Taranaki oil sector ready to move away from fossil fuel exploration

Tuesday, 20 March 2018

Up to 8000 people, around 10 per cent of Taranaki's population, could be seriously affected if the government went ahead and stopped future oil and gas exploration, a regional business leader has said.

Prime Minister Jacinda Ardern's statements this week that the government was 'actively considering everything' on the future of oil and gas exploration has put many in the region on alert.

An economic report by tourism and economic body Venture Taranaki in March 2015 found the oil and gas industry pumped $1.57billion into Taranaki's total GDP.

The industry directly employed 4340 full-time workers and created 7070 jobs, the report said.

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Exploration in the region is expected to increase later this year.

Petroleum Exploration and Production Association of New Zealand (PEPANZ) confirmed TagOil​ was currently drilling, and Tamarind Resources had an offshore well planned for the 2018-19 summer.

There were other drilling commitments coming up in South Island, with east coast permits held by Shell, OMV, NZ Oil and Gas, and Beach Energy, likely to be drilled in the 2019-20 summer, a spokesman said.

Taranaki Chamber of Commerce chief executive Arun Chaudhari said any uncertainty in allowing future drilling permits would be 'very detrimental' to the local economy.

'We have in Taranaki around 8000 people, directly and indirectly involved in the oil and gas industry, whose jobs would be at risk,' he said.

There would be flow-on effects, from the benefits of the oil and gas industry, in local businesses from the dry cleaning store which cleaned overalls, to retail shops, real estate and schools, he said.

'Everything would be affected.'

Chaudhari said Ardern was in a 'tough spot' as she asked for more time to decide on whether to stop all permitting.

'It is far too early for the government to be saying anything about stopping permits as it is not addressing the reality, it's only using ideology, not the methodology, on how it wants to achieve its aims.'

The worst thing New Zealand could do is put up a sign saying it is closed for business and create a climate of uncertainty among the global oil and gas sector waiting for any shift in government policy, he said.

'We don't want to do send out that sort of message.

New Zealand's energy generation was 80 per cent renewable energy and Taranaki was the only region in New Zealand producing oil and gas, he said.

'It is the cleanest and most reliable form of energy; it provides Aucklanders with hot water for showers each morning.

'We want to 100 per cent sustainable and renewable but it will take time to achieve this.'

Chaudhari supported reskilling the workforce, which would be vulnerable to mass redundancies.

'We need to change but it will not happen overnight, it will take decades.'

Opposition energy resources spokesman, and New Plymouth MP, Jonathan Young, said everyone acknowledged a transition was taking place in the energy sector.

Fossil fuel usage and the intensity of energy demand will continue to decline over time, but it made no sense to abandon the oil and gas industry overnight, he said.

'A ban would effectively send thousands of high-paying Kiwi jobs overseas and mean that we would just have to import more oil and gas instead.

'It would also harm the environment.'

Venture Taranaki chief executive Stuart Trundlesaid in a statement the region was already anticipating a move away from the current reliance on petroleum products.

A plan to utilise the extensive expertise of the region's energy sector to progress future energy technologies is underway and linked to the regional economic development strategy, he said.

'The details of any transition process will be critical to the impact on the Taranaki region and its people.

'We look forward to working with the Prime Minister to identify evidence-based solutions to secure long-term jobs in the region.'

Etu regional organiser Ross Henderson said the region was already experiencing a downturn in exploration.

'There has been no new significant exploration for the past three years,' he said.

Henderson said it was critical a plan for transitioning was made for when exploration finally ended.

The shift away from fossil fuels was real as renewable energy became cheaper and technology improved, he said.

'Oil is not a finite resource and there is a lot happening with renewable energy, like and wind and solar, we can be looking at.

'We can't continue to put so many eggs in the oil and gas basket.'

The transition from fossil fuels to renewables was happening and it was important to prepare the region and the workforce for it, he said.

The union supported a just transition where workers received fair redundancies, re-training and school leavers were encouraged to look for sustainable jobs, he said.

Most of the workforce previously employed in the industry in Taranaki was now working overseas, many in Papua New Guinea.

'They are using their skills in mining and construction projects because there has been no work with the same income they were receiving.'