Woods vs. MBIE on oil and gas ban
Megan Woods will this week introduce legislation to implement the ban on new offshore oil and gas exploration against the advice of MBIE, which says it will cost the Government $7.9 billion in lost revenue.
The legislation gives effect to the decision taken by Woods in April to ban future offshore exploration "block offers".
Under the proposed legislation the Government will stop granting any new offshore exploration permits. It does not affect holders of existing offshore permits, but any future block offers will be limited to onshore exploration.
Woods’ decision was controversial and the revelation that it was made without widespread industry consultation was widely criticised as further damaging Labour’s relationship with the business community.
National Party leader Simon Bridges called the ban a "wrecking ball" for regional New Zealand.
Regional Development Minister Shane Jones allocated nearly $20 million in funding from the Provincial Growth Fund to Taranaki, but Bridges labelled the funding a "compensation package" which could not make up for the loss of high-paying oil and gas jobs. Rod Oram, writing for Newsroom Pro, cast doubt on some of the oil and gas industries claims about lost revenue and jobs.
A regulatory impact statement from MBIE reiterates the ministry’s opposition to the ban, saying it will cost the Government $7.9 billion in lost revenue between 2027 and 2050.
Woods has cast doubt on that figure, saying it relied on data from a GNS report, which cautioned readers about the limitations of its estimates of oil reserves.
A spokesperson for Woods also said MBIE’s figure ignored possible revenue generated from the 100,000 square kilometres already allocated under previous block offers, which could still be drilled.
MBIE advised Woods in early April that it considered “a ban on all future offshore petroleum exploration to run counter to a number of important public policy objectives”, largely because of lost revenue and possible increased emissions as gas was substituted for more harmful fossil fuels.