No cost analysis, no consultation, no idea on oil and gas ban

Minister of Energy Megan Woods has said she isn’t aware of any cost-benefit analysis before the decision to ban future oil and gas exploration permits, no formal consultation was undertaken with the Petroloeum Exploration Association, and the impact on the price of gas was not considered.

And alarmingly, no estimates were made on whether global greenhouse gas emissions will fall as a result of the decision.

Newshub: Government did no cost-benefit analysis on oil and gas ban

The decision to ban future oil and gas exploration was made without a cost benefit analysis to back it up, Newshub can reveal.

It’s one of a number of admissions revealed in parliamentary written questions pointing to a lack of evidence behind the decision.

“I am not aware of a cost-benefit analysis using the Treasury’s CBAx tool being undertaken in relation to the decision to grant no further offshore oil and gas exploration permits,” Megan Woods said.

Dr Woods’ office told Newshub officials did not think it was appropriate to use the Treasury tool in this case as there were too many unknowns about how much gas and oil was actually out there.

“Searching for petroleum offshore is a low probability of success event but high impact if found, so trying to model the costs and benefits in a traditional option analysis spreadsheet would have required substantial assumptions to be made,” a spokesperson for the minister said.

So they just decided to do it regardless of possible costs and effects.

The Energy Minister has also admitted no formal consultation with the Petroleum Exploration and Production Association of New Zealand (PEPANZ) took place.

“No formal consultation was undertaken with PEPANZ in relation to the decision to grant no further offshore oil and gas exploration permits. However, I have spoken publicly about the Government’s direction to transition away from fossil fuels and my office has had open dialogue with PEPANZ before this announcement.”

Woods has just been to meet producers in New Plymouth this week.

“No specific estimate has been provided to me on the price impact on gas of the decision to grant no further offshore oil and gas exploration permits. Officials have advised that gas prices have risen in the past when the supply of gas has been constrained,” Dr Woods said.

No concerns about adverse effects of the decision.

There’s also been no estimates on whether global greenhouse gas emissions will fall as a result of the decision.

“No specific estimate has been provided to me. I have been advised by officials that the effect on global emissions depends on the response of New Zealand’s large gas users.”

And it seems that there was little or no interest in whether the ban would be effective or not.

It looks like this is a rushed ideological decision rather than evidence based.

And it looks negligent.

33 Comments

  1. Blazer

     /  April 24, 2018

    more efficient producers of oil already…NZ doesn’t need it.

    • Gezza

       /  April 24, 2018

      Never mind that. I’ve got piped gas for cooking & heating. More bloody price increases??

      They’ll have to go! 😡

      Who else have we got? 😳

      • Kitty Catkin

         /  April 24, 2018

        Then there’s the news that the idea of decreasing beneficiary numbers is all wrong and will be (from the sound of it) scrapped. It sounded as if the rates will rise and the obligations will ease.

        Er…where is the money coming from ?

        The Chimps Tea Party would do better.

        • Kitty Catkin

           /  April 24, 2018

          Gezza, you may have to buy a Thermette.

  2. Grimm

     /  April 24, 2018

    This is why the Greens get slammed. They constantly harp on about evidence based policy.

    Yeah, nah.

  3. Maggy Wassilieff

     /  April 24, 2018

    Crikey, you wouldn’t read about it….

    • Kitty Catkin

       /  April 24, 2018

      But we just have….can I offer you a brandy ? I think we all need one.

      • Maggy Wassilieff

         /  April 24, 2018

        Oh, no spirituous liquor for me, thank-you.

        I’ll settle for a gumboot T.

        • Kitty Catkin

           /  April 24, 2018

          All right…I don’t drink either, but there are times when one sees the attraction. I’ll have a latte before the Greens make tea and coffee illegal ! (switches jug on)

  4. David

     /  April 24, 2018

    WTF, so this was really a result of Ardern needing to deflect from the groping at the youth event by accepting a petition and then actually having to do something and thinking with 30 year permits it would look good but make no difference. Stunning.
    NZ will now be poorer because some idiot shoved his hand down the front of someones jeans. The butterfly effect.

  5. David

     /  April 24, 2018

    Ironically the oil price is breaking out after and has doubled in the last year, with the NZD dropping its going to be an interesting shock to hard pressed families when couple with the excise tax rise for tourist trams to the airport.
    This is going to produce some bloody ugly headlines for Ardern.

    • Kitty Catkin

       /  April 24, 2018

      I see that she’s going to be working up to the last minute. Yeah, right.

  6. Alan Wilkinson

     /  April 24, 2018

    None of that is any surprise. What would be a surprise would be any display of thoughtful, rational, informed decision-making from this lot.

    • Gezza

       /  April 24, 2018

      There’ll be plenty of that when the Remuneration Authority recommends the next round of pay increases for MPs and other beneficiaries of the public’s largesse. No worries there I reckon, Al. I imagine there’ll be a lot of debate about whether they should accept more money. 😐

    • David

       /  April 24, 2018

      Quite alarming with 11000 jobs, billions in exports, loads of taxes and royalties one would think a minister of finance would veto such mad behaviour..probably another captains call.

      • Blazer

         /  April 24, 2018

        usual b/s …so predictable…when will this take effect?

        • Kitty Catkin

           /  April 24, 2018

          MPs have no option about negotiating or accepting pay rises, contrary to popular belief, It’s completely out of their hands.I know that a number quietly donate their salary, either all or a generous amount to charity. National ones, anyway, and former Act ones. No, Blazer, I won’t name names, I don’t break confidentiality.

        • High Flying Duck

           /  April 26, 2018

          The ban takes effect immediately.
          While the Government are saying there are 30 years worth of permits in play still, investment in them will drop immediately – if exploration shows resources outside of the permitted areas there is now no-where to go. With the finite term placed on the industry, who would invest?

  7. Gezza

     /  April 24, 2018

    Helpful hint of the day:

    Don’t ever freeze yoghurt. And if you’re thinking of doing by accident – don’t!

  8. Blazer

     /  April 24, 2018

    I always laugh at the promoted urban myth that Key donated his salary to..charity…as if- a man who worships money ..would!The reality …’a portion’…$5 ..thats big of you…!!

    • High Flying Duck

       /  April 26, 2018

      Very pertinent to the discussion – thanks for the input.

      • Blazer

         /  April 26, 2018

        someone mentioned Nat M.P’s and their ‘quiet donations’ to charity.Most pertinent…yoghurt maybe not…so much.

  9. Alan Wilkinson

     /  April 25, 2018

    Usual response to your claims: how would you know?

    • Alan Wilkinson

       /  April 25, 2018

      That was supposed to reply to Blazer. WordPress decided otherwise.

      • Gezza

         /  April 25, 2018

        Bollocks it did – ya cocked up somehow ! 😀

  10. PDB

     /  April 26, 2018

    Scoop story about RNZ interview with Ardern – September 2017;

    “Simcock says she was shocked at Ardern’s reasoning for wanting to continue deep sea oil drilling in New Zealand.

    “Jacinda’s comments make no sense. She says she won’t rule out new deep sea oil drilling because she wants to make sure we have a ‘just-transition’.

    “During the interview, Ardern also refused to rule out an end to new coal mines – the dirtiest fuel on the planet – and advocated a transition to gas, another fossil fuel”.

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