The 2018 ban on offshore oil and gas exploration is facing a repeal, with part of the Crown Minerals Amendment Bill due for its third reading in Parliament today.
A last-minute amendment passed on Tuesday means the Resources Minister and the Finance Minister would decide who pays for decommissioning of oil and gas fields.
In the last Budget, the government set aside $200 million over four years for co-investment into new gas fields.
The International Court of Justice said in last week’s non-binding opinion that countries could be held legally responsible for their greenhouse gas emissions.
The Science Media Centre asked experts to comment.
Dr Nathan John Cooper, Associate Professor of Law, University of Waikato, comments:
“Current debate in New Zealand’s Parliament on the Crown Minerals Amendment Bill should bear in mind last week’s ICJ Advisory Opinion on State Responsibility for climate change.
“Hon Shane Jones, Minister for Resources should be mindful that States have obligations under international law to ensure the protection of the climate system from anthropogenic greenhouse gas emissions, and that States are subject to legal consequences connected to these obligations where they have caused climate harm.
“Moreover, States are responsible for climate harm caused by actors under their jurisdiction or control. This ICJ advice should induce caution when reconsidering the onerous obligations of oil and gas companies operating in New Zealand.”
Conflict of interest statement: No conflicts of interest.
Dr Jen Purdie, Senior Research Fellow, Centre for Sustainability, University of Otago, comments:
“The government’s Crown Minerals Amendment Bill proposes re-opening New Zealand’s territorial waters to oil and gas exploration.
“This flies in the face of projections that global demand for oil will peak soon. The International Energy Agency (IEA) has predicted demand for oil will peak before 2030. A 2023 report by Shell projects fossil fuel use dropping rapidly in coming decades, while BP thinks oil demand for combustion has already peaked. Many large organisations think peak oil demand will happen this decade or the 2030s. But the progression from prospecting new oil and gas wells to exploration and mining can take decades. This new bill therefore just doesn’t add up.
“The IEA has stated we don’t need any new fossil fuel exploration or development, with enough projects already in existence or planned to meet global energy demand forecasts to 2050. New research agrees, saying governments around the world should stop issuing new oil, gas and coal licences.”
Weakening clean-up laws
“The government is also proposing weakening the law that requires oil and gas permit holders to pay for the decommissioning and clean-up of wells. This law was passed in 2021 in response to taxpayers having to pick up a NZ$400 million bill for decommissioning the Tui oil field after the financial collapse of the oil company.
“Weakening these laws re-opens the prospect of taxpayers paying for clean-up. The government may be weakening these laws to attract drilling interest, as many oil interests, including BP, project declining investment in new oil and gas infrastructure globally in coming decades, and the IEA’s World Energy Investment report notes an ongoing hesitancy about oil and gas investment comes partly from concerns about downward long-term demand projections.”
Natural gas
“New Zealand does not import natural gas, but our gas fields have been yielding less than forecast for some years. Increased maintenance drilling or limited new expansion of current gas fields for the next decade will help smooth the energy transition, alongside other measures to firm up intermittent renewable electricity.”
Invest in the energy transition
“New Zealand should be moving away from oil drilling and instead invest in the energy transition, including decarbonisation of industrial heat, subsidising low-emitting vehicles (and charging high emitters), better public transport and bike lanes, increased EV charging infrastructure, and “urban mining” (recycling) of batteries and other technology currently filling rubbish dumps.”
Fossil fuels MUST stay in the ground
“We’ve known for some time that remaining fossil fuels must stay in the ground to meet the Paris Agreement goal of keeping the world below 2°C above pre-industrial temperatures, and to enable us to continue to have a liveable planet.”
Conflict of interest statement: “I do occasional consulting work for various organisations in the energy industry.”
Jess Rutherford, PhD candidate in marine environmental sciences, University of Waikato, comments:
“In addition to being a major setback for New Zealand’s climate commitments and environmental protection, this bill clearly favors short-term gains- however minimal- that undermine long-term intergenerational environmental sustainability. It’s back to the 2008 industry and economic focus. It also fails to confront the existing undemocratic decision-making processes; instead, it gives more decision-making power solely to the minister.
“The reversal of the ban is in my view a regression in climate policy and conflicts with New Zealand’s climate commitments. It will particularly challenge its Net Zero 2050 target, which the country is already failing to meet. From a climate leadership perspective, it also undermines NZ’s credibility as a leader in climate action and sends a signal both nationally and internationally that NZ is flip-flopping on its long-term climate crisis planning.
“Regarding marine conservation, reopening offshore areas for fossil fuel extraction without adequate environmental protection risks further harm to biodiversity and ecosystems, and will most likely increase conflict. Some of the concerns I can see are the lack of comprehensive no-go zones for oil and gas within the EEZ; early permit decisions under the Act do not consider cumulative environmental impacts or any environmental factors. Oil and gas activities can take place anywhere in the EEZ, except in seamount closure areas.
“One of the biggest issues with the Act and the amendment is the lack of public consultation and the undemocratic processes. There is still no public engagement required in this Act, specifically around the early decision of the block offer, which is to go to the priority and time model, where companies can also apply for fast-track approvals. This also has the potential to completely limit meaningful dialogue, especially with iwi and hapu – essentially potentiating a situation that goes against treaty principles and obligations of the Crown. Resource decisions (in my perspective) should involve public engagement and not be left to a select few or, in this case, ministerial discretion.
“The way the changes read in the amendment, it appears to give the resource minister extensive, unchecked power. Additionally, reverting the purpose statement of the Act to’ promote prospecting for, exploration for, and mining of Crown-owned minerals for the benefit of New Zealand’ implies that social license is presumed, favouring extraction activities. This effectively normalises resource extraction as the default approach, rather than requiring a broader assessment of environmental and socioecological cost to New Zealanders and future generations. Loomis 2017 and Bond et al (2023) underscore this ‘normalising a common sense attitude to extraction.’
“Although I haven’t discussed it extensively, the changes to the decommissioning amendments create significant loopholes for industry. From my understanding, when permits are transferred between companies, there is no requirement for the new permit holder to demonstrate social license or undergo proper vetting processes. This means that the consent is attached to the permits, regardless of the incoming company’s track record. Also, the financial provisions around decommissioning seem to lack clarity, which should raise concerns about the companies’ ability to fund the decommissioning. However, I am not specifically up to speed on this so could have misread this.
“If I were to submit something, I would suggest not approving this bill. Instead, the government should focus on developing legislation that prioritises a strong climate commitment, giving New Zealand a better chance to achieve and commit to the Net Zero 2050 targets. Additionally, I believe the key issue is to introduce broader engagement and consultation in the early permit process under this Act, and before granting any further offshore permits, to first establish specific no-go oil and gas zones. They should be moving more towards marine spatial planning in the EEZ or at least within potential prospecting regions. There need to be more marine protected areas in the EEZ.
“Also, the issue of seismic surveying needs to be addressed. Is it really necessary to continue, or should there be better laws around data sharing from industry? Australia’s recent acreage releases have banned any further seismic companies from acquiring existing seismic data if needed.
“And finally, another issue is that the decision-making power of the minister is very clear in these amendments. It seems they have even more discretionary power. One of the suggestions I was going to recommend in my discussion was to make the decision-making authority broader, perhaps involving some form of joint decision-making board (maybe other agencies like DOC), because, as it currently stands, the decision rests solely with a single minister.”
Conflict of interest statement: No conflicts of interest.