Government's oil and gas exploration halt was a 'kick in the guts for Taranaki': Mayor

Thursday, 12 April 2018

The Labour Government has stopped permits for onshore oil and gas exploration

The Labour Government's decision to stop offshore oil and gas exploration in New Zealand is a 'kick in the guts' for the Taranaki economy say politicians.

National Opposition energy and resources spokesman Jonathan Young said the decision had come without any consultation with industry.

'The Government had promised to consult but have now made an abrupt decision to stop any new offshore exploration,' he said.

Young predicted there would be no new exploration in Taranaki in three years time unless there was a National government.

**READ MORE:

Prime Minister Jacinda Ardern says the end to oil exploration is for future generations.

* [Offshore oil exploration to end, Government aims to soften blow for Taranaki

](https://www.stuff.co.nz/business/103031705/ardern-to-end-to-offshore-oil-exploration-with-short-reprieve-for-taranaki)*** Taranaki oil sector ready to move away from fossil fuel exploration

New Zealand has only about 10 years supply of gas reserves left, he said.

Offshore gas exploration has been halted by Labour Government

'So in 10 years time we will be buying imported gas to fire up the barbecue,' he said.

Young said 20 per cent of nationwide electricity generation depended on gas.

'What will replace gas as the demand for more electricity rose with electric vehicles and we don't have enough renewables.

'It will be coal - good one Government.'

New Plymouth mayor Neil Holdom called the decision a 'kick in the guts' for the Taranaki economy.

The industry provided directly and indirectly up to 7000 jobs in the region.

'It was a kick in the guts for the long term future of the Taranaki economy and urgent work was needed on a plan to maintain Taranaki's position as the provincial powerhouse of New Zealand's economy,' he said.

Prime Minister Ardern announced the end to offshore exploration in New Zealand, with no onshore permits except in Taranaki.

Holdom said there had been a lack of consultation with Taranaki industry leaders over the decision.

He was disappointed the announcement was made prior to a combined plan being developed to move the region through the transition to renewable energy.

Ardern's decision sent a message to major investors and employers in Taranaki that they do not have a long term future in New Zealand, he said.

Oil and gas royalties from Taranaki help boost government revenue by $300m a year.

'The national electricity infrastructure and economy continued to rely on natural gas to keep the lights on across the nation,' Holdom said.

'These are businesses that serve our community well, demonstrate leadership in environmental stewardship, community investment, safety and operational excellence.

'Thousands of households in Taranaki depend on the oil and gas industry.'

Holdom wanted to know how Government would support Taranaki as the country shifted to a low carbon economy.

'We expect there will need to be significant investments from Government in energy innovation, in education, reskilling of our people and in economic development.

'Having generated billions in GDP and crown mineral royalties for NZ Inc over the years, our people will want to know what investments this Government will be making to mitigate the expected impacts on our household incomes and employment in what has been and continues to be the provincial rock star economy,' he said.

'We expect to see a significant chunk of the $300 million plus of crown mineral royalties the government pockets from Taranaki each year reinvested in our economy over coming years to smooth the very real impacts of this major change in Government policy,' he said.

Oil and gas industry leaders said the decision would shake international investor confidence in New Zealand.

Taranaki Chamber of Commerce chief executive Arun Chaudhari said the announcement was 'a huge disappointment' for everyone in Taranaki.

'We strongly agree that climate change is a major issue and we need to reduce net emissions, but this decision will not achieve that,' he said.

Petroleum Exploration and Production Association of New Zealand (PEPANZ) said the decision was a surprise with no consultation and no mention in any pre-election policy.

'The decision is a lose-lose for New Zealand's economy and environment, likely to threaten jobs and mean higher prices for consumers,' says PEPANZ chief executive Cameron Madgwick.

'This will do nothing to reduce global greenhouse gas emissions and could make them worse,' he said.

'Because petroleum is produced to meet growing global demand, not exploring and producing in New Zealand simply means other countries will produce it instead and we will have to import it at higher cost.'

Port Taranaki chief executive Guy Roper said the Government's announcement was disappointing and unsettling for Taranaki and New Zealand.

'Oil and gas make a significant contribution to the Taranaki and national economy so we are concerned and disappointed. We believe this decision will have long-term impacts on export returns and associated jobs in Taranaki,' Roper said.

'What the government has stated is a significant change for the sector and its support industries. We believe these decisions should involve consultation so we can put in place a well thought-out plan to transition to a low carbon economy.

'This transition is a generational change to allow new technology to develop and the economy to evolve. Natural gas is a key to this transition and that resource exists in Taranaki,' he said.

Roper said Port Taranaki would assess the implications of the Government's announcement as more information came to hand and would continue to support the oil and gas industry's exploration under existing permits.