Crown Minerals Amendment Bill

I present a legislative statement on the Crown Minerals Amendment Bill.

ASSISTANT SPEAKER (Hon Jenny Salesa): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon Dr MEGAN WOODS: I move, That the Crown Minerals Amendment Bill be now read a third time.

Our Government is committed to transitioning New Zealand to a low-emissions economy. New Zealand has targets to reduce our greenhouse gas emissions with carbon emissions to reach net zero by 2050. We have set a target of 100 percent renewable electricity generation by 2030. On 9 August, I announced that the Government would consult on an ambitious programme of work for this transition—over five streams of energy policy. I want to ensure that the legislation for our Crown minerals is keeping up with the times, and that’s why I initiated the Crown Minerals Act review.

There have already been shifts in how the regime operates as a result of the review. The 2018 tranche 1 amendments put an end to offshore petroleum exploration permitting. The 2020-2021 tranche 2 amendments ensured that petroleum decommissioning obligations sit with the people and companies that profited from these resources and not the taxpayers of New Zealand. This bill concludes tranche 2 of the Crown minerals review by making important incremental amendments while reform in the broader regulatory framework is under way, such as in the resource management system.

A big part of bringing the Crown Minerals Act up to date is to ensure that it is consistent with our push to net zero. The Government recognises the continued importance of petroleum throughout the transition. We also need other minerals for the roading infrastructure and for the clean technologies in our future. But the Crown Minerals Act is out of step with our wider policy settings to get us to net zero. The promotional intent of the Act currently requires the Minister to take certain steps to promote development of our mineral resources, and this includes the expectation that we run an annual block offer for petroleum permits. This is expected regardless of whether it is in the best long-term interests of New Zealand.

Part 1 of the bill proposes changes to enhance flexibility in the way we manage our petroleum and minerals. It would remove that promotional intent to make the Crown Minerals Act neutral so that the development can be promoted where there is a need and minimised where there is not. With these changes in place, the Crown Minerals Act would be better aligned with wider policy settings and this would no longer be in conflict with the wider settings for a net zero transition. The bill strikes that balance by ensuring that continued investment and security of supply for fossil fuels are not put at risk during the transition. But the bill also keeps clear the path for development of other minerals into the future should there be a need, such as for clean-tech minerals used in renewable energy.

Part 2 of the bill makes changes to improve permit holder engagement with iwi and hapū, extending existing requirements that have been in place since 2013. Iwi and hapū reported that engagement quality is highly variable and does not always respect or reflect understanding for their authority, mana, and expertise in relation to the natural environment and their local communities. In part, this is because the Crown’s expectation for engagement under the Crown Minerals Act was unclear. The proposed changes will bring more clarity to iwi and hapū and other stakeholders about how engagement will be reported and how feedback from iwi and hapū can inform future allocation under the Crown Minerals Act. I expect to see an improvement in permit holder engagement with iwi and hapū because of these changes.

Part 2 of the bill also makes decommissioning-related clarification to ensure that there is no doubt over the interpretation of the provisions introduced in 2021. These ensure that industry decommission so that there will be no repeat of the events surrounding the Tui oil field, where the operator liquidated and Government had to step in at a significant cost to the taxpayer—hundreds of millions of dollars to the New Zealand taxpayer.

The select committee reported back to the House with four recommendations, and these were shared with this House during the second reading. As part of the committee of the whole House, I tabled a Supplementary Order Paper that made minor and technical changes to the bill, including moving provision relating to the Minister’s ability to consider past iwi feedback on existing or previous permit holders out of the Schedule of the bill and to new section 29C in clause 11 to increase clarity; clarifying, in section 105(1) in clause 19, what time periods can be described for the purposes of preparing and consulting on draft iwi engagement reports; presenting finalised iwi engagement reports to the chief executive of the Ministry of Business, Innovation and Employment and making the consequential changes to section 33C, in clause 12; and amending the Schedule of the bill to refine the application of new Part 5 inserted into Schedule 1 of the Act, and to remove an unnecessary clause from the new Part 5.

I want to thank the Economic Development, Science and Innovation Committee again for their work and consideration of this bill. I believe that the changes that were made to the bill as a result of the select committee process have resulted in a better and more robust piece of legislation. I want to thank everyone who has contributed to the preparation and passage of this bill. I look forward to seeing the amended Crown Minerals Act serve New Zealanders now and into our future with the development of minerals promoted where they are needed, but clearly charting our pathway of how we achieve net zero in our future. I commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Mr Speaker. It is a pleasure to have a speech in this third reading of the Crown Minerals Amendment Bill, which we oppose.

The Minister who’s just taken her seat had a lot to say about climate change and about transition. Unfortunately, this bill is not really going to have much of an impact on that, although it will have an impact on the wealth of New Zealand and New Zealanders. She talked about clause 4, which changed “promote prospecting for, exploration for, and mining of Crown owned minerals for the benefit of New Zealand.” to “manage prospecting for, exploration for, and mining of Crown owned minerals for the benefit of New Zealand.” Unfortunately, that will have some impact. Semantics do have a practical effect. Unfortunately, the management of permits is anything but efficient. They are not efficient. The delay’s unbelievably long and it is having a deleterious effect on the mining industry. Ironically, as my colleague pointed out, the Labour Party had its roots on the West Coast in the mining industry and now the Labour Party appears to be abandoning its base, leaving their mining past behind—and the hard work and toil of those miners that set up the Labour Party all those years ago.

The transition to a greener economy is essential. We are doing that; it’s an essential part of the modern world. Unfortunately, as part of that, as I alluded to in the committee of the whole—and this has been right across the Western World—we’ve got a bit worried about mining and the impacts that it has. But what we’re doing—we still require all those minerals—is we’re essentially exporting the mining responsibility to people overseas where the environmental rules are not as stringent as they are in the Western World and the labour regulations are not what we would expect here.

In New Zealand, people working in the mining industry earn well above the average or the median. It’s a very well-paid sector to work in, and people’s health and safety is incredibly well looked after. I have been down two gold mines, well underground, very deep in the Waihi mine and also on the Snowy River Mine on the West Coast, not far out of Reefton—fantastic facilities. The attention to detail on the safety of their staff is unbelievable, almost. So they really take that very, very seriously. So, too, do they take the environmental obligations very seriously as well. All of the plans for the restoration of the mining sites are in place in a modern mine when it’s opened. Now, no doubt regulations may change over the time of that mine but they are responsive and the people that handle their restoration are only there for that job. They are not the miners. They are not the people doing the drilling and the blasting, they’re not people operating the machinery, they’re not people operating a trammel mill or the other processes in the mine. They are there to protect the environment and to meet the obligations that any good steward of the land would do, and I have seen that firsthand on numerous occasions.

I’d have to say what a pleasure it was to visit the Stockton mine, and I’d urge anyone who gets the opportunity to go there; they should do that. The professionalism of the people working there and their attention to detail and the way that they go about their mining is something I think we should all as New Zealanders be very proud of. This goes to the transition. The coal from Stockton is metallurgical coal. It is used to make steel, primarily, and in other industrial processes as well, but not just for the calorific value of the heat in the coal; it can be used for industrial processes, as well as other things.

That coal is used by steel mills overseas to lower their emissions. Because of the chemical makeup of that coal on the West Coast, they blend it with other coal and are able to use less coal, in total, to make that steel—and they have lower emissions as a result of that. The emissions from that coal is a significant part of steelmaking. Now, there are some strides being made to make steel without coal. That is in its infancy at the moment. Basically, it’s not taking it from iron ore to steel; it’s the scrap metal to steel stage that’s able to be done more easily, and that is really pretty much in its infancy and the costs are quite high. So I think coal is going to be with us for quite some time to make steel. As my colleague Melissa Lee mentioned earlier, an everyday thing that we think of today, such as a wind turbine, has, on average, 220 tonnes of coal used to manufacture that turbine. We need coal and I know, as a man of the West Coast, you’ll be delighted to know that there are jobs for West Coasters and a future in the mining industry on the West Coast. That’s a message, certainly from this side of the House, that I’d like to get on the record.

But mining goes much wider than people would think. If we do think about batteries—if we think about an alkaline battery, it’s got zinc, manganese, potassium in it; a silver oxide battery has silver, zinc, potassium; a lithium-ion battery has lithium, cobalt and carbon, and it has 28 percent graphite. Graphite is also mined, albeit that in my electorate, at CarbonScape, they are making—right through the process of being able to make, and now trying to commercialise—green graphite. That is from carbonaceous waste into graphite that can be used at a very high purity, higher than most deposits of graphite that are found naturally and mined, and that will lower emissions for batteries. But, VW did a comparison of a battery electric vehicle with a diesel vehicle of a similar size and they found that, for those vehicles over their lives they would have to do 100,000 miles before the EV reached the same emissions level as the diesel. So once they went beyond 100,000 miles, then the EV was actually lower on emissions.

So, just to put these things in perspective; it seems to be forgotten by others, or perhaps it’s not known, and that’s to their shame. But I would like to point out, as I said, mining goes much wider than things like wind turbine towers and batteries. Toothpaste, for example, has fluoride in it, as you would be aware, where they mine for fluoride. Calcium, aluminium, and sodium—all of those are mined for. In deodorant, there’s aluminium and zirconium—all mined. Sunscreen has zinc; electric shavers and toothbrush—[Interruption]

DEPUTY SPEAKER: Sorry, could I just ask those members at the back to move a little closer for your conversation instead of yelling at each other across. I can hardly hear this very good speech.

STUART SMITH: And magnesium is used in anticaking, for foundation powders and creams. Who knew? Titanium is used as a whitening agent in powders and cosmetics, and potassium is used in fragrances and tanning lotions. Iron, of course, is used in cosmetic pigment and metal polish. So all of those things are mined for. Not all of them but a lot of them are available here.

Now, do we want those things that we use to be made ethically? Do we want those things to be made with as little impact on the environment as possible? Do we want those things mined where the mines will be restored in an environmentally responsible and sustainable manner? I would say yes to all of those things, and I think all New Zealanders would say yes to those things. But this Government seems intent on exporting our sins overseas. They want it all to be done overseas and, as I mentioned in the committee of the whole House, the West has made a strategic mistake here. We are now dependent on regimes that are not often as ethical in terms of labour laws and the environmental practices, and yet we seem quite happy to have that happen. Do we care about the climate? Yes, but it is a global issue, not a national issue.

Thank you, Mr Speaker. It’s my pleasure to be able to support the Crown Minerals Amendment Bill. This is a bill that was considered carefully by the select committee—a great select committee, the Economic Development, Science and Innovation Committee, and I just wanted to thank all the submitters and all of the officials for working with us on this bill. As it has been already canvassed in this House, we made a few more changes and a few more clarifications around some of the clauses in this bill, but mainly this bill is here so that we can make sure that our Crown-owned minerals are there to benefit all New Zealanders, and the management, and the way we manage it can be good for our environment and our economy as well.

We have strengthened the rules of engagement with iwi and hapū; we’ve also made it more clear about what the requirements are for decommissioning, making sure that we give these rights to those responsible mining companies. I just wanted to quote something—as many of us would watch every day—from Air New Zealand: that this land is not just yours or mine, it’s not just inherited from our ancestors but borrowed from our children, and we have a responsibility for future generations in looking after it. That’s why I commend this bill to the House.

Thank you, Mr Speaker. I’d like to commend my colleague Stuart Smith, who has articulated brilliantly, and like you, Mr Speaker, I too enjoyed that tremendous speech.

In the third reading, obviously, I’d like to thank my select committee members on the Economic Development, Science and Innovation Committee. As the chair said earlier, we do actually work very cooperatively and efficiently, and I’d like to wish the members—I’m not so sure if I’ll get another chance to wish them good luck in the coming election, because next week is our final week in the House.

But on this bill and the purpose, right from the outset it changes the dynamics of how the industry is supposed to operate. Instead of the Government promoting prospecting and exploring for minerals, it is basically only going to be managing it. So, literally, it is not saying, “Welcome, you are here to explore”—and, potentially, get more minerals that are needed for all of the products that Stuart Smith talked about in his speech. That change is in clause 4.

The other aspect of it in clause 5 is that it also talks about the functions of the Minister responsible for the administration of the principal Act where the attracting of the permit application is now officially cancelled. They’re not going to be attracting it. They’re going to decide “from time to time”, meaning hardly ever, under this Government, because it looks like they’re officially off the target area for the Labour Government for the prosperity of New Zealand. Where other Governments in the world are trying to incentivise mining for minerals and they are even subsidising some of the work that they do, New Zealand is basically saying no, and that is at the cost of us all. I know that the Government actually talks in a very big-falutin way about how they’re committed to emissions reduction, and yet their decision to close down on gas exploration, which other countries support as a backstop for energy, means that we don’t actually have that any more. I think that overseas, they say in Norway—

Stuart Smith: They’ve just reopened.

MELISSA LEE: They’ve reopened, according to Stuart Smith. He’s just told me that.

Hon Member: Oh, Stuart Smith is a very wise man.

MELISSA LEE: He is—well, he is the spokesperson, after all. He knows his business, and I think sometimes I have to wonder whether the Minister does, in fact, know about it.

The issue is that the Minister of Energy and Resources, in her answer during the committee stage, said that it wasn’t part of the debate, but she introduced it by trying to defend her Government’s position by saying that New Zealand has had the lowest importation of coal in the last quarter of last year. I have to remind the members that in 2021, we had one of the highest importation of coal—close to 2 million tonnes—that came into this country from Indonesia, where we cannot guarantee that their exploration methods are as clean as we do it. Why not open the mines here in New Zealand so that we can control the environmental impact? We only do it because we may need it when the water levels in our hydro lakes are down and we need the coal to power our energy, but, instead, we import it from another country where we can’t control the emissions commitment of those countries or the practices of those countries.

Going forward, whether or not it is products that use minerals that we import, we probably, as a nation, need to think about how those products are manufactured in terms of their emissions profile, because that’s the trend around the world. I think we would all support that, but we need to actually think about how we do it in New Zealand. I think we can be better, and all of us can agree to that. But, as Stuart said, do we want to make sure that we support the mining industry to explore and get these minerals out of the ground to, potentially, use for the things that we need, including electric vehicles (EVs) and including silica, for example. I mean, you know, Silicon Valley—we need chips, right? Potentially, we could actually create manufacturing where we filter the silica that we—

Stuart Smith: We could sell them silicon ingots.

MELISSA LEE: Exactly, and we should think about the future. The future is in digital and it needs a lot of minerals. I think that EVs have—how many more minerals?—six times more minerals than conventional cars. I know that earlier I talked about the wind turbines—one wind turbine takes 220 tonnes of coal to manufacture.

Hon Member: So you replace the coal.

MELISSA LEE: I know. But the thing is that we have to look at those costs as well, and perhaps those costs for carbon emissions could be reduced if we did it from New Zealand, rather than importing coal that has a really terrible carbon emission profile, and it has to be shipped to New Zealand as well. That also is a carbon profile addition, rather than things that are dug up from our own ground.

I’m not suggesting we go all foolhardy on coal, coal, coal; I’m talking about minerals. There are plenty of minerals in our Crown land, where we can promote and be responsible in their attraction. I think that the Government could actually do more to support the industry instead of kiboshing it and saying no, and calling them out as if they are bad actors. I think everyone tries to do their very best. Yes, we do get some bad actors, and those bad actors need to be pulled up for their activities and we should make sure that they pay for their bad activity in terms of their pollution. But when we consider the fact that overseas Governments are incentivising minerals mining and trying to make sure that there is competition in the field, I think New Zealand is actually badly served by our Government trying to reduce the amount of exploration. I certainly do not support this bill.

One of the worst and laziest debating habits that occurs in this House from time to time is the creation of the straw man. That is the development of an argument that is self-evident but doesn’t actually go to the matter that is under consideration. That is what we have been treated to over the last couple of speeches from the Opposition, who are opposing this bill. The Opposition have waxed lyrical at some length about the fact that extractive industries are important to our modern economy and our modern society. There is not a single member of this House who disputes that in some cases extractive industries are important for some of the things that we enjoy in our societies, and nor does this bill make that claim, yet listening to the Opposition members’ speeches, one might think that.

What this bill simply does is to ensure that we have a Crown minerals regime in New Zealand that ensures that when we do allocate rights to Crown minerals—which we accept in this House it is the purview of the Crown to allocate—that they are managed in a way that is good and to the benefit of our country, and, as the previous Labour speaker Naisi Chen said, with a broader range of considerations in mind, including environmental considerations and the needs of future generations.

What we really got to, and we heard this from the last couple of speakers as they got a bit deeper into their speeches, is the fact that the National-ACT Opposition fundamentally has got to the point where they’ll mouth some words about climate change, but, ultimately, will not actually do anything to change our practices in a meaningful way that would reduce emissions. They want to reopen prospecting for new oil and gas. They want to mine for more gold. It’s good to get the clarity and honesty from the ACT Party, and I give the ACT Party some credit for that. I disagree with them profoundly, but they tend to coat it in fewer weasel words than the National Party. The ACT Party wants to mine for more oil and gas and coal, and that is what we will get under a future National-ACT Government that will abandon all of the meaningful steps that we have taken to actually reduce our carbon emissions.

The final point that I find extraordinary is that we have an Opposition voting against this bill that puts in place stronger provisions around the decommissioning of oil and gas infrastructure. That is a fundamentally irresponsible position because it will leave the Crown in the position of having to take up the costs of that decommissioning in future years—yet another cost that you can add on to the National Party’s uncosted future Budgets.

This is a good bill that means that we can manage mineral extraction in a better way in the future, not close it down—no one’s proposing to do that—and that will reduce cost to the taxpayers through the decommissioning of future infrastructure. It’s a prudent and sensible bill and I’m very pleased that it will pass through the House today.

Thank you, Mr Speaker. Thank you to the previous speaker, the Hon Michael Wood, for acknowledging that the ACT Party does support ongoing development of oil and gas resources and our mineral resources, and that we also have a strong commitment to reducing the effects of greenhouse gas emissions by making sure the emissions trading scheme puts a price on emissions so the incentives to reduce emissions are clear.

That is why the ACT Party says that the provisions of this bill, which further go to restrict access and development of New Zealand’s natural and physical resources—particularly those hydrocarbon resources natural gas and oil which we absolutely depend on for residential heating, generating electricity, and for producing manufactured goods like methanol; like paper from our timber and forestry, and so on—that we continue to have an adequate supply of those resources at a cost-effective rate.

So let’s come to the problems that this bill proposes to solve and the problems that this bill causes. This bill proposes to amend the Crown Minerals Act, which includes minerals in the ground—things such as gold and silver, for example—and oil and gas. They are all covered by this Act. It enables a more flexible approach to the management allocation of rights to Crown-owned minerals. Well, what it does by removing the word “promote” from the purpose of the bill—“promote” the development of minerals—it, essentially, takes away the “New Zealand’s open for business; we want New Zealand to be a wealthy country so we can afford better social outcomes.” It takes away the “promote” and goes back to “manage”.

Then it says, instead of the Minister being required to make offers to the market to access New Zealand’s Crown-owned minerals—oil, gas, and other minerals such as gold—instead of being required to “promote” that and to provide permitting in a regular and timely manner, it’s going to be “from time to time”. So when a Minister feels like—and we didn’t hear any criteria from the Minister what that might be. Of course, we could expect that under a Government that was supported by the Green Party—which is fundamentally opposed to mining—and Labour, which, essentially, does whatever it thinks will get the kids to vote for it.

If this administration continues along this route, what we can see is an ongoing pathway to reduction in access to affordable oil and gas energy and to the critical minerals that the Minister acknowledged are critical for life on earth as we know it now. Whether it’s medical imaging equipment, satellites, cell phones, or simply the batteries and computer chips in the electric vehicles that one day we’ll all be driving.

We have a choice. Do we go back to a zero-growth, doughnut economy—a circular economy, essentially: limits of growth, some socialist utopia where a centralised government will tell you where you are allowed to live, what car you are allowed to drive, what fuel you are allowed to use—or should we choose, instead, the economic opportunity that developing New Zealand’s resources offers us? Because that’s what ACT would do. We believe that getting the resources out of the ground, turning them into economically valuable goods, trading them with our neighbours and our partners value-for-value actually uplifts all New Zealanders—but particularly those in the regions like Taranaki; the West Coast of the South Island; Southland; Otago; and, of course, Coromandel, where small towns like Waihī benefit from having fantastic high-tech, environmentally friendly operators like OceanaGold operating gold mining in in that area.

So the Minister admitted that this bill is necessary because of something that happened in 2018. This bill backfills and, essentially, resolves a lot of the messy policy and legislative damage caused by former Prime Minister Jacinda Ardern, who announced on 11 April 2018 a ban on oil and gas exploration offshore in New Zealand, quoted at the time, “must start somewhere”, no jobs will be lost, effective immediately. Well crikey, that’s policy on the hoof. Here we are in 2023, five years later, the forlorn Minister of Energy and Resources, Megan Woods, having to come to the House and try to close off some of the issues that that flawed, hopeless announcement has resulted in.

It was described—that announcement—as a major victory by the Green Party leader, James Shaw. Truly, in the Prime Minister’s words, he said it is a “nuclear-free moment of our generation”. Well, this is how it’s going so far—

DEPUTY SPEAKER: Right, Mr Court—

SIMON COURT: Yes, Mr Speaker?

DEPUTY SPEAKER: Back to the bill.

SIMON COURT: Thank you, Mr Speaker. So what does this mean? What does this mean? What is a more flexible approach to management allocation of rights to Crown-owned minerals mean in New Zealand? Well, it means a Minister will have more ability to say no to things, even if they choose to offer permits—even if they choose to offer them.

This legislation does not repair the economic vandalism of that 2018 announcement to ban oil and gas exploration. It does not help the environment long term, because all emissions in New Zealand are covered by the cap under the emissions trading scheme, which the Minister of Climate Change can set. If they wanted to reduce emissions, they simply reduce the cap and the number of credits that are auctioned under the emissions trading scheme. It does not reduce carbon emissions by a single tonne. That is a fallacy; that is gaslighting.

But what it certainly does do is increase the national security risk that losing our energy independence creates by reducing the amount of oil and gas that we produce here in New Zealand. The Minister talked about a gas transition plan. There is no other country in the world that has embarked upon the removal of an energy source like natural gas from its economy and then, having decided they were going to do that, found the rainbow that leads to the field of unicorns where we all live in this just transition world where no jobs were lost.

There is no other country in the world that’s turned off gas. In the midst of a global energy shortage, President Putin having invaded Ukraine and forced Europe to reconsider its own energy transition to increase the volume of renewables, this is what UK Prime Minister Rishi Sunak said recently in relation to their gas transition plan: “We’ve all witnessed how Putin has manipulated and weaponised energy, disrupting supply and stalling growth in countries around the world. Now, more than ever, it’s vital we bolster our energy security and capitalise on that independence to deliver more affordable, clean energy to British homes and businesses.”

Now, a future Minister of energy may well make the same speech with regard to New Zealand. Because if the UK deems it necessary to offer hundreds of licences for exploration in the North Sea to the rest of their natural gas resources, to make sure they have clean and affordable energy, and to make sure that their national security interests are upheld, you know, it may well apply to New Zealand too.

ACT opposes this bill, but we do support a regime where decommissioning the Tui oil field or other installations is carried out to an extremely high standard—but that’s already allowed for under existing legislation. ACT would support engagement with iwi and hapū about natural gas and mineral resources where they have customary rights, where they have a demonstrated property right. For example, Ngāi Tahu in the South Island made the case very strongly when the Government was considering whether mining should be banned or prohibited on conservation land, particularly stewardship land, that there are iwi and hapū in New Zealand that have potentially a right—a property right or a customary right—to access minerals that the Crown owns.

So it is important that the Government engage with iwi and hapū to understand what that property right is. But ACT can’t support this bill because it doesn’t reduce, by a single tonne of carbon, New Zealand’s greenhouse gas emissions capped under the emissions trading scheme; it acts to further sterilise economic opportunities, particularly in regions like Taranaki; it exposes New Zealand to a higher risk of our national security being compromised by energy and materials shortages that we could address on-shore; it increases the cost of energy to homes and businesses; and it risks the leakage or deindustrialisation of jobs overseas. ACT opposes this bill. We’ll repeal the ban on oil and gas should we be in Government.

The time has come for me to leave the Chair. The House will resume at 2 p.m.

Sitting suspended from 12.57 p.m. to 2 p.m.