The government is preparing to lift the ban on oil and gas operations this week, following a last-minute amendment that grants discretionary powers to two ministers.
An extensive 25-page amendment was released at 5pm on Monday, giving opposition MPs less than 23 hours to ready themselves for the debate.
The amendment primarily addresses the regulations concerning the decommissioning of oil and gas fields and the financial responsibility for the cleanup.
The Tui oil field in Taranaki was abandoned in 2019, leading to a cleanup cost of $293 million to taxpayers after its Malaysian owner, Tamarind Taranaki, went bankrupt. The government had initially allocated up to $343.4 million for the project.
In response to this issue, the Labour government introduced a law in 2021 to prevent similar financial burdens on the government in the future.
Resources Minister Shane Jones has pledged to revive the oil and gas industry, citing the need to address loopholes in the 2021 law.
“It was not acceptable for the Crown to bear that responsibility while those at fault managed to evade liability through clever maneuvers. We have rectified that situation,” he stated in Parliament.
The changes in the amendment empower the Resources Minister and Finance Minister to make decisions regarding decommissioning costs, eliminating the need to trace previous permit holders.
Labour’s Energy and Resources spokesperson Megan Woods criticized the government for prioritizing the interests of the oil and gas industry over the welfare of New Zealand.
The amendment, supported by coalition parties and opposed by the opposition, is expected to lead to the repeal of the oil and gas ban in the upcoming third reading on Thursday.
Despite warnings from a gas company about investor caution, the government has allocated a $200 million fund in this year’s Budget for potential investments in new gas fields.
Furthermore, the government’s decision to withdraw from the Beyond Oil and Gas Alliance has sparked criticism from environmental groups, with the move being labeled as an “international embarrassment” by the World Wildlife Fund.
Climate Minister Simon Watts’ previous assurance that New Zealand would remain in the alliance appears to have been contradicted by the recent withdrawal.
