anadarko, Statoil and more” as examples of companies that had “wasted years and millions of dollars in a futile attempt to get a foothold here.

“[T]hey know they’d face even more resistance now, so they won’t be back because of this government’s flip-flop.”

In that case – plainly -there is no need for Greenpeace to bother being bothered.