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Petroleum Conference - headline comments

By Neil Ritchie

In a strange way, the first speaker at the 2018 New Zealand Petroleum Conference, held in Wellington last week, summed up the overall mood of the event, talking about positives and negatives, caution and commitment, for the future of oil and gas in this country.

“Maori are the true stakeholders . . . Maori are strongly opposed to oil and gas . . . our dream would be to have no need for oil and gas in New Zealand,” Maori woman Mary-Jane Waru told delegates at the conference breakfast.

“We are the tangata whenua of the land and the ocean but (the industry) needs to respect the tangata whenua, despite our (Maori) objections.”

And she urged the oil and gas industry to “consult . . . keep in touch”.

But Maori recognised the need for some future oil and gas exploration and development, conceding petroleum still had a future, albeit a limited one, the trained Marine Mammal Observer (MMO) added. For several years the Government has required MMOs to be aboard any seismic vessel operating in New Zealand waters.

“So we do not think it’s time to cast this industry aside.”

And she also said: “We have to put an end to ‘the myths of Greenpeace’ . . . ‘all the protest, all the conflict, is the biggest barrier  ... protestors do not care’.”

She urged the petroleum industry to be honest, to respect the views of others, and to be an industry known for its integrity.

Petroleum and Exploration and Production of New Zealand (PEPANZ) chief executive Cameron Madgwick said at the conference that PEPANZ was aware of the need for the organisation to play its part in addressing climate change, particularly in New Zealand, while also playing a part in providing for the energy needs of this country.

PEPANZ was also helping, to a much lesser extent, overseas countries provide for the energy needs of their countries (through the export of Kiwi oil, condensate (light oil) and methanol), as well as assisting these countries lower their carbon emissions.

“We are ‘up for it’,” he said regarding his organisation’s ability to help fight climate change while also helping provide for the energy needs of New Zealand.

However, Energy and Resources Minister Megan Woods refused to be drawn on when or even if the Labour-led Government would announce any changes to its previously annual blocks offer, allocating new exploration permits. But she did say “a multi-party approach” would be taken.

“(Prime Minister) Jacinda (Ardern) will do that (announce any changes to the Crown Minerals Act) in a few weeks.”

Using the word ‘transition’ 24 times in her speech, she said there would be no abrupt changes but a clear and well managed transition to a totally renewable energy economy and that this would be done over ‘10 and 20 and 30-year timelines’. And she reassured delegates that there would be no changes to existing petroleum exploration or mining permits.

“We know we have 10 years or so of natural gas consented for drilling, and potentially many more years that could be discovered under existing exploration permits. Some of these permits run as late as 2046.”

However, some delegates wondered how the process of changing existing exploration licences into “new” mining permits would go in the event of new commercial finds of oil and/or gas.

Woods declined to comment on specifics but said the Government was committed to plans to have a carbon neutral economy by 2050. This included reaching 100 percent renewable electricity by 2035. At present, renewable electricity generation -- from such sources as hydro, geothermal and wind -- accounts for more than 80 percent of total power production.

Madgwick said that although the industry had yet to be fully consulted over any proposed changes to the blocks offer and/or permit changes, PEPANZ recognised this was a long-term process. “Our members, and the industry, are very keen to understand the role that we will have in any transition to a net zero emissions economy,” he said.

Several delegates focused on the future of gas as an export commodity, with veteran oilie and Greymouth Petroleum chief executive Mark Dunphy being blunt with his question.

 “My company supplies gas to people who manufacture sugar, glass, wood products, fertiliser, many other core industries that I think help keep New Zealand competitive. I’m hoping this Labour Government will be very focused on the economics to the consumer when it considers changes to this area.”

Woods’ responses were again deflections, rather than answers, as she repeatedly referred to the looming announcement from the Prime Minister on the future of new exploration permits.

Protestors tried, unsuccessfully, to keep delegates outside of the TSB Arena and some later thumped on the arena’s walls trying to disrupt the event. There were also chants of “shame, shame”, which caused fellow veteran oilie and New Zealand Energy chairman James Willis to tell delegates “we need to change that perception”.

New Zealand Petroleum and Minerals manager Josh Adams pointed out that under the Crown Minerals Act the Government was “duty bound” to encourage the energy industry, be that oil and gas, hydro, geothermal or the fledgling hydrogen industry.

He also stressed the importance of oil and gas to the country.

During 2008-09, the Government collected a total of $NZ543 million through the Energy Resources Levy and Royalties – the zenith. However, that had dropped to a nadir of only $NZ184 million during 2016-17.

Overall, delegates at the conference – with its theme Poised for Action and Ready for Growth were cautiously optimistic about the short-term future of their industry.

 As one said: “I thought the event was good and I got to some good presentations. Networking was good too . . . overall I would give the conference a solid seven out of ten.”