INDEPENDENT NEWS

Urgent need to close loopholes in exploration ban

Published: Fri 19 Oct 2018 12:56 PM
Urgent need to close loopholes in the Government’s exploration ban legislation
Last Wednesday it was announced that Austrian oil company OMV had been granted a two-year extension to its exploration permit to ‘assess geological data’ in the Great Southern Basin off the Otago Coast before deciding whether and where to drill an exploratory well.
It’s known in the industry as a ‘drill or drop’ decision.
The announcement comes barely nine months after New Zealand Oil and Gas was granted a second extension for their Barque prospect off South Canterbury, ostensibly for further data analysis. The extension was granted by officials in record time over the Christmas holiday because the drill or drop deadline was in April. Market analysts point out that NZOG has been struggling to find a farm-in partner to share the costs of an exploratory well.
Both extensions appear to be examples of ‘gaming the system’ which FFARN warned about in its submission on the CMA (Petroleum) Amendment bill last Wednesday.
The ban and this bill could provide an incentive for oil companies to ramp up their exploration activities. An example of what some economists have termed the ‘green paradox’, where government climate policy measures spark accelerated emissions-producing behaviour from the petroleum companies.
At present 15 more exploration permits are facing drill or drop decisions in the next 18 months
Sections 35 and 36 of the CMA provide that the Minister may change a permit at any time under specified conditions. An exploration permit extension may only be granted in accordance with Section 35A for purposes of ‘appraisal of a discovery.’
According to the ODT (10 October 2018), OMV’s application letter stated the extension would enable the company to “become significantly better informed about the underlying geology before commencing drilling under the work programme. This reduces the prospect of unnecessary drilling taking place." That doesn’t appear to be grounds for an extension under the Act.
Minister Woods told Parliament she would treat extensions on a case by case. In practice decision-making is devolved to New Zealand Petroleum and Mining officials who are also responsible for promoting O development.
FFARN recommended to the Select Committee that if the Government is serious about phasing out fossil fuels, the regulations around extensions should be tightened by allowing oil companies only one extension for one year, placing the decision-making back in the hands of the Minister and adding a provision that the Minister be advised by an ‘independent expert’.
-- Ends

Next in New Zealand politics

Primary teachers vote for settlement
By: NZEI
Pike River: Weeks of work before team gets beyond 170 metres
By: RNZ
New report calls for four-year term, more MPs in Parliament
By: RNZ
Ban on smoking in cars with children passes first reading
By: RNZ
Fair Pay Agreements will make working life better
By: New Zealand Council of Trade Unions
Amy Adams to retire from politics at election
By: New Zealand National Party
Gordon Campbell on yesterday’s cosmetic banking reforms
By: Gordon Campbell
Police use of force following pursuit in Auckland
By: Independent Police Conduct Authority
Ministry response to NZEI Ballot Result
By: Ministry of Education
Primary teachers settle but principals reject
By: New Zealand National Party
Pike River Mine 30m - 170m drift examined
By: Pike River Recovery Agency
'Archaic' law allows multiple-property owners extra votes
By: RNZ
Parliament does well to separate smoking from vaping
By: Alt New Zealand
Fair Pay Agreements Better for Workers And Good Employers
By: Public Service Association
Transport workers support Fair Pay Agreements
By: Rail And Maritime Transport Union
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media