The Prime Minister says the Government needs to weigh-up the benefits and costs to the economy and the environment when considering the future of oil and gas exploration.
In her weekly post-cabinet press conference on Monday afternoon Jacinda Ardern attempted to clarify comments she made earlier in the day.
On Monday morning, she met with Greenpeace protesters outside Parliament to accept a petition calling for the end of oil exploration.
Standing in front of posters of Labour Prime Ministers past, Ardern revealed the Government was “actively considering” Greenpeace’s call.
The Government needs time to consider the proposal, she said, “but not much.”
“Just enough that we can make sure that we factor in everything that you would ask us to factor in.”
She later clarified this meant the Government would be assessing future block offers for exploration.
Under the Government’s programme of block offers, successful applicants are granted exploration permits for 10-15 years to search for oil and gas in specifically allocated blocks.
At the press conference later in the day, Ardern was downplaying the significance of the comments.
She says at this time of year, every Energy Minister considers the future of block offers in regards to what will and won’t be considered.
“What I’m pointing out is that every government, at around this time of year, actively considers how it will manage block offers, that’s what we’re doing.”
She says no decisions have been made yet.
“At the moment, we are working on the way we will manage future block offers and I need to allow cabinet colleagues to factor in environmental impacts, economic impacts and our focus on a just transition.”
Ardern pointed out a number of times that the Government will be focusing on assessing future block offers.
But what about current block offers?
“We have to keep in mind that there are contractual obligations that the Crown has entered into and there is a cost to moving away from those,” she says.
Progress on US tariff exemption?
Meanwhile, Ardern says she has written to US President Donald Trump to ask for an exemption to his administration’s steel and aluminium tariffs.
“[The letter] outlines some of what we understand to be the existing areas of concern for the US and what has driven their position of those tariffs and some of the things that would be considered in deciding whether or not any country would be exempt.”
She is awaiting a response.
The former head of the World Trade Organisation (WTO) and United Nations Conference on Trade and Development (UNCTAD), Supachai Panitchpakdi, says US threats to impose tariffs on its steel and aluminium imports shouldn't hurt New Zealand.
44 Comments
What have the Oil and Gas ever done for us? Given Ardern is yet to establish if drinks were alcoholic at a notorious Young Labour camp I'm not holding my breath on the oil and gas analysis.
http://www.newshub.co.nz/home/shows/2018/03/mistakes-have-been-made-ard…
For those so concerned about oil & gas exploration - why wait ?
You can personally give up air travel, electricity on a cold winter night when the marginal generator is gas, gasoline and diesel for you car. No more plastics.
Not sure how our exports and imports will travel on shipping that will be driven by oil into the foreseeable future.
Your nirvana can arrive tomorrow - just do it as they say and please advise how it all works out.
Jacinda Ardern is truly a genius. She has figured out a ground-breaking solution to global warming; she beat some of the brightest minds of our generation to it. Ban oil exploration - so simple. Why didn't we think of this before?
Jacinda is the type of leader who arrives at a 'Ban Oil' march in a motorcade of oil-guzzling vehicles.
I think that's called "governing" and "incentivising" - smart countries do it such as Germany and China. They are doing quite well BTW.
The track record of regulations is quite good:
- ending child labour
- banning slavery
- food safety standards
- clean air & water regulations
- vehicle safety
- air traffic control
- building codes
- 8 hour working day
- consumer rights
- gun control
Or you can live in the anarchic corporate oligarchy that is now the US....
I do not deny the long-term benefits of banning fossil fuel exploration - our planet will thank us for it. However, there isn't a plan to reduce the domestic demand for oil in the short run. The ban will increase our reliance on imported fuel, which will push up its landed cost.
Our working class spends the highest proportion of their income on fuel and will be most affected by any such surge in prices. Ironically, most of Labour's policies hurt the demographic it pretends to care about the most.
I would say the track record is a bit mixed to say the least - on all the things you mentioned they are still problems. For example, there are more slaves today then in any point in human history.
It also may come as a surprise to you that the US is a far more regulated economy than NZ is.
I'm not waiting. I already drive an EV and intend to invest in solar PV for my house. That should augment quite nicely the ~85% electricity from renewables in NZ already, with lots more wind & geothermal waiting to be consented once Huntly dies a natural death.
Pohukura gas fields is already on the way out and unless you're an advocate for polluting our aquifers and causing earthquakes - aka fracking - we should allow market forces to determine where the energy dollar is best invested - it won't be coal.
Leave it in the ground. It's better there and it's not like our oil only gets used by New Zealanders. It gets sold on the international market at international rates. No problem with plastics - that's only about 5% of oil use anyway. So, overall - nothing to see here?
Some confused logic here (very common mind you) ... i think you might want to have a read of this
https://surplusenergyeconomics.files.wordpress.com/2018/03/surplus-ener…
More nonsense on energy recovery vs energy available.
Makes the classic mistake of leaving out a price variable.
If I burn 2 x $ 5 barrels of oil in a tar sand operation to make 1 barrel of $ 50 oil - the it is perfectly rational - yet the energy consumed is greater than that produced so the ratio is negative.
Yet tar sands go on producing as they will for many more years.
ECoE is not the full story on net energy available for the economy - but the trend highlights that we must burn more to produce the same net output ... then add in that the financial system demands a continual climb in NET energy availability (in a form suitable for existing infrastructure) and we've got problems
There is sufficient spent nuclear fuel in the UK if processed through breeder reactors to provide literally thousands of years of electricity at their current demand.
There is no energy shortage or ever will be - just the will to make intelligent trade-offs.
Just remember western world nuclear power has not yet killed a single person yet we happily knock of maybe 30,000 per annum in the US alone from coal fired pollution.
How rational is that ?
Not for France that runs an intelligent re-processing program.
Their total final storage - and yes they are long-lasting actinide nasties - but only occupy a couple of football fields in area which seems a perfectly acceptable trade-off for over 50 years of clean dependable electrical output.
We can easily manufacture more oil and gas from limestone - at a cost - with no net CO2 using renewable energy for liquid transport fuels if that's what's required.
I am also reading that fracking only works with the right geology. So a) does NZ have oil shales in abundance? not really, are they the right type?
Meanwhile I think we are fortunate that we as voters have a lot more say in local and national Govn about restricting the deterioration of our country to the greedy who wont pay the true and full costs of the damage they cause in pursuit of short term profit.
"leave it in the ground" we are peak oil and everyone including the Green's are deluded or in denial that once oil production drops globally our "life styles" will be hugely impacted.
"solar panels for my house" is IMHO an excellent idea medium and long term if you are cash rich. Right now you get 2.5%? net from a deposit account with at quite a risk of an OBR losing much of it.. So for me solar panels are pretty close to a zero risk rate of return. Unlike a deposit account, or shares or any investment as the systek is buggered (except maybe Govn bonds and they also pay chicken feed). I am eriously considering doing it myself at the moment but it takes cash on hand really, debt financing it doesnt work and carries risk.
Solar during the day and still connected to the grid !
All that does is increase the hydro spill or storage during the day which it is very hard to imagine delivers any net environmental benefit - then use the gas powered generators at night.
The problem arises because the 85% renewables is an average. You need to think at the margin and in basically a hydro and geo-thermal powered system solar rooftop and grid connect makes no sense from an economic or environmental perspective in our system.
We are very fortunate to have such a significant hydro and geothermal resource in relation to our economy.
We should use it.
It is relatively easy to forestall an iceage with smallish quantities of power or materials, sprinkle coal dust on icecaps, pump cold sea water from depths to surface in right locations, cover deserts in low albedo materials or greenhouses etc. But fossil fuels are unnecessary, fissionable elements in accessible earths crust can provide power for billions of years at current power consumption rates.
"jobs" Labour's problem is and always has been it is wedded to growth as that provides more jobs. Hence in the election before last we saw a "just" environmental policy/stance from labour, ie if its jobs of environment, jobs win every time. In this respect National and Labour differ by little its just who gets most of the profit from the exploitation at the end of the day.
Quite apt,
https://climatecrocks.com/2018/03/11/save-americas-vhs-industry/
At the end of the day its really simple, no one is prepared to pay the cost of doing less, or setting up to de-drow and de-populate. Even the Green's rank and file mostly dont get it, mainly I think because most of them are really "water melons" when it comes down to it. Yes it can be seen as a derogatory term but very apt.
Making the President of Indonesia (a population of 261 million) wait while she addresses a small crowd handing over a petition with a meagre 45,000 signatures shows she's not up to the job or very clever.
Standing on the steps of parliament feeding the chooks a story about stopping oil exploration takes the heat off the Labour camp controversy.
Ardern is backpedaling on the emphatic endorsement of Greenpeace's position which receiving their petition on the steps of parliament sent. Underscored by her decision to court the press in front of their banner demanding all exploration ends.
Now, so we are invited to believe, the event was simply to deliver an innocuous message that the Govt will reconsider all options. We should apparently read nothing into the dramatic gesture nor the president of the most populous south Asian nation being put on hold while this routine announcement was made.
Nothing at all to do with political posturing over her BFF Green party mates feeling miffed about Winston Petersofski being teachers pet. Nor a continuation of the poor judgment calls by an inexperienced political leadership.
Between that effort and Kelvin Davis this morning I wistfully remembered the Clark years. I couldn't stand her either but at least she was across the detail and you could respect her holding the position of PM. This lot are feckless and I sense the HMNZS NZ is rudderless. I know the Indonesian culture well. They will smile all the while taking it as a snub. Taxinda has put the relationship back years if not decades. They don't take a lack of respect well at all.
"Ardern told the crowd she was supposed to be attending a state visit but had elected to receive the petition because of its importance. Behind her the Parliament flagpole was flying the Indonesian flag to mark the visit of President Joko Widodo".
So receiving a petition from Greenpeace is more important than meeting the President of Indonesia.
... yes ... that was exceedingly ill mannered of her to fob off the Indonesian President whilst she wandered off to address a rabble of just 45 Greenpeace advocates ...
The oil and gas around NZ waters are too deep and in too small quantities to be of much interest to drillers ... why else has Shell cleared off ... .. exploration will grind to a halt anyway ...
I have had an EV for two years now and love it. The cost to run it is negligible compared to a petrol car. Taking into account the cost of the car, financially I am better off and continue to be so as the cost of insurance declines the older the car gets. Last year I spent $10,000 on solar panels and the return there is around 8.5% and is, of course, not taxable. The only comment I would make is that I got my panels in May and was quite sure I had been sold a pig in a poke until September when the change in my electricity bill from the year before was dramatic. It continues to be so. I was told to wait a year before judging them and that was good advice. The only adverse comment I have got was ‘how long will it take to get your money back’. I can’t see the logic in that. Nobody expects to get their money back when they buy a sofa, a table or a computer nor do they expect to get a return on the money spent for those things but with solar panels you do.
A typical car owner pays ~$1000 a year in fuel/RUC taxes while you pay nothing, but when EV's become more common they will inevitably be taxed the same way. EV's have a bright future, and I expect they will almost entirely replace IC engines within 30 years, but the economics are not quite there yet.
EV's are well below critical mass, and suffer from three - presently quite crippling - practical disadvantages:
- Range limits. Few NZ-consumer-affordable EV's - say, under $40K - have a range of more than 200 km. That's fine for pottering around town, but useless for trips. Christchurch to West Coast is 250kms, with vertical ascents totalling around 2 km's into the bargain.
- Charging infrastructure is sparse and expensive to install. Particularly fast-charge. It will get better but slowly. And it will rapidly move to a user-pays mode, just like liquid fuels. In remote spots on the tourist trail such as Haast, the chargers will be diesel-driven gensets....
- Forget about towing, heavy loads, off-road/gravel/back country or many pax, on those road trips. They eat kWh like yer would not believe. Real-life: neighbour (Mk I Leaf) and I picked up a 500 Kg machine from a client about 20 k's away, on the flat, with a small trailer. Round trip was 40 km, had 10km range left as I backed it into the shed...Phew.
It adds up to Intense Range Anxiety. And to add spice to the mix, EV manufacturers have not even standardised on charging plug hardware, so yer gets to carry a Blue Commando-to-your vehicle-du-jour heavy-duty charging lead in the fond hope that a caravan park will, for a Modest Fee, let you recharge at a (low) powered site, somewhere out in the sticks. Such are the joys of Pioneering....
To be sure, it will change. But it will take decades.
Or car companies will pull their heads out of their arses and adopt standardised swappable batteries. In which case their economics and convenience would come close to matching IC cars in very short order. But I'm not holding my breath for such sense to prevail in short term.
Also consider that you can buy a perfectly serviceable and functional car for $20-30k, but people routinely pay 2-5x that for fashion reasons. EV's are well within the cost range of current fashion cars.
Tesla appears to have batteries down to about NZD $15k for a 500km range. so a $30k, 500km range car is now possible from the likes of Toyota or VAG. IC engine cars cost around $10/100km in fuel, with about $6-7 of that being tax, and once EVs are taxed equivalently for road use they will probably cost (oops edit) ~$10-11/100km for electricity+tax.
EV's lack some utility, but are very close to cost competitive with IC engine cars, and will likely be forced upon us for political fashion reasons without too much extra cost or inconvenience over coming decade or two.
Or car companies will pull their heads out of their arses and adopt standardised swappable batteries. In which case their economics and convenience would come close to matching IC cars in very short order. But I'm not holding my breath for such sense to prevail in short term.
Not going to happen in this decade or the next, and pretty doubtful for the decade after that. A nissan leaf doesn't need a 400V 1500A capable battery like a tesla P100D does, and one uses liquid cooling, and one doesn't actively manage the battery temp at all. You could put one standardised sized module in a Leaf and 4 in a Tesla, but you've just added anotehr 2 dozen connectors that are all a point of possible failure. Add in the packaging restrictions and limitations on design you've created and it become an unmanageable nightmare of an idea.
Most suburban families are a two (or more) car entity these days, in the majority of cases one of those cars could be substituted with an EV without creating any practical hardship. Use the ICE for visiting the rellies in the sticks, use the EV for Mum (or dad #2, gotta be PC) to drop the rugrats/furbabies at school/doggo daycare), do the shopping and the trip to work. The ICE can tow the boat or the concrete mixer. Overnight charge at home.
But yes, we are still a long way from the average family being able to get away with only EVs in the driveway.
Both of these arguments are flawed.
1. A major issue with EV’s (other than range, battery disposal etc.) is there is currently an exemption on road user charges until 2021. A lot of cost of petrol is taxes to pay for road repairs etc. if everyone drove EVs today there would have to be road user miles similar to a diesel car to pay for road repairs etc. which would negatively impact the economics. I believe it will still happen (with battery technology) but everyone forgets that we have to pay for pot hole repairs.
2. Solar panels. Again I like them but you have an alternative called buying off the grid which is already 85% renewable. So it’s a capital project that has an alternative (unlike a couch) because your alternative would be to buy off the grid at a lower cost with no capital outlay. Versus the capital investment cost of installing the panels - hence why you want your money back.
It’s not really that simple to say that the government can just ban exploration. They have entered into contracts that they have to honor or they will be in breach of contract and risk litigation (at tax payer expense). They can however stop putting any new exploration blocks up for auction but it will take decades to unwind the existing petroleum permits as fields are depleted. But even if they do the point is pretty much mute - energy prices are so low that no one is really “exploring” due to poor economics - its all development drilling in the US shales and OPEC production. So really Adern can stop new blocks from being offered to make a political point but it’s really business as usual. And now if you don’t know now you know...
The govt can pass any law it wants, and stomp all over existing contracts at will rendering them null and void. Though in practice they tend to try to avoid screwing over existing owners of assets (except when the owners are small weak and electorally irrelevant, like when they expropriated ownership of all green stone from a few west coasters to hand it to Ngai Tahu)
Energy projects can run into the billions of dollars. Not exactly ticky tacky. Higher risk of downside in stomping on the contracts. Also doesn’t really give much of an appetite for future large international investment in any type of project when your political risk involves the government shutting your projects down after contracts are signed. Not a long term value building focus for an isolated country in my opinion
Virtue signalling at its stupidest. Greenpeace: Lets displace the oil exploration and production to somewhere else on the planet with worse environmental protection policies, despotic/oppressive/misogynistic government and an urge to murder millions or build up large nuclear armed military forces, and we'll pay them to prop up their contribution to global cultural 'vibrancy'. Just so long as they ship all that tasty oil to us and we can't see the bad stuff it enables happening in front of us. If there is a massive and pointless hit to NZ's economy in the process then we give no shits, just please please don't point out our hypocrisy in this.
Greens+Labour have been very busy with their international junkets of late huh? ~1000L for an economy return trip to US or Asia, more like 2000L for business class. I bet they weren't travelling economy.
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