By Russell Palmer of RNZ
The Government is set to repeal the oil and gas ban this week, after a significant 11th-hour change handing discretionary powers to two ministers.
A 25-page amendment was published at 5pm on Monday, leaving opposition MPs less than 23 hours to prepare for the debate.
The change largely deals with the rules for decommissioning oil and gas fields, and who is responsible for paying for the cleanup.
Taranaki’s Tui oil field was abandoned in 2019 after its Malaysian owner, Tamarind Taranaki, went bust, costing taxpayers a total $293 million to clean up, with work concluding just last month. The Government initially set aside up to $343.4m for the project.
The Labour Government in 2021 introduced a law to prevent the Government being lumped with such costs again in future.
Resources Minister Shane Jones has vowed to restart the oil and gas industry.
He said the aim of the amendment was to close a loophole in that 2021 law.
“It did not seem correct or moral that the Crown should be left with that liability and the people [at fault] – with some very shrewd manoeuverings of script – would escape liability. We have solved that problem,” he told the House.
The changes replace the process of going through the list of previous permit-holders to figure out who pays for decommissioning, instead putting that decision in the hands of the Resources Minister and the Finance Minister.
The amendment also removes several clauses from a previous amendment the minister made to the bill, which itself amends the Crown Minerals Act.
Labour’s Energy and Resources spokeswoman Megan Woods led the 2021 law change in response to the Tui Oil Field debacle, and told Parliament the changes showed the Government capitulating to the industry’s wishes.
“They have bowed to the suggestions of the oil and gas companies and done what they wanted. They have further bowed to the interests of the oil and gas companies in taking eight months to sit with them, find out what they wanted, and then bring a bill back to the House. This is not a government that is putting New Zealand first.”
Labour’s Deborah Russell pointed out the Regulatory Impact Statement referred to consultation with affected stakeholders.
“Those consulted preferred ministerial discretion to the current act and approach in the bill. In other words, these shadowy participants in the oil and gas industry – a dying industry – who we don’t know who they are, much prefer to be able to lobby a minister.”
Jones was unapologetic about those he consulted with.
“Why would you not engage with the stakeholders, the risk-takers, the providers of what precious little gas we have, ruined by the cancel culture.”
He was unapologetic about a lack of consultation with others, including iwi.
“So in the future, the engagement will happen. This highly technical matter was not the subject of consultation in a detailed way, it was dealt with with a great deal of confidentiality. And in terms of providing a Māori dimension, I interviewed myself.”
The amendment passed with the coalition parties in support, with the opposition parties opposed. The third reading, which would see the oil and gas ban repealed, is expected on Thursday.
A gas company warned investors would be cautious about coming back to New Zealand without broad political consensus – and with the opposition parties currently staunchly opposed that consensus seems vanishingly unlikely.
The Government also has a $200m fund set aside in this year’s Budget to allow the Government to co-invest in new gas fields.
It last month pulled out of the Beyond Oil and Gas Alliance, an international coalition for phasing out fossil fuels, in a move the local World Wildlife Fund called an “international embarrassment”.
That was despite the Climate Minister, Simon Watts, previously saying New Zealand would not need to exit the group.