12 Apr 2018

Oil, gas exploration move a 'kick in the guts' for Taranaki - mayor

11:49 am on 12 April 2018

The government has announced it will not grant new deep-sea oil and gas exploration permits, but New Plymouth's mayor says he has not heard of a specific plan for transitioning to green energy.

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Photo: 123RF

Energy and Resources Minister Megan Woods announced this morning there will be no new offshore block offers, the annual tender process that allows corporations to bid for permits, this year.

"The Prime Minister has taken the opportunity to announce the more long-term direction that this government is taking, that there's no offshore in this 2018 round and there won't be any further offshore permits," Ms Woods said.

The Block Offer programme set up by the previous government annually invites bids for new onshore and offshore oil and gas exploration.

Ms Woods said the decision would not affect the 22 active offshore licences, which cover roughly 100,000 sqkm of ocean, with the last one to finish in 2030.

"In each of the last two years only one permit has been granted for offshore oil and gas exploration," she said.

"The existing mining permits, they'll absolutely be respected and honoured and there's permits that go out there till about 2046.

Prime Minister Jacinda Ardern, flanked by Energy and Resources Minister Megan Woods, Regional Development Minister Shane Jones, and Climate Change Minister James Shaw, answers questions about the government's stance on oil and gas exploration.

Prime Minister Jacinda Ardern, flanked by Energy and Resources Minister Megan Woods, Regional Development Minister Shane Jones, and Climate Change Minister James Shaw, answers questions about the government's stance on oil and gas exploration. Photo: RNZ / Chris Bramwell

She said people who currently had an exploration permit would also continue to have the chance to turn that into a mining permit, which could mean New Zealand could still be mining fossil fuels into 2050 at least.

"This decision does not affect current reserves or the potential finds from current exploration permits. As the industry itself admits, there is good potential for more to be found."

Exploration on land for petroleum products was not being halted however, with Ms Woods set to consult with iwi and hapū regarding a 1703sqkm area proposed in the Taranaki Basin.

She said all conservation land would be excluded from the final tenders.

'These people are going 'my career doesn't actually have a future' - Mayor

New Plymouth mayor Neil Holdom.

New Plymouth mayor Neil Holdom. Photo: RNZ / Robin Martin

New Plymouth mayor Neil Holdom said the move was a "kick in the guts for the future of the Taranaki economy".

"The key thing for us is that we want to see a plan," he said.

"We all want a sustainable New Zealand, and that is reflected in our people, however we need a plan and we need to create some certainty because we've got 4000 directly employed people working in the sector and about another 3000 to 3500 in related industries.

"If you consider those households and those people, they are correct that nobody's going to be losing their jobs overnight but in terms of the long-term outlook for those industries these people are going 'my career doesn't actually have a future'.

"If you look at the local perspective, we've had a rough time in the last few years. The oil and gas commodity prices have dropped anyway so we've seen a reduction in employment and exploration.

"Our farming sector ... we've seen a reduction in dairy prices then we've had a drought that was followed by some severe wet weather.

"So, we know that there's this announcement but we haven't seen any plan ... that, I think, is what we have to do now, we have to accept this, but we really have to work together."

"We have the highest GDP in the country per capita - it's concerning the government has made this announcement without a plan ... or if they have one we haven't seen it."

"Our goal is, Taranaki continues to bat above the average, that we continue to be a contributor to New Zealand, eh. And the issue is, to do that we're going to need local government, central government, iwi, and our businessses to have a shared plan, a shared vision."

Ms Woods said Mr Holdem's assertion the move was a kick in the guts for the region was not correct.

"I spoke to the mayor yesterday, I understand this is something that's going to be challenging for a number of people in the region."

Taranaki needs 'hundreds of billions' from govt

"Is the government going to put money to help us? It's all very well for Shane Jones to come up here and give us $20 million in regional development but it will take a hell of a lot more than that to help transition us out of oil and gas."

"It was wonderful to have the government come here and sprinkle $20 million last week ... but in terms of energy investment in future [the government allocated] less than $250,000.

"And we're going to need to see significant investment from Wellington to help transition our economy and we haven't seen any major signal of heavy investments in economy.

He said the offshore oil and gas fields had historically yielded the highest amount, and were currently delivering more than $300 million a year to the government in royalties.

"If they want to help Taranaki transition to this net zero carbon economy we're going to need to see significant investment: not hundreds of thousands, hundreds of billions.

ACT party leader David Seymour also said the government's decision would put 11,000 jobs at risk. In its announcement however, the government said it wanted to be clear no current jobs would be affected.

However, Regional Economic Development Minister Shane Jones said the move did not affect any jobs that were already there.

Mr Jones said the Taranaki Regional Economic Development action plan launched last week identified energy as one of the four industries the region would rely on in future.

"The initial money the Provincial Growth Fund (PGF) committed to investigate establishing Taranaki as an internationally recognised leader in clean energy technology is an example of the collaboration needed between government and the energy sector," he said.

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