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Home / Business / Companies / Energy

Taranaki leaders use Prime Minister Jacinda Ardern's visit to appeal for help after oil and gas exploration announcement

NZ Herald
25 May, 2018 04:20 AM4 mins to read

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Prime Minister Jacinda Ardern received some tough questions from Taranaki leaders today - along with a pair of Taranaki-coloured baby booties. Photo / Twitter

Prime Minister Jacinda Ardern received some tough questions from Taranaki leaders today - along with a pair of Taranaki-coloured baby booties. Photo / Twitter

Taranaki leaders have asked Prime Minister Jacinda Ardern to help them address economic uncertainty, during her first visit since last month's surprise call to end further offshore oil and gas exploration.

Ardern, who spent the morning in closed-door meetings with community and industry leaders, also announced Taranaki would host a national summit on the "just transition" to clean energy, and a new unit within the Ministry of Business, Innovation and Employment had been set up to drive it.

The Government's April 12 announcement took the oil and gas industry and the leaders of the energy-rich region by surprise - instantly drawing criticism and fears for an industry responsible for $1.57 billion of Taranaki's total GDP.

It directly employed 4340 full-time equivalent roles, while overall, it was linked to the creation of 7070 jobs in Taranaki.

Speaking to media today, Ardern described her meetings as "really constructive".

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"We've talked about really where the future takes us, we've given that certainty through the decision that's been made, and it gives us now the next 20 years to work on those alternative fuel and energy sources ... and Taranaki really has expertise here to really take the lead and be the forefront of some of that development."

The Government had put $100,000 toward a business case for a New Energy Development Centre to be based in Taranaki.

The region's leaders had since asked the Government for $42 million over the next three years to go toward a regional economic strategy, helping establish an expert team to plan, research and advise on the transition.

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Ardern wouldn't be drawn on whether the Government would make the investment, but noted that $20m had already been pumped into the region through the Provincial Growth Fund.

Asked why it had taken more than a month to travel to the region since the announcement, Ardern said she had intended to visit sooner but was delayed by international travel commitments.

"But what it has allowed us to do is work out some of those plans to really sit down and have those constructive conversations."

Responding to questions over why mayors and industry leaders hadn't been warned before the announcement, Ardern said the Government had already known the industry's position.

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"We are now saying to the industry, we are alongside them to develop the alternative plans that will take us beyond [the next three decades]."

Ardern reaffirmed that more than 30 existing permits, 22 for offshore oil and gas exploration, would not be affected.

If those permits, which cover 100,000sq km are continued or taken up, exploration will continue for more than a decade.

New Plymouth Mayor Neil Holdom said Taranaki was now resolved to working with the Government on the transition, but he said there needed to be policy, education and investment from the Government to make it work.

"We are aware that international investors are very nervous and investment decisions in Taranaki have been put on hold," said Holdom, who had remarked after April announcement that it would have a "chilling effect" on the local economy.

"What we have asked the Prime Minister to do is help us address the risk, and address the uncertainty, and we have made the point that Taranaki is going to become ground zero for this just transition."

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Petroleum Exploration and Production Association of New Zealand (PEPANZ) chief executive Cameron Madgwick said while he was glad Ardern had come to Taranaki, "we would have rather that she came a couple of months ago, before the decision was made".

"And we expressed ongoing concern at the manner in which the decision was made."

Madgwick said the move had come with economic consequences, not just for workers in the sector, "but potentially for the cost of energy for New Zealanders".

New Zealand had 10.5 years of natural gas reserves remaining, he said, "and if we don't keep exploring for it, eventually that will run out - so that's pretty important".

PEPANZ's preference was that offshore oil and gas exploration should continue into the future - something National's Simon Bridges said would be allowed if his party was voted back in next election.

"But of course, the decision has been made and now it's our job, along with others, to see if we can find a way to work with the Government to help address some of these consequences."

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Madgwick was pleased Ardern had given the industry extra assurance around the permits already in place.

"Hopefully that's enough for the potential investors out there, but that was a real positive that we took from our meeting today."

PEPANZ argued that hydrocarbons - notably hydrogen - should have a place in a low-emission economy.

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