Party leaders made oil and gas decisions, not Cabinet

Theoretically in New Zealand’s democratic system the Cabinet of the day makes Government decisions. But when governing arrangements are made before the Cabinet has been formed decisions are effectively made by party leaders and whoever is a part of their decision making processes.

It is being reported this is what happened with the decision to end the issuing of oil and gas exploration permits, but that was not a specific coalition or confidence and supply agreement. Cabinet was not involved in the decision anyway.

Stuff: No Cabinet paper written, no Cabinet decision made, in “political decision” to ban new oil exploration

Cabinet has made no decision on ending oil exploration, documents being released today will show, with April’s announcement made on the basis of a political agreement between the coalition parties.

On April 12, Prime Minister Jacinda Ardern led a group of ministerial colleagues into the Beehive theatrette to confirm news that the Government had decided it would offer no new offshore permits for oil and gas exploration, with onshore permits offered in Taranaki for as little as three years.

Although the news was delivered by ministers affected by the decision and in a forum usually used to discuss decisions made by Cabinet, politicians made the decision in their roles as party leaders.

Today the Government will release a series of documents generated in the making of the oil and gas exploration decision, but it has already confirmed to Stuff that no Cabinet paper was created and that Cabinet has not voted on the matter.

“There was no Cabinet decision,” a spokesman for Energy Minister Megan Woods said.

“The decision not to offer future offshore oil and gas exploration permits was made between the three coalition parties, and the Minister [Woods] was simply notifying Cabinet of that decision as well as noting that future cabinet decisions would be required to implement that decision.”

The spokesman added that there was no requirement for Cabinet to make a decision, but a Cabinet paper would be developed on implementing the decision.

“Officials are currently drafting advice on implementing the offshore decision and alongside this work, we’ve also begun discussions with industry about protecting rights of existing permit holders.”

There has been justified criticism of making a decision that potentially could have a major impact before spending time considering and deciding how it might be implemented.

In a statement, Ardern defended the handling of the decision, but said it was not how most decisions would be made.

“The decision on future oil and gas block offers was a political decision made by the government parties. It was consulted on and agreed between the parties and taken to Cabinet for confirmation,” a spokesman for Ardern said.

“This is a normal decision making process when it comes to coalition wide matters, but does tend to be the exception rather than the rule.”

So some major decisions are made by three party leaders and their negotiating teams, with Cabinet expected to just ‘confirm’ it – that sounds like rubber stamping.

In this case it seems that the Minister of Energy, Megan Woods, was instructed on decisions made outside her Ministry.

A spokesman for Ardern said the exploration permit announcement was usually made around the time of the oil industry summit and “had nothing to do with the Prime Minister’s trip to Europe”.

Just a lucky coincidence for Ardern to be able to take the decision with her on her European trip.

Perhaps big decisions being made by Government party leaders is a practical reality of our form of MMP democracy, but it does have risks of diktat be a self selected few.

This is a particular risk when a new Government is formed, and the checks and balances seem alarmingly limited.

It is unlikely a newly appointed Minister would feel free to speak up against an imposed decision.

In the case of the oil and gas decision, going by the obvious discomfort shown by Shane Jones at the announcement, the cessation of issuing of exploration permits seems to have been a decision made by two party leaders and imposed on the other party in Government with just a whimper in protest.

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49 Comments

  1. Blazer

     /  June 5, 2018

    nothing particularly new to see here.
    The previous Govt always implemented what Key …suggested.
    The Anardako exploration ‘deal’ squeaky Bridges is so keen on is another example of …haste without real expert consultation.

    Reply
  2. Trevors_elbow

     /  June 5, 2018

    Hmmmm. No consultation. No policy analysis. No cabinet discussion.

    Sounds very Politburo….

    Unless the law in the Oil and Gas domain allows this type of unilateral behaviour methinks a lwgal challenge could eventuate as no governance process appears to have been followed…

    And every industry in NZ is now on notice that on a whim all planning parameters can be changed by diktat…

    This could really hurt Labour down the track… Taranaki will look to National and shun Labour and NZF… and other regions will do similar…

    Its going to get interesting….

    Reply
    • Blazer

       /  June 5, 2018

      ‘On Friday industry publication Upstream reported that companies which had conducted seismic testing on a speculative basis were planning a legal challenge to the Government’s decision, probably led by the Texas-based International Association of Geophysical Contractors.

      Ardern said that the issue was not raised during her recent trip to New Plymouth, a trip which came more than a month after the decision was announced.

      “The Government has yet to be notified of any proposed legal challenge from the industry body. I met with the industry recently and no one raised this with me.”

      Upstream, extensively quoting unnamed sources, described a subsidiary of US oil services giant Schlumberger among a group of companies “most affected” by the decision, warning of “significant” losses in revenue. Approached for comment the day the ban was announced, no one from Schlumberger has yet responded.’

      Sabre rattling that could become more with the CTPP agreement.

      Reply
    • Griff

       /  June 5, 2018

      No policy analysis.

      Umm no
      There has been a forest of Radiata pine sacrificed on this subject both here and around the world.
      Right wingers are experiencing culture shock over a goverment that actually does something rather than nationals talking shite then sitg on its hands.
      National signed up to international agreements to limit carbon emissions then gutted the ETS and gave backhanders to industry.http://morganfoundation.org.nz/new-report-climate-cheats/

      Reply
      • High Flying Duck

         /  June 5, 2018

        And does that research not show that the natural gas that makes up the vast majority of the resource to be found in Taranaki is far better than other fossil fuels when it comes to GW affects?

        Reply
        • Griff

           /  June 5, 2018

          Taranaki has most of the area of interest already open for exploration under existing permits. Same goes for the prospect in the deep south.
          These exploration permits have not been canceled .
          The oil industry can still both search for it and exploit fossil fuels in existing permits areas under existing policy.

          Repeating scare story’s about exploration has been banned just makes you look vacant from my perspective.
          No new permit areas will be issued.
          The areas most likely to have extractable resources have been opened to exploration for decades now.

          Reply
          • High Flying Duck

             /  June 5, 2018

            If you could point out the bit where I repeated scare stories it would be appreciated.
            You appear to be making shit up.

            Reply
            • Griff

               /  June 5, 2018

              And does that research not show that the natural gas that makes up the vast majority of the resource to be found in Taranaki is far better than other fossil fuels when it comes to GW affects?

              http://data.nzpam.govt.nz/permitwebmaps?commodity=petroleum

              The Taranaki basin is already open for research and extraction .
              What the fuck does your post actually mean?
              I will tell you.
              Its vague waffle pushing the misrepresentation that NZ has banned exploration and extraction of fossil fuels in the Taranaki oil field when we have not.
              Keep it real .

            • High Flying Duck

               /  June 5, 2018

              I see now how you manage to maintain a barely concealed rage and condescension throughout all your posts.

              You blithely build straw men for every argument and then angrily smack them down one after another leaving a fumy cloud of smug trailing behind.

              I was commenting on your point about policy analysis (on which in the case of the NZ affects of this Govt policy there has been precisely zero done).

              As Matthew Hooten has noted:

              If the policy was such a winner why was there no supporting information offered?

      • NOEL

         /  June 5, 2018

        Initally carbon credits were an opportunity for those industries in NZ who could not fully mitigate their emissions to ensure their employees didn’t loose their jobs. Like all simple ideas it was amplified into a system to be manipulated to advantage.

        Reply
      • Trevors_elbow

         /  June 5, 2018

        No papers were presented to Cabinet Griff. The rights or wrongs of the decision are up to political considerations… but its rule by diktat and very poor governance to make regulatory changes in this manner…

        Should be worried a Nat givt is not far off and all this poorly applied policy by Labour can be undone in exactly the same poorly considered way

        Reply
        • Griff

           /  June 5, 2018

          Climate change | Ministry for the Environment
          https://www.mfe.govt.nz/climate-change

          New recommendations on how New Zealand can adapt to climate change. If New Zealand hopes to adapt to the effects of climate, proactive planning needs to …
          ‎New Zealand’s 2030 climate … · ‎New Zealand’s climate change … · ‎Climate change
          New Zealand’s climate change programme | Ministry for the Environment
          http://www.mfe.govt.nz/climate-change/what…/new-zealands-climate-change-programme

          New Zealand’s climate change programme will help us reduce our emissions and ensure a climate resilient future for New Zealanders. This page has …
          New Zealand’s 2030 climate change target | Ministry for the Environment
          https://www.mfe.govt.nz/climate-change/…/New-Zealand’s-post-2020-climate-change…

          Dec 11, 2015 – In December 2015, countries met in Paris to establish a new international climate change agreement under the United Nations Framework …
          ‎Starting with C · ‎Starting with N · ‎Starting with O · ‎Starting with P
          Climate Change – New Zealand Labour Party
          https://www.labour.org.nz/climatechange

          Climate change is the greatest challenge facing the world. … With a plan, and with all of New Zealand working together, we can do our part to fight climate …
          New Zealand | Climate Action Tracker
          https://climateactiontracker.org/countries/new-zealand/

          Climate change in New Zealand refers to change in the climate of New Zealand on the scale of ….. the Intergovernmental Panel on Climate Change, the Fourth Labour Government of New Zealand started developing policy for climate change.
          ‘High time’ for New Zealand’s act for climate change | Stuff.co.nz
          https://www.stuff.co.nz/…/climate-news/…/high-time-for-new-zealands-act-for-climate-c…
          Mar 7, 2018 – New Zealand’s lake of “bite” over climate change has left us playing catch … Why this expert thinks NZ should copy UK’s climate change policy.
          Climate Change Policy | Green Party of Aotearoa New Zealand
          https://www.greens.org.nz/page/climate-change-policy

          Our Climate Change Policy is about improving the way we live and do business. We can reduce emissions and enhance our quality of life.
          Climate change | New Zealand Ministry of Foreign Affairs and Trade
          https://www.mfat.govt.nz/en/environment/climate-change/

          New Zealand is committed to combatting climate change. … to climate change through multilateral negotiations, our foreign policy and trade, and climate-related …

          Climate change & the primary industries | MPI – Ministry for Primary …
          https://www.mpi.govt.nz/protection-and…/climate-change-and-the-primary-industries/
          4 days ago – Climate change will affect what and how much New Zealand can grow or … One of MPI’s roles is to advise Government on policy matters.
          Climate Change & Business Conference
          http://www.climateandbusiness.com/

          After years of slow progress in climate policy, the new government has set New Zealand on a path of profound change. A Climate Commission will plan and …
          Horizon Research: New Zealanders’ Climate Change Actions and …
          https://motu.nz/…new-zealands…/horizon-research-new-zealanders-climate-change-act…

          … Skip to content · Top of page · Motu Economic and Public Policy Research. Economic and Public Policy Research. Menu. Our work Research & findings …
          Climate Change Strategy – NZ Super Fund
          https://www.nzsuperfund.co.nz/how-we…climate-change/climate-change-strategy

          Our goal is to make the Fund more resilient to climate-related risk. Our strategy, which applies to the NZ Super Fund’s entire investment portfolio, has four parts:.
          Climate Change | Department of the Prime Minister and Cabinet (DPMC)
          https://www.dpmc.govt.nz/cabinet/portfolios/climate-change

          Responsibilities include overall climate change policy direction, including the New Zealand Emissions Trading Scheme and targets for emissions reduction.

          And on and on and on and on …….
          Consulted to death
          literally a forest of words about Climate Change have been produced over decades.
          National committed to reduce our emissions on the world stage.
          Now we have action we hear cry’s of no one told us its unfair .
          yeah right.

          Reply
          • Trevors_elbow

             /  June 5, 2018

            All out of date. No current summary. No impact on existing industry. No documented and consulted change plan..

            Yip aligns to your personal beliefs Griff… but its poor decision making

            Reply
    • Gezza

       /  June 5, 2018

      All the Taranaki electorates except Te Tai Hauāuru are already held by National MPs Trev.
      New Plymouth gave Andy Little the fingers.

      Reply
      • Gezza

         /  June 5, 2018

        (Metaphorically speaking)

        Reply
      • Trevors_elbow

         /  June 5, 2018

        True but the flow on to other regions is more where im thinking… NZF want to be NZs country party… and this decision shows they are toothless when the Greens want something…

        Reply
        • Gezza

           /  June 5, 2018

          Well, I’m not inclined to get my undies in a knot. They go to the country again in 2020. If they’ve made the wrong decision they’ll get tossed out. If they don’t, they’ve probably made the right decision for most of the voters.

          I do share your disquiet about the matter not going to Cabinet though. This is something that should be debated and voted on. Pretty sure there have been Cabinet revolts in the past.

          Reply
  3. artcroft

     /  June 5, 2018

    A decision based on sentiment will be reversed when the hard edge of reality hits and overseas gas supplies are found to be insecure.

    Reply
    • Griff

       /  June 5, 2018

      What is the carbon bubble and what will happen if it bursts?

      As the world moves towards a low-carbon economy, fossil fuel investments worth trillions of dollars, from oil wells to cars, will lose their value

      What is the carbon bubble?

      Investments amounting to trillions of dollars in fossil fuels – coal mines, oil wells, power stations, conventional vehicles – will lose their value when the world moves decisively to a low-carbon economy. Fossil fuel reserves and production facilities will become stranded assets, having absorbed capital but unable to be used to make a profit. This carbon bubble has been estimated at between $1tn and $4tn (£3tn), a large chunk of the global economy’s balance sheet.

      Read more: ‘Carbon bubble’ could spark global financial crisis, study warns

      https://www.theguardian.com/environment/2018/jun/04/what-is-the-carbon-bubble-and-what-will-happen-if-it-bursts

      Reply
      • High Flying Duck

         /  June 5, 2018

        Sounds like legislation is completely unnecessary doesn’t it – the market will make the extraction of fossil fuels completely uneconomic.
        And yet Cindy felt the need to step in on a hunch that green initiatives are still a long, long way from being the solution…

        Reply
        • Griff

           /  June 5, 2018

          ROFL
          More dribbling .
          “As the world moves towards a low-carbon economy, ”
          Second sentence down
          why is it moving ?
          Because of govermnt intervention .
          Like banning new permits for oil exploration signaling the end of the extraction industry some time on the future within our waters . After all labour has a policy of zero emissions by 2050.
          Ten years for exploration ten years to develop infrastructure to exploit a gas field and you wonder why they stopped new permits now?

          I am not raging my friend I have found debating with those in denial amusing as fuck for almost a decade . The ROFL is real I even run the car of the road one day because I was still laughing hard hours later over something some reality denying whacko said on a NZ blog to me.
          As to condescending?
          Yip as hell when you have dealt with the same old rubbish from the same old fools for years on end you up with a somewhat low view of their “thinking” processes .
          Like you know.
          Ignoring why a carbon bubble collapse is in our future and claiming we dont need intervention when its implicit in the second sentence of the passage .
          oh and your attempts at logic are really funny as well .

          Reply
          • Alan Wilkinson

             /  June 5, 2018

            Because governments have such a great record of forecasting demand and meeting it compared with the private sector they need to control investment themselves.

            Reply
            • Alan Wilkinson

               /  June 5, 2018

              .. as of course you were arguing yesterday re Trump vs coal.

          • Grimm

             /  June 5, 2018

            What effect will this policy have on climate change?

            Feel free to use science if you like.

            Reply
          • High Flying Duck

             /  June 5, 2018

            More dribbling is right. The rest, not so much.
            You expound on the wonders of solar, the huge potentials of renewables, and yet…Government intervention. And fossil fuel plants are being built worldwide more than ever.
            In other words this low carbon economy is a pipe dream for now.
            Banning exploration will achieve nothing other than economic pain.

            Reply
          • Traveller

             /  June 5, 2018

            “The ROFL is real I even run the car of the road one day because I was still laughing hard hours later over something some reality denying whacko said on a NZ blog to me.”

            That’s compelling. I really must take a fresh look at your position.

            Reply
  4. Westie Bob

     /  June 5, 2018

    Lets not forget Labour signed us up to the ETS scheme and told us it would earn us 1/2 a billion dollars. Yet inside of 6 months of signing it was oops it is going to cost us 1/2 a billion dollars.

    Reply
  5. High Flying Duck

     /  June 5, 2018

    The Govt. were warned a permanent ban on offshore permits would impact the sector:

    Officials from the Ministry of Business, Employment and Innovation (MBIE) issued a warning about the impact possible moves could have on employment.

    “So long as industry is clear that there will be an offshore offering from 2019, which would at least include offshore Taranaki, then it is unlikely that there will be much impact on jobs or industry in the short term,” MBIE official James Stevenson-Wallace wrote on the Government’s plan for a temporary stop to offshore exploration.

    “If the scope of the review is poorly communicated or open-ended and includes the possibility that no offshore acreage will be offered in 2019 or later, then this will likely have a chilling effect on investment,” Stevenson-Wallace added.

    “The immediate effects on employment are likely to be relatively small as there are relatively few employees involved in initial exploration efforts. Anecdotally, MBIE is aware of at least one field operator who is holding off making investments in the tens of millions of dollars until they get greater certainty from Government over the future of petroleum allocation.”

    At the time the decision was made, Prime Minister Jacinda Ardern said the move would have no immediately impact on jobs and the impact would continue to operate for decades.

    https://www.stuff.co.nz/business/104465563/government-warned-oil-decision-could-have-chilling-effect-in-investment-in-taranaki

    Reply
    • Blazer

       /  June 5, 2018

      ‘Anecdotally, MBIE is aware of at least one field operator who is holding off making investments in the tens of millions of dollars until they get greater certainty from Government over the future of petroleum allocation.”…

      yeah..right!

      Reply
      • Traveller

         /  June 5, 2018

        I do wish you’d share your crystal ball around

        Reply
        • Blazer

           /  June 5, 2018

          I held off focussing on making the cut and trialling for the AB’s ,hoping they’d increase the remuneration package. 00

          Reply
  6. PDB

     /  June 5, 2018

    David Farrar – Kiwiblog:

    “This huge decision was:
    Not policy before the election for Labour or NZ First
    Not included in the coalition agreement
    Not made by Cabinet after due consideration
    Not had any analysis done on the environmental and economic impact
    Not consulted on in any way with affected companies

    This is the way you expect decisions to be made in Venezuela, not New Zealand.”

    https://www.kiwiblog.co.nz/2018/06/government_by_decree.html

    Reply
    • Blazer

       /  June 5, 2018

      just like Keys mass surveillance spying …legislation ..then.

      Reply
      • PDB

         /  June 5, 2018

        You mean the GCSB legislation put in place after an extensive review undertaken by Sir Michael Cullen and Dame Patsy Reddy?

        Reply
        • Traveller

           /  June 5, 2018

          Pffft. Facts Pants…who cares about those pesky things?

          Reply
          • PDB

             /  June 5, 2018

            Blazer will forget this conversation and then bring up the very same point next week as if it hadn’t already been discredited.

            Reply
  7. High Flying Duck

     /  June 5, 2018

    More Government advice on the drilling decision:

    Reply
  1. Party leaders made oil and gas decisions, not Cabinet — Your NZ – NZ Conservative Coalition
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