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Government ignores fossil fuel opposition with release of oil-heavy energy strategies

When a draft copies of the government’s New Zealand Energy Strategy and New Zealand Energy Efficiency and Conservation Strategy were leaked earlier this year, they were met with a barrage of criticism for what some groups deemed to be too greater a focus on the continued extraction of fossil fuels. But with the official release of the documents today, it looks as if oil is set to continue as a cash cow opportunity for New Zealand. 

“We can’t just turn off the tap in our journey to a lower carbon economy,” said acting minister of energy and resources, Hekia Parata, who released the documents today. She added that New Zealand can’t ignore the “major economic opportunity that continuing global oil demand could provide New Zealand. Petroleum was our fourth biggest export earner in 2010”.

In addition to the energy strategies, Parata also released the independent Woodward report assessing New Zealand’s oil and gas potential. That report states New Zealand is set to earn more than $3 billion in royalties from oil and gas fields already in production, with the potential to increase to 12.7 billion with future discoveries. And, playing at the heartstrings of Kiwis, the government says that money could be used to pay for schools, hospitals, broadband and roads.

"People want to be sure that the environment is protected and they also want jobs and growth,’’ said Parata. 

Not surprisingly opposition to the strategies is starting to seep through, with the Green Party describing the government as “backward-looking”. 

“The Acting Minister says the switch from fossil fuels can't occur overnight. No-one ever said it could,” said Green Party energy spokesperson Dr Kennedy Graham. “But to plan to be a net exporter of oil two decades from now, while identifying climate change as one of the two main challenges in energy, demonstrates a startling lack of insight, or candour. 

"The Government relies on the sleight-of-hand that fossil fuel exports are somebody else's national accounting problem. They need to understand that the planet and the global economy are integrated. New Zealand is a part of it, and its fate is our fate.” 

Graham points to Denmark as an example of a country that’s got it right when it comes to its energy strategy. Denmark plans to be fossil free by 2050, all without a reliance on fossil fuel and nuclear energy. According to Graham, the plan will give it an edge and generate a number of jobs in a post-carbon global economy. He's confident New Zealand could be the same. 

“If we were to secure just 1 percent of the global renewable energy market in the next 5 years, we'd create a $5.8 billion new industry here, with 60,000 more green jobs.” 

But the newly released strategies do place some focus on renewable energy. Renewable assets like hydro, wind, geothermal, oil, gas and minerals are mentioned as key in helping New Zealand achieve its goal of 90 percent renewable electricity generation by 2025. The current level stands at 79 percent, the second highest in the OECD behind Iceland. 

Renewables aside, there have of course been a number of big industry players coming out in support of the fossil fuel focus. With Australian company Bathurst Resources last week being granted consent for an Escarpment mine on the Denniston plateau near Westport, and with Solid Energy announcing it will collaborate with Bathurst as each business seeks to develop their export coal resources on the Denniston plateau, it’s completely unsurprising to see Solid Energy pledge its support. 

Chief executive Don Elder said the strategy recognises that coal, oil and gas will play an important role in “delivering secure and affordable energy over the next few decades” as New Zealand and the world makes the transition to renewable energy. 

“This is good approach. It will support accelerated resource development in ways that will maximise value for New Zealand, but at the same time meet New Zealanders’ environmental and sustainability expectations, and ensure that we don’t lose offshore the significant economic benefits of our natural resources.” 

And with the coffers of the Denniston plateau Escarpment mine probably still ringing in his ears, Elder especially welcomed proposals to change permitting for oil and gas exploration and the recognition that New Zealand’s gas hydrates have huge economic potential for the country. 

View the energy strategies here and the Woodward report here.

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Royalties may be just a mirage. The Woodward report confirms domestic production is falling off a cliff and royalties with it. The much hyped royalty figures are 10 years away and assume more oil will be found.

Meanwhile the ANNUAL cost to NZ of importing ever more expensive oil could rise by 2015 to $10 billion which is equal the cost to Govt of the Christchurch earthquake EVERY year. $19 billion by 2020. more at

Even if new oil was discovered tomorrow none will come on stream for at least 5 years more likely 10 years. While we wait for the govt's massive gamble to pay off — the oil crunch for prices and supply is NOW

What part of oil above $100 a barrel for over 6 months and the world economy stalling as a result does the govt not understand? It received advice from officials in 2009 that NZ was more vulnerable to oil shocks than other OECD nations but ignored it.

It's frustrating to see New Zealand's potential for an environmentally sustainable future destroyed by those plans. Not only does the oil business damage the country's clean, green brand value, it also creates a sense of 'look, there's loads of oil here, no need to change our driving habits' - leaving the country vulnerable to the direct and (for NZ probably even more relevant) indirect impacts of global warming.

Sustainable futures look different:

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