Ardern has to defend high speed legislative process

: 2013 petroleum conferecne with then-Energy Minister, Simon Bridges, and Greymouth Petroleum Chair and CEO, Mark Dunphy
 

Parliament's Environment Committee has dealt with 2249 submissions on the offshore oil exploration legislation in 18 days and unsurprisingly concluded the Bill should go ahead.

But the Environment Committee who considered the Bill have attached what amounts to an election manifesto promise from the National Party prosing to reverse the ban and adding another seven points essentially setting out technological proposals to deal with carbon emissions from fossil fuels.

Prime Minister Jacinda Ardern at her post-Cabinet press conference was forced into defending the speed with which the legislation had gone through the Committee process.

Ardern said the speed was to allow the annual offer of exploration rights in the only area where new petroleum exploration will now be permitted – onshore Taranaki.

“This is a process we are going through in order to allow the block offer for 2018 to go ahead,” she said.

“That is something that we want to make sure we progress this calendar year.”

But in their submission to the Committee, the petroleum explorers through their industry association, the Petroleum Exploration and Production Association of New Zealand (PEPANZ) made it clear they were willing to forgo the block offer.

“The oil and gas industry would prefer a further delay to the already postponed Block Offer 2018 if that is what is required to allow a regular process under normal timeframes," they said.

“The Government’s delays to Block Offer 2018 should not be used as a reason to truncate an important process to the detriment of industry and other interested groups.”

But Ardern said the block offer needed to be put in a wider context, and she rejected a suggestion there might be little interest in it.

“The last block offer I think had one successful offer.

“And I don’t think it would be fair to make that assumption based on the wider decision here because there has been a change in the uptake in the last few years.

“But we are giving certainty to those who currently hold permits and those who would be seeking an onshore block offer that we will honour the commitments around those permits.”

But then Ardern seemed to contradict her earlier claim that it was necessary to proceed with the block offer when she said that block offers happened at the discretion of the Minister of Energy.

“Ultimately the decision as to whether there are block offers or not is at the discretion of the Minister of Energy.”

The Committee, chaired by Labour MP Deborah Russell,  in its report, noted the concerns about the short time frame for submissions.

“Some submitters considered that there had been a lack of engagement with iwi over the bill, and a lack of public consultation in general,” the report said.

“Some suggested that the policy should be put to a referendum or left to the next election.

“Many submitters expressed concern that insufficient time had been given to the select committee for consideration of the bill, and about the lack of oral hearings in Taranaki.”

However, beyond noting the concerns, the report said no more.

In their Minority Report, the National Party members on the Committee said they strongly opposed the Government’s policy and process at every level.

“We believe it is essential to reduce emissions but see that the Government have shown great negligence to proper process around developing policy and progressing it for the betterment of New Zealand,” they said.

Meanwhile, the Crown faces legal action over its ban on offshore exploration n from New Zealand’s second largest petroleum company, Greymouth Petroleum.

The company, whose assets include the onshore Turangi, Onaero, Kowhai, Radnor and Ngatoro gas fields, said the government's April 12 announcement halting further offshore block offers was unlawful and that the Crown Minerals Act required the government to consult on any planned changes which it had not done.

Greymouth’s chair and major shareholder, Mark Dunphy, submitted to the Committee with a typically blunt submission warning that New Zealand faced gas shortages and that the Bill should be consigned to the rubbish bin.

He then added a second submission which showed a series of cartoons including the Prime Minister shooting herself in the foot.

Dunphy’s warned that there was a chronic shortage of gas today – “there is no spare capacity or redundancy upstream in national gas supply – Spot (daily) Gas prices are at record high levels and demonstrate the shortage.

“The policy change is abrupt, counterproductive, comes too soon and will add to current gas shortages and further increase gas and petroleum prices," he said.

“Renewable energy technologies are not yet affordable and efficient enough to replace fossil fuels completely, despite ongoing research worldwide.

“In the coming years, technological advances may be made that could be a substitute for oil and gas, but the world is not there yet.

“ here is no magic wand that will produce such a substitute.”

And that will be the question; has the Government in its rush to judgement on offshore exploration created a problem for itself with energy supply in the coming years.

At best it’s a gamble.

 

 

 

 

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