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Submission of New Zealand Oil & Gas Limited Crown Minerals (Petroleum) Amendment Bill

Posted on 16 October 2018

New Zealand Oil & Gas has submitted to parliament’s Environment Select Committee about the Crown Minerals (Petroleum) Amendment Bill, which puts in place the government’s decision not to offer further exploration permits outside of onshore Taranaki.

A copy of our submission is attached below.

The main points are: New Zealand Oil & Gas is the only oil and gas exploration and production company publicly listed on the NZX.

  • We submit that the Bill should not proceed.

  • We support the government's ambition to achieve a net zero energy system and submit that the best tool to achieve that goal is through a carbon budget and carbon emissions pricing.

  • No reputable research or analysis supports a ban on offshore exploration as a means of achieving the net carbon zero goal.

  • The ban on exploration is likely to worsen global emissions.

  • The Bill fails to distinguish between types of fossil fuel. Low-carbon, job-rich, natural gas from New Zealand is a transition fuel that helps to replace high carbon alternatives such as coal bed methane, Canadian tar sands, Venezuelan bitumen and fracked shale gas in the global energy system.

  • We operate the highly prospective Barque prospect, east of Oamaru. Though not directly affected by the ban, the Bill makes development of this prospect materially less likely. 

  • Independent research demonstrates that lost opportunity from failure to develop Canterbury and Great South basin prospects may seriously impact regional development and cost the government revenues that could be used to achieve policy priorities such as funding essential social services.

  • The Amendment is inconsistent with the purposes of the Act. There is no pressing need to pass the Amendment immediately. Therefore, even if the government is determined to stop further offshore exploration, the appropriate mechanism would be to review the Act as a whole rather than piecemeal.

  • The manner of the policy announcement and time available for submission are unacceptable, and mock modern constitutional norms and parliamentary processes.

  • The policy-making process has not been evidence-based, and the capricious-style of decision- making damages New Zealand's reputation for international investment. This imposes avoidable costs on all New Zealanders. 

  • If parliament opts to proceed with the Bill, it should be amended as follows:

    - The duration of existing permit commitments should be extended, so that operators have a fair opportunity to respond to the decision and the way it was made.

    - A sunset clause should apply, and the clause should lapse subject to a recommendation from the climate commission.

    - An exception to the ban should exist where a permit joint venture can establish that development of a discovery would be likely to displace higher-carbon sources in the global energy mix.