Reports of the decline of oil and gas in New Zealand are greatly exaggerated, says Pepanz boss
Sunday, 26 January 2020
OPINION: My new role as Chief Executive of the Petroleum Exploration and Production Association of New Zealand (PEPANZ) is something of a homecoming for me as I'm proudly born and bred in Taranaki.
This time 12 months ago I certainly didn't think I'd be in this position, but when the opportunity came up last year I didn't have to think twice.
Why? Because despite some well-known challenges, I have no doubt the oil and gas industry has a positive future in New Zealand. To paraphrase a well-known expression – reports of its demise have been greatly exaggerated.
People in Taranaki understand better than most how important the energy provided by oil and gas is. Our entire economy and way of life depends on this energy, which powers homes, schools, businesses and communities across the country while keeping the lights on and our showers hot.
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It helps grow and produce food, building materials, transports people and goods, and is used in everyday products like cellphones and computers.
So we have an amazing story but we need to tell it better to the Government and wider public.
At the same time, though, this doesn't mean complacency. The world is changing and so is our industry. This is why I've always hated the phrase 'business as usual', because there's no such thing in our sector – we're not standing still.
The global challenge of climate change means the world is moving to lower emissions and we are part of the solution – especially natural gas, which is lower carbon, affordable and reliable.
This is why global demand for natural gas is booming as it replaces other energy sources like coal which has twice the emissions.
Natural gas also makes renewable energy possible by providing a reliable back-up for times when supply is intermittent, keeping the cost of electricity down for New Zealanders.
Our industry is constantly innovating to improve how we do things and reduce emissions that come from our own operations. We're also keen to see carbon capture and storage technology used here in New Zealand.
And of course there are countless uses of oil and natural gas which don't involve burning and releasing any emissions, such as in plastics, building materials, clothing and medical products.
As we transition the world (and New Zealand) is still going to need new sources of oil and natural gas, even to meet the ambitious climate targets set in Paris in 2015.
Given this, I think it makes sense to develop our own sources here in New Zealand and reap the economic benefits rather than importing from overseas.
None of this is to say we don't have challenges, though. There's no doubt that confidence in the industry has taken a hit over the last couple of years due to the Government's exploration decision and more recently by the struggles of Tamarind's offshore operations.
However it's important to remember that existing exploration and production permits are protected and there is still a big pipeline of upcoming work.
For example, OMV is investing around $500 million into exploration and development work in Taranaki and is exploring off the coast of Otago as we speak. Todd Energy has also outlined $2 billion worth of work over the next decade.
So I'm excited to be in my new role and looking forward to being a strong, collaborative advocate for the industry and for Taranaki.
I want to work with the Government to help them achieve their goals of a managed transition to a lower-emissions world, while also protecting jobs and wellbeing in places like Taranaki.
You can expect to see and hear me advocating for evidence-based policies that will make New Zealand a better place for us all, ensuring we have sustainable, affordable and reliable energy.
* John Carnegie is Chief Executive of the Petroleum Exploration and Production Association of New Zealand (PEPANZ)