Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Opportune Time to End Petroleum Industry Subsidies

Opportune Time for the New Government to End Petroleum Industry Subsidies

"A new study has found that taxpayer support for the New Zealand oil and gas industry has doubled under the National government. In 2009 subsidies of all kinds were $40.5 million but that increased to $87.6 million by this year, a more than 100% increase."

Internationally, governments provide more than $US775 billion in subsidies annually to support fossil fuel industries according to the IMF. The UN and the insurance industry have called for abolishing state subsidies to help mitigate climate change impacts and speed the transition to a global clean energy economy.

The author of the study, economic anthropologist Dr Terrence Loomis, said successive governments had been gradually ratcheting up industry support over the past couple of decades.

But “when National came in in 2009 with the aim of boosting oil and gas exports from $3 million to $30 million by 2025, subsidies really took off.”

The study builds on previous research by WWF-New Zealand in 2013.

National consistently maintained the government did not ‘subsidise’ petroleum exploration, production or consumption, and was part of an intergovernmental group pushing for subsidy reform. Dr Loomis said “the Government was hiding behind a technical definition of a ‘subsidy’ and misleading the public.”

The latest study documented a wide range of production, consumption and general support to incentivise and benefit the New Zealand oil and gas industry.

In spite of government efforts, the New Zealand industry was in trouble and it looked like a protracted retrenchment. Royalties are down 70% over the past seven years, few new permits are awarded annually, 71% of all permit contracts have been cancelled, and the industry is cutting capex and laying off staff. Some energy commentators suggest this is not a typical boom-and-bust cycle, but a sign the industry globally has entered terminal decline.

Industry representatives and PEPANZ offer the false hope of a ‘game-changing’ discovery (see RNZ 30 Oct 2017 ‘Gas field prospect could be a game-changer’. But international energy analysts predict increasing volatility in oil and gas markets and a much more rapid shift to renewables than initially anticipated. Investment firms are getting out of fossil fuels because of poor returns and the risk of ‘stranded assets’ from global action to address climate change. If there were a major discovery in New Zealand, the chances are it won’t be commercially viable given the rapid changes occurring in the global energy scene. The government could end up spending billions supporting regional infrastructure development just to have the whole project fall over.

“New Zealand’s future is with clean energy, and the sooner we transition to it the better,” said Dr Loomis.

With a new incoming Government committed to addressing climate change and phasing out fossil fuel dependency, Dr Loomis said this seemed like an opportune time to review the subsidies regime.

“This report estimates that at least $65 million in subsidies could be redirected to initiatives such as heavy transport electric conversion tax incentives and EV infrastructure development, as Norway did.”

Full text of the study:

http://www.terrenceloomis.ac.nz/uploads/5/3/3/3/5333337/govt_subsidies_update_report__2017-2.pdf


ENDS


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Campbell on: the local body election result in Wellington

For obvious reasons, politics is more of a big deal in the capital city than anywhere else in the country. Even so, fewer than four in ten eligible voters bothered to vote in Saturday’s local body elections in Wellington (turnout 39.66%).

Even less was felt to be at stake this time around than in 2016, when 45% of the electorate voted Justin Lester into the mayoralty.

To put it mildly, the Lester-led Council failed to live up to expectations. Lester will be remembered mainly for the fact that somehow, he managed to lose this election. . More>>

 
 

Could Do Better: Post-Sroubek Review Of Deportation Info

Ms Tremain acknowledges that the review highlighted some aspects of the process that can be improved and makes five main recommendations to strengthen the existing processes for preparing files for decision-makers. Those recommendations are: More>>

ALSO:

Gordon Campbell: On A New Book On The Leaky Homes Scandal

We all know that journalism is short of cash and under pressure from the speed, brevity and clickbait pressures of the 24/7 news cycle… but hey, given the right subject and a sufficiently stubborn journalist, it can still surpass most of the works of the academic historians... More>>

Regulation: Review Finds NZTA Road Safety Failings

The independent review, carried out by consultant agency MartinJenkins, lists at least 10 reasons for the failures including the agency being focused on customer service at the expense of its policing functions. More>>

ALSO:

Rod Carr: Climate Change Commission Chair-Designate Announced

Climate Change Minister James Shaw has today announced the appointment of Dr Rod Carr as Chair-designate for the Climate Change Commission. More>>

ALSO:

Compliance Complaints: 'Putting Right' Holidays Act Underpayment In Health

The Government is putting right a decade’s worth of underpayment to nurses, doctors and other health workers, says Health Minister Dr David Clark. More>>

ALSO:

IPCA: Disasterous Police Pursuit, Excessive Use Of Dogs

At no stage did Police follow the correct procedure for the commencement of a pursuit... A Police dog handler used his dog to help with the arrest of two of the young people. One suffered injuries resulting in his hospitalisation, and the Authority found that the use of the dog was an excessive use of force. More>>

ALSO:

‘Hard Place To Be Happy’: Report On Youth Residential Care

Children’s Commissioner Andrew Becroft says the report, A Hard Place to be Happy, contains important challenges from children and young people, aged 9 to 17, about their experiences in care and protection residences. “I found this report extremely difficult to read, and I think most New Zealanders would too.” More>>

Africa And Middle East Refugees: 'Family Link' Restriction Removed

The founder of the Double the Quota campaign has applauded the coalition government for Friday’s announcement that a discriminatory policy would be removed. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels