What will hap­pen when our coun­try can­not rely on the black stuff?

An­drew Lit­tle MP gives his view of the Gov­ern­ment’s plan to end oil and gas ex­plo­ration.

Taranaki Daily News - - News -

OPIN­ION: Last week’s an­nounce­ment that no new block of­fers for off­shore oil and gas ex­plo­ration was long term no­tice that change is hap­pen­ing.

Be­cause the re­al­ity is the world is chang­ing.

Just about ev­ery gov­ern­ment in the world signed up two years ago to the Paris Accord to re­duce the planet’s car­bon emis­sions and reliance on fos­sil fu­els.

For a coun­try whose main ex­ports are cli­mate-de­pen­dant, we have a big stake in how the world deals with cli­mate change.

It isn’t just govern­ments tak­ing ac­tion. The car in­dus­try is start­ing to pre­pare for a dif­fer­ent world. Volvo and other Euro­pean car mak­ers will aban­don in­ter­nal com­bus­tion en­gines within 20 years. The Ja­panese are well ahead in elec­tric ve­hi­cle tech­nol­ogy.

Oil com­pa­nies like Shell are chang­ing. They are mov­ing away from fos­sil fu­els to re­new­able en­ergy tech­nol­ogy as part of their com­mit­ment to re­duce their emis­sions, and also be­cause con­sumers are de­mand­ing it.

Shell’s de­par­ture from New Zealand is part of its plan to fo­cus on its re­main­ing oil and gas re­serves that it knows it can vi­ably pro­duce at US$40 a bar­rel.

In New Zealand, it isn’t vi­able to ex­plore at US$70 a bar­rel.

That is why last Thurs­day’s an­nounce­ment made it clear that only fu­ture per­mits would be af­fected. All ex­ist­ing 22 per­mits in Taranaki con­tinue un­changed. Ex­ist­ing ex­plo­ration and pro­duc­tion rights are un­af­fected. On­shore per­mits will con­tinue to be let in Taranaki for the next three years, and there will then be a re­view about what hap­pens af­ter that time.

Let’s be clear about what ex­ist­ing rights ac­tu­ally mean. The 100,000 square kilo­me­tres of area off­shore that is per­mit­ted but not yet ex­plored can still be ex­plored.

Vi­able re­serves that are dis­cov­ered can still be put into pro­duc­tion.

Ex­ist­ing fields un­der pro­duc­tion, like Kupe, can still be fur­ther de­vel­oped as ad­di­tional re­serves are dis­cov­ered.

Long term sup­ply con­tracts vi­tal to busi­nesses like Methanex will be un­af­fected, and there will con­tinue to be new sup­ply op­por­tu­ni­ties into the fu­ture.

This in­dus­try will be around for an­other 30 to 40 years at least. Job losses from the in­dus­try are a long way away. There is a de­cent amount of time for lo­cal lead­ers and the gov­ern­ment to work on the tran­si­tion.

But let’s be hon­est about jobs in the in­dus­try. It has been fac­ing un­cer­tainty over the last few years. There hasn’t been a sum­mer ex­plo­ration cam­paign for the last two sum­mers. It just hasn’t been eco­nomic to do so.

Oil and gas com­pa­nies have shed jobs. So have al­lied busi­nesses, es­pe­cially heavy en­gi­neer­ing. Tenix went out of busi­ness. En­er­gy­works suf­fered. All en­gi­neer­ing busi­nesses have di­ver­si­fied to keep them­selves go­ing.

Think­ing lead­ers in the com­mu­nity have been ask­ing for a cou­ple of years now about spread­ing the risk for Taranaki. What do we do when we can no longer rely on the black stuff?

The coali­tion gov­ern­ment has been com­mit­ted from the out­set to re­vi­tal­is­ing the re­gions. Most re­gional economies are slow­ing and peo­ple are leav­ing for op­por­tu­ni­ties else­where. Taranaki is no dif­fer­ent. That’s why we have the pro­vin­cial growth fund worth $3 bil­lion over three years.

The gov­ern­ment has al­ready an­nounced ini­tia­tives for the re­gion worth $20 mil­lion. Some of those are fea­si­bil­ity stud­ies into al­ter­na­tive en­ergy and other eco­nomic op­por­tu­ni­ties. The gov­ern­ment has the means and the will to work with lo­cal lead­ers on de­vel­op­ing the next gen­er­a­tion of wealth cre­ation for Taranaki. Let’s use the time we have. There is no lead­er­ship in hop­ing we can hold on to the sta­tus quo for­ever.

Lead­er­ship means an­tic­i­pat­ing the threats to our na­tional liveli­hood, look­ing through short term po­lit­i­cal cy­cles and do­ing the right thing.

I look for­ward to play­ing my role in this great re­gion’s fu­ture.


An­drew Lit­tle says the de­ci­sion on oil and gas is no­tice that the world is chang­ing.

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