New Zealand may halt new oil and gas exploration
Jacinda Ardern’s government is considering a halt to new oil and gas exploration as the world tries to tackle climate change.
New Zealand’s centre-left government is considering a halt to new oil and gas exploration, with Prime Minister Jacinda Ardern backing alternative industries with less environmental impact.
As her Labour-led coalition considers the issue of granting petroleum companies new rights to search for crude oil and natural gas in New Zealand waters, Ms Ardern said an option was to put up nothing for tender.
“This is all about what we do in the future,” she said today. “In considering block offers, you are considering the future of oil and gas exploration in New Zealand. What we are actively considering is the thing that decides whether or not we continue to drill for oil and gas.”
New Zealand’s oil and gas sector contributes over $NZ2.5 billion to the economy, underpinning oil exports worth around $NZ1.5 billion a year, according to the country’s petroleum industry. Each year the government allocates petroleum exploration permits to explore New Zealand’s basins in a tender process called a Block Offer.
While New Zealand is reliant on imports for two-thirds of its petroleum needs, oil and gas are produced from 21 petroleum licenses and permits, mostly in the Taranaki basin on the west coast of the North Island.
On Friday, OMV bought interests in a portfolio of New Zealand energy assets from Royal Dutch Shell for $US578 million. Shell had operated in New Zealand for about 100 years, and its businesses account for about half of the country’s natural-gas production and a large chunk of light oil output.
Political opponents warned that curtailing oil and gas would sour sentiment among foreign investors. Opposition Leader Simon Bridges, a former energy minister in the previous centre-right National government, said oil and gas was a multibillion-dollar export earner that underpinned thousands of jobs.
“You can’t just slice that off and think it doesn’t have an effect,” he said. “These are high-value sectors and I hope that some in Labour who are more sensible about these things … will stand up for our regions.”
Former finance minister Steven Joyce called it “virtue signalling on a destructive scale” by the new government.
Ms Ardern, a former president of the International Union of Socialist Youth, said the government wasn’t looking at halting permits already awarded. Still, she said the world was moving on from fossil fuels and the government was looking at the future, promising a decision within months that would consider any economic impact.
“But we also have to consider generally where the world is moving as we confront climate change,” she said. “There are still resources that contribute to a more sustainable future, and they are things like silica, away from other extractive industries which actually instead contribute to climate change.”
Ms Ardern delayed a state visit by Indonesia’s President yesterday to accept a petition to end completely oil and gas exploration from environment group Greenpeace.
Dow Jones Newswires
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