New Zealand bans new offshore oil, gas exploration

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New Zealand will not grant any new permits for offshore oil and gas exploration, Prime Minister Jacinda Ahern said on Thursday, taking the industry by surprise with a decision that it says will push investment overseas.

Prime Minister Jacinda Ahern shocked New Zealand's small oil industry by ruling out any new exploration permits for drilling while the country strives towards a "carbon-neutral" economy.

Government ministers announced the decision as a starting point for a 30-year transition away from fossil fuels in pursuit of a net zero emissions economy by 2050, arguing the announcement would assist a "just transition" and reduce the impact on affected communities by giving a long timeframe to adapt. The Petroleum Exploration & Production Association of New Zealand protested the lack of consultation with industry representatives before the decision was made, with chief executive Cameron Madgwick telling media "It shows a complete misunderstanding by the government of how our industry works. these are multi-decadal decisions, there are people here today that are looking forward to the future and what that might look like for their business, the planning around that indeed the equipment that might be needed".

On the question of supply, Ms Ardern said there were 31 active oil and gas exploration permits, including 22 offshore. "These and other companies have for years pressured governments to suit themselves, and have actively sought to maintain the environmentally irresponsible fossil fuel production and very poor public policy on climate".

"We're striking the right balance for New Zealand - we're protecting existing industry, and protecting future generations from climate change", she said.

On the face of it, the decision to ban new offshore exploration permits will have little effect on our use of oil and gas.

Environmental group Greenpeace welcomed Ms Ardern's move.

In December previous year, France's parliament has also approved a law prohibiting all oil and gas exploration and production within the country and its overseas territories by 2040.

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New Zealand exports about $1.1 billion worth of oil per year, less than it imports, according to The New York Times.

The opposition National Party called the move "economic vandalism".

"This decision is devoid of any rationale".

"All three of the parties in this government are agreed that we must take this step as part of our package of measures to tackle climate change".

"This statement sends a message into your of Taranaki's leading investors and companies that they don't have a longterm future in New Zealand", may or Neil Holdom said. "These changes will simply shift production elsewhere in the world, not reduce emissions", he said.

Woods said that existing exploration and mining rights would be protected. "But there is no need to put an entire industry and thousands of New Zealanders' jobs at risk".

"It is time to also retire the applications and permits held over the large tracts of our sea that the previous government opened to exploration under its block offers".