Another blow to New Zealand’s energy security

The surrender of another offshore exploration permit is a blow to New Zealand’s energy security and potential wellbeing, according to the Petroleum Exploration and Production Association of New Zealand (PEPANZ).

New Zealand Oil and Gas announced today it is surrendering the Clipper exploration permit, which contains the promising Barque prospect 60km offshore from Oamaru.

“This is disappointing news given the enormous potential benefits from the Barque prospect,” says PEPANZ Chief Executive John Carnegie.

A 2017 report by MartinJenkins found this field could have earned $32 billion in royalties and taxes over its lifespan. Construction alone could have created 5700 jobs per year and add $7.1 billion to New Zealand’s GDP.

It could also have helped lower emissions here in New Zealand and around the world by replacing coal for industrial use and electricity generation.

The offshore area available for exploration has now shrunk by over 80% since April 2018.

“This raises serious questions for New Zealand’s long-term energy security, given the absence of realistic alternatives to natural gas to power industries, heat our homes and keep electricity prices down.

“Just this week it was announced the Huntly power station is bringing a third coal-fired electricity unit out of storage due in part to looming shortages in the gas market. This is a worrying foretaste of the future.

“Even the Climate Change Commission has highlighted a near-farcical scenario where we could end up importing gas in the form of LNG from Australia, instead of developing our own resources and enjoying the jobs and royalties created.

“PEPANZ members are continuing to invest in their existing assets to enhance supply in the short and medium term, but beyond that we need new exploration and the right conditions to encourage investment.”