Crown Minerals (Petroleum) Amendment Bill

I’d like to take this opportunity in the debate on Part 1 to have a look at some of the issues raised by submitters during the select committee process, and highlight some of the changes subsequently made to the bill. With the title and commencement clauses—clause 2 being the commencement—some submitters requested that the commencement of the bill be delayed to allow for further consideration of the policy decisions that led to the bill. My response is that any delay in commencement would undermine the policy intent of the bill. Simply put, this Government is committed to taking the action and providing the certainty that we need, and the vast majority of submitters on the bill supported that approach.

In terms of Part 1, “Substantive provisions”, clause 4—interpretation—was something that was discussed at some length in the Environment Committee, and an issue was raised about the definition used for the onshore Taranaki region. In particular, this area follows the political boundary of the Taranaki region rather than the geological boundary of the Taranaki sedimentary basin. I’d like to make two points in response to this. The first is that the area in the bill captures all areas of current onshore petroleum production—so what is currently being drilled is already caught in that area. The second is that the intention around allowing exploration to continue in onshore Taranaki was to support a transition, which includes the potential for new discoveries, to make use of existing production and transmission infrastructure.

The other issue that was brought up at the select committee was clause 5, applications for permits, and clause 6, allocation by public tender—I’ll take these two clauses together. Some submitters raised an issue around flexibility and sought to retain greater flexibility for the Minister to exercise discretion regarding where and when permitting can occur. My view is that this flexibility would only lead to uncertainty around where new petroleum exploration could occur. The Government has taken a very clear position that there should be no new petroleum exploration permits issued outside the onshore Taranaki region. The only exception to that is for permits issued subsequent to an existing permit. This approach provides the most certainty around new exploration.

Other submitters raised issues around the matters which we were asked to take into account when considering permit applications—for example, that climate change could be a factor. Such a change would represent a significant departure from the status quo. Our position is that this bill is focused on giving effect to the Government’s recent changes to new petroleum exploration, and that changes that go beyond this are outside the scope of this tranche one of changes. So, they’re some of the changes that were outlined and have been effected, and I’m sure I will respond to more of those as we go through this committee stage.

Thank you very much to the Minister for giving us that preamble. I guess, in some regards, when the Minister discounts climate change mitigation as a policy purpose for the bill, I want to just highlight in the commentary, in the second paragraph, “This bill is one of several initiatives that seek to aid New Zealand’s transition to a low-carbon economy in line with the country’s international commitments.” And so it can’t be separated. It can’t be divorced from that purpose. Certainly, I understand that to write that into the bill would be problematic; however, the policy purpose of these changes seems to be quite clear.

I want to come to the Part 1, clause 4, where section 2 talks about the onshore Taranaki region as being the area that’s constituted as that which is able to receive applications or bids through a block offer for expiration permits. It’s significantly unclear, in the bill and the preamble and any commentary that we have received prior to, the differentiation between offshore and onshore. To say that it’s maximising current infrastructure—well, of course, any company would want to do that. But we also understand that, in regard to the offshore 2018 block offer that people were expecting, there were nominations of around 39 different particular areas. So to say, as the Minister has said in the past and the Prime Minister has also said, that offshore block offers in the past couple of rounds have been poorly subscribed to—well, of course, that occurs, because it is more expensive. And, secondly, it is during a period of time where the price for oil went below $30 a barrel—quite significantly lower—and so it became an economic choice rather than a resource choice.

Currently, New Zealand has 50 percent of its resources offshore, 50 percent onshore. And so we would say that consideration around offshore and onshore, and the differentiation—it has been unclear why the Government has sought only to choose onshore Taranaki. Yes, I acknowledge that, in some respects, the Minister has talked about a transition—and, obviously, the industry is based there—but the industry has also looked beyond there in the past, and there is certainly enough evidence and enough data to suggest that there is opportunity beyond regional Taranaki.

When we look at regional Taranaki—perhaps some of my questions to the Minister will come as we go through this committee stage—we do understand that there is a very defined boundary for regional Taranaki, as is mentioned here in the bill. The Local Government (Taranaki Region) Reorganisation Order 1989 depicts boundaries, but what is interesting about Taranaki, and looking at this boundary between offshore and onshore, is that the first sightings of oil evidenced in Taranaki were actually in that middle space. It was on Ngāmotu Beach in Moturoa in Taranaki where oil seeps came through the sands. So, actually, making differentiation between onshore and offshore is—well, if you look back in history, to 1865, it’s really interesting that the first discoveries of oil were on the beach, in the border between. Significant discoveries have been in both particular areas. It’s known that, even in pre-European times, Māori discovered and saw the evidence of oil seepage not only in onshore Taranaki, on the beach, but also in other regions on the East Coast, as well. If you look at the history that New Zealand Petroleum and Minerals put up in terms of the history of New Zealand’s oil and gas discoveries, it’s particularly interesting.

It’s very clear and obvious to the Minister of Energy and Resources that the National Party opposes this bill. We oppose it on many grounds. But going back to some of these introductory remarks that are in the commentary, there is the issue there around achieving New Zealand’s climate goals. And I put it to the Minister and to the committee, and I would like an explanation on constraining exploration to onshore Taranaki: what will that do to achieve a climate goal for New Zealand, particularly when we understand that New Zealand produces around 131,000 barrels a day, which is mostly exported? If we were to cut off the supply of that, or reduce it severely—this bill’s final intention would be to do that; it would be to close it down and make this a sunset industry—then we would no longer be able to supply that to the world market. And will that make a significant difference to the goals of climate change mitigation?

The reality is that the Organization of Petroleum Exporting Countries runs a daily excess of two million barrels a day. And it’s a little bit like this: if I put my hand in the ocean and pull it out—if I pull my hand out of the ocean—it will be filled instantly and there will not be left a gap. And it’s the same issue with New Zealand’s hydrocarbon exports. If we withdraw from the international market by trying to constrain only into the Taranaki region, excluding all other regions, excluding offshore, and think that that is going to make a dent in international demand and take up, we’re mistaken.

So what we have here is a bill that seeks to reduce the area where this activity can take place, with the intention that, as the Minister has said, it’s going to fulfil these wider and deeper obligations. But it won’t. And so, in a sense, all that we are achieving here is what this party says is virtue signalling. We are saying that we are prepared to create such pain, such disruption—we are prepared to end an industry for a goal that we will not reach. And I think that that is poor governance and poor decision-making and certainly is an effect of the lack of consultation that’s taken place through this whole process. At least in the committee stage we get to go through it clause by clause, and, hopefully, the Minister will be able to stand on her feet and answer the many questions that we have, to validate this piece of legislation, to try to convince not just us but New Zealanders why it’s so important when, in fact, it doesn’t achieve some of the big goals that she and her party and the coalition members are seeking to achieve.

I don’t know what the goals are of New Zealand First, because this is the party across the way that, in terms of the onshore Taranaki region—actually, they’ve now got a huge expectation. How can you find a replacement in terms of the just transition the Minister speaks about for 4,500 direct, and another 3,000 indirect, jobs that come from an industry that actually powers New Zealand’s economy? And if we don’t have them powering our economy, we will import the product from somewhere else. We’ll pay somebody else—give them our economic value. We will have higher levels of hydrocarbons just to get the product here. So, actually, we are defeating ourselves at multiple levels, and I look forward to contributions from across the Chamber. I certainly look forward to what the Minister has to say about these particular issues. Thank you very much, Madam Chair.

Thank you, Madam Chair. The time caught me a little bit there. I rise to give my first contribution in the committee stage. I would like to draw my comments around, obviously, Part 1 and an area that Jonathan Young has already begun our conversation on this afternoon, and that is section 23A in clause 5, which is focusing on limiting exploration to Taranaki—in particular, onshore Taranaki. So the question that, I guess, sits at the core of our policy discussion this afternoon is: what are we seeking to achieve by this restriction? Now, the Minister of Energy and Resources is on record saying that this is part of New Zealand’s so-called leadership position in impacting global emissions from a New Zealand perspective, but she is particularly silent on global demand with respect to oil and gas. So my question to the Minister is, surely, when we are reflecting on whether we should constrain New Zealand’s economic potential with respect to extracting oil and gas, the first key question that we should ask ourselves is: what is the global demand for gas looking out into the medium term?

One would assume that if you hold a policy view that is to restrict New Zealand’s economic potential with respect to this extraction, it needs to be hung off some commercial advice with respect to the place of gas in that global demand. Now, the Minister may have different figures than what I am aware of, but I’d be interested to hear it. What I read is that looking out to 2040, there is a 40 percent increase in expected demand globally for natural gas—40 percent. In fact, by 2040, natural gas is going to be the single largest fuel source globally. Now, I’d like the Minister to challenge those figures and potentially table the advice that she has received that challenges that—that that is indeed the global demand with respect to natural gas. Our advice on this side is very clear: it’s a critical part of the global energy mix.

The reason this is so important is that if the global demand is demonstrably significant for natural gas, why is it that New Zealand would be constraining its ability, looking out over the next 20 to 30 years, to extract that natural gas and, obviously, make significant export receipts from that? It’s half a billion dollars, currently. We have reflected previously in the debate around this issue that if this proceeds, we are talking about $7.9 billion of lost export receipts, potentially as high as $23 billion.

So we need to be clear around what the policy objectives are here. If the view is that the natural gas, which we believe is a critical part, is not going to be a critical part, then we would like to have an understanding of that and to hear specifically from the Minister what data and assessment and modelling she is relying on that suggests that New Zealand, despite what we can see is happening around the rest of the world with other gas-producing countries—they see the opportunity in supporting natural gas as a positive. They see it as a commercial imperative for their people and their countries, and they see it as very much part of their climate change narrative. That in particular is an issue that I would like to return to as we reflect on, I guess, a series of core questions that Part 1 brings into sharp relief, which is: what actually is the policy objective here in simply constraining oil extraction and gas extraction to onshore Taranaki? They are my first series of questions. I have many more others to come.

Thank you, Madam Chair. There are a couple of clauses that I’d like to talk on in this, Part 1 of the Crown Minerals (Petroleum) Amendment Bill. One is a clause that was introduced during the select committee process, and that’s clause 6A. It’s going to amend section 25 of the Act, and what it does is it restricts what the Minister may do. Now, in clauses 5 and 6 of the bill as introduced, a number of restrictions were introduced as to who might apply for an exploration permit and what tenders the Minister might accept. So you might think that that was sufficient protection to stop ongoing offshore oil exploration, but the committee, on the advice of officials, elected to take a belt and braces approach and to add clause 6A, which amends section 25. As well as restricting who may apply for a permit and the offers, and which tenders the Minister may accept, it also says “The Minister must not grant a permit for petroleum in respect of any land outside the onshore Taranaki region”. So, that does restrict the Minister’s actions.

I’m quite interested to hear from the Minister what her views are on this belt and braces approach, as to why we needed this additional restriction in the Act—so not only who might apply for a permit, and which tenders the Minister might accept, but also that extra restriction on, actually, what permits the Minister might not grant. So it’s a restriction on the Minister’s activities, and it does add a real extra layer of protection. I’d be interested to hear the Minister’s comments on that.

One other issue was raised extensively by many people who supported this bill in submissions, and that was their concern for the protection of the great treasure in Taranaki, the maunga, Taranaki the mountain, which the residents of the province—and indeed I, as someone who was born and bred there—hold in great affection and very high regard, and not just the maunga, but also the Egmont National Park. Many, many people who made submissions were concerned that—well, even if onshore exploration is going to be permitted, they absolutely wanted to be assured that the maunga was protected, that there would be no exploration and no drilling under that great treasure, Egmont National Park, which cloaks Taranaki and the maunga. So I’d be interested to hear the Minister’s comments on that.

Now, the Environment Committee didn’t introduce any changes in that regard, because we felt that the protections that were there were sufficient, that there is restricted access to conservation land, and that access to Egmont National Park is, in fact, already further restricted by the Minerals Programme for Petroleum. What it means, by the time you have that minerals programme as well, is that no prospecting, exploration, or mining activities could occur in the National Park. But I think that people at home and people listening along to this, particularly the people who submitted on this bill, would appreciate hearing from the Minister that that protection for Taranaki’s treasure is guaranteed under this bill and under the resulting Act. Thank you, Madam Chair.

I’m pleased to take a call on this bill. I’d like to take a slightly different tack. Part 1 clearly is the substantive provisions of the bill—who can apply for a permit and where—and the submitters that we heard from in the Environment Committee spoke quite clearly and in unison around the process and the lack of time that they had to submit, and the lack of time they had in select committee to give their views around this, Part 1. I’d like to speak about one of those in particular which I found quite concerning, and I want to hear from the Minister in the chair about what she thinks of the process and whether or not we need, perhaps, to go back to select committee. There was a gentleman that came to speak to us by the name of Paul Rishworth, chairman of the Legislation Design and Advisory Committee—the body responsible for advising Parliament on policy and legislation.

He raised serious issues with the bill and the bill’s process. In his submission he said that the submission process around Part 1 was inadequate, and further said that “There is no suggestion that an extra week or two in the legislative process or in the select committee process would have [had] a major adverse effect.” So my question to Minister Woods is, really: why wasn’t it considered that there were an extra couple of weeks available to us to hear from more submitters and to hear for a longer period of time from submitters around this substantive part of the bill?

The submission from Paul referenced Treasury’s analysis of the bill, which said, “[D]ue to the time limitations and analytical constraints arising from Cabinet’s previous decisions, MBIE did not consult the petroleum industry and the public on the proposals.” His submission pointed out that this showed the limitations and constraints of having such a short consulting period. And we saw this in submissions from others—many others—who complained of a lack of time to prepare and the very short time that we in select committee allowed for them to be able to present, either five minutes or 15. Frankly, it was embarrassing. I felt, and members on this side who sat in on that process felt that to be hearing from CEOs of major companies and major industry bodies who only had 15 minutes to present and to answer questions, and to cut them off at the last second was, frankly, embarrassing.

The Minister was quoted in the media as saying that there were a couple of thousand submissions, and therefore the short time frame was fine and those who wanted to have a say got to have a say. She was quoted in the New Zealand Herald as saying, “This is something [that] we announced in April. The Prime Minister and I have been meeting with communities and the industry since April and have been having discussions about it.” Well, this flies in the face of what submitters told us in select committee. They said that there wasn’t enough time, that there were a lot of people that they knew of that didn’t have time to submit, that because we didn’t go to Taranaki there were people in Taranaki—businesses and individuals—who didn’t get to have their say, and that the time they had to make their submissions was far too short.

Powerco said in their submission that “The Government did not consult with stakeholders prior to making its announcement on 12 April ... Nor has it consulted on the development of the Bill”—despite what the Minister said. “The Bill [was] placed into urgency,” which means the select committee process “has … not allowed for meaningful consultation with [the] affected industry or the public.” That’s what Powerco said. So there were a number of industry organisations, and businesses, and submitters who felt that they hadn’t been consulted, despite the Minister’s claims. So I’d like to ask the Minister whether or not she feels that this process has been fair to the industry and to the people of Taranaki, given that we didn’t go there, given that we only gave them two weeks to take a look at the bill and to make submissions, given the fact that we only gave them five or 15 minutes in select committee, and given that the overwhelming feeling of all of the submitters against the bill was that the process was flawed and was undemocratic.

One of the things that the Prime Minister and the Minister have said is that they rushed this process because of the block offer, and I’d like the Minister in the chair, Megan Woods, to advise us whether or not she had had representations from the industry and the industry bodies to say that they actually didn’t mind if that block offer was put off in order for the select committee process to be pushed out. What we heard from many of the industry organisations was, in fact, that they didn’t mind whether the 2018 offer was, in fact, pushed out. In fact, we learnt that the 2018 block offer wasn’t even going to happen in 2018. In fact, it’s not happening until next year. So the question for the Minister in the chair is: why the rush? We didn’t need to have all of these submitters complaining about this undemocratic process and the shortened time frames, because in the end the block offer isn’t happening until next year, and the industry is more than happy for that to be pushed out. I would like to ask the Minister in the chair: why the rush? Why did we need to be in this situation, having CEOs of companies being cut off to the second by the chair in an embarrassing and appalling manner, when there was no need for this rush—when there was no need for urgency? That was made quite clear by the industry bodies that came to talk to us. They were more than happy to have that pushed out.

Furthermore, I would like to ask the Minister in the chair—we know that advice wasn’t gained by the Minister prior to the announcement. We know that the regulatory impact statement came after the announcement. We know that there’s been no cost-benefit analysis. We know that there hasn’t been a lot of consultation done in Taranaki. I’d like to ask the Minister in the chair whether or not she thinks that this process has been a good, thorough, democratic process, and whether or not she thinks that the Minister needs to, in fact, get far more information around the lack of investment that’s going to be happening in Taranaki and the loss of jobs.

Carbon leakage—we asked that question in select committee about carbon leakage, about what would happen when we would be, in fact, importing more oil and gas from overseas, from countries which, frankly, don’t have the environmental standards that we have in this country and what that would mean to global emissions. One of the things brought up by the submitters was the fact that although this sounds nice, the effect, in reality, is that global emissions are likely to rise from this policy—and that was actually made clear by MBIE as well—because it’s not doing anything with demand. That was something that came through quite clearly in the submissions, as well. I’d like the Minister to actually talk to us today about what is going to happen with demand, because she’s said quite a lot about the reduction in global emissions from this bill, but, in fact, the advice has been to the contrary. With the uptick in petrol tankers and the uptick in importation of natural gas to this country, it is most likely that global emissions will rise, and that’s what carbon leakage is all about. Just because we stop producing it here—it’s got to be produced somewhere else, and the likelihood is that global emissions will rise because of that.

So there are a number of questions for the Minister, mostly around process and whether or not she thinks that in fact, because of the thousands of people that we didn’t get to talk to and that didn’t get to submit in Taranaki, that haven’t had their say—should we go back to select committee? Secondly, should the Minister now get a lot more information, especially around carbon leakage? We asked that question, and an answer hasn’t been forthcoming. Is she going to get more of a cost-benefit analysis? And does she have information around the potential job losses and lack of investment in the Taranaki region? We have yet to see that information. We’ve been asking, and we haven’t seen it. It’s all been nice words and virtue signalling and fluffery, but what we’re asking for are the details. We’re talking about a huge region, thousands of jobs—highly skilled, highly paid jobs—and a bill that is, in fact, most likely going to have the opposite effect to its intent. I would be keen to hear the Minister’s answers to those questions, and I will be back for more shortly. Thank you.

Thank you, Madam Chair, for the opportunity to speak on this bill, which is a distressing one for many of us on this side of the Chamber, because it will have such an impact on our economy, on our living standards, and in particular on the region of Taranaki—all for very unspecific and unthought-through potential goals. So we’re looking at Part 1 here, which stops the exploration offshore anywhere and retains some work onshore in Taranaki.

If we go back to this whole process, it was announced on the fly by the Prime Minister a couple of days before her intended global audience to announce it. There was no broader cost-benefit analysis, or any analysis whatsoever underpinning that judgment and that decision. And then, after the decision was made and it was announced, the Government decided to go through the process of actually legislating and consulting with the industry affected, which is an appalling way of doing things. I struggle to remember such an egregious example of Government behaviour in recent times. And so this whole process has been a sham.

The select committee process, which has been truncated by this Minister, Megan Woods—truncated by this Minister to the point of ridiculousness—has been carried through, and this whole process has been carried through, in a sham-like way because the Government has already decided what it was going to do. You might say, “Well, does that matter?” Well, it does matter. Look at the eye-watering potential costs—I’m holding the regulatory impact statement, which does various modelling and thinks that the potential cost in terms of just the revenue that the Crown will be forgoing might range between $1.8 billion and $26 billion over an extended period, with the mid-range being about $10 billion. That’s the fiscal cost to the Crown. Then it may be, in terms of the company profits that could be affected by this, somewhere between $200 million and $2 billion.

But what about the broader economic costs for the New Zealanders employed in the industry, the economic costs of more expensive energy, and all the many potential ramifications of this decision. Well, they haven’t even tried to calculate that. The regulatory impact statement says, “Well, we didn’t try to do it, but they could be substantial. The broader economic contribution of the petroleum sector to the national economy has not been modelled, and we can’t work out just what this is going to cost.” So here we are, blundering in—for the sake of a speech from the Prime Minister—to a decision, the costs of which we have no idea, but they certainly run into the billions and billions of dollars. Now, OK, you might do that if there is a clear benefit—

💬 Todd Muller: Billions.

Billions—that’s right. “Billions.”, as Shane Jones would say. You might do that if there is a clear and obvious benefit, but all the indications are that this decision will lead to higher climate global emissions from the New Zealand economy. Why? Because this bill does nothing to have any impact on the behaviour of New Zealanders using the energy. It makes no impact on what energy they use; it only makes an impact on what we produce. If we continue to use as much energy, we’ll just have to import it from somewhere else, and the net impact is worse for the climate. So it costs a huge amount—potentially a colossal amount. There are no clear benefits whatsoever other than virtue signalling by the Prime Minister in front of audiences around the world.

But the final thing is the wider cost to New Zealand’s reputation and attractiveness as a place of investment, because New Zealanders will only get the opportunity to have good quality jobs and to live fulfilling successful lives if we have a strong economy. That strong economy relies on investment—investment coming domestically, but from around the world. Well, who is going to invest in this country from around the world if you have a Prime Minister that’s prepared to chop off at the knees a major industry without any proper process and without any analysis before she makes that decision? Anybody might well ask, “Well, I’ll invest in another industry, but who knows what the Prime Minister might decide to knock out next.” And that sense of uncertainty and unpredictability that this Government has demonstrated since it’s come into the office is the biggest cost of all, and on that basis, I’m shocked.

The first question that I have for the Minister in the chair, Megan Woods, is: can she recite any decision in any portfolio area as important as is in Part 1 of this bill, in which a decision has been announced without any Cabinet process whatsoever? Can the Minister cite me any example in the last 20, 30, 40 years where a Government has announced such a huge change in public policy without even going to Cabinet?

I was gobsmacked when my colleague from New Plymouth said, when the Government had made the announcement, that it hadn’t gone to Cabinet. I said, “Hey, Jonathan”—Young; Jonathan Young, the MP for New Plymouth—“be careful. I’ve sat in the Cabinet room for 12 years. I’ve never heard of a Government making a decision without going to Cabinet. I don’t think that can be true.” And when I found out that what Jonathan Young said was correct—that the Government was prepared to make a decision with implications of over $23 billion and not even go to Cabinet—I said, “Has this become a sort of banana republic? Have we become some sort of laughing stock, that we are prepared to give up basic processes of Government?”

I see Mr Kris Faafoi’s in the Chamber. He might be able to answer me. Can he recall any decision of the scale of what we have in Part 1 of this bill that has been made without even a discussion or a paper in Cabinet? I say that’s extraordinary—I say that’s extraordinary. I say that’s an embarrassment, and I want the Minister in the chair to answer: why were these decisions in Part 1 of this bill never even considered by Cabinet?

Then the second question I want to come to, and I’m just flummoxed by this: anybody who’s been engaged in the debate around climate change realises that the number one issue for us is around coal—that coal has the highest level of emissions, that coal historically has played the biggest role in the increase of carbon dioxide in the atmosphere and in the global warming that has occurred to date and in the global warming that is projected to occur into the future. So why, when coal is the biggest problem, is the Minister in the chair preoccupied with shutting down gas? It just makes no sense. In fact, if we look around the world to where the most progress has been made on climate change it has been where we have expanded natural gas to reduce the amount of emissions from coal. That’s what’s occurred in the United States with the development of the new gas industry around fracking. That’s what’s enabled countries like the UK and Germany to make some of the best progress of any country in reducing emissions.

So where I am completely lost, as one who takes the issue of climate change so seriously, is why do we want to shut down gas when, actually, it is such an important transition fuel and when our number one priority should be in terms of reducing the use of coal? To put it quite simply, we’ve got large numbers, and my colleague Barbara Kuriger—a person who comes from the dairy industry—would know that a good amount of the dairy industry’s energy sector comes from coal. And if the Minister in the chair was promoting a policy that would substitute that coal with natural gas, my colleague could understand it, I could understand it, my good friend Jonathan Young could understand it, but to shut down natural gas, as is proposed in clause 6 of this bill, simply does not make sense.

The third issue is that the entire slogan of the environmental movement has been “Think globally, act locally.” Where is the global thinking in this provision? If New Zealand just imports its petrol, its diesel, and its gas, we don’t achieve one iota for the issue around climate change. All we’re going to do is damage our economy, import our petroleum, and do nothing for climate change. And I will not have a bar of such loopy policy.

Thank you very much, Madam Chair. I stand today to speak to the Crown Minerals (Petroleum) Amendment Bill. I want to make it really clear from the outset that this side of the House does not support this bill.

I’m talking today to Part 1, section 23A, amended by clause 5, regarding the application for permits. Now, we’ve heard a lot about the process of the development of this bill and the select committee process, but in response to the Hon Nick Smith’s contribution, the revelation that Cabinet did not even consider this leaves me wondering: how did the whole of Government find out about this? Was it actually at the announcement when the support parties were actually informed about this? This is a shocking process.

💬 Hon Shane Jones: Democracy! Democracy!

Shane Jones yells out, “Democracy!” You ask the people of Taranaki if they feel like they’ve been part of a democratic process. I can tell you that they do not, sir. They do not.

Now, this Government is not only turning off the tap—quite literally—for the Taranaki region, they are actually making it a sunset industry for the whole of New Zealand. There are other areas in this country that are closing the door on this and the next provincial success story that could come out of natural oil and gas. There are areas around this country that are not even explored yet. Where are we going to find the next success story like Taranaki? Well, actually, we don’t know, because this Government has put a doorstop on it. Does the Government know what lies off the south-east coast of Ōāmaru, 60 kilometres out? I’ll tell you what’s offshore there: 5,700 jobs, $32 billion in royalties to the Crown, and that community will now never realise the opportunity to bring that to fruition.

If I think about my own area of West Coast—Tasman, where there is smoke, there is usually fire. Where there is coal, there is usually gas. Sometimes coal gets a bit of a bad rap, but out of those coal seams comes coal seam gas. The Minister in the chair, I’d like to ask: this bill, in effect, prevents the capture of that coal seam gas, so what is going to happen to that as a by-product of this bill going through this Parliament? I suggest that the gas now has to be released into the atmosphere. What on earth does that do for our global emissions, our carbon emissions? Absolutely nothing. In fact, it makes it even worse. And these are the types of situations we find ourselves in when we have not had the expert input into the development of this bill from the very outset. So, Minister, I would be very keen to hear from you about what the proposed intention is around the capture of coal seam gas, because there are a number of prospective resources on the West Coast.

Now, the venting of these gases into the atmosphere is a total waste of a resource when, in fact, we could be turning that resource into electricity or heat generation. And it’s not dissimilar, I would argue, to the Nelson situation, where they capture their landfill gases and they use them to heat the hospital boilers. That’s just an example of what happens when you truncate a process and when you don’t involve the experts, and we are left in a situation of unintended consequences simply because there was a priority to make a grandstand announcement on the global stage.

We have heard today already about the energy crisis coming to this country, and even a question today from David Seymour relating to the 120,000 tonnes of coal that is on its way from Indonesia to fill what could be a gap in our electricity supply by the end of this year. This is a nonsense bill, and I’ll be back to talk about other parts.

Before I call Andrew Falloon to take the next call, could I ask an honourable member, please, to do something with the unattended file boxes that are sitting on the Opposition side of the Chamber.

Thank you, Madam Chair. It’s a pleasure to be joining my colleagues this afternoon on this side of the Chamber in opposing this bill. I sit on the Economic Development, Science and Innovation Committee and, unfortunately, we weren’t called on to consider this bill. Usually, we do look at Crown minerals bills; in fact, we have a Crown minerals bill before us at the moment. But, unfortunately, this bill went to a committee where the Government has a stronger majority. So this is the only opportunity that I’ll have during the committee stage to scrutinise the legislation. I intend to take numerous opportunities to do so.

I want to focus my initial comments on Part 1 of the bill, clause 5, which inserts a new subsection (2)(b). It says, “a person may apply under this section for a prospecting permit for petroleum, or a mining permit for petroleum, in respect of any land in the onshore Taranaki region only:”. And so my first question to the Minister this afternoon is: why have they specified Taranaki and not included any other regions within that? I understand why the Minister has probably done that, and I guess I support it to an extent that there is a very strong and functioning oil and gas industry in Taranaki. It accounts for about 41 percent of their GDP. So to safeguard some of that for the time being, I think, on this side of the House, we do have some support for, but the concern that we have is that no other regions have got the opportunity to do that.

My colleague prior to me, Maureen Pugh, mentioned the Barque gas development off the coast of North Otago and South Canterbury, and my concern as the MP for Rangitata is the impact that this bill will have on somewhere like Timaru. If that gas development had gone ahead, it would’ve be a huge boon for the South Canterbury and Timaru area. And so to have this bill, which specifies only onshore Taranaki and leaves out every other region in the country, is, in my view, wrong. And in a debate just a few days ago we had the Government accusing this side of the House of picking winners. Well, my concern is that they’re picking some regions to be moderately successful in the short term, and leaving other regions like South Canterbury out in the cold.

My next point I wanted to make was that during the debate on the first reading, we had MPs on the other side talking about the environmental impact. This is the reason for this bill, apparently: the environmental impact of oil and gas on climate change. And we had Deborah Russell, during that debate, accusing us of backing the burning of the planet. She mentioned several times that we supported the burning of the planet. Well, my question to her, and, I guess, for the Minister as well is: what is it about onshore Taranaki petroleum that doesn’t affect the environment? Because what they’re saying is that it’s fine for onshore Taranaki to continue to have permits allowed for, but not for any other region in the country. So I ask the Minister in the chair, and any member opposite who’d like to take a call: what is it about Taranaki onshore petroleum that doesn’t have an impact on the environment?

The second point I’d like to make in relation to environment is just what impact this bill will have. We’ve heard at length from members opposite that the reason they’re doing this is because we need to be a world leader in climate change and we need to substantially reduce our carbon emissions. And I think, on that latter point, most members on this side would agree with, but this is not the bill to do it. And the reason for that is that this bill will lead to an increase in the short to medium term of carbon emissions. And the reason we know that is because it sees it and the Government’s own advice. The Ministry of Business, Innovation and Employment’s own advice to the Government literally quotes “The net impact on global emissions is uncertain but more likely to be negative than positive.” So emissions in New Zealand will actually increase with the passage of this bill.

And the reason for that is very simple, actually: it’s because we’re going to rely more on coal. And my good colleague Maureen Pugh down there is screwing up her face because I know she’s a big supporter of the West Coast coal industry, as am I. But there’s no doubt that coal has a greater impact on the economy than natural gas. The Government opposite are talking about banning the exploration for gas and, in the short to medium term, that’s going to lead to an increasing reliance on coal and will increase our emissions—as the Government’s advice says to them and, unfortunately, they haven’t listened to it.

So this bill doesn’t stack up from an economic perspective in Taranaki where they’re going to shut down all offshore what exploration. It doesn’t stack up from an economic sense for any other region in the country. And nor does it stack up from an environmental perspective, because the Government’s own advice says that it will lead to an increase in carbon emissions in the short to medium term.

Thank you, Madam Chair. I’d like to make a couple of points on Part 1 of this bill, and a particular reference to the commentary on this bill and the introduction, which kind of goes, really, to what the heart of this bill is—and it says it in black and white—which is that it’s one of several initiatives. So it’s not the only initiative to aid New Zealand’s transition to a low-carbon economy, in line with the country’s international commitments. The other key word there is “transition”, which, I think, is a pretty important word. And listening to the debate coming from the other side of the Chamber this afternoon, one would think that this is all happening tomorrow.

So the points that I want to just quickly touch on are that this is the first tranche of it. It’s a bill which has a narrow scope. It’s the first tranche of a review of the Crown Minerals Act and is only to give effect to the Government’s decision about oil and gas permits. Listening to the flowery, over-the-top language coming out of the Opposition, on the other side, one would think that it was all about to happen tomorrow. Tranche two is a much wider review of the Act that will enable stakeholders to take part in future-proofing the Crown Minerals Act.

It was also strongly signalled. The Prime Minister said in one of her first interviews after being elected that this might be the last block offer. It’s also very strongly about leadership. It’s the right thing to do. We’re not going to stick our heads in the sand like the previous National Government and the existing National Opposition. And, really important, it’s a carefully managed transition over 30 years.

One final point is that, with regards to the submission process, with all of the 95 submissions that were heard, many of them came in through technology—this thing called “technology”: through Skype, through video link, through telephone link from other parts of the country. And people did get a good hearing. They were treated very fairly. And just reinforcing that this bill has a narrow scope, and it was strongly signalled.

Thank you, Madam Chair. I’d just like to take a call to respond to some of the questions that have been put by members in the committee. The first question that was asked—one of the fundamental questions that has been asked—was what is the policy objective that the Government is trying to achieve here. Well, that’s something that is very straightforward and something that we have been talking about since before we made the announcement back in April of this year, and that is that we cannot afford an economic shock in this country. What we need to do is we need to put in place the long-term transitions where we know there are economic changes ahead that climate change is bringing, and that is what this is about. This is about making sure that we don’t pull the rug out from underneath communities and individuals, but instead we are putting in place now the planning and we are starting that transition. One of the things that we are very aware of as a Government is that a transition has to start somewhere. A transition isn’t just a continuation of the status quo. A transition means that things need to change.

Members on the other side have, rightly, raised questions around the jobs and where jobs are going to come from. The member from Taranaki, Jonathan Young, has talked about the 4,500 people who are directly employed in the Taranaki region, and the 11,000 indirectly employed. Well, one of the things that I know that that member is aware of is that, actually, this is an industry—particularly the indirect jobs—that has been shedding jobs over the last few years. We have seen a number of engineering works shut down in the Taranaki region as a downturn in a market as volatile as the gas industry hits. So what we want to do is make sure that we don’t go through what this country went through in the 1980s by not putting in place the planning early enough, but that we can get on the ground in Taranaki—as we are—and we can put in place the replacement industries.

That goes directly to one of the issues that both Maureen Pugh and Andrew Falloon raised. They talked about lost opportunity in relation to the Barque prospect. I think one of the things that I would like members in the Opposition to understand is that all the existing exploration permits will be honoured, and that includes the Barque prospect. It means that that can still be progressed from exploration to mining.

Now, I have also made some comments in recent weeks about how we will work with individual permit holders around hitting a bit of a pause button on the drill or drop provisions. We understand that there has been some change and that companies might need a year or two in which to readjust themselves to the new environment. I have invited all permit holders to get in touch with us—and many have—around hitting the pause button around those.

So, in terms of the concerns of those members, I can understand those concerns that Maureen Pugh and Andrew Falloon were outlining, but I’d like to reassure you that those permits will not be dropped. I think something everybody has to realise is that we could still see drilling for oil and gas from the 100,000 square kilometres that we already have in exploration permit off the coast of New Zealand for decades to come, and that’s something that we have to bear in mind.

Now, another issue that was brought up was the issue around the security of supply. The Opposition members seem to be labouring under a false assumption that this Government’s plan once we stop using oil and gas is to burn other fossil fuels. That certainly isn’t our plan or our intention, but what we are embarking on—and the Government is doing the work—is around making sure that we are putting in place the planning to get to 100 percent renewable electricity. I would point members to work that has been done, like a recent meta-analysis of 18 large-scale post - carbon economy transition strategies. It found that looking at 18 of these in a meta-analysis way showed that technology and costs are not the key barriers to making these transitions. They listed three of the major roadblocks as being climate change denial, the fossil fuel lobby, and political inaction, and those are things that we cannot be guilty of in this country.

We’ve heard Nick Smith talking about what happens in the UK and Germany. Now, New Zealand is in a very, very fortunate position in the abundance that we are blessed with in terms of the access to renewables. Not only do we have the hydro, which has been invested in over many decades in this country, but we also have wind, we have solar, we also have geothermal, and we actually, at times, have an abundance of renewable energy, which opens up real economic opportunity for us in things such as hydrogen. Countries that have an abundance of renewable energy can certainly make use of those. Todd Muller brought up the lost—

💬 Hon Members: “Mull-er”.

Muller—sorry to the member. He brought up some of the lost opportunities there in terms of the ability to export. Well, I’d like to just point out to that member that at the moment, we don’t export our gas. We do not have LNG facilities in New Zealand, and, in fact, the latest LNG facility that was installed in Australia cost tens of billions of dollars. Now, in the entire history of the oil and gas industry in New Zealand, no one has been willing to invest in that infrastructure to put in place an LNG facility so that we can export. So I think to say that these are things that sit out there in the never-never is something that we need to move past.

But what I also want to address is a really real issue, and that is the issue around the fact that somehow we’re too small to do anything as a country in terms of—

💬 Hon Dr Nick Smith: Never said that.

No. Jonathan Young, in his contribution, said that we were very small and what we did didn’t make—well, what I’d like to point out to Jonathan Young is that the 197 countries who signed the Paris Agreement create less than 1 percent of the world’s emissions, but together, collectively, we make up 20 percent of the world’s emissions. That’s as much as Europe or China. No country can sit back and say they don’t have to do their bit. [Interruption] Well, Jonathan Young was saying that we were too small to matter.

The other question that has been put is about carbon leakage and the fact that we’ll simply transfer production from New Zealand to a country where there are higher levels of emissions. Now, this is an argument that’s come through a lot in this debate, both from the Opposition and from the oil and gas industry, but I think one of the things that we have to realise is that the world is changing, even from 12 months ago. What we see is that China is currently trialling seven different versions of emissions trading schemes, which they have said will move to be comprehensive schemes in a very short space of time. China is ahead of its Paris peaking target and is already moving to shut down coal in some of its cities. I think what we have to move to understand is that when China does roll out its comprehensive cap-and-trade system—which will be in place by the time that New Zealand finally gets to not be producing oil and gas—what we won’t be able to do is simply put in place production in China without taking something off, because they will have that cap-and-trade system, which, in many ways, is more comprehensive than our own emissions trading system, which does not have a cap on it.

So there are many reasons for us to be very optimistic about our future and to think about what opportunities sit in front of us, and renewable energies offer us key opportunities. But one of the things that I want to leave this committee of the whole House with is to realise that transitions have to start somewhere. They aren’t just the continuation of the status quo. Continuing to do the same is not a transition; it’s just keeping on doing the same. What we are doing in this Government’s bill—what our object is—is to make sure that we are beginning that long-term, managed transition.

Kia orana, Madam Chair. Thank you very much. Parts of that contribution from the Minister were absolute gobbledygook, and I know that some of my colleagues on this side of the Chamber and I were listening intently, trying to make sense of what she was saying. It was clear at one stage, when she was shuffling through her notes, that she’d got herself completely lost and utterly tied up. Well, I say to that Minister: if that was an attempt to answer some of the very serious and well-informed questions that have been put to her by members on this side of the Chamber, she failed dismally. Even more importantly—and I’m sure that people listening throughout the great Taranaki province at this moment will be saying to her—if that was intended to give assurances to that province, they will be deeply disappointed in what that Minister had to say.

Now, I am not a member of the Environment Committee, and I’m not a Taranaki member of Parliament, but as a proud member of the neighbouring region, the mighty Waikato, I feel very proud to stand up today in support of our sister province, in defence of one of the most important industries not only in their region but which their region is able to show leadership for throughout our country. I’m particularly pleased—I say this while Jonathan Young is in the Chamber—that both his great province of Taranaki and mine, of Waikato, have had a recent run with the Ranfurly Shield. So sorry we took it away from you! But we won’t go any further—we won’t go any further.

Let me get back to Part 1 of this particular bill, because I want to pick up on a couple of the things that have been covered and, in particular, to emphasise what an outrageous, truncated select committee process the Parliament and the country have been treated to. This is a very important issue, and members of the National Party have fought a very good fight in recent times to try to stand up for the interests of that region, of that industry, and of our nation, and it was with absolute disbelief that we heard that this whole process was being truncated, rushed through the House, in such a cavalier fashion. Industry bodies have asked—and deserve answers to—the question of why they were treated so shamefully. This was not only a process that had been rushed; it was shambolic. It was disingenuous on the part of this Minister and her Government. It is potentially very damaging for our climate change efforts, to which we are commendably subscribed as a small country. It is hugely damaging to Taranaki’s economy and to our overall national interest, and the Minister has not answered any of those very real concerns in her contributions so far.

As the Hon Paul Goldsmith noticed, this was a decision that was announced on the fly by the Prime Minister on the eve of her international trip. It was all about appearances on the world stage, and what a shameful thing it was to put our national interest at risk for a photo opportunity on the world stage. With no cost-benefit analysis having been undertaken, or even requested, it seems—not even requested—and in a manner that even by this Government’s inept and disastrously low standards makes New Zealand not admirable on the world stage but a laughing stock. To act in such a cavalier, irresponsible fashion which will lead to increased global emissions is not just embarrassing but disgraceful.

Now, the Hon Clare Curran a few moments ago seemed to think that by arguing that this is “not the only”—I think I wrote her words down correctly—“but one of several measures to reduce carbon emissions” makes it defensible.

💬 Hon Clare Curran: It’s what the commentary says.

It may be what the commentary says, Ms Curran, for your particular point of view; it does not in any way deal with the very real concerns of people affected by that decision.

Ms Curran went on to describe Opposition speeches as being flowery and over the top. Well, I say to that member that I have heard this afternoon, for the last hour or so, very well-informed and strongly argued contributions from Jonathan Young, the Hon Dr Nick Smith, Todd Muller, Erica Stanford, Andrew Falloon, the Hon Paul Goldsmith, and Maureen Pugh. I think I’ve got them all—yes, Maureen Pugh. All of them—all of them—have been extremely strong and well argued. None of them have been flowery, none of them have been over the top; they’ve all been focusing on the very, very real, very serious concerns that this disastrous measure places before the committee. So for Ms Curran to suggest that National’s reaction to such a rushed and undemocratic announcement was over the top adds insult—[Time expired]

I move, That the question be now put.

It’s with great pleasure that I speak to this bill. I hadn’t intended to today, but as I reflected on my first year in Parliament, I have to say that this is the worst piece of process and legislation that I’ve seen in this House—the worst process, the rush, and the lack of any proper analysis. Minister, with the greatest respect to you and your position, there is no pathway from an energy perspective in this decision.

We’ve been hearing questions in this House, today even, about peak electricity prices. The Minister Megan Woods answers those by saying there is a problem with the infrastructure. Well, there will be a problem in New Zealand, all right, when there is no gas whatsoever. It won’t matter what the infrastructure is. What we’ve got today is just a small example of what could happen in the future. When we have no gas—and I hear the Minister saying there is plenty of prospecting—New Zealanders will face a choice: blackouts or importing more coal.

So far from this current Government, I haven’t heard that there is a ban on coal importation into the future, or that somehow we’re going to stop all the exploration of coal, because what we have in this country is, on best evidence, 10 years of gas supply at its current usage. Yes, there may be permits and there may be exploration, but it takes a long time for that to come on stream.

In my view, this process has been corrupt. On this side of the committee—

CHAIRPERSON (Poto Williams): I caution the member.

My apologies, Madam Chair. On this side of the committee, we are willingly and with the best of intent seeking to get an accommodation and agreement with the current Government on a climate change commission. My colleague Mr Todd Muller is working hard to achieve that with the Prime Minister and the Leader of the Opposition. If this process had any integrity, this very decision would have waited and gone through the climate change commission. It could’ve probably been looked at by the technical experts that are going to be put into this commission. If at that point the commission had then said it made sense to ban oil and gas from a time in the future that was agreed, then this side of the committee would not be having this argument.

The problem is, in this very instance, the Prime Minister went overseas, made a decision pretty much the night before, which even shocked the Hon Shane Jones—which is quite a difficult thing to do, but it even shocked the Hon Shane Jones—and now we know: no Cabinet paper, and the analysis from the Ministry of Business, Innovation and Employment simply says that in the medium to short term this could be worse for the environment than the status quo. So in my view, all this is about is blind ideology.

The Minister did not like what I said about the process, and it might be on the margins, and I apologise for that unparliamentary language. But my point is this: when there is no integrity in the process, then you end up with a result that is not in the best interests for New Zealand. It is my view that that’s exactly where we’re going. That is the path we’re going down. We are going to ban oil and gas exploration in this bill. At some future time when this bill kicks in, when all the investment has been scared off and when we run out of gas, guess what’s going to happen. The New Zealand public is going to have to deal with a very difficult choice: do we import more coal or do we turn the lights out?

Gas, particularly from my perspective, is a great and fundamental transitional tool. Yet we’ve lost an opportunity to use that in seeking out our energy futures, and, quite frankly, the answers that the Minister in the chair has given today have given me no confidence whatsoever that this has been thought out. This side of the committee is thinking about the future of New Zealand—the future of New Zealand—where that very difficult trade-off will have to be made, between turning the lights out and importing more coal.

I move, That the question be now put.

I, firstly, want to respond to the naivety of the Minister Megan Woods in her assessment of the impacts of Part 1 on the oil and gas industry. What the Minister said is, “Hey, don’t worry that we have arbitrarily cut off at the knees any exploration, because we are still going to allow the development of petroleum through mining and through development petroleum permits.” Minister, here’s the problem: if the Government can wake up one day, without any Cabinet process, and just arbitrarily cut off exploration—why would any business invest tens of millions of dollars in a permit when the Government could wake up tomorrow and decide to do with petroleum permits what it’s done with exploration permits? They just don’t get it. They don’t get the idea that when you make arbitrary decisions, you completely undermine business confidence—not just, Minister, in the area of the oil and gas sector but, actually, right across the economy. On that, you are wrong, you are naive, and you are doing enormous damage to jobs—

💬 Hon Shane Jones: Fake news! Fake news!

—and the New Zealand economy.

CHAIRPERSON (Poto Williams): Order! Order! Just—

The Minister.

CHAIRPERSON (Poto Williams): Thank you.

The second point is so relevant, in hearing Mr Jones chip in. He said that this was a democratic decision. Well, let’s test that. Can I ask Mr Jones: did he campaign in the 2017 election on ending oil and gas? Do any of my colleagues recall that? Mr Jones, was that your position at the last election? In fact, I remember Shane Jones saying, “New Zealand First will stand shoulder to shoulder with the oil and gas industry.” That’s what they said. Well, can the member opposite count? Actually, with the Opposition and the party policy positions of the National Party and when New Zealand First was being true to its word—actually, a majority of people voted for parties that are opposed to the very policy that is here in Part 1, and it is anything but democratic for the dodgy deal that’s been stitched up with the Greens. Let’s be upfront here: there was a quid pro quo. New Zealand First got the waka-hopping and the Green Party got the ban on the oil and gas industry, and that was anything but democratic.

Now, the third part of Part 1 that I want to refer to is just for the Minister in the chair to acknowledge the scale of what is being done. Does she agree with my assessment that clause 6, effectively, is going to ban exploration in 4.3 million square kilometres of New Zealand—4.3 million square kilometres?

Now, I know the Government’s trying to shut down this debate, but we should be very clear in this committee that we are talking about banning any exploration in an area that’s 20 times the size of the land area of New Zealand. We’re talking about the fourth-largest exclusive economic zone in the world. This isn’t tiddlywinks. This is truly massive, and the exemption provides for only 7,300 square kilometres. It’s not 1 percent. Effectively, the Minister in the chair is banning any oil or gas exploration in 99.9 percent of the realm of this country. That comes with an economic cost of nearly $24 billion, and I want to see some acknowledgment from the Minister of the scale of what is being done in Part 1, because I haven’t seen any of that in her contribution. I hear naivety.

It reminds me that the last Labour Government promised to reduce emissions. They went up by 20 percent. They promised to be carbon-neutral. I compare that with our own record in Government, where renewable electricity increased from 65—[Time expired]

Thank you, Madam Chair. I would like to come to clause 7 and speak to Supplementary Order Paper (SOP) 150 in my name. As I go back to the announcement on 12 April, the Prime Minister released a press statement, and attached to that was a fact sheet. In that fact sheet, she said—and the Minister in the chair has said it time and again—that permits will be protected. In that fact sheet, it said “Oil and gas permit holders have a number of existing rights under law which will continue following today’s announcement, including:”—and I’d just like to highlight one in particular—“Extensions of land to which the permit relates”.

Now, there is a provision in the petroleum programme which states that if a permit holder has made a discovery, the Minister will grant an extension of your land. So if you can imagine that they have a permit area, for example, the size of the Table in front of you, Madam Chair and Minister, and there was a discovery at the very edge of that. Then, that company could go to New Zealand Petroleum and Minerals and go to the Minister and ask for an extension of land for that permit, because the discovery of that field would extend beyond the permit. This says here, in 12.4 of extension of land area of permit: “(4) If the permit holder has made a discovery, the Minister will grant an extension of land, subject to the holder agreeing to an appraisal work programme that is satisfactory to the Minister, where the Minister is satisfied that: (a) the discovery extends beyond the boundary of the permit area,”.

Now, what we have is a promise from the Prime Minister, reiterated by the Minister of Energy and Resources, that now that we have a very constrained area, which is onshore Taranaki region, if there was a discovery on the boundary of that region with a field that extended beyond it, it, essentially, means that they cannot fulfil their obligation and their word to the industry. So what I am proposing in this SOP is that the Minister may grant—if I can read out what I have in new subsection (2A): “However, the land to which a permit for petroleum relates cannot be extended to include any land outside the onshore Taranaki region”—that’s as it currently reads—“unless—(a) the extension only relates to land that is contiguous to the onshore Taranaki region;”—so that is land that is immediately connected to that boundary—“and (b) the discovery originated from permitted activity within the onshore Taranaki region.”

Now, this is the status quo—this is as it presently is. So what I am saying is that that boundary of the Taranaki region ought to have some flexibility ascribed to it, rather than be hard and fast, in keeping with the Prime Minister’s promise and the Minister of Energy and Resources’ obligation that permit rights will be protected, as was stated in the fact sheet attached to the Prime Minister’s speech on 12 April.

I don’t think that is unreasonable to ask. It’s extending what the Minister has prescribed in the bill, but it’s creating an ability for consideration. In fact, in 12.4 of the Petroleum Programme, it actually implies there that the Minister does have an obligation, because what it states is that if a permit holder has made a discovery that extends beyond the boundary of a permit area, “the Minister will grant”. There is a further section that says that if a permit holder’s application to an extension of land is based only on seismic or other geotechnical information and not an exact discovery, then “the Minister may grant” and gives a lesser sense of obligation, but certainly an obligation to consideration.

So I am asking the Minister to consider this. This is a serious Supplementary Order Paper, which I believe would give a degree of flexibility. The problem is that if they don’t have this, then will they explore within the closeness of the boundary? Probably not.

I’d like to take a very quick call to respond to the member Jonathan Young on his Supplementary Order Paper 150. I advise the member that we won’t be supporting that Supplementary Order Paper, and that is for a very simple reason. Our policy has been very clear that the purpose of this bill is to restrict the offer of further exploration permits to onshore Taranaki.

Now, the member advances an argument that the oil and gas industry have also brought up with me in the time since we made the announcement in April. The conversation that I have had with them around that is that what we are doing in this bill are the things that we are required to do to give legal effect to the decision of the April announcement, and this is what we are calling “tranche one”. Tranche two of changes to the Crown Minerals Act will be more broad-reaching, where we will consider a range of things, and I have invited them to continue the conversation, both with myself and with officials, around that very point.

So I invite that member, in terms of thinking about that and in terms of contributions he might want to make to any work that we do around tranche two changes to the Crown Minerals Act, but in these very restricted and tight changes that we are making in tranche one of the amendments, we won’t be accepting that Supplementary Order Paper.

Thank you—finally—Madam Chair. It seemed like I wasn’t going to get a call, but thank you for recognising me and giving me an opportunity.

Right at the beginning, I would like to flag the fact that I want to have a conversation about the “offshore” definition in clause 4 in Part 1. But before I get to that, I’d like to speak or at least react to the comment that was made earlier by Minister Megan Woods in relation to what this Government and her announcement in relation to this particular bill was. I think she actually said something along the lines of “The decision was to prevent economic shock.” I was floored by that comment. I thought that when a Government makes a decision and makes an announcement on policy that wasn’t even consulted with the industry or the region, or that even had a Cabinet decision on such a big issue, it was going to create an economic shock—that it was going to create the loss of thousands of jobs, and I think someone even mentioned that the indirect job loss was going to be more than 10,000 jobs. I was floored by that.

She talked about wanting to be more, I guess—getting away from coal-powered generation. I think I remember, in a speech that I made, that when we look at alternatives to coal—I’m not suggesting we stick to coal, but the thing is that there needs to be a plan. I know that Maureen Pugh is a huge supporter of the region, and I understand that, but we need to actually grapple with the issue of security of energy in New Zealand

One of things that I actually mentioned was that in order to create one wind turbine, for example—and I know the Minister actually mentioned wind as an alternative—it needs 270 tonnes of steel; 270 tonnes of steel to create one wind turbine. And to create that amount of steel needed to create one wind turbine, it needs 300 tonnes of coal to make that amount of steel. You sort of wonder whether it is really an alternative that is actually very green.

I remember, earlier—my colleagues have actually mentioned about the process and the lack of process at the Environment Committee. Companies have actually invested millions of dollars, and wanted to come to the select committee to present their case in opposing this legislation and there were literally—

💬 Maureen Pugh: 10 minutes.

10 minutes in select committee. I would have thought that when people come from all over the country, wanting to comment about a particular bill—I just wonder what the rush was by this Government in order to actually hurry up. I digress.

I wanted to talk about clause 4—the definition in relation to the “onshore Taranaki region”. There are a number of parts of this definition that need the examination of the committee. The Crown Minerals Act 1991 defines “offshore” as “anywhere that is the seaward side of the mean high-water mark”. This seems to be a very pretty straightforward definition. However, I sort of wonder—I mean I’m not much of a sea-going person. I don’t really know what that “mean high-water mark” actually means.

I guess, you know, when the National Institute of Water and Atmospheric Research has a paper titled “Guidance Notes for the Determination of Mean High Water Mark for Land Title Surveys”, I guess what it actually means is “the line of medium high tide between the springs and neaps”—I have no idea what that actually means. I wonder if the Minister understands what that mean high-water mark actually means to everyone. I think one of the definitions is “the foot of the cliff”; another one is “the toe of the bank”—the “edge of vegetation”. To a layperson, who doesn’t really know much about what that mean high-water mark actually means, I would like an explanation of what the Minister actually understands to be the definition.

And just to—I’ve got 24 seconds—for the benefit of my colleagues who actually quoted Mr Shane Jones for his support of the democratic process that this Government apparently took, when the announcement was made by the Prime Minister, I would like to quote the honourable member—[Member puts head in hand] How do you quote that?

We have heard a large number of claims about the process in the Environment Committee. A number of members, including some who actually weren’t even in the room, have been commenting on the process and claiming that it was difficult, unfair, and that people were cut off short. I just want to clarify some of what happened in the committee so that we need not traverse this ground again.

First of all, the claim just recently from the previous speaker—that submitters were allowed only five minutes for individuals or 10 minutes for groups. In actual fact, we allowed five minutes for individuals, as is usual with select committees, and 15 minutes for groups. So that was quite a generous time allowance. I’d also like to point out that, as a way of trying to be as fair as possible to submitters, as chair of that committee, I did keep people very carefully to that time. I warned them that I was going to do so. As their time came to an end, I asked them to finish and I did move them on very quickly. I did this because opinion was so polarised on this bill. I knew that I couldn’t extend people’s time, because it would be seen as unfair; so I made sure we were as fair as possible to each submitter.

In fact, Opposition members on that committee actually commented to me at the end of it on how fair and reasonable a process I’d made. So I am mystified at the claims that are being made in the Chamber right now. And the people who were in that room will know the truth of that claim. But for those who weren’t in the room, I would like to remind them that the submissions process—the hearing process—is all live-streamed on Facebook, so there’s actually a record of what happened in that select committee room and of the way that we tried to treat every single submitter with fairness and respect.

So, in light of all the claims that have been made about the process in that room, in light of all the claims have been made about whether people who wanted to make oral submissions were heard, I’d just like to put what I recall of the process there and say that we heard from every single submitter who asked to be heard. We made every single effort to hear them, to bring them in from all around the country via technology to give everyone their opportunity. And so with respect, Madam Chair, I think that this matter has been dealt with sufficiently.

Madam Chair, I would like to speak to Supplementary Order Paper 148. It is similar to the previous one but has a slightly different application to it. As the bill states in clause 8, then down to new section 50A, “Restricted access to Taranaki conservation land”, in subsection (3), “However, this section”—which restricts access to Taranaki conservation land—“does not prevent prospecting, exploration, or mining carried out below the surface of Taranaki conservation land in accordance with section 57.”

I’d like to apply that same parallel to where there is ordinarily schedule 4 land, which can’t have access, and here this bill creates an opportunity for exploration mining as long as it is below the surface and does not impact the surface at all. In Supplementary Order Paper 148, what I am seeking a consideration for is that the Minister may grant a permit for petroleum where the mining operations are entirely located on land within the onshore Taranaki region, regardless of whether the petroleum being mined is located within or outside the onshore Taranaki region.

Once again, looking at that previous Supplementary Order Paper, which talked about how a field may extend, we know today that there are huge scientific improvements and technological improvements in terms of drilling technique. It’s often called “horizontal” drilling. We know that, for example, at Pohokura there’s been horizontal drilling to Kupe, to Maari, and to different places, where a drilling platform may be in one position but may target another position that could be three or four or five kilometres away.

So if we are prepared to say in this bill and the Minister is prepared to allow conservation land to have that style of exploration take place under it, although not on it, why would the Minister not allow for that type of exploration and that technical horizontal drilling to occur beyond the Taranaki border, even though it is located within the Taranaki onshore border? Because that might be a solution to the issue that I raised before, where it comes to a field, a reservoir, or whatever, that seismically has been located beyond the onshore Taranaki region.

Once again, it is ensuring that those activities that actually seek to do that exploration occur within the Taranaki region, but what is subsurface can be a different thing. I’m not suggesting that that subsurface go to offshore, because it’s explicitly in the bill that that is not a consideration, but some flexibility—whether the Minister is going to respond by saying “Well that may be part of consideration of tranche two.” or not—I do think is worthy of consideration, considering we have an exemplar here of what will occur or could occur in conservation land.

Surely, sort of rough Taranaki scrubland is no more important than conservation land. And so I’m proposing that we look at this amendment here in Supplementary Order Paper 148 to grant what’s considered to be “running room”—a current practice, a current understanding, a current process by which the hydrocarbon sector can operate, and currently a regime that is in play with New Zealand Petroleum and Minerals.

It doesn’t seem to me to be outrageous or outlandish; it seems to be reasonable, and I would invite the Minister to consider this Supplementary Order Paper, because I believe that what it does is create that flexibility that will enable that investment that companies make to be able to be protected. And one of the things that she has said in terms of part of her policy background of this is to maximise the infrastructure and the investment cost for the sake of New Zealand and those companies. Thank you.

I move, That the question be now put.

Thank you very much, Madam Chair. It’s with pleasure that I will make a short contribution on the Crown Minerals (Petroleum) Amendment Bill, whether for five or 10 minutes—the latter being urged by Andrew Falloon, but perhaps he’ll be urging me in a different direction once he’s heard the content of what I have to suggest, along with some other members of the House, perhaps.

I’d like to focus on clause 4 of the bill, which relates to section 2 of the principal Act, which is in relation to interpretation and more particularly the phrase “onshore Taranaki region”. Now, in the bill it’s proposed by the Minister of Energy and Resources and her Government that this be defined in a certain way, which I’ll come to quite specifically in a moment. My colleague Melissa Lee asked some very intelligent questions about exactly the meaning of some of these words, and it is significant because the application of the Act, as amended, as it will become if this passes, will be affected by exactly the areas that we’re talking about.

So onshore Taranaki region, then, “means the Taranaki region as constituted by clause 4 of the Local Government Taranaki Reorganisation Order 1989, but excludes any part of the region that is offshore”. I emphasise the final word “offshore” because the meaning of that isn’t actually particularly clear in this amendment bill. And so we can actually look, of course, in the Act itself, and we see there a definition of offshore as being, and I quote, “anywhere that is on the seaward side of the mean high-water mark.” Seaward, meaning on the side, of course, of the sea rather than the land, in the same way that leeward and windward are opposites.

I’ll just pause for a moment to note that this is an area of my life which I have in a previous professional life spent some time agonising over as a navigator with the navy. So I appreciate and understand that actually lives are at stake when it comes to understanding exactly the definition and understanding of where water and land intersect. So what then is offshore? And we have that definition in the Crown Minerals Act, but that, in turn, leads us to ask the question: what does the phrase “mean high-water mark” actually mean?

Some concerned citizens and I have been looking into this question with some enthusiasm, and we’ve noted that there’s a paper from the National Institute of Water and Atmospheric Research in the early 1990s that provides guidance along those lines. It was published by the professional development committee of the New Zealand Institute of Surveyors. It actually goes back to the common law cadastral boundary definition, so as between, again, the land and the sea, as being, and I quote from a case in 1854 between the Attorney-General v Chambers—whoever or whatever “Chambers” might have been. “The line of medium high tide between the springs and neaps”—“springs” being the tides which are at their greatest or lowest extent corresponding to full moons or new moons, and “neaps” being all those other tides. So on a sine curve, such as we can use to represent tides coming and going over the course of a year—our springs being at the greatest extent.

So again just reminding you, Madam Chair, and anyone else who’s still following with interest at this point, we’re talking about the definition of “offshore”, which specifically helps to define the exclusion within the “onshore Taranaki region” definition in the bill. And so we’ve got a legal definition by that particular item of case law from a century and a half ago but also some advice of chief surveyors that talks about the foot of a cliff, the toe of a bank, the edge of vegetation, or, my personal favourite, a line of driftwood as being indicators of where the mean high-water mark might occur.

So my question to the Minister then, noting all these possible different understandings, is whether she agrees with any of those types of definitions for what a mean high-water mark might mean. Bearing in mind that that in turn will define what will be “offshore” for the purpose of section 2 of the principal Act in defining onshore Taranaki region. So if she can give some guidance on that. No doubt there won’t be any changes to the legislation on the basis of me having asked these questions. I don’t seek that; I merely seek some clarification so that the record will state when this bill comes into the law, as amended, as it inevitably will—it seems then we’ll at least know what we’re dealing with.

I move, That the question be now put.