One Question Quiz
oil and gas exploration
oil and gas exploration

OPINIONPoliticsDecember 6, 2023

Why overturning the oil and gas ban is a fool’s errand

oil and gas exploration
oil and gas exploration

Danny Rood challenges the arguments in favour of allowing offshore oil and gas exploration in Aotearoa.

In the National and Act coalition agreement, a quick CTRL + F for “climate” will give you zero results. Not a jot. The National and NZ First agreement gives just one:

Ensure that climate change policies are aligned and do not undermine national energy security.

Climate change policies could be aligned to many things. The Paris Agreement. Emissions budgets. Irreversible heating. Unaffordable insurance. Alignment to misalignment. The national energy security line, however, is a very clear wink wink, nudge nudge, say no more to the oil and gas ban. A ban on a ban. A ban ban. And it’s a win for the lobbyists and those spouting talking points that often avoid scrutiny. So, let’s address some of the realities of this fascinating and essential part of the Aotearoa economy.

There are myriad talking points to look out for:

‘We still need oil and gas’

This is partially true, and somewhat a self-fulfilling prophecy. We still need energy! As outlined before, the need for fossil fuels and energy does not form a perfect circle Venn diagram. Once the ban is unbanned, I imagine any international oil and gas investor’s first question would be: won’t this policy change when the New Zealand government changes again? Investors and entities want certainty. They won’t have time for flip-flops. Even if the ban is overturned, we shouldn’t expect a plethora of petroleum executives knocking down the door. 

‘We support the 2050 Paris target, but…’

Under the Paris Agreement, we need to limit global warming to well below 2°C, with efforts to limit warming to 1.5°C. Significant emissions reductions are needed, in combination with many system changes, to achieve this goal. The Paris Agreement requires a 2030 target. Our Nationally Determined Contribution or NDC outlines this. Our target is a 41% gross emissions reduction by 2030 compared to 2005. If efforts to reach our 2030 target aren’t discussed or embraced, the 2050 line is the kicking of the Jerry can down an ever-congested road.

‘The ban means we had to import more coal from Indonesia, increasing our emissions’

Many say the ban resulted in us importing foreign energy, namely Indonesian coal, because we had missed out on extracting our own non-renewable resources. This rhetoric is flimsy. Firstly, the ban would reduce emissions in the medium-long term, not overnight or in the following years. Any ongoing exploration programme or existing producing fields weren’t affected, which is why we had a rig in our waters in 2022. Secondly, there are quite a few steps to finding oil. An operator would need to apply during a permit round. An operator is then awarded a permit, potential leads are worked up, seismic analysis and acquisition completed, a prospect defined and committed to, a drilling rig secured, and a well drilled. This is about a 10-year process for offshore drilling. And that’s just to find the stuff. Ban or no ban, we would have no additional energy from offshore hydrocarbons because of the length of time it takes to find, produce and distribute oil. 

And then there’s the chance of finding something commercially viable. Sure, you can have hydrocarbons appear in your well. But by the time you set up production infrastructure and transport that oil around, you need to make money. When it comes to oil and gas in New Zealand, offshore drilling in the last 15 years suggests that there is nothing commercial out there. Anadarko tried and failed, and they were the best offshore drillers in the game. We’ve tried wooing big oil before. Red carpet rolled out, legislations changed, beers shared and fine dining enjoyed. Hardly a free market and no royalty boost for the coffers, either. 

‘We need to focus on climate adaptation’

Climate adaptation is about altering our societies and economy to live with the effects of climate change. National deputy leader Nicola Willis outlined during the campaign that climate adaptation will be a focus of this government. But it’s not mentioned in the agreements once. By extension, climate adaptation can include market adaptation. That means embracing the change in the winds as renewable solutions become increasingly cheaper, not propping up old ideas in a sunset industry. Further proof the market is hardly free. 

Focusing on just adaptation is like making a bigger drain in your bathtub instead of easing the water coming out of the taps to ensure there’s no overflow. You do both, it’s not either/or. It would be smarter to focus on solar and wind. You don’t need to do seismic surveys, hire a rig, and hope someone gets beyond lucky with a commercially viable hydrocarbon discovery. The sun. The wind. I can see it out my window. This is the avenue to energy security and can help address the cost of living crisis these parties were elected to fix. Offshore wind is also missing from any agreement, despite it being a campaign promise from National.

Outlooks and outcomes

Merging parties’ short-sighted ideas and acquiring a terrible international reputation, just as Cop28 kicks off, isn’t fiscally prudent or common sense. National is meant to represent smart economic management, business enterprise and innovation. Act has got the back of consumers and taxpayers. New Zealand First’s mantras are common sense and having a fair go. And all three espouse chat around personal responsibility at the drop of a hat. Can these three parties honestly say those values ring true with this ban reversal? This makes the inevitable transition to a low-carbon economy harder and harsher for many workers. Their honest anxieties of providing for their whānau are being unfairly taken advantage of here.

Ultimately, this reversal is a waste of time and effort designed for short-term ostensible wins for the oil and gas sector. And they may not even come to pass. It is not aligned with specific outcomes. We can have a good chat about what a modern national energy strategy looks like. And we should! For oil and gas, that means how much less energy it will be producing in five-year intervals from 2025. No one is advocating to turn the taps off overnight (another strawman talking point). Outlining and promoting an exciting, modern energy strategy will help us reach many economic and national outcomes Christopher Luxon likes to remind us about.

Keep going!