Why eco-warriors should support the drilling of NZ wells and the export of what flows from them

Iran  has  announced  the  discovery  of  a  new  oilfield containing 53 billion  barrels  of   crude.

So  what  does that  say  about the NZ  government’s move to  be a  world leader  in shutting  down the issue of  new  permits  for   oil and gas exploration – a  move which  Jacinda Ardern characterised   as  her   government’s  “nuclear free moment”.

Critics  say  the   ban on future  oil and gas exploration is  an   empty  gesture  in   the  global  context of   climate change.

They  point out that China is aiming to double the share of gas in its overall energy mix over the next ten years.  Around half of its gas imports  is likely from pipelines, including from Russia.

The remainder will come from imported LNG. China has invested in LNG terminals to facilitate these imports.

A major discovery of gas in NZ could help to meet that demand and displace coal consumption.

Currently   half of the gas produced in NZ is converted to methanol for export. More methanol is produced and used in China than any other country.

Much of the methanol produced in China is made from coal.  Its manufacture emits nearly three times as much CO2 than methanol produced from gas.  It also requires substantial quantities of water and produces waste products of ash, slag and atmospheric emissions.

And so gas exported from NZ as methanol reduces global CO2 emissions and improves global environmental outcomes.

Andrew  Jefferies,  CEO  of   NZ  Oil  and  Gas,   told the  NZ  Petroleum Conference NZ is predominantly a light oil province.

Even as the world reduces emissions to the level demanded in Paris, every forecast suggests oil will be used for decades to come.  So it follows that anyone wanting to reduce emissions should prefer to produce oil from NZ.

“NZ light oils will displace production of extra heavy oil overseas. Oil discoveries in NZ would leave an equivalent amount of less attractive oils in the ground.

“Our analysis shows that producing NZ  light oils will reduce global CO2 emissions per litre of petrol by about 20%. Even though that oil would probably not be used in NZ, it would offset use of those oils elsewhere.

“It is better for the world to use light oil from NZ than to produce oil from open cast mines of tar sand in forested Canadian wetlands”.

Jefferies  noted that in a competitive world NZ does not have many competitive advantages. One of the few it has is a massive continental shelf – the fifth largest in the world.  Beneath it lie vast quantities of undiscovered natural gas, and probably some light oil.

It will benefit the world to find it, produce it, and export it to energy-hungry markets of the world”.,

Unfortunately   the government’s  decision  has  driven  away  some of  the oil  majors  which have  the  skills and  resources  for  the difficult work  of   oil and gas exploration.

The   question  is  whether  those  companies  which  still  hold   permits  to   explore in   NZ  waters  will  persevere.

Austria’s  OMV, which operates the Pohokura, Maui, and Maari fields, has  plans to   drill  a  well in  the Great  South Basin  and  has succeeded in  securing a consent   from  the  Environmental Protection Agency.

Its  permit  requires it to  drill one exploration well  in the  area off  the Otago  coast  before  July 1, 2021.

It is  a  high-risk  venture   estimated  to  cost  around  $80m, and OMV  with its partner  Mitsui,  which has a  17% stake in the permit, is said   to  be  looking for other  companies  to  spread the risk.

A large  discovery from NZ, if used – for  example – to create LNG exports, could help to displace coal.

Given   the  proposition    that  oil and gas from NZ can be part of the solution to a safer and better world, shouldn’t  even the  eco-warriors of  Extinction   Rebellion  be  supporting it?.

One thought on “Why eco-warriors should support the drilling of NZ wells and the export of what flows from them

  1. Too bad. Ardern is a woke idiot. Her antidemocratic, heavily stage managed, narcissistic ban is possibly the most grievously stupid and counterproductive decision in our history.

    Liked by 1 person

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