New Zealand coast

New Zealand to phase out offshore oil and gas exploration

Image credit: Dreamstime

Jacinda Ardern, the Prime Minister of New Zealand, has announced that the government will no longer award permits for offshore oil and gas exploration in order to help the country move towards a zero carbon future.

Ardern, who became Prime Minister in October 2017, has promised to reduce the country’s net greenhouse gas emissions to zero by 2050.

The decision to end offshore oil and gas exploration will not, the government said, affect the 22 existing permits for exploration or extraction of these natural resources. The oil and gas industry will continue to operate for decades longer; any new discoveries by current permit holders by 2030 could still reap a mining permit of up to 40 years.

Ardern said that the government was “striking the right balance for New Zealand”, and that nobody would be left out of a job by the decision. The oil and gas industry is not large in New Zealand, accounting for approximately 1 per cent of the economy and employing approximately 11,000 people.

“We’re protecting existing industry, and protecting future generations from climate change,” she said.

Inevitably, the announcement has been met with some criticism by political opponents; the conservative government, which preceded Ardern’s, was in favour of continuing to expand the oil and gas industry. According to Neil Holdom, Mayor of New Plymouth, the announcement is a “kick in the guts for the future of the Taranaki economy”, in which the majority of the industry is based in New Zealand.

The Petroleum Exploration and Production Association has argued that putting an end to oil and gas exploration in New Zealand will not affect the global supply of these resources, and could instead have worse environment impacts as exploration and production moves elsewhere.

Environmental pressure group Greenpeace welcomed the announcement. According to Russel Norman, the group’s executive director in New Zealand: “By ending new oil and gas exploration in our waters, the fourth largest Exclusive Economic Zone on the planet is out of bounds for new fossil fuel exploitation. New Zealand has stood up to one of the most powerful industries in the world.”

Since the 2010 Deepwater Horizon oil spill – for which BP was ruled to be primarily responsible and forced to pay $18.7bn (£13.2bn) in the largest corporate settlement in history – criticism of the offshore oil and gas industry has intensified.

Following the almost universal adoption of the Paris Agreement – which seeks to reduce carbon emissions in order to mitigate the most serious impacts of climate change – many governments have taken steps to move away from their dependence  on fossil fuels. In December, for instance, the French government announced that it would phase out all oil and gas production by 2040.

Ardern, who leads a left-of-centre government, has pledged to ensure that the grid in New Zealand runs entirely on renewable energy, and has said her government will plant 100 million trees every year. The government will review its handling of onshore exploration permits after three years.

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