Ardern strikes drilling compromise

Labour has stopped issuing new permits for offshore drilling, but will keep issuing new onshore permits and will let existing ones run for decades to keep Taranaki jobs. Bernard Hickey and Shane Cowlishaw report.

Prime Minister Jacinda Ardern has taken the Government's first major step to address climate change, announcing there will be no more offshore oil and gas exploration permits granted.

But the move is a compromise as existing permits covering an area the size of the North Island will allow further drilling and new permits for onshore exploration will continue.

Ardern said the 57 existing permits already awarded for offshore and onshore exploration would be protected and could allow oil and gas extraction for decades to come. The Government also opened a new 'block offer' for onshore exploration for oil and gas.

At a press conference Ardern repeatedly said the move would be a long-term, managed transition and no jobs would be lost.

It was important to get ahead of a change that would inevitably happen as the world moved to combat climate change, she said.

“Unless we make decisions today that essentially take effect in 30 or more years time we run the risk of acting too late and causing abrupt shocks to communities and our country. I’ve seen that happen once in the 1980s and I don’t want to see it happen again.”

She noted there were 31 oil and gas exploration permits currently active, 22 offshore. They covered an area of 100,000 sq kms, nearly the size of the North Island.

Energy and Resources Minister Megan Woods announced the start of consultation with iwi and hapu on the 2018 Block Offer for an area restricted to the onshore Taranaki Basin covering a 1,703 square kilometre area.

NZ First support key

Regional Development Minister Shane Jones has a long political history of supporting industry and it was an unusual picture to see him standing next to Ardern and the Green’s co-leader James Shaw to make the announcement.

Prime Minister Jacinda Ardern speaks to media flanked by Energy Minister Megan Woods, Regional Development Minister Shane Jones and Climate Change Minister James Shaw. Photo: Shane Cowlishaw

He admitted that he would likely lose some support in regions such as Taranaki, but said NZ First had insisted that all current permits remain intact.

“For those of you who might be saying 'does this mean a bloody nose for the first citizen of the provinces', I can’t deny the fact and I won’t walk away from the challenges of defending our programme that while rights remain intact we are on a journey..

“I would say to the industry in my own style, this is not a welsh mining moment, no one is going to wake up tomorrow and find they don’t have a job in the sector.”

Ten years’ worth of natural gas was consented, with potentially billions of dollars of reserves permitted but yet to be consented.

That insured the industry was not at immediate risk, but New Zealand had signed up to international obligations and it needed to meet them, Jones said.

New Zealand First was one of three parties that made up the Government and when it had made the decision to go into coalition with Labour it had known Ardern’s strong stance on climate change, he said.

“I wouldn’t be standing in front of you if I wasn’t going to back 100 percent the Prime Minister and I’m doing that. This is an MMP government and within the privacy of our own discussions we have our say.”

A blindside?

The oil and gas industry have slammed the move and a lack of consultation before the decision.

At the petroleum industry conference last month it emerged the Government were yet to talk to the group about the future of exploration.

This morning Cameron Madgwick, chief executive of the Petroleum Exploration and Production Association of New Zealand, told Newstalk ZB that had continued right up to the announcement.

“The press release is the first we’ve seen of this," Madgwick said.

“It’s deeply disappointing. There was absolutely no consultation with the industry.”

Ardern rejected this, saying the Government’s position on a transition away from fossil fuels was clear.

“I would be surprised if they consider themselves to have been blindsided. Look, we flagged both our interest as a party and a Government about moving away from fossil fuels.”

The industry’s viewpoint was well-known as it had met with the Energy Minister on several occasions, she said.

A historic green day

Shaw, who described the plan as a “gentle transition”, could not hide his excitement.

“It is certainly one of the biggest wins the Green Party has ever got, I’m absolutely delighted with it. I also know it’s not going to be the last win we get as well. We’re just getting warmed up.”

Environmental groups also welcomed the changes. Forest and Bird CEO Kevin Hague, a former Green MP, said he wanted the temporary breathing space of the end of offshore block offers made permanent by changing the Crown Minerals Act to dismantle the block offer process.

“Half the world’s whale and dolphin species visit or live in New Zealand waters, from the critically endangered Maui’s dolphin to giant blue whales. Today, these sensitive creatures are made safer from the threat of oil spills and the sonic barrage of seismic testing," Hague said.

Greenpeace executive director Russel Norman, a former Green co-leader, described the announcement as a historic moment and a win for people power.

"Today’s announcement is significant internationally too. By ending new oil and gas exploration in our waters, the fourth largest Exclusive Economic Zone on the planet is out of bounds for new fossil fuel exploitation," Norman said.

"There is still some work to do, however. We are disappointed that onshore Taranaki, where communities have to deal with ongoing fracking and exploration, is exempt from the ban, and that existing offshore exploration contracts will remain," he said.

"We will continue to demand a complete end to fossil fuel exploration on land and sea as well as the revoking of existing permits."

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