“I think there is a bigger question regarding climate change - should New Zealand Oil & Gas fossil fuel exploration activities continue at all?
Should the company be investigating alternative options that will align with a low carbon future? Particularly given the timeframes for production.
By the time resources come online we are likely to be quite a different world with greater renewable energy resources”
The world is reducing its carbon emissions. We can help.
Following the Paris COP21 agreement at the end of 2015, the Government is committed to doing more to reduce New Zealand’s carbon emissions as part of increasing worldwide initiatives. Its main tool to achieve this is a price on carbon through the Emissions Trading Scheme.
We recognise that addressing climate risks is a priority for our generation and will be for those to come. We expect significant policy action is likely to reduce carbon emissions, including both domestic policy initiatives, and increasing global cooperation.
OUR VIEW OF CLIMATE POLICY
Oil and gas are an essential part of today’s energy mix. Natural gas, which earns around three quarters of our revenue, is a clean, accessible, affordable, reliable and flexible energy source that can help reduce carbon emissions by replacing other high-carbon fuels.
Climate policy should be stable, transparent and internationally consistent to ensure the best climate outcome and the fairest and most efficient economic results.
Climate policy in New Zealand should be regulated through a single, market-based instrument that is neutral between technologies and fuels. Policy should focus on carbon emissions and avoid preferencing investment in one sector over others through regulation or subsidies beyond the market signal.
We recognise that other countries will adopt policy approaches that may be more appropriate to their own circumstances.
Indonesia, for example, is an energy-constrained emerging economy where peat fires are the single largest anthropomorphic source of carbon emissions in the world. Those fires are a high priority for policy attention, while natural gas is essential to meeting Indonesia’s energy needs.
Read more about our response to the Zero Carbon Bill.
WHY WE LOOK FOR AND PRODUCE OIL AND GAS.
Today carbon is emitted from many essential activities, from power generation and transport to manufacturing and ultimately, nearly everything we use, buy, wear, eat and do.
Together oil and gas help to power our way of life, providing more than half of the world’s primary energy.
Globally, oil production keeps an estimated one billion cars on the road, some 20,000 commercial jet airliners in the air and at least 50,000 trading vessels at sea.
Natural gas provides almost 40% of residential space heating2 , 22 per cent of electricity generation globally3 and provides heat and power to much of the world’s industry and manufacturing.
The transition to low carbon forms of energy will take decades4, while new technologies are developed that don’t currently exist yet and the costs of new energy sources fall to levels that make them realistic replacements in the energy mix.
We need to provide for our current energy needs during this transition. With appropriate policy settings the oil and gas industry in New Zealand can continue to develop, making an increasing contribution to our economy consistently with global carbon-reduction initiatives.
WHAT ARE WE DOING?
- We support the transition to clean-burning, lowemission natural gas, especially to replace coal in the global energy mix.
- We are working with other gas industry businesses to highlight the role of natural gas as a clean, reliable and cost effective transition fuel.
- We submitted5 to the government review of the market-based New Zealand Emissions Trading Scheme, “The company’s concern is that, if the ETS is to be used as the primary policy instrument to achieve a given reductions target, it should be applied in a way that is consistent across sectors. If the ambition of the scheme is to transfer costs of reducing emissions to emitters, and to reduce New Zealand’s net emissions below BAU, and if the primary instrument to accomplish this objective is an efficient market, then there is no policy or economic justification that can support favouring one sector of the economy at the expense of another.”
- We manage our liabilities under the Emissions Trading Scheme.
The company continuously monitors likely obligations under the NZETS, and buys forward credits on a prudent management of risk basis. • We work with other businesses to understand likely climate outcomes and support advocacy for high quality policy outcomes. New Zealand Oil & Gas is a member of the Business Energy Council (www.bec.org.nz). We contributed towards the Council’s study of New Zealand’s energy future, and the range of trade-offs and choices that may be needed as patterns of energy use change and disruptive technologies emerge.
- We are open about our view of our role in the economy and the role of our products in the energy mix. We work with regulators, industry and others to grow mutual understanding of climate policy issues. We disclose publicly our involvement in any advocacy on climate policy. We inform our community about our stance on the issues and we seek feedback.