New Zealand may have just killed its oil industry

New Zealand may have just killed its oil industry

Ending new exploration permits for offshore oil and gas deposits uses the wrong tool for the right target, says the BusinessNZ Energy Council, a sub-group of Business New Zealand, the country's peak business lobby group.

Prime Minister Jacinda Ardern, who campaigned heavily on preventing climate change in the run-up to last year's tight election, said the decision was a responsible step and provided certainty for businesses and communities.

The decision will see existing permits retained but no new offshore ones issued as the country moves towards the carbon-free future the Government has touted.

"The oil and gas industry creates thousands of jobs, contributes $2.5 billion to the New Zealand economy and $500 million to the government in royalties each year", leader David Seymour said.

In total, there are 31 now active oil and gas exploration permits in New Zealand with nine of them being onshore. "These and other companies have for years pressured governments to suit themselves, and have actively sought to maintain the environmentally irresponsible fossil fuel production and very poor public policy on climate". "We're striking the right balance for New Zealand - we're protecting existing industry, and protecting future generations from climate change", she added. Taranaki Daily News quoted Energy and Resources spokesperson for the opposition party Jonathan Young as saying, "What will replace gas as the demand for more electricity rose with electric vehicles and we don't have enough renewables".

New Zealand Oil & Gas this week acquired a 25% interest in an onshore exploration opportunity in Taranaki, which will be drilled in the fourth quarter this year (subject to regulatory consents).

Mr Madgwick, and New Zealand Oil & Gas chief executive Andrew Jefferies both emphasised the decision sent a worrying message to domestic and worldwide investors, about New Zealand as a place to invest and create jobs.

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The National Party said the move was "economic vandalism".

"This decision is devoid of any rationale. New Zealand has stood up to one of the most powerful industries in the world", Norman said.

Ardern said that by signaling the eventual end to exploration, the government is giving the industry and gas users like Methanex Corp. and Fonterra Cooperative Group ample notice to develop new technologies and invest in fresh directions. "It certainly has nothing to do with climate change", he said. "These changes will simply shift production elsewhere in the world, not reduce emissions".

"We now have 31 live exploration permits, 22 of them offshore".

Angus Rodger, a research director at consultancy Wood Mackenzie, said New Zealand's move was "a bold step".

"Nobody's going to be losing their jobs overnight but in terms of the long-term outlook for those industries. people are going "my career doesn't actually have a future", he told Radio New Zealand.

"These companies and PEPANZ carry a huge load of responsibility for the delay in decarbonisation in New Zealand and the risks to our climate and environment".

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