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Home / New Zealand / Politics

Energy Strategy: Extending oil and gas ban on table for Government

Thomas Coughlan
By Thomas Coughlan
Political Editor·NZ Herald·
17 Apr, 2022 12:23 AM5 mins to read

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The Government is set to consider New Zealand's energy needs and how to generate them from renewables. Photo / Will Rose

The Government is set to consider New Zealand's energy needs and how to generate them from renewables. Photo / Will Rose

The Government will fire the starting gun on its future Energy Strategy later this year, which will look at how New Zealand will manage its future energy needs, ideally from renewable sources.

The Greens want the Government to use the opportunity to push on with the next stage of its oil and gas ban by extending the ban to cover all oil and gas exploration in New Zealand.

In 2018, the Government announced a ban on new offshore oil and gas exploration in New Zealand. The ban left existing exploration permits untouched, and allowed the Government to continue offering permits for onshore gas exploration - although the Government said it would consider banning this too, at a later date.

The Green Party's energy and resources spokesman Teanau Tuiono would like Labour to hurry that process up, and to ensure the existing ban was in force, after reports one firm was conducting seismic surveys in an area adjacent to the one it had a permit for - an event that might be described as a new offshore drilling.

Tuiono said he wanted to see a "clear pathway" for New Zealand's energy industry away from fossil fuels towards renewables.

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Tuiono used written Parliamentary questions to ask minister Megan Woods whether she was considering banning all oil and gas exploration after the 2020 Block Offer, which allowed firms to bid for the opportunity to explore for oil and gas onshore.

Woods replied that no decisions had been made on the future of the Block Offer system.

"Policy regarding gas demand and supply will be considered alongside the Energy Strategy to ensure the best outcomes in terms of the energy trilemma: supply, security, and affordability."

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Woods said no decisions had been made about whether to extend the offshore exploration ban to onshore exploration.

"We haven't made any subsequent decisions around that. One of the most important pieces of work that we'll do, which is a recommendation of the Independent Climate Commission and it's also, from memory, part of the Infracom report, is a consolidated Energy Strategy," Woods said.

"We'll pull together all the various work streams that we've got. We'll be starting that in Q3 of this year."

The Climate Change Commission's advice to the Government on its first three emissions budgets said it should "develop a comprehensive energy strategy to ensure actions to decarbonise are considered across the whole energy system".

It said the strategy should include "setting a system-wide renewable energy target and increased investment in energy efficiency. A strategy would help Aotearoa leverage its extensive renewable electricity to decarbonise areas like transport and industry and reduce fossil fuel use in buildings".

Woods said such a strategy would allow the Government to be "volumetric" in the way it looked at future energy needs.

"We know how much gas we're going to need for a transition. We'll also know how much is consented, so we'll have a good evidence base for making subsequent decisions," Woods said.

She said the Government would be able to know what volumes of energy would be required as the Government builds up renewable generation and phases out energy derived from fossil fuels.

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"We know what we're going to need for a phase-out, we know what the build-up will be, and we know what the phase-down will look like, we know what volumes will be required," Woods said.

She said the strategy would look at all energy uses, including the energy demands of decarbonising industry.

"Not much of it is actually electricity, it's more of a question of energy - how much of it is being used for industry and process," Woods said.

Tuiono was also critical of the terms of the existing oil and gas exploration ban after Greymouth Petroleum was given permission to conduct a seismic survey for oil and gas in an area adjacent to its existing permit off the coast of Taranaki.

Woods said that as part of the oil and gas exploration ban, terms attached to existing permits were kept intact. This meant existing permit holders were allowed to conduct seismic surveys in areas adjacent to their permits - a right those permit holders had before the ban.

The catch is that should anything be discovered offshore, there is no ability to convert that permit into a production permit to actually pull the fuel out of the ground.

"They have the ability to do exploration on an adjacent area, but there isn't a provision to convert that to a production permit because it would be a new permit," Woods said.

"It can't be granted as a new permit," she said.

Woods said what would come of the survey would likely be a "very interesting set of data".

"As for why they'd do it, I don't know that's a question for them [Greymouth Petroleum]," Woods said.

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