The Environment Committee has examined the Crown Minerals (Petroleum) Amendment Bill and recommends by majority that it be passed with the amendments shown.

The Crown Minerals (Petroleum) Amendment Bill seeks to amend the Crown Minerals Act 1991. The amendments would give effect to the Government’s decision to stop the granting of new offshore petroleum permits and to limit new onshore petroleum permits to Taranaki. This bill is one of several initiatives that seek to aid New Zealand’s transition to a low-carbon economy in line with the country’s international commitments.

The amendments we propose are mostly minor changes intended to help make the bill clearer.

Many submitters expressed support for the bill, noting it is an overdue first step away from reliance on fossil fuels. The majority of these submitters suggested that the bill should go even further, and advocated a complete ban on all permits. Those supporting the bill submitted that it:

• would help develop alternative energy sources

• shows leadership in the international community

• is in line with New Zealand’s international commitments

• would support greater climate change action for the benefit of future generations.

These submitters also commented that the Minister’s discretion to extend the duration or area of existing permits should be limited.

A number of submitters requested that petroleum permits should not be granted over national parks. The committee notes that new provisions around accessing Taranaki conservation land for new petroleum permits are intended to make access more restricted.

Many submitters were also opposed to the bill. They expressed concern about how it would affect the New Zealand economy. They commented that there are no viable low-emission energy alternatives to oil and gas, and that New Zealand’s existing natural gas reserves equate to only about 10 years of demand. Part of this concern was a view that there is no overarching plan to support New Zealand in its transition to a low-carbon economy. Likewise, submitters expressed concern that the bill could affect the cost of living if future energy supplies are constrained or if reliance on international sources of energy increases.

These submitters also commented that:

• the impact on climate change would not be substantial

• the impact on Taranaki’s economy would be disproportionate to the rest of the economy

• the bill could deter international investors.

Some submitters specifically discussed the importance of petrochemicals as vital ingredients in many everyday items. They commented that the demand for methanol is growing internationally, by about 4 to 5 percent a year, and that there is currently no replacement for it. They expressed concern that this bill would limit the continued use of methanol which they see as enabling a low-carbon economy.

The National Party strongly oppose the Government’s policy and process at every level. We believe it is essential to reduce emissions but see that the Government have shown great negligence to proper process around developing policy and progressing it for the betterment of New Zealand. The National Party ascribe to the following steps in addressing the issues of climate change and the hydrocarbon sector’s involvement in that goal:

• We will reverse the Government’s decision to ban new offshore exploration as we believe it is poorly planned, will not achieve emission reductions, but potentially increase them.

• We will consult with the sector to see a planned, effective and smooth reduction of emissions to agreed levels, technology led and economically sound with definite environmental and economic outcomes.

• We will support advanced low or zero emission fuels as part of the mix of transport in New Zealand, in areas where battery or other technology is not suitable, with natural gas being the optimum feedstock for these advanced fuels.

• We will reach out to build linkages with significant countries and companies who are leading R&D in advanced fuels to ensure we are pursuing best practice and support further R&D in New Zealand.

• We will work to advance Resource Management Act (RMA) and Exclusive Economic Zone (EEZ) reform to enable Carbon Capture and Storage (CCS) with the intention of keeping more carbon in the ground.

• We will collaborate to develop a cross sector Energy Strategy aimed at increasing renewables, reducing emissions, managing energy costs, and maintaining energy security.

• We will strive to protect the economy, firm investment certainty, retain skilled people and minimise social disruption.

• We will work to diversify the Taranaki economy alongside supporting the petrochemical industry.

We believe this bill is a retrograde step for the New Zealand economy, the Taranaki region, and our broader climate change objectives.