KEY POINTS:
Government subsidies to boost exploration in the oil and gas sector are off the table in the face of record oil prices of US$111 ($135) and the vast profits reaped by the major oil companies in recent years, Energy Minister David Parker says.
Similarly, the Government will not be making any major priority for the potential development of massive low rank lignite fields in Otago or Southland or toward the technology development of "carbon capture and storage" methods, which are yet to be proven economically or technically.
Mr Parker said oil explorers had reaped the benefit of $20 million during the past three years from the Government because its permit agency Crown Minerals acquired offshore seismic data off East Cape in the North Island and the Great South Basin and made it freely available to explorers.
It had also relaxed royalty fees and granted tax incentives.
"That helped lower their risk. There shouldn't be any need for subsidies with oil at US$100 per barrel.
"The industry doesn't need it when when five of the top 10 companies around the world are oil companies. Oil companies are coining it," Mr Parker said of current prices.
Mr Parker, Minister of Energy and Climate Control, spoke at the biennial Petroleum Conference in Auckland this week, and yesterday was unrepentant that his presentations to petroleum, energy and power audiences should foremost target carbon emission and renewable energy issues.
"We will not be backing away from renewable energies," he said. "It is evident we have won the battle, and we are right."
Regardless of theories abounding on the timeframe of "peak oil", it was "undeniable" oil production would decline. New Zealand had the resources in renewable energies and to grow biofuel matter, he said.
Mr Parker has praised the $1.2 billion committed to the Great South Basin by overseas explorers but when asked whether another $20 million Government investment might also be a good investment, he said he did not comment on Budget considerations.
Mr Parker acknowledged lignite, which contains high carbon levels, remains a vast resource and the Government had invested through state-owned Solid Energy's $70 million purchase of lignite-rich Southland land.
"[However,] money would be better spent on hip operations than on having this resource developed. New Zealand could make a small contribution to technology development but it will be an adopter rather than a developer."
- OTAGO DAILY TIMES
