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End of New Exploration Could Mean filling a Large Energy Gap
A high profile campaign to end oil and gas exploration immediately is coinciding with a number of senior ministers seriously contemplating either ending or putting some roadblocks in the way of any new exploration.
The Greenpeace-led campaign would have a number of implications if successful. Politically it may be popular in many circles, however it would get a very bad reaction from those who have spent millions (and still plan to spend more ) in what is a legal activity which was encouraged by the last government.
However, even an indication of intent such as the end of the Block Offer process or other regulatory moves may be enough to kill off any exploration in the near future anyway. Oil and gas exploration is already an expensive risky business and many of those with the money and risk-appetite have fled NZ in recent years. This is partly due to oil prices and cheaper, less risky opportunities elsewhere in the world.
Those arguing for the ban say it will send a message to the world about addressing climate change and the need to not use even existing reserves of fossil fuels, let alone seek out new reserves. They cite Prime Minister Jacinda Ardern’s commitment to make climate change the nuclear-free moment of her generation. A cynic would say very few countries followed NZ’s nuclear ban.
Supporters say a ban would enforce a move to clean energy. This is certainly true. A ban on exploration would mean there is no chance of replacing the Taranaki gas fields with a domestic source of supply. Estimates vary but the Petroleum Exploration and Production Association say NZ will run out of natural gas in 10 years. There is no guarantee of finding an economic gas supply in NZ in the coming years, and with no chance of this people will have to start thinking very quickly about how to bridge the energy gap. Many rely on gas and either this will have to be imported or there will need to be a massive investment in new energy sources and converting systems to accommodate them. This will be a very expensive prospect for the government, businesses and households.
PEPANZ says a ban would shift production overseas with this then imported to supply NZ. It would have no effect on the oil drilled or used around the globe. The Sustainable Energy Association is more optimistic and believes electric vehicles, solar PV, battery storage, and energy management systems can play a key role in bridging the gap.
Either direction the Government takes there are some serious challenges ahead. Climate change policy is having little impact on NZ’s emissions. Energy Minister Megan Woods has also echoed the fears of others that the direction of energy technology is heading towards greatly favouring the wealthy and punishing the poor. New technology’s offer new opportunities, but there are concerns about whether systems can cope with them.
This story and other energy and environment news at https://energyandenvironment.net.nz/home.html
Article originally published in the NZ Energy and Environment Business Alert on March 14.
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