Mixed response to drill permit move
Energy A plan to give oil companies more decision-making time on their drill permits as the government winds down oil and gas exploration has received a mixed welcome in Taranaki.
On Tuesday, energy minister Megan Woods said she agreed that on a case-by-case basis, she will consider giving the oil companies more time to fulfil the commitments on their permits, describing it as ‘‘a little bit of a pause’’. It follows Prime Minister Jacinda Ardern’s announcement earlier this year that Labour was issuing no new offshore permits for oil and gas exploration and no onshore permits outside Taranaki, which will be reviewed after three years.
New Plymouth Mayor Neil Holdom said it was a step in the right direction but there was still no guarantee a company would receive the extra time.
‘‘That means that companies can’t necessarily plan on an extension being granted. They have to go through a process; there’s that element of risk.
‘‘I think it probably reflects that without a comprehensive plan for how New Zealand is going to power the future of its economy, the government has had to step back a little and has to show that it’s started to listen to the oil and gas industry.
‘‘The fundamental missing piece is a plan, and what’s been articulated to the minister is that as our gas reserves decline and we don’t have some other energy form coming on-stream to fill that gap. We run the risk of the economy faltering.’’
A round table discussion should be had to develop a plan that Kiwis and businesses understood, he said.
New Plymouth MP Jonathan Young said the government had not planned on losing so much investment. ‘‘It’s a loosening off of the restrictions because the government’s decision has basically tightened on the sector so much that they’re losing investors.’’
The government’s long-term plan continued to be winding down the oil and gas sector, he said.
‘‘It will give them a bit more time to get their plans together in terms of the domestic companies but it’s not going to encourage international investment to come back to New Zealand.
‘‘The uncertainty is already scaring off massive investment. A sector that contributes $2.5 billion a year to New Zealand’s GDP is outraged over the way it has been treated. PEPANZ (Petroleum Exploration and Production NZ) calls the rushed legislation ‘an undemocratic disgrace’ that came with ‘a shocking lack of consultation’.’’
However, Catherine Cheung from Climate Justice Taranaki said the government couldn’t just follow what the big corporations wanted.
‘‘The longer they are here the more impact there is on climate and the less time we have to invest towards more benign forms of energy.
‘‘It’s not simple but the longer we delay the harder it is and the more costly it will be.’’
There are 31 oil and gas exploration permits currently active in New Zealand, 22 of which are offshore. Of the total, 27 are currently producing oil and gas. The permits cover an area of 100,000 square kilometres. The last of the permits ends in 2030, but if a discovery is made, production could continue for decades. All existing permits will be protected under the Government’s plans.
‘‘The fundamental missing piece is a plan.’’ New Plymouth Mayor Neil Holdom