Govt’s proposed exploration ban ‘selfish’
AUCKLAND: The Government’s proposed exploration ban is a ‘‘selfish and richworld’’ approach that ignores the country’s responsibility to help deliver lowcarbon energy in the broader Pacific region, MPs heard this week.
New Zealand’s exclusive economic zone was the ninthlargest in the world and that brought with it a special responsibility, Elemental Group managing director Brett Rogers said.
Banning further exploration of the EEZ’s 18 prospective basins was ‘‘throwing away’’ a huge opportunity to help develop Pacific basin nations — such as India — meet their rising energy needs without resorting to coal.
The sedimentary basins New Zealand had explored to date had proven to be gasprone. That taonga was both a huge opportunity and a huge responsibility in terms of developing the resource and dealing with the emissions from it, he told Parliament’s environment select committee on Wednesday.
‘‘New Zealand is part of the international community and should be contributing,’’ Mr Rogers said.
‘‘Not doing our part in sustaining humanity’s needs including energy — while reducing the carbon content of energy — is in our view a selfish and richworld approach that we shouldn’t be associated with.’’
The committee is hearing submissions on legislation the Government needs to effect its proposed ban on new offshore exploration.
On Tuesday, the committee heard New Zealand was already approaching a gas supply gap and the 30year transition period the Government was allowing was illusory. Some investment — including in planned emission reduction projects — had already stopped since the April 12 announcement and much of the existing exploration acreage might be surrendered during the next seven years.
The committee heard that the rigid ban would increase electricity prices and that that impost would fall disproportionately on lowincome households. Engineers and workers were already starting to leave Taranaki.
The International Energy Agency had urged member countries to accelerate work on carbon capture and storage. It did not believe global emission targets could be met without it, alongside heavy investment in wind, solar, hydro and nuclear generation.
Mr Rogers told the committee there was now a real opportunity for ‘‘cradle to the grave’’ handling of carbon dioxide (CO2). Twentytwo largescale projects were operating globally and had so far sequestered 220 million tonnes of CO2. He said New Zealand’s depleted reservoirs had capacity to store 450 million tonnes of carbon — equivalent to about eight years of New Zealand’s net emissions.
Gas reinjection undertaken at Pohokura and Kapuni showed it was feasible in New Zealand reservoirs and more offshore exploration would open up a ‘‘golden opportunity’’ to use lowemission gas and put more CO2 back into the ground. That could also provide a competitive advantage for New Zealand emitters such as makers of steel, cement and methanol.
While the cost of sequestration was high at present, that gap would narrow and it could be a viable part of the country’s emissions response, Mr Rogers said.
Todd Corp, owner of the onshore Kapuni and Mangahewa fields, on Wednesday told the committee restricting gas supplies would increase energy costs and was likely to increase global emissions as gas was either imported, coal was used for longer, or manufacturers relocated to higheremitting jurisdictions offshore.
Chris Hall, the firm’s vicepresident for growth businesses, said the ban was the biggest change for the sector since oil and gas resources were nationalised in 1937, yet it was being imposed with little discussion and at great risk to the economy.
He said the ban should be deferred until the Government’s other work on the emissions trading scheme had been completed and the Independent Climate Change Committee could consider it.
Supporters of the Bill resisted any idea New Zealand needed domestic gas supplies for industry and for winter and dryyear supply security in the hydrodominated generation market. Using gas as a transition fuel was simply too late, they argued.
The International Energy Agency was forecasting a 45% increase in gas use globally by 2040 as countries worked to replace coal in power generation, petrochemicals and steelmaking.
Michael Heard, a lawyer specialising in climate change, urged the committee to act now. The oil and gas industry had been aware of this issue since at least 1992 and refused to act, he said. Warnings by British economist Lord Nicholas Stern in 2006 of the need for early action were ignored and it was now too late.
‘‘What are we going to discover between now and 2020? If we are going to burn it, we are part of the problem,’’ he said.
Claudia Palmer, 350 Aotearoa campaign manager, said the ban was an essential response to climate change as ‘‘it addresses the root cause — the fossil fuels industry’’.
Committee members appeared to struggle with the differing roles that gas plays in the economy and as a complement to the country’s renewable power generation. Largescale wind is already cheaper than gasfired generation.
Labour MP Angie WarrenClark said she had believed the sector might be able to make a ‘‘quite nimble’’ move into hydrogen.
Pat Hills, chairman of the Engineering Taranaki Consortium, told the committee hydrogen might still be five to 10 years away. While some pilot studies were proposed there was no concept yet of largescale hydrogen production from renewables locally.
One of the challenges the ban had created was retaining the engineers in the sector to help develop that ‘‘new energy future’’, he said.
Earlier, committee chairwoman Deborah Russell also opined while gas might be preferable to oil and coal, it was not preferable to renewables.
‘‘When are we ever going to stop using fossil fuels, if not now?’’ she asked the Todd executives.
Babu Bahirathan, chief executive of Toddowned Nova Energy, said hydrogen might become a renewable thermal fuel option further down the track.
But in the meantime gasfired generation would play a critical role in enabling greater electrification of industry — a key part of the Government’s strategy.
Without assurance of reliable power supplies — through dry years and periods of light wind — firms would not make that change, he said.
‘‘Gas will be the best fuel to provide that security of supply at the least cost. So maybe hydrogen might come in by 2050, and we go completely emissionsfree, but until that time gas will provide that security.’’
Green MP Gareth Hughes challenged a delegation of Taranaki mayors on whether they had been remiss in not starting a transition plan earlier. Oil and gas was a ‘‘sunset industry’’ and explorers such as Apache, Anadarko and Petrobras had seen the writing on the wall and left New Zealand years ago, he said.
New Plymouth Major Neil Holdom said the region had been backing renewable energy development for many years.
Historically, New Zealand’s approach to dealing with climate change had been through the ETS. His council had not expected to have a ban imposed on 40% of the regional economy without the development of a proper plan by central government through proper consultation and clear identification of goals, he said.