NZ plummets in energy investment ranking, Government happy

New Zealand has dropped from 14th to 46th in a ranking of attractiveness to energy investors. This isn’t surprising after the Government put significant limitations on oil and gas exploration.

‘Green’ or alternative energy prospects don’t seem to rate – I’m still unclear how we will meet al our energy needs if we transition away from fossil fuels completely as some want.

NZH:  Survey of top energy executives shows NZ has become a lot less attractive for investors

An annual survey of the world’s leading oil executives, which ranks the ease of investment into oil and gas producing countries, shows New Zealand has dramatically dropped down the list in terms of its attractiveness to investors.

The Fraser Institute, which has run the survey every year for 12 years, asks executives to rank provinces, states and countries according to the extent to which barriers to investment in oil and gas exploration and production are present.

New Zealand’s attractiveness to investors has dropped from the 14th highest country/region to 46 in the space of a year.

“This drop is based on poorer scores with respect to political stability, environmental regulations and protected areas and taxation in general,” the report said.

The Opposition is critical.

National’s Energy spokesman Jonathan Young put the blame for the drop squarely in the lap of the Government.

In April, Prime Minister Jacinda Ardern banned future offshore oil and gas exploration in New Zealand with the exception of Taranaki.

The ban took the industry by surprise because it was not part of any confidence and supply or coalition agreement and had not been explicitly promised by Labour during the election campaign.

According to some industry players surveyed in the Fraser Institute report, this was a key reason for the drop in New Zealand’s attractiveness.

“New Zealand’s move to ban new offshore exploration is a deterrent for investors,” one said.

“Jurisdictions that are openly hostile towards resource development, like New Zealand, cause investors to take their investment dollars elsewhere,” said another.

Young was not surprised by this and said the ban had “scared off” potential investors and would cost the economy tens of millions of dollars.

It’s not surprising – it looks like to an extent at least it was the intent of the ban, or it must have been at least a predictable consequence.

Energy Minister Megan Woods is unrepentant:

“We’re incredibly proud of the fact that New Zealand is leading the world on a managed, long term transition to a clean energy future.”

Hardly. The Government has limited fossil fuel exploration possibilities, but I have seen little of the other side of the equation – alternatives.

“International investors will consider a range of information when making decisions about where to invest, including the likelihood of a discovery and the likely value of any potential discovery.”

Climate Change Minister James Shaw was not surprised by the survey.

He said because oil and gas exploration was being phased out in New Zealand, there was not actually much more investment in the sector that was needed.

“So it’s unsurprising that investors in that industry would be saying that over the long term it’s not a place they wanted to end up.”

Shaw needs to come up with a credible path to sufficient alternative energy to replace fossil fuels, otherwise we will either have an energy shortfall, or will have to rely more on more expensive imports of fuel.

I’d love to see polluting fuels phased out, but I would also love to see a realistic and viable plan for what will replace them. At the moment I see little more than pie in the sky idealism.

Energy of dreams – ban them, and alternatives will come. Maybe.

 

The public ‘being fleeced’ by petrol companies, duped by Ardern

Following rising petrol prices and rising rhetoric from Simon Bridges and others, Prime Minister Jacinda Ardern has said that she thinks consumers are being fleeced by petrol companies.

She says that the Government is ‘prioritising’ an urgent amendment of the Commerce Amendment Bill – to do market studies that might eventually say something like petrol prices have been higher than the should have been for years.

NZ Herald: ‘Consumers, in my book, are being fleeced’ – PM Jacinda Ardern on petrol prices

National Leader Simon Bridges has been critical of the Government and its fuel taxes which he said is pushing the price of petrol up.

“Unlike petrol, talk is cheap. And the Government is a big part of the reason why petrol prices are so high.”

Petrol prices are creeping up to $2.50 in some parts of the county.

In response:

Prime Minister Jacinda Ardern has launched a scathing attack on fuel companies, telling reporters she thinks “consumers are being fleeced” at the petrol pump.

“I am hugely disappointed in the level of price that consumers are currently paying at the pump for fuel,” she said at her weekly post-cabinet press conference today.

Ardern came out swinging, pointing the finger at fuel importers – such as Z Energy, BP, Mobil and Gull – and their margins.

“Between 2008 and 2017, the margins importers were taking for themselves more than doubled from 7 per cent to 16 per cent.

“That increase represents a transfer of wealth from petrol consumers to producers, to the tune of hundreds of millions of dollars a year.”

Between October 2017 and September this year, petrol prices have risen 39c – Ardern said just 6.8c of this was tax.

But 9.8c of that was down to the margin from importers, she said.

“I do not see that as acceptable.”

In fact, she said that pre-tax, New Zealand has the highest cost for fuel in the OECD. In 2008, New Zealand had some of the lowest.

Given the concerns about “anti-competitive behavior” in the fuel market, the Government has prioritised the passing of the Commerce Amendment Bill.

This bill would amend the Commerce Act to enable the Commission to undertake market studies.

Once the bill is passed, Energy Minister Woods has signalled that she intends to ask the Minister of Commerce and Consumer Affairs Kris Faafoi to request the commission to conduct a market study into fuel markets to better understand how the market is functioning.

Ardern is anticipating the bill to be passed in two weeks’ time.

The study will report back next year, and the Government will prioritise a response to what the Commerce Commission finds.

So an urgent amendment to initiate a study that will report back some time next year.

Another bloody Government inquiry on something they say is a priority requiring urgency. We have been paying increasing petrol prices for how long?

Bridges said the Government should axe its fuel tax increases to provide immediate relief to motorists.

“[Ardern] is saying consumers are being ‘fleeced’ while her Government is driving up fuel prices and taking hundreds of dollars from Kiwi households through higher taxes on fuel.

“The [Commerce Commission] inquiry will take months and any resulting changes could be years away. Meanwhile New Zealanders are paying record prices for petrol and the Government is collecting hundreds of millions of extra tax [dollars] from them.”

We are reminded of petrol prices whenever we fill up our vehicles, so this could be an effective line of attack from the Opposition.

Hamish Rutherford (Stuff): If the Government is so certain motorists are being fleeced, what is it waiting for?

Prime Minister Jacinda Ardern is convinced that Kiwis are being “fleeced” when they pay for petrol.

“As a moral stance, I think New Zealanders are paying too much,” Ardern said.

With motorists paying close to $2.50 a litre for petrol in many parts of the country, it is understandable that the issue is back in the headlines, and that the Government wants to be seen to be taking action.

The problem is, the action being taken is to ask the Commerce Commission – effectively the referee on whether consumers are being ripped off – to investigate. These studies tend to take around a year.

If Ardern is already convinced that a rort is taking place and Energy Minister Megan Woods believes the market is “broken” as she said in May, why are they bothering to investigate?

This has been an issue for years – and that means under the last Government as well.

Simon Bridges also criticised Ardern for announcing “yet another inquiry”, when for years National failed to give the Commerce Commission the teeth it needed to investigate a market it also believed was flawed.

Had it acted earlier, we may be closer to a definitive answer.

But the Government’s urgency has a rich irony. Ardern has described climate change as New Zealand’s “nuclear free moment”.

Her Government seen fit to crack down on the oil exploration industry, ending new offshore permits, purportedly as a means to take action.

But the reason the climate is warming is not because fossil fuels are being extracted, it is because people are burning them.

If Ardern was really serious about tackling the issue, surely she would do something about demand.

But that is a probably subject to some sort of ongoing process or inquiry too.

Ardern is fiddling while petrol prices keep burning consumers in their wallets and purses.

Gareth Hughes versus Megan Woods on oil and gas exploration

Green MP Gareth Hughes has made it clear that he and the Green party disapprove of a concession given to the oil and gas exploration industry, as announced by Minister of Energy Megan Woods.

Hughes in a speech in parliament in March:  End Oil Exploration, General Debate Speech

While the media debate the pros and cons of oil exploration you can’t debate the physics of climate change.

Scientists warn we can’t afford to burn 75% of the fossil fuels we’ve already discovered if we want to avoid dangerous climate change.

A study in Nature Communications last year found if we burn all available fossil fuels, we’ll cause the fastest climate change in 420 million years!

Exploring for more oil is like pouring petrol into an already filled gas tank and lighting a match.

This is the nuclear-free moment of our generation.

We find ourselves at an important historic turning point – will we continue exploring for new oil and gas that we can’t afford to burn?

To get there we need to transition away from fossil fuels like oil.

Given some existing permits don’t expire until expire 2046 we need to stop granting more.

That’s why I’m calling on the government to stop offering new exploration permits for fossil fuels.

Our future isn’t more oil rigs off our coasts it’s wind turbines on our hills, insulation under our roofs, solar panels on top; modern public transport in our cities and sustainable zero-carbon jobs in our regions.

I support the end to exploration.

On Monday: Bill to end new offshore oil and gas permits a win for the planet

The Green Party welcome the introduction of the Crown Minerals Amendment Bill, which will legislate to officially stop new offshore oil and gas exploration permits.

“This is a special day for the planet, and proof that this Government are now meaningfully acting to address climate change”, Green Party energy spokesperson Gareth Hughes said today.

“This is Greens in Government at its best and represents an important step to stopping new offshore permits, so that our environment is better protected.

“We’re looking forward to the upcoming wider review of the Act. We will push hard to change the purpose of the Act so that exploration is ‘regulated’, not ‘promoted’ by this Government.

Surprisingly given the Green Party’s in ending the use fossil fuels and ending oil and gas exploration it looks like they were blind sided by Woods’ announcement on Tuesday:

Mining companies with existing licenses for drilling have a time limit on when they can explore. If they reach the time limit, their permits are handed back to the Crown.

Oil drillers shouldn’t be offered special treatment to extend or waive that time limit. I struggle to see the point in banning offshore exploration for oil and gas if existing companies with huge blocks can hold off from exploring until way later down the track.

Hughes followed up in Parliament yesterday:

Question No. 7—Energy and Resources

7. GARETH HUGHES (Green) to the Minister of Energy and Resources: Does she stand by her reported statement that she will “consider giving the oil companies more time to fulfil their commitments on the permits”; if so, which permits are currently facing a “drill or drop” decision in the next two years?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Yes, I am in discussion with officials regarding the possibility of exercising my statutory powers, as the responsible Minister, to make changes to petroleum exploration permits. Any such change would be made on a case by case basis under the current law. There are 16 permits with “drill or drop” decisions in the next two years. More information about all active petroleum exploration permits, including “drill or drop decision” points, is publicly available on the New Zealand Petroleum and Minerals website. As the member is aware, our Government is committed to a long-term transition away from reliance on fossil fuels, and the introduction of legislation this week reflects exactly that commitment.

Gareth Hughes: Does she stand by the Government’s historic decision to halt offshore oil and gas exploration, and if so, does she think a long tail of up to 16 active permits undermines this decision?

Hon Dr MEGAN WOODS: In answer to the first part of the question, yes, and in answer to the second part, no. As we’ve been clear, the Government is committed to a long-term transition away from fossil fuel exploration and a clear plan for our future. We’re achieving this by issuing no further offshore exploration permits, while also protecting the existing exploration permits that cover 100,000 square kilometres, to enable a smooth transition over the coming decades. This is a sensible approach that allows regions, communities, industry, and the workforce a just transition to a low-carbon future and avoids sudden economic shocks like we saw in the 1980s.

Gareth Hughes: Does she agree with recent comments by our climate ambassador Jo Tyndall that this Government has sent a clear signal to industry that we are phasing out oil and gas extraction, and if so, does relaxing the work programme deadlines on permits undermine that message?

Hon Dr MEGAN WOODS: I do agree and am proud that we are ending offshore exploration and are committed to a just transition, and we’re not relaxing those conditions.

Gareth Hughes: If the Minister grants extensions to any offshore permits, will she limit their duration, and if so, what time frame will she use?

Hon Dr MEGAN WOODS: As I indicated in my primary question, each of these needs to be on a case by case basis, and I will consider those applications on a case by case basis.

Gareth Hughes: Will the Minister commit to passing more wide-ranging changes to the Crown Minerals Act (CMA) this term to ensure New Zealand does transition away from fossil fuel extraction?

Hon Dr MEGAN WOODS: As the member knows, the first tranche of the CMA reforms was introduced this week. This legislation is to give effect to the Government’s decision about the future of offshore petroleum exploration. Our intention is to begin tranche two following the passage of this legislation, and we’ve long signalled that tranche two will involve a comprehensive review of the CMA and will engage with a wide range of stakeholders to ensure the legislation is fit for purpose as we make this transition. The Government’s decision about—

SPEAKER: Order! Order! That’s enough. That’s enough.

Hughes followed that up:

Hughes is the Green Party spokesperson for Energy & Resources. It seems odd that he hasn’t been closer to Woods and what she is doing and announcing on this – has she ignored Hughes and the Greens?

Surprisingly there is no mention of fossil fuels or oil and gas in the Labour-Green confidence and supply agreement.

And as Climate Change Minister where is James Shaw on this? Last week in an email to party supporters – James Shaw promoting Green achievements

Being in Government means we can deliver on our Confidence and Supply Agreement – but it also means so much more. For instance, we got an end to new exploration for offshore oil and gas – yet this wasn’t covered in our agreement.

It seems that they didn’t get as much as they thought they had.

 

‘A bit of a backdown’ on oil and gas exploration annoys Greens

It appears that the government has backed off a bit on it’s contentious ban on new oil and gas exploration, which was applauded by environmentalists and slammed by Taranaki business interests in particular. Is has been pointed out that it could lead to higher carbon emissions as more alternatives were sourced from overseas.

Hamish Rutherford (Stuff):  Symbolic backdown undermines Government’s untidy oil move

After all the hype, the Government’s troubled path to ending new oil exploration has a bizarre sting in the tail: a bit of a backdown.

In the hours before she announced a law change to give effect to decisions announced in April, which mean no new offshore permits, Energy Minister Megan Woods met with the industry to deliver a piece of good news.

Oil explorers facing deadlines on their permits to either commit to exploration wells or relinquish the permits – referred to as “drill or drop” – are likely to be given more breathing space.

It seems the deadline to drill could be pushed back for years, although Woods has not given details other than that she will consider giving more time on a case-by-case basis.

In terms of concessions, it looks like no big deal, given the Government is changing the legislation that frames the sector. No-one in the industry will celebrate this as a victory, given the overall impact of the moves by the Government.

But it seems like Woods is trying to head off a potentially major “what if?” headache.

As it stands, the Barque prospect off the coast of Oamaru will be lost forever if New Zealand Oil and Gas (NZOG) does not find partners willing to commit to the major cost of drilling, by early 2019.

Although the odds of success are put at only one in five, NZOG has claimed that, if successful, Barque could transform New Zealand’s energy outlook, with thousands of jobs and tens of billions of revenue.

Seen this way, Woods’ gesture to the industry looks like a major contradiction of the Government’s plan, to set New Zealand on a renewable future.

Reality wins over idealism?

Greens are not happy.

Both Greenpeace and the Green Party are furious, with the Government’s partners warning it waters down the moves made so far.

Given where we have come from, the latest move should be no surprise.

On a sunny day in March, Ardern walked down the steps of Parliament to greet Greenpeace activists, delivering a major shock that the Government was “actively considering” their call to end oil exploration. Although her speech was more symbol than substance, it was clear major plans were afoot.

As it turned out, the Government was not really considering anything, and it certainly did not want much in the way of advice.

Less than a month later, Ardern would lead a group of ministers into the Beehive theatrette to announce the decision, giving the impression that ministers had considered the matter.

In fact, all that had happened was that the leaders of Labour, NZ First and the Greens had reached a deal. Cabinet had no input in the decision.

Officials were so furious at being sidelined from the decision that it was leaked, spoiling Ardern’s plan for a dramatic announcement at Victoria University.

Greenpeace and the Green Party furious. Officials furious. Officials furious. It looks like this was rushed and bungled.

It should be remembered that this advice comes from bureaucrats who have not only been ignored in the actual decision-making, they are giving advice on a decision that could kill the sector they work in.

Seizing on the fact that – as in all long-term forecasting – the report on the oil exploration decision outlines a vast range of possibilities of the cost (from a few hundred million to more than $50 billion), Acting Prime Minister Winston Peters dismissed it as a “very, very bad piece of analytical work”.

It is fair to say that the official advice offers no accurate guide as to what the fiscal cost of the decision would be.

Given that we do not know the future for carbon prices, oil prices or interest rates, there is no way we could possibly know what that cost would be, a fact which seems lost on Peters.

What we do know is that there will be a cost, and it will likely be significant.

We also know that the way it was handled has had a significant impact on investor confidence in New Zealand, which seems to have dawned on the Government only months later.

It is also likely to have an impact on energy prices, both from the cost of gas to households and its impact on future electricity prices.

Woods said on Monday that, even with the benefit of hindsight and advice, she would still push for exactly the same decision.

Of course, she would say that. But it seems the Government has decided to breathe a little more life into oil exploration, just in case.

Green Party: Minister must not water down oil and gas decision

Green Party: Minister Woods must not water down decision to ban offshore oil and gas exploration

The Green Party does not support Labour Party Minister Woods allowing mining companies with existing offshore oil and gas exploration permits more time to consider if they will drill.

“Mining companies with existing licenses for drilling have a time limit on when they can explore. If they reach the time limit, their permits are handed back to the Crown”, Green Party energy spokesperson Gareth Hughes said today.

They shouldn’t be offered special treatment to extend or waive that time limit.

“I struggle to see the point in banning offshore exploration for oil and gas if existing companies with huge blocks can hold off from exploring until way later down the track.

“New Zealand took an incredibly exciting and brave step for people and planet when we decided to ban future offshore oil and gas exploration.

“It has been congratulated world-wide and New Zealanders are proud of the decision, let’s not water it down.

“I am urging her to reconsider this proposal”.

Remember Gareth Hughes? I’m not sure how much clout he has. He is till an MP but is far from prominent.

 

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.

Ardern belatedly fronting up on oil and gas in Taranaki

On April 12 the Government announced that there would be no more oil and gas explorations issued – No more offshore oil permits, existing permits remain.

The Government was immediately criticised for a lack of consultation prior to the announcement, and the lack of details about how ‘transition’ from oil and gas might work.

Andrew Little was quickly sent to a meeting in New Plymouth to try to do some damage control in a region that relies heavily on the oil and gas industry.

The lack of consultation was raised again in Parliament yesterday. When questioned Minister of Energy and Resources Megan Woods said there had been “there were very strong signals” – but that isn’t consultation.

Jonathan Young: When she described ending new offshore permits as a “planned, measured and careful transition … towards renewable energy”, did she actually tell anyone in the petroleum industry her plan to ban new offshore permits, prior to 12 April?

Hon Dr MEGAN WOODS: This is a question that has been asked in this House and responded to in this House previously. What we have been very clear on is that both the Prime Minister and myself made very clear comments around the future of offshore drilling prior to 12 April. Indeed, two weeks before making that announcement, I went to the Petroleum Conference and gave a speech reassuring the sector that the changes coming would not affect their existing permits.

Jonathan Young: Did she actually tell anyone in the petroleum industry prior to 12 April that she was planning to ban new offshore permits?

Hon Dr MEGAN WOODS: As I just answered in the previous question, there were very strong signals. But we made an announcement; that was the point at which we told people in the petroleum sector. As that member knows, members of the sector received phone calls from myself, several colleagues, and officials the night before the announcement was made.

Phone calls the night before a planned announcement is not great consultation either.

Today prime Minister Ardern will meet with the oil and gas industry for the first time since the announcement.

Newstalk ZB: PM to meet with oil industry for first time since ban

The Prime Minister is heading to New Plymouth today to meet with representatives from the oil and gas industry.

It’s the first time she’s been to the region since the Government banned on any future offshore exploration permits.

Jacinda Ardern says the focus of her meetings today will be on what needs to be done to help the industry transition.

“There are decades left of work and exploration in this industry. What we need to think about is what happens in the 30 years after that, and that’s why we’re going to Taranaki to talk about that.”

The industry has been very critical, saying they weren’t properly consulted by the Government, but Ardern maintains that’s not the case.

“There have been changes in this industry for some time and anyone who listened to what we’d been saying about there not being a future for fossil fuels would not have been surprised by this move at all.”

Ardern and the Government have said quite a few things that they haven’t followed through on, or have deferred. They have cited the demands of being in a coalition as a reason for dropping or watering down some policies.

It looks like Ardern rushed into the oil and gas announcement to use as show piece action ahead of a trip to Europe, but she should have done far better in New Zealand, especially in Taranaki.

There will be pressure on Ardern today to assure the oil and gas industry that consultation on transition plans – if they have any plans of substance – will be given a far greater priority than sending signals via the media.

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.

Ministers differ on banning coal

Megan Woods, the Minister of Energy and Resources, interviewed on Q&A this morning and was asked about the future use of oil and gas, and coal.

She gave an assurance they (the Government) “we have done no work on banning coal” and “there are no plans to do that”.

CORIN Where does coal sit in this? Will you ban future exploration of coal?

MEGAN Look, this isn’t a decision about coal; this is about block offers. And this is about offshore oil and gas.

CORIN This is important, though, because you need that coal, as we mentioned earlier, in terms of electricity supply in the event of a dry year. And the papers that were given in terms of the Greens’ questioning during the coalition was that if we didn’t have any more, if you stopped coal exploration, you’re talking 2028, there’d be no more coal.

MEGAN Look, one of the things that we are seeing, Huntly is transitioning to a gas peaking plant, away from using coal. Gas is about half the emissions of coal. But it still is half the emissions, so we’ve always said it’s part of the transition, gas. But I think one of the things that we need to be really clear on, that a transition is not status quo. The status quo is doing nothing, burying our heads in the sand and not having the long-term future-proofing plans for the economy. So we are absolutely accepting that gas will be used as part of that peaking.

CORIN I don’t mean to be rude – I just need an answer on coal. Is there a future for more exploration of coal?

MEGAN Oh, look, we have made no announcements about ending coal, and we certainly haven’t done any work.

CORIN Are you ruling out that you won’t ban coal exploration?

MEGAN Oh, we have done no work on banning coal.

MEGAN No, I’m not saying it’s a possibility at all. What I’m saying is there are no plans to do that. We haven’t done anything.

But this has been questioned: ‘Incredulous’ for Energy Minister to say no work on coal ban been done – National MP

Energy Minister Megan Woods says there’s been no work, plans or announcements around banning coal exploration yet Climate Change Minister James Shaw has signed New Zealand up to phasing out coal by 2030.

In November shortly after the Labour/NZ First/Greens government was formed, Shaw headed to Germany where he told the COP23 conference that New Zealand intends to become a leader in the global fight against climate change.

While there he signed New Zealand up to the international “Powering Past Coal” alliance, which is committed to phasing out the use of coal for electricity generation.

At COP23 Shaw said, “we know that the future of our electricity system is in renewables, not coal, so I was delighted we could recognise that formally at this important international meeting”.

NZH: Shaw to UN conference: NZ now a leader in climate change

At COP23, New Zealand has also signed up to the Powering Past Coal alliance, which is committed to phasing out the use of coal for electricity generation by 2030.

Shaw told the Herald New Zealand’s only coal-burning generators at Huntly are to be decommissioned by 2025.

“But symbolically it is really important, and the more countries that get in on it, the better.”

Newsroom: Our Inconvenient Truth: NZ will keep burning coal

Green party leader and Climate Change Minister James Shaw was unconcerned by the announcement when interviewed before question time on Wednesday.

“We want to get out of fossil fuels by 2035. I think the Genesis announcement is consistent with that,” he said.

He hoped that technological advances would help Genesis get out of fossil fuels before 2030.

Full interview: http://www.scoop.co.nz/stories/PO1804/S00238/qa-megan-woods-interviewed-by-corin-dann.htm

Labour-Green oil and gas naivety questioned

The Government announcement last that no more off shore oil and gas exploration permits would be granted was celebrated by the Greens and their allies (like Greenpeace), but it hasn’t received wide support. Questions are being asked of the possible negative effects, and the lack of planning or substance on the transition from fossil fuels to alternative forms of energy.

Listener: Is the Govt’s ban on new oil and gas exploration brave or naive?

Just transition or heart over head?

The decision to stop issuing offshore oil and gas exploration permits was not pre-election policy. Although Prime Minister Jacinda Ardern was musing privately months ago about the politics of such a move, it is barely a month since she broke from her formal programme to accept a petition from Greenpeace on the forecourt of Parliament.

Always with an eye to powerful imagery, Greenpeace backed the moment with pictures of history-changing Labour leaders of the past: Savage, Kirk, Lange and Clark. Ardern could enter that pantheon with a huge symbolic gesture designed to make real her claim that climate change is “this generation’s nuclear-free moment”.

She has done so, in a move that is at once measured and justifiable yet also naive and arguably cavalier with a major industry. No other country with a significant oil and gas industry has made such a decision.

…the naivety of the Government’s new policy is that it will not, of itself, reduce global carbon emissions, but could increase New Zealand’s if it leads to more coal use in the meantime.

It is disingenuous to claim that existing permits might sustain a healthy oil and gas sector until the 2040s. The fruitless hunt for major gas fields in the Great South Basin since the 1960s proves the point that exploration is expensive and usually unsuccessful.

But perhaps the biggest risk is the promise of a Government-led “transition” to new industries of the future. Airy ministerial talk of capital being redeployed to new activities is a carbon copy of Rogernomics-era rhetoric. Capital was redeployed, but not necessarily in New Zealand.

The Government is talking a big game on its ability to direct the emergence of such new industries, but its capacity to deliver this upside of transformative change is untested and the value of the industries it is disrupting is all too measurable.

While radical change was necessary then ‘Rogernomics’ was executed hurriedly with more hope or desperation than planning.

Tim Watkin takes the similarity with Rogernomics style reform-and-hope policies, as opposed to David Lange’s ‘anti-nuclear moment’ – Oil be alright. But has Labour learnt the wrong lesson from its past?

Jacinda Ardern has drawn on our national pride in New Zealand’s nuclear-free stance to rally support for her decision to end offshore oil drilling. But her announcement has echoes of Douglas and Prebble as much as Lange and Palmer

When Jacinda Ardern was asked to justify her government’s decision to stop issuing oil drilling permits forthwith she drew on a memory that sits deep in her party’s – and our country’s – soul. Our nuclear-free status. The decision for me, however, recalls another controversial move by that same fourth Labour government.

For Ardern and her team, so long out of government, it is a chance to do the sort of thing they expect Labour government’s to do. The moral thing. Policies that show vision and make the world a better place. What’s more, it shows leadership in the Pacific.

As with our nuclear-free policy, the decision to leave the oil where it is gives New Zealand the moral high ground, a sense of mission and it gets us noticed. It’s also similar in that it will also do next to nothing in the short term to change global behaviour or make the world safer.

Our nuclear-free stance has been largely symbolic, as will this stance be, unless or until the rest of the world follows suit.

Like Rogernomics, last week’s decision was announced with no real consultation and ruthless speed. There was no time for opponents to circle the tankers. Like Rogernomics, it moved Labour away from the safe centre and took it to the edge of mainstream politics. And like Rogernomics, they have shown no sign that they have planned for the consequences – forseeon or unforseen – of this policy.

Talk to members of the fourth Labour government today and few resile from the thrust of the economic reforms, but almost all wish they had done it differently. More slowly, with transition funding and re-training upfront. With more consultation. More commitment to not leaving some people on the scrapheap.

Sadly, there’s no sign this government has heeded that lesson. Not yet anyway. The announcement came with the zeal of the nuclear-free dream, but without the legwork. There was no transition fund announced. No plan to find new purposes for the people and their skills. No three year grace period, for example, in which the country’s fourth largest export-earning industry could start on what Greens co-leader James Shaw has promised will be a “gentle transition”.

One could forgive Shaw and the Greens for being naive, given their lack of experience in power. The same could be applied to Ardern – but as Prime Minister she should be better advised. She seems to have believed her lofty hype over leading a generational change on climate change.

It is becoming increasingly apparent that the new Government was woefully unprepared for taking over. They have taken some quick and bold moves – like committing to major spending (handouts) for fee-free tertiary education – and leading the charge against climate change without any sign they know where this will take New Zealand economically.

But by embarking on this in a sudden, even sneaky, way and without a considered and consulted transition plan, it’s undermined the ‘what’ by buggering up the ‘how’. Labour has failed to learn from its own history. Or, at least, the part of its history Ardern says inspired this bold move. The question now is whether the government moves rapidly and with proper thought to live up to its promise of that “gentle transition”.

There is time for getting it right, or at least better and less risky, but there is no sign of this being recognised by the Government.

Another unlikely critic is Brian Fallow: Exploration ban a pointless, self-righteous policy

Resounding cheers greeted Jacinda Ardern and James Shaw when they went to Victoria University last Thursday to explain that morning’s announcement that no more offshore oil and gas exploration permits will be granted.

Gratifying to their ears, no doubt — but entirely undeserved.

This policy is self-righteous nimbyism, environmentally pointless, economically costly and politically counter-productive to the Government’s own agenda on climate change.

Tossing a trophy to the Green Party base, perhaps in the hope of reducing the risk that the Green vote gets wasted in 2020, smacks of ad hoc partisan politics as usual.

It is utterly at odds with the careful, consultative, consensus-seeking approach being pursued over the larger climate agenda.

James Shaw has set up a committee (according to National the 75th committee/group of this Government) to consult over climate change transition but as pointed out in Climate Change Committee announced, significant omissions this notably lacks direct representation from the key farmer and oil & gas industries.

Is there anyone in Labour capable of doing the hard work necessary to make such a transformative  policy work successfully without too many risks and adverse effects?

With Shaw in charge of the Climate Change ministry the only Labour MP (apart from Ardern) with related responsibilities is Megan Woods as Minister of Energy and Resources, and Minister of Science and Innovation, things that will be (or should be) a prominent part of the climate change/fossil fuel transition.

Labour slow to restore Canterbury democracy

After slamming the last Government’s sacking of the Canterbury regional council ECan, and of promising to quickly restore democracy, Labour is now in no hurry to act.

Christchurch Labour MP Megan Woods in 2016: ECan legislation an affront to democracy

The Government’s ECan Legislation is an affront to Cantabrians and continues to deny them a democratically elected regional council, says Labour’s Canterbury Spokesperson Megan Woods.

“There is simply no logical, rational or compelling case for a system of regional government in Canterbury that is anti-democratic and radically different from other parts of the country.

“This is not the return to democracy we were promised. This is a continuation of government control.

“It has been six years since the Government sacked the regional council. It is time to put regional governance back where it belongs. That regional governnment has to be in the hands of Cantabrians. There is no justification for controlling Canterbury through appointments made in Wellington.

“I have a Private Members Bill in the ballot to return to a fully elected council at this year’s elections. That Bill stays in the ballot because Labour backs Cantabrians to run their own region,” says Megan Woods.

Labour’s policy on Canterbury (August 2017): Unlocking Potential – Labour’s Plan for Canterbury

Our plan has eight crucial components, each demonstrating Labour’s commitment to get the region moving – and thriving.

Labour will:

  • Restore full democracy to Environment Canterbury

Stuff (November 2017): ECan elections unlikely before 2019

A return to democracy at Environment Canterbury (ECan) appears unlikely before 2019, despite Labour’s long-standing objection to the status quo.

The last Government removed democratically-elected councillors in 2009 and replaced them with seven commissioners the following year.

One of the sacked councillors, Eugenie Sage, is now Minister of Conservation.

Despite promises by former Environment Minister Nick Smith to restore democracy in 2013, it was pushed to 2016. A full return to democracy was delayed again until 2019 – half the current council is elected and half appointed.

During the election campaign, Labour said full elections would be restored “as soon as possible,” but it is understood that is unlikely to happen before 2019, when elections were expected anyway.

Newsroom (today): Labour’s big miss in Canterbury

The Labour-led Government has failed a crucial test in Canterbury.

Despite making an election issue out of a return to full democracy at Canterbury’s regional council, Local Government Minister Nanaia Mahuta has confirmed to Newsroom it will follow the last Government’s timetable of waiting until next year’s scheduled local body elections.

That’s little payback for a surge of support for Labour in Christchurch at last year’s election. The decision not to call early elections will disappoint many – including Mahuta’s ministerial colleague Eugenie Sage, who was one of 14 councillors sacked by the National-led Government in 2010, mainly over claims it was mismanaging water.

Labour’s go-slow on Canterbury democracy even leaves it open to a swipe from ex-Environment Minister Nick Smith, who made the National-led Government’s decision, jointly with then Local Government Minister Rodney Hide, to sack councillors at Environment Canterbury (ECan).

Smith, a fading flower in National, says Labour “screamed from the rooftops” in opposition and if it believed the strength of its rhetoric it would have moved to restore a fully elected council. “I think they know, as I did, that a sensible transition through this term of council and full elections in 2019 is actually the right thing for Canterbury.”

After this length of time without an elected regional council it makes sense to restore a democratic body during the Local Body elections next year, but Labour have failed to fulfil their promise. At least they haven’t set up an inquiry on this.