PM's oil and gas remarks will have 'chilling effect' - MP

Taranaki's oil and gas sector is responsible for more than 4000 direct full-time roles and $1.57b of Taranaki's total GDP. Photo / File

Prime Minister Jacinda Ardern's remarks that the Government is considering an end to oil and gas exploration will have a "chilling effect" on what is a multibillion-dollar industry, New Plymouth's MP says.

And while a Taranaki business leader also fears any abrupt move could drive major employers out of the region, its business and tourism development agency says Taranaki is already expecting a gradual move away from reliance on petroleum products.

Ardern unexpectedly appeared on Parliament's forecourt yesterday to accept a 45,000-strong Greenpeace petition urging the Government to make the move, telling activists that "it's something that we can't afford to spend much time on but we are actively considering it now".

But she confirmed today that the Government was not looking at halting current permits as it considered the future of block offers for oil and gas exploration, although she said other materials were less harmful to the environment.

"There are still resources that contribute to a more sustainable future, and they are things like silica, away from other extractive industries which actually instead contribute to climate change. So there are still opportunities," she said.

Silica is found as quartz and can be smelted into silicon, which is used in products such as photovoltaic solar energy panels.

The National Party's energy and resources spokesman, Jonathan Young, whose New Plymouth electorate has a long and lucrative history with oil and gas sector, said Ardern's initial statement would have a chilling effect because a majority of the investment in the industry is from international companies.

"The PM is already backtracking on her statement, but it is consistent with [Labour's] pre-election energy policy and consistent with remarks she has made since coming into office," Young said.

"Added to that, if any significant investor does their due diligence they will realise that 20 per cent of our electricity generation is supported by gas-fired generation; and so our security of supply would be questionable.

"This could have a chilling effect on investment into any energy-intensive industry."

Young said if the Government was looking at a transition between 20 and 30 years from now, it was not saying it.

"Their continual rhetoric sends the signal that their decisions are imminent. New Zealand is already challenged enough in terms of our prospectivity.

"The Government are simply putting up a sign that says 'closed for business' and so we will not only lose investment, but we will most likely lose a highly qualified and skilled workforce, which could be our leading innovators and engineers to develop new energy technologies."

Young said the flow-down benefits of the oil and gas industry were "enormous" in terms of employment in other service companies, from law to accountants, to IT, to mechanical and chemical engineers and construction companies.

"It is a $2.5b contribution to Taranaki and New Zealand's GDP, and pays significant royalties to the Government.

"The world is going to need oil and gas for many decades yet, and the Government is being far-sighted on climate change issues, but very short-sighted on how to get there."

Young said the Government was putting too much store in the Paris Accord agreements, noting that the International Energy Agency could not identify enough activity from the 195 signatory nations to see the emissions reductions needed to keep the world under a further 2C of warming.

Prime Minister Jacinda Ardern and Climate Change Minister James Shaw address supporters of Greenpeace's End Oil petition on Monday. Photo / File

"New Zealand is missing out on an opportunity to export gas to coal burning countries, and therefore contribute to CO2 reductions," he said.

"The Government are taking a purist instead of practical approach, that has the power to make New Zealander poorer and less likely to make the very expensive transition to a low carbon future."

Taranaki Chamber of Commerce chief executive Arun Chaudhari said Ardern's comments created uncertainty in the strategic planning of companies in this sector and for the Taranaki community, which relied heavily on the industry.

"Many people and small-to-medium enterprises depend on the oil and gas industry for their living."

Chaudhari said an end to exploration would likely eventually drive away large employers like Methanex and Todd Energy, which supported the community not just through jobs, but also through philanthropy.

"New Plymouth's Aquatic Centre, the Len Lye Centre, the Womad Festival, Methanex Maths Spectacular, are just a few amongst the huge number of projects and activities supported by these companies."

Venture Taranaki chief executive Stuart Trundle said a 2015 report by the business and tourism development agency found the oil and gas industry was responsible for $1.57b of Taranaki's total GDP.

The industry directly employed 4340 full-time equivalent roles, while overall, it was linked to the creation of 7070 jobs in Taranaki.

Yet, as a region, Taranaki was already anticipating a move away from the current reliance on petroleum products, Trundle said.

"A plan to utilise the extensive expertise of the region's energy sector to progress future energy technologies is underway, linked to the regional economic development strategy."

The details of any transition process would be "critical" to the impact on the Taranaki region and its people, Trundle said.

"We look forward to working with the Prime Minister to identify evidence-based solutions to secure long-term jobs in the region."

Chaudhari said the chamber wanted to see more investment in renewable energy.

"We're 100 per cent behind that and those renewable energies are one of the key cornerstones of our regional development plan, 'Tapaue Roa – Make Way for Taranaki', which we fully support.

"However, 'actively considering' ending oil exploration is not the answer at this time. A lot more work needs to be done to ensure a successful transition from gas to renewable energy."

Greenpeace, whose petition included notable signatories such as directors Jane Campion and Taika Waititi, has meanwhile compelled the Government to take action now.

"The world can't afford to burn even existing fossil fuel reserves let alone seek out new oil and gas if we want to avoid catastrophic warming," climate campaigner Kate Simcock said.

"Searching for new oil or gas is senseless, and we're asking the Jacinda Ardern Government to put an end to it."