Prime Minister Jacinda Ardern bans oil exploration

Prime Minister Jacinda Ardern is defending her Government's dramatic ban on offshore oil exploration, saying the transition to a zero-carbon economy "must start somewhere" and promising that no jobs will be lost.

"Unless we make decisions today that will essentially take effect in 30 or more years' time, we run the risk of acting too late and causing abrupt shocks to communities and our country," she said at a press conference in Wellington this morning.

"I have seen that happen once in the 1980s and I don't want to see that again."

The ban on new offshore oil and gas permits is effective immediately, but will not affect existing permits or onshore exploration in the energy-rich Taranaki region over the next three years.

Leader of the Opposition Simon Bridges said the ban was "a wrecking ball" for regional New Zealand.

"What's worse than that is it's not just the economics of it - it doesn't make any environmental sense."

It did not amount to a transition away from fossil fuels because it was halting exploration "in pretty short order".

"What's going to happen here is international investment will literally dry up from now. If you're a business in New Zealand in this sector you're not going to do more and so you will see job losses follow reasonably quickly."

The policy would "send a chill down the spine of NZ business" following moves last week which affected the irrigation sector and also came after little consultation, he said.

Ardern was surprised that the oil and gas industry felt blindsided by the new policy, saying that Labour had clearly signalled its intent and had met with representatives from the sector.

The Government had to start preparing communities and industry for a transition to make sure "jobs that are there today will remain tomorrow", she said.

"I am proud of this Government for facing up to the inevitable and for planning for it. We owe that to future generations."

The policy, announced this morning to the shock of some in the oil industry, is a major victory for the Green Party - possibly one of its biggest in its 23-year existence.

Party co-leader and Climate Change Minister James Shaw said his party had been working towards this moment for years, if not decades.

"This is truly, in the Prime Minister's words, the 'nuclear-free moment of our generation'," he said.

It meant that New Zealand's beaches and marine life would be protected from the possibility of a "Deepwater Horizon-style event".

Pacific Island neighbours who are facing the brunt of climate change would now know that New Zealand "had their back", Shaw said.

The policy is also a significant concession for New Zealand First, which has long been a pro-industry party and is heavily dependent on regional votes.

Regional Development Minister and NZ First MP Shane Jones accepted that he could get "hammered" in provincial areas but said it was "a debate worth having".

He acknowledged that some in the regions would be fearful about the transition away from fossil fuels, but said they were at least being given time and support to adjust.

"I say to my provincial neighbours, think back to Rogernomics when change was imposed upon people such as my father and they were powerless to deal with it.

"This is a multi-decade set of changes, but it's better that we get ahead of the curve and tell not only the provinces but all of New Zealand that Government is up for the change and managing the inevitable destructiveness."

His party secured concessions which allowed onshore oil exploration to continue in Taranaki, and the existing 57 exploration and mining permits would remain protected. That means extraction could potentially continue to nearly 2050.

"People might say that you could have done a hell of a lot more. But the reality is we are one of three parties and ... we were very firm that there were existing jobs, existing investments, existing firms both domestic and international and today we've delivered to them the confidence the rights that they currently have ... are not going to be molested."

Jones offered support to the oil and gas industry.

"This is not a Welsh mining moment", he said. "No one is going to wake up tomorrow and discover they don't have a job in that particular sector."

But he also stressed that it was "just one segment of our GDP" and was "not the entire story" of the regional economy.

The Labour-led Government announced $20m in regional initiatives in Taranaki last week to begin laying the groundwork for a transition to lower-carbon industries.

That has not appeased locals in the region.

The exploration ban was called "a kick in the guts" by New Plymouth District Council mayor Neil Holdom, and "economic vandalism" by the local National Party MP, Jonathan Young. Many in the energy industry say they were caught completely unawares by the announcement.

In a bid to calm fears about the major shift in policy, Ardern will travel to Taranaki with Energy and Resources Minister Megan Woods immediately after returning from Europe next week.

The reaction

• "This is truly the nuclear-free moment of our generation, and the beginning of a new and exciting future for Aotearoa New Zealand," - Greens Co-leader James Shaw.

• "The decision is a lose-lose for New Zealand's economy and environment, likely to threaten jobs and mean higher prices for consumers," - Petroleum Exploration and Production Association chief executive Cameron Madgwick

• "This announcement sends a message to some of Taranaki's major investors and employers that they do not have a long term future in New Zealand," - New Plymouth Mayor Neil Holdom

• "We're striking the right balance for New Zealand - we're protecting existing industry, and protecting future generations from climate change," - Prime Minister Jacinda Ardern

• "Ending offshore exploration will force New Zealand households and firms to buy higher-cost and dirtier energy from foreign sources," - ACT leader David Seymour

• "The tide has turned irreversibly against big oil in New Zealand," - Greenpeace chief executive Russel Norman

• "Without exploration there will be no investment in oil and gas production or the downstream industries. That means significantly fewer jobs," - National Party energy spokesman Jonathan Young

• "The block offer does not affect any jobs that are already there. New Zealand First's support is predicated by its commitment to protect the rights of existing permit holders," - Regional Economic Development Minister Shane Jones

• "Half the world's whale and dolphin species visit or live in New Zealand waters, from the critically endangered Maui's dolphin to giant blue whales. Today, these sensitive creatures are made safer from the threat of oil spills and the sonic barrage of seismic testing," - Forest and Bird chief Kevin Hague.