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Home / Business / Companies / Energy

Row over oil exploration heating up ahead of Just Transition Summit

Grant Bradley
By Grant Bradley
Deputy Editor - Business·NZ Herald·
5 May, 2019 02:10 AM5 mins to read

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Producer James Cameron and wife Suzy Amis Cameron will speak at the summit. Photo / AP

Producer James Cameron and wife Suzy Amis Cameron will speak at the summit. Photo / AP

Ahead of a contentious summit on the transition away from oil and gas exploration, energy minister Megan Woods has hit back at an attack on the government's policy by
Greenpeace over-extending permits for offshore drilling.

The environmental lobby group says a bid by two companies for a permit extension undermined the Coalition's ban on new oil and gas permits offshore.

"Any extension of an existing permit is essentially granting a new permit and is entirely inconsistent with climate leadership. If permit extensions like this continue, Ardern's Government will lose international credibility," said Greenpeace climate campaigner, Amanda Larsson.

Woods said Government had been ''very clear'' that it was pursuing a just, long term, managed transition away from fossil fuels and towards clean, renewable, affordable energy.

New Zealand Oil & Gas wants the permit on its Toroa prospect, about 200km south of Dunedin in the Great South Basin extended from 2020 to 2022, to align with other, separate permits offshore from Oamaru.

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Austrian giant OMV was granted a two-year extension last October for up to 10 prospects off Dunedin, and now has a marine consent application before the Environmental Protection Authority being considered for that area.

Oil companies must either commit to drill a given permit by a certain time, or relinquish them altogether.

Woods, who is also under fire from proponents of exploration said the decision made in April last year made it clear we were protecting existing permits and allowing them to run their course.

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Todd Energy's Mangahewa C site in Taranaki.  New exploration is confined to onshore. Photo / Glenn Taylor
Todd Energy's Mangahewa C site in Taranaki. New exploration is confined to onshore. Photo / Glenn Taylor

''That is what is happening in the case of this decision. The minister offered companies the opportunities for a short term pause on a case by case basis on their drill or drop commitments while they reorient themselves to the changed context they are operating in after our April 2018 decision. This does not extend the life of the existing permits.''

The minister said the decision was always about a long term transition - ending the provision of new permits, not scrapping existing ones.

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A Ministry of Business, Innovation and Employment summit, co-hosted by the New Plymouth District Council, will next week bring together youth, Māori, workers, businesses, local and central government to start discussion on the path of a ''just transition'' to a low emissions economy.

Film maker James Cameron and his wife Suzy are scheduled to speak at the summit, along with former Midnight Oil front man Peter Garrett.

The National party has decried the lack of representation from the oil and gas industry while Petroleum Exploration and Production NZ (diplomaticly says it is prepared to pay the near $500 conference fee to go and listen.

Woods has said James and Suzy Cameron will discuss how New Zealand can maximise the opportunities of symbolic global leadership, and ensure that it has an economy that is future-proofed for 2050 and beyond.

''With a particular interest in sustainable agriculture and land use they will share their perspectives on global agriculture trends and emissions reductions and where they see opportunities and challenges for New Zealand.''

Last week the government put up 2200 sq km of Taranaki land for potential oil and gas drilling in its long-awaited first block offer since imposing tight restrictions on the sector last year. The block offer is confined onshore in the province.

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Going down in last 3 years

•Oil and gas royalties: $258m to $218m

•Oil production: 17.2m barrels to 11m

•Gas production: 216PJ to 184PJ

Previous National-led governments had trumpeted block offers, highlighting the opportunity for explorers, to go along with MBIE releases.

This year there was no accompanying ministerial announcement but in response to inquiries Woods said: "This is the first onshore only block offer. We've had good engagement with local people and industry and now there's a clear process to go through for bids."

MBIE figures show oil production in Taranaki fell from 17.2 million barrels in 2015 to 11 million barrels last year. Gas production fell from 216 gross petajoules to 184 gross petajoules over the same period, although gas field shut downs had an impact. Royalties paid to the government fell from $258m to $218m.

The Noble Bob Douglas drilled test wells off Taranaki in 2014. Photo / Brett Phibbs
The Noble Bob Douglas drilled test wells off Taranaki in 2014. Photo / Brett Phibbs

While production and royalties had been heading down, figures suppled to Pepanz show there had been an increase in interest from explorers - before the Coalition's decision last April to severely restrict exploration.

''MBIE's internal analysis showed that Block Offer 2018 was looking to be potentially the most successful ever with a total of 38 area nominations possible (23 nominated and 15 implied),'' the association said.

Its chief executive Cameron Madgewick will be spectator at the Just Transition Summit in New Plymouth on Thursday and Friday.

In response to the Block Offer announcement - which put up just a small proportion of acerage of previous years - he said it was ''pleasing'' to see it was going ahead.

He stressed that about 400,000 businesses and households use either natural gas or LPG to for heat, cooking and industrial purposes.

''It's also very important to our electricity system, helping keep prices down when other sources are scarce.''

The approach is a diametically opposite to that of Greenpeace which is is calling on the Government to follow the lead of the Britain and declare a climate emergency and ban any new fossil fuel exploration at sea and on land.

The organisation is also demanding a plan to phase out the import of petrol and diesel vehicles, and heavy investment in electric transport and renewable energy like wind and solar with batteries.

The government wants to manage a transition towards a carbon-neutral economy by 2050 and a goal of achieving 100 per cent renewable electricity by 2035.

Just Transition Summit

•New Plymouth: May 9-10

•Speakers include:

•Midnight Oil musician and former Australian environment minister Peter Garrett;

•Doughnut Economics author Kate Raworth

•James and Suzy Cameron

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