Megan Woods has been forced to give oil and gas permit holders more time to arrange financing amid evidence her ban on new offshore exploration is deterring investment, National’s Energy and Resources spokesperson Jonathan Young says.

“Methanex is the second major natural gas consumer to halt new investment, putting on hold a $100 million expansion of its Taranaki plant. That follows Ballance Agri-Nutrient’s decision this year to shelve a billion-dollar rebuild of its Kapuni facility.

“Both these projects would have helped reduce greenhouse gas emissions but this Government’s ill-conceived ban is having a chilling effect on innovation and advances in technology that the Productivity Commission says should be part of New Zealand’s response to climate change.

“These sorts of projects have very long lead times and investors need to be sure they have certainty over gas supplies. Without certainty they will vote with their feet. National would overturn the ban, ensuring industry has room to meet the challenges of climate change.

“The Energy Minister’s agreement to relax the ‘drill or drop’ rules in exploration permits on a case-by-case basis is absolute evidence that the Government’s ban hurts investment in the oil and gas sector that contributes $2.5 billion a year to GDP.

“This comes after she unwittingly and recklessly restricted the flow of capital into the industry. The Government is now ramming through the ban against the advice of officials, at a potential cost to the economy of tens of billions of dollars, job losses, higher energy costs and with the risk it will actually increase global greenhouse gas emissions.

“The Energy Minister would have been wise to heed the recent comments of NZ Oil and Gas that the ban signalled to international investors that New Zealand is closed for business. She ignored them in the same way she has blocked her ears to many stakeholders in the sector.

“We have an incompetent and arrogant Government making decisions without advice, without understanding of investment cycles and without acknowledging New Zealand’s increased energy risk. It beggars belief the Government can claim to be a climate change leader.”

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