Oil and gas subsidy ‘needs to stop’
A Ma¯ ori Party candidate is calling for the Government to stop all the financial help it offers oil and gas companies.
Debbie Ngarewa-Packer, of Taranaki, is pleading for the Government to stop offering 42 per cent of decommissioning costs to the companies and also get rid of their income tax exemption, which was renewed in June.
While the Government recently withdrew the majority of its support for the industry, it still offers to pay part of the costs to plug and abandon wells and gives tax breaks so offshore companies don’t have to leave and re-enter New Zealand waters every 183 days.
Petroleum Exploration and Production Association of New Zealand (Pepanz) say the decommissioning costs are rebate and there’s ‘‘no direct subsidies’’ offered to the industry.
Ngarewa-Packer disagreed and said it was a matter of ‘‘semantics’’.
‘‘They’re not subsidies but they’re financial assistance – what’s the difference?’’
Ngarewa-Packer said she was shocked because the Government was telling the rest of the world to stop offering such subsidies to fossil fuel companies.
The Taranaki woman’s recent plea follows reports the Government may have to fork out $155 million for the entire decommissioning cost of the Tui oil field, owned by Tamarind Taranaki, which has been put into voluntary administration.
‘‘What they’re allowed to do is come and go as it suits them. Then they can’t afford to clean up the mess they’ve brought in.’’
An interview with Minister of Energy and Resources Megan Woods was requested but turned down.
Instead her press secretary sent an an emailed response that said when the Government took office it inherited policy settings that did not allow a plan to transition beyond fossil fuels.
‘‘Our Government is turning that around, leading a long-term managed transition away from fossil fuels and towards renewable energy.’’
Pepanz spokesman Phil Rennie said there were ‘‘no subsidies’’ offered to the industry.
Rennie said the income tax exemption stops a greater cost to the companies, higher emissions and no extra revenue for the Government.
‘‘So a lose-lose all round.’’ But Ngarewa-Packer said if the Government kept financially supporting these companies, it’s taking away money that could be invested in renewable energy.
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