Doubts and emotions run high as MPs hear views on searching for more oil and gas

Friday, 4 October 2024

The ‘ban’ introduced by Labour in 2018 meant no new exploration permits could be issued, outside of onshore Taranaki.

The Government shouldn’t be surprised if the European Union took action against New Zealand for resuming issuing permits for offshore oil and gas exploration, Greenpeace executive director Russel Norman has told MPs.

Parliament’s Economic Development, Science and Innovation select committee has begun hearing what are expected to be two days of heated oral submissions on the Crown Minerals Amendment Bill that would lift the exploration ban imposed in 2018.

A leaked, unredacted copy of advice provided to the Government appears to show the Ministry of Foreign Affairs and Trade believes the bill would “likely be inconsistent with the obligations in several of New Zealand's free trade agreements not to reduce environmental protections for the purposes of encouraging trade or investment”.

While that also stated the chances of a legal challenge by one of New Zealand’s trading partners was low, Norman told MPs he “wouldn’t be so sure”.

“I've had conversations just recently with the EU Ambassador about these issues,” he told the committee.

The European Parliament approved its free-trade deal with New Zealand with a large majority last year because of its environment chapter “which this law breaches”, Norman said.

“There is a very high risk that New Zealand's position on climate change will become a focus of the European Union.”

Greenpeace executive director Russel Norman says he “wouldn’t be so sure” trading partners won’t take action against New Zealand for resuming exploration.

Norman indicated under questioning from committee chairperson Parmjeet Parmar that the concerns he heard EU officials voice about the country’s position on climate change were not specifically about the lifting of the oil and gas exploration ban, however.

The Crown Minerals Amendment Bill is being rushed through the select committee after being introduced under urgency late last month.

It would lift the ban on new offshore permits that was implemented by the Labour government in 2018.

Despite being given only 3½ working days to make a submission, 5600 people and organisations lodged written submissions on the legislation, with 392 asking to be heard by the committee.

Individuals and organisations, some selected at random from those wanting to speak, have been allocated either five or 10 minutes to give oral submissions today and on Monday.

Wood Processors and Manufacturers Association chief executive Mark Ross was one of only a small number of submitters expected to speak in favour of the bill.

Ross said wood was an “eco-friendly” material but its members had been severely impacted by a decline in natural gas supplies and saw fresh exploration as a way to increase energy security.

Three mills had closed due to the “energy crisis”, causing job losses, roll-on losses to many other businesses, economic loss to communities and “community breakdowns”, he said.

“Our hope is that, in the future, we can transition away from the likes of petroleum energy. But for now, to keep the lights on and for our country to avoid further job losses, we need to embrace what resources we have,” Ross said.

Resources Minister Shane Jones confronted climate protesters in Wellington, sparking a fiery exchange over the Government's reversal of the oil and gas ban. Protesters called Jones a 'climate denier,' while he accused them of being 'extreme.'

Even if new supplies of gas took 10 to 30 years to bring on stream, that would help as many investors in wood processing took “a very long term perspective”, he said.

Labour MP Helen White questioned that, noting Winston Pulp and Paper had announced the closure of two mills in the central North Island with the loss of 230 jobs within weeks of the latest energy sector crunch in August.

Andy Kenworthy, spokesperson for the Sustainable Business Network, which lists its financial supporters as including BNZ, Spark, Foodstuffs and New Zealand Trade & Enterprise, said the law change was “unnecessary, rushed and retrograde”.

The Government’s proposal was “unlikely to solve any issues claimed, while being likely to trigger other negative outcomes”, he said, noting the organisation had not had time to consult with its supporters on its submission.

Restarting petroleum exploration without a robust and rapid greenhouse-gas reduction plan risked being “complicit in the death of millions of people in poorer countries across the globe, most directly our Pacific neighbours”, he said.

“Pursuing unsustainable policies like this one is distracting us from the well-defined and necessary work of transitioning New Zealand to a low carbon, sustainable circular economy.”

New Zealand was well-placed to become “an absolute global leader” in transitioning away from fossil fuels but was instead “chasing along after the some of slowest people on the planet”, which would have trade consequences, he said.

Kicking off Fiday’s the hearings, Te Iwi o Ahipara spokesperson Rueben Taipari said the country needed economic prosperity but that there needed to be a “long and careful conversation” that listened to youth as the future of the country.

“We feel like we are being rushed,” he told the committee.

Marian Krogh from outdoor activities group Protect Our Winters Aotearoa said its members, outdoor activity enthusiasts, had seen “snow lines rising and glaciers shrinking.“

The Ministry of Business, Innovation and Employment said earlier this week that only four submissions it had received in response to the Government’s wider Minerals Strategy had been entirely opposed.

Resuming offshore oil and gas exploration would “send New Zealand backwards” and damage the country’s reputation, she said.

Solar was “available now” and any new gas finds would take 15 years to bring on stream, she said.

Oil Change International senior campaigner David Tong said the details of the bill relating to the decommissioning of oil and gas wells “shifted risks from companies to the taxpayer”.

Most oil and gas that had already been discovered needed to be “left in the ground” to meet the goal of keeping global warming below 1.5 degrees, he said.

The law change would compromise New Zealand’s reputation, Tong said.

“We would be swimming against the tide.”

The hearings got emotional at times, with visibly upset Generation Zero spokesperson Carley Dove-Mcsalls, emphasising the powerlessness and mental anxiety young people were feeling at seeing climate change initiatives rolled back.

MPs should think about the legacy they wanted to leave, she said. “Is it a ravaged, uninhabitable planet for people, animals, plants … or is a planet where people can live in harmony with the land, water and other beings that share the one home we have?”

Resources Minister Shane Jones said when introducing the bill to Parliament last month that natural gas was “critical to a secure and affordable supply of energy”.

“Our gas fields are in decline and without further investment in existing and new fields to increase production, supply issues and high prices will persist when generation from our renewable energy sources is at capacity,” he said.

The Ministry of Business, Innovation and Employment (MBIE) this week brushed off suggestions it had put a spin on a summary of the 102 submissions the Government received in response to its wider Minerals Strategy, which includes the axing of the offshore oil and gas exploration ban.

Almost all of the 102 submissions the Government received on the strategy broadly supported the idea of “a minerals strategy”, according to a summary released by MBIE on Monday.

It indicated only four were entirely opposed to the actual strategy the Government had drafted, classing the other 98 submissions as “supportive with suggested changes”.