New Zealand halts new offshore oil, gas exploration permits

The New Zealand government has made the surprise announcement that it will not grant any new permits for offshore oil and gas exploration.

The Labor government of Prime Minister Jacinda Ardern said the move would not be retrospective. The country’s 22 existing offshore exploration permits along with any discoveries made in them could still lead to the granting of production licenses of up to 40 years duration.

Ardern said the decision was a responsible step that provided certainty for businesses and communities.

“We are striking the right balance for New Zealand,” she said. “We’re protecting existing industry and protecting future generations from climate change.”

Ardern campaigned strongly on the prevention of climate change during the run-up to last year’s national election.

Environmental groups have welcomed the move, branding it a major step forward for New Zealand and a landmark moment in the transition to a clean-energy economy.

However there has also been vocal opposition to the move. The country’s opposition energy spokesman, Jonathan Young, accused Ardern of “economic vandalism.” He said natural gas helped ensure New Zealand’s electricity supply and when existing reserves run out in a decade’s time, the country would be forced to import emissions-heavy alternatives like coal.

“The decision is devoid of any rationale and certainly has nothing to do with climate change,” he added.

Industry lobby group Petroleum Exploration & Production NZ (PEPANZ) admitted it had been blindsided by the announcement and had not been consulted by the government.

PEPANZ Chief Executive Cameron Madwick said that a well-managed trading scheme was the way to reduce New Zealand’s emissions, not arbitrarily banning certain fuel types.

New Zealand currently has a total of 31 active oil and gas exploration permits—22 offshore and 9 onshore.

In the past, the country has held an annual tender process to award permits, mostly in the Taranaki basin region of the north island. However, industry interest has fallen recently due to low global oil prices. Ten new permits were granted in 2013, but only one in 2017.