Saturday, 21 April 2018

Destructive Ignorance

Oil and Gas Exploration Ban is a Mistake

Jonathan Young MP

 I'm not disappointed – I'm angry!

A kick in the guts, a wrecking ball for the region, killing the golden goose. All these phrases express the emotional response to the Ardern-Peters Government's announcement to end new offshore oil and gas exploration. Without doubt more bad news is still to come as the Green Party and Greenpeace make onshore exploration their next target.

This decision was made with zero consultation with the petroleum industry and there lies the problem.  The Ardern-Peters' government's announcement to end new offshore oil and gas exploration is a wrecking ball for the Taranakli region, writes New Plymouth MP Jonathan Young.

Not only is it incredibly disrespectful to an industry that has supplied billions of dollars of revenue to the Government and the people of New Zealand, but it has meant that the Government has made a decision regarding the industry with little understanding of how it works.

The opportunity for a positive way forward gets lost in the disruption and destruction of business confidence they have created. The Government may think they have attacked the problem, but unfortunately, they have attacked the solution.

As National's Energy and Resources spokesperson I would support a transfer of knowledge, skills and investment into the greening of the petroleum industry rather than ending it.  Apart from 50 per cent of all oil produced being for environmentally benign purposes, we should continue to pursue the goal of utilising hydrocarbons as feedstock for ultra-low or zero emission fuels.

Research is already underway for this, such as methanol, and hydrogen. There is a tremendous amount of research taking place on improving engine and fuel efficiency. The petroleum sector has some of the smartest people in the country when it comes to understanding carbon and molecules. Utilising their knowledge and skills here and collaborating with other industry-based research is the smart thing to do.

The Ardern-Peters Government has made a significant misstep in their approach.
New Zealand has 10 years of known gas supply lefts. We haven't had a gas discovery for eight years. With existing exploration hoping to make a discovery, it has a 10-15% chance of success.

When a discovery is made, it will take a further ten years of development before gas is available for market. Just do the math.  Without considering any chilling effect on investment the Government's decision has created, we should get ready for a gasless future.

With every fifth day of our electricity generated from fossil fuels (mostly gas) – we have a problem. When electricity demand increases because of the growth of electric vehicles in New Zealand, we have a compounded problem. Wind and solar energy might contribute, but both are intermittent. This will require overbuild and capacity charging, leading to higher electricity prices. With gas possibly gone, and any shortfall in renewables, we're left with coal to keep our lights on. Emissions will likely rise rather than fall.

Considering New Zealand's contribution to world Green House Gas emissions is 0.17% of the total, our energy emissions (including electricity generation and transport) is 40 per cent of that 0.17 per cent.

If the petroleum industry was to completely disappear tomorrow, then our emissions profile will remain unchanged as we import crude for all our liquid fuels. What we sell overseas will be sold by someone else, as supply exceeds demand. There will be no change here both domestically or globally.

If we were able to replace half of our liquid fuel fleet with zero emission electric vehicles, we'd be down to 0.136 per cent of the world's emissions. The sobering truth is our reductions will get swallowed up by the massive increase of emissions in a growing and developing Asia. So, while we work hard to do our essential bit, world emissions increase for some time yet.

We ought to be realistic about being "world leaders" as James Shaw wants. Norway are world leaders, but they do that through giving all electric vehicles free electricity for life, free parking and exemption from any congestion taxes, arguably afforded through their wealth derived from oil production.

World emissions are set to increase for a while yet, which is why I think we must take a global and rational approach. We should find more gas and export it to Asia. We should encourage the industry rather than close it down. It's counter-intuitive, but it works!  Gas replacing coal is one of the key reasons why energy emissions stalled in their growth in 2014, 2015 and 2016 according to the International Energy Agency.

James Shaw has said no to that, because according to the Paris Accord, the market for gas is going to dry up and no one will need it. That's an unrealistic proposal. The IEA have said in 2050, 50 per cent of world energy will still be fossil fuel based.

It's time for Ardern-Peters Government to pull their head out of the sand and talk to the people who understand the challenge. Stop attacking the solution.

Jonathan Young is the National MP for New Plymouth

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