Exports and Energy Security Compromised by Offshore Exploration Ban
New Zealand’s exports and energy security will be compromised by the government’s decision to stop issuing permits for offshore drilling, according to minerals sector industry association, Straterra.
“New Zealand needs to continue to take advantage of its energy reserves as technology develops that enables emissions reductions – in New Zealand and globally,” Straterra chief executive, Chris Baker said today.
“New Zealand’s exports will suffer as a result of this decision. Not only does New Zealand export fossil fuels, which are not counted in terms of New Zealand’s emissions, New Zealand’s export dependent economy is relatively energy intensive. High levels of energy are used to produce heat for industrial processes. The dairy and steel sectors for example are dependent on New Zealand’s competitive advantage in energy.
“Without cost effective energy sources production costs in our export sectors would be higher and New Zealand less competitive in the international markets in which we compete.
“If New Zealand does not take advantage of its energy reserves, investment and business will shift offshore, our export receipts will suffer and New Zealand workers, regions and government would lose out in terms of employment and revenues.
“Most importantly, ending exploration in New Zealand is symbolic. Such action will do nothing to reduce global demand and nothing will be achieved in terms of emission reductions internationally.
“What is more, given competing countries typically have lower environmental standards and less regulatory oversight than New Zealand environmental impacts could worsen as production moves to other countries.
“As a back up to renewable sources, fossil fuels also play an essential role in providing energy security in New Zealand. We might note, during last week’s storm lightning strikes halted gas processing and gale-force winds reduced wind farm output meaning coal fired generation had to come into play.
“Straterra acknowledges the global imperative of reducing carbon emissions but believes more can be achieved if New Zealand acts in concert with global progress and supports options where we have an advantage, such as electric vehicles”, Mr Baker concluded.