Oil and gas ban reversal to be introduced to Parliament this year

Sunday, 9 June 2024

The Government has confirmed it will reverse the ban on oil and gas exploration, with the proposal expected to be introduced to Parliament this year.

The coalition Government had signalled and promised to reverse the ban. Resources Minister Shane Jones said removing the ban beyond onshore Taranaki was part of a suite of proposed amendments “to the Crown Minerals Act to deal with the energy security challenges posed by rapidly declining natural gas reserves”.

“Natural gas is critical to keeping our lights on and our economy running, especially during peak electricity demand and when generation dips because of more intermittent sources like wind, solar and hydro.”

Jones said the Government was proposing further changes “to re-establish New Zealand as an attractive and secure destination for international investment”.

“Some of our current settings are a barrier to attracting investment in exploration and production because they are overly costly and onerous on industry. Some obligations lack necessary flexibility, and compliance obligations are uncertain and unclear.

“As well as removing the ban, we are proposing changes to the way petroleum exploration applications are tendered and allocated, aligning the petroleum decommissioning regime with international best practice, and improving regulatory efficiency.”

Jones told The Post the Crown Ministerial Act would be amended and small portions of DOC land will be reopened for oil and gas exploration in Taranaki, along with a reversal of the offshore ban and recalibration of the decommissioning obligations, “and all of that is driven to boost the resilience of our energy supply network”.

On making New Zealand an attractive and secure destination for investment, Jones said he had been advised post-the oil and gas ban, international investors began to “fear New Zealand did not have a durable sovereign risk position”.

“We need to give confidence that the oil and gas sector has a future at least till 2050.

Green Party co-leader Chlöe Swarbrick said the “science is clear that fossil fuels must stay in the ground to limit global warming within 1.5 degrees”.

“This Government’s actions are anti-science and show a flagrant disregard for international climate commitments which could lead to huge costs down the line.

“The climate crisis is the defining issue of our time.

Labour energy spokesperson Megan Woods called it a “mindless charge toward giving fossil fuel companies free reign”.

“Climate change is the number one issue facing New Zealand, and Minister Jones is hell bent on ignoring options of energy that are future-proofed and up to global standards.

“New Zealand is being taken backwards. This Government is being cruel to future generations, this will take decades to undo – if the damage can be undone at all.”

In response to criticism, Jones said, “I and New Zealand First, our view about New Zealand is that we are an environmental garden of Eden, we resent the notion we are in climate purgatory”.

“I've said that there is a perspective from the Green Party that we are precipitating a crisis. And I regard that as hyperventilation.”

Greenpeace Aotearoa spokesperson Niamh O’Flynn called it a “pipe-dream”, adding “the oil exploration industry won’t risk coming back to Aotearoa because they know that it’s not worth coming all this way to fail again”.