A supplementary order paper from Green MP Gareth Hughes threatens to rip the scab off the Government’s contentious ban on new offshore oil and gas exploration.
The Government announced an end to the issuing of exploration permits for offshore oil and gas exploration in April.
The ban did not affect existing permit holders, who were free to continue extracting oil and gas.
But as backlash mounted against the ban, the Government granted a significant concession to exploration companies.
Under the existing “use it or lose it” rules, companies that held an exploration permit would see their permit expire after four years if they had not started drilling. But in September, Energy Minister Megan Woods removed this requirement, meaning the 28 companies with unused exploration permits face no pressure to begin exploring.
Hughes has used a supplementary order paper (SOP) to try to overturn Woods’ decision. An SOP allows MPs to amend legislation that is currently before the House.
But the proposal has come at an awkward time for the Government.
A perfect storm of catastrophes has exposed just how reliant New Zealand is on gas. Unseasonably cold weather and low water levels at the South Island’s hydro-lakes has meant electricity generators have had to use gas and coal.
Unfortunately, two outages at the Pohokura gas field and essential maintenance on the Maui pipeline has meant New Zealand’s gas resources haven’t been ready to pick up the slack left by depleted hydro-lakes.
This has sent wholesale electricity prices soaring .The average wholesale price for most of October was $300 per MWh. Last October the average was just $102 per MWh.
This brief glimpse at what a life without gas holds for New Zealand means the Government is likely to continue treading softly when it comes to phasing out oil and gas.
The SOP is unlikely to get support from Labour and New Zealand First when it comes up for debate on Tuesday.
Hughes says the loophole means offshore drilling could continue indefinitely, defeating the purpose of the ban. He has called on Labour and New Zealand First to back him.
“The whole point of ending future offshore permits was to ensure a smooth transition away from fossil fuels. To extend existing permits defeats the purpose,” he said.
