A bolder and greener government

The Labour-led government is looking bolder, smarter and greener than it did a week ago. Its announcement of the ban on new gas and oil exploration in the seas around New Zealand has been viewed as a defining moment for the new government. But critics insist the policy is either intrinsically flawed or doesn’t do enough.

Richard Harman has an excellent analysis of the new policy, saying “It may turn out to be a defining moment for Jacinda Ardern’s government; a bold rebranding that turns Labour a greener shade of red” – see: Defining moment for Ardern. As Jacinda Ardern put it to Mr Harman, “We are bold … That will be a defining feature for us … We will be willing to take bold action, to take action, to take risks on the big stuff.”

Mr Harman compares the policy to when Labour was last in government. At that time Ms Ardern was working for then associate minister of energy, Harry Dynhoven, who “presided over an aggressive government policy, which saw it chase big international players, dangling tax incentives and reduced royalties in an attempt to kick-start interest in areas like the Great South Basin.”

Labour is now targeting the youth vote, which takes climate change seriously. Mr Harman says the latest announcement “was a relatively cheap policy to implement as it cemented in its youth vote base and paid its dues to the Greens.” And he points out that the exploration ban comes on the heels of the “government policy statement on transport and ending of large-scale irrigation subsidies.”

The exploration ban is applauded by conservative commentator Martin van Beynen, who says “it demonstrates this government is prepared to make uncomfortable changes we all know need to happen” – see: Government's oil move atones for our environmental sins. He argues that such boldness, based on principle, will be respected by the public even if it is painful because “the electorate can be surprisingly forgiving on points of principle.”

According to Mr van Beynen, if this policy is successful it might well push the government to go even bolder: “The stance also has the benefit of not appearing as a major cost item on Grant Robertson's coming budget. With an important environmental notch on its belt, the government might feel emboldened to deal more bravely with income inequality and poverty next. This will involve some real pain and might force the government to throw off the shackles of the budgetary rules regarding spending as a proportion of GDP.”

This article by Mr van Beynen, like many others, emphasises Ms Ardern’s claim that climate change is her generation's nuclear-free moment. Nadine Higgins says the decision is a “line in the sand” that will be challenging to many people because this is a rare case of real “leadership” rather than the usual “reflectorship” that Labour and other parties typically practice, whereby they do what is popular rather than what is right – see: Jacinda's 'nuclear-free moment' puts Government one step ahead of the public.

Ms Higgins says, “There have been many reforms that went against the tide of public opinion at the time but were later lauded as a seminal moment in history that happened not a minute too soon … In the decades to come, I envisage us looking back on this week's decision about oil and gas through a similar lens.”

Similarly, an editorial in the Wanganui Chronicle says that, although there is plenty of criticism of the new policy, “it may be that we look back on this ban the way we look back at our nuclear-free stance, or being first to give women the vote, or the 1981 Springbok tour protests. Divisive at the time but we ripped the scab off and they're now a source of pride” – see: Ripping the scab off oil exploration.

Is the policy really such a big deal?
Although the articles by Richard Harman and Martin van Beynen emphasise the boldness of the new oil and gas ban, they also make some very good points about its shortcomings. Mr Harman suggests the government might have simply made a virtue out of reality, as offshore exploration applications appear to have dried up anyhow: “The offshore petroleum exploration industry in New Zealand has been in the doldrums now for the past two years and it may well have turned out that even if the government had offered up blocks of ocean for exploration, there may have been no takers.”

He quotes a recent industry report: “Interest in New Zealand's annual oil and gas block offers remains at an all-time low, declining from a peak of 15 new exploration permits awarded in 2014, to just one in each of the past two rounds.”

And van Beynen points out how slowly the change will occur, and that under the government’s policy there might yet be a boom in offshore oil extraction: “The oil change was a bit like the last National government announcing it was raising the age of superannuation to 67 in a year so far away that it was academic for most people. Radical change to the oil industry, it is not. About 30 existing exploration permits will continue until at least 2030 and viable oil and gas finds made under those permits could mean production for years after that. We could still have a massive oil industry off the coast of Canterbury and Southland and more onshore wells in Taranaki.”

Will the policy have any real impact?
The oil and gas extraction industry claims the change will do nothing for climate change, saying the problem can only be tackled at the “demand side” rather than the “supply side”. If New Zealand stops producing oil and gas, this will not necessarily reduce its use – but instead just lead to importing more energy.

This is also a point made by Hamish Rutherford: “This will feel good for environmental activists but, unless there are more significant moves to dampen demand, all this will do will be to grant more geopolitical power to countries in the Middle East and of the likes of Venezuela, holder of the world's largest oil reserves” – see: A knock for the regions, but exploration end won't curb NZ oil demand.

Mr Rutherford says the ban will have “little or no impact on motorists or fliers. Until the government takes steps to tax users of fossil fuels, the impact on the climate will be limited.” He argues that the policy “seems moderate.”

It is for this reason the National Party has been using the term “virtue signalling” about the ban, which is defined by an editorial in The Press as used to “refer to pious but empty gestures by the left” – see: The virtues and vices of oil. The newspaper also criticises National for opposing the policy, even though The Press agrees the ban may have little impact: “A position must sometimes be taken because it is the right one. A moral example can be set. In this case, it is an example that has left the Opposition confused about whether to call it an empty gesture or wholesale destruction of a regional economy. It cannot be both.”

National has also argued the ban could be counter-productive, with Judith Collins alleging it will actually lead to more coal being burnt, which is worse for the environment. For a discussion of this, see Dan Satherley’s Ending oil and gas extraction – what scientists think.

Another criticism that is gaining more resonance is about what the government failed to do in announcing the new policy. According to Jo Moir, “It's understood some in the government executive are frustrated the announcement wasn't made in the region most affected and that there was no clear strategy for explaining what comes next” – see: Shane Jones looked a little green, and it wasn't with envy.

Having no transition plan for either the regions or for energy use seems unforgivable to Ms Moir: “If you decide to mess around with one, you sure as hell need a good plan for the other. And that's where the government got it wrong this week – the messaging about why New Zealand needs to do its bit domestically by moving away from oil and gas exploration was fine but the explanation of what it was being replaced with was non-existent.”

Ms Moir adds: “Wanting to lead the way on the next big technology is one thing, but having a plan is another… a situation not too dissimilar to being told we're moving you out of your house but we don't have another one for you to move into.”

Political analyst John Armstrong also has concerns about the “failure of the government to address a crucial aspect of the ban on offshore exploration,” explaining that “Ms Ardern and her administration were too busy basking in the glow of self-satisfaction when preaching to the converted” – see: More than a touch of irony if Andrew Little becomes Jacinda Ardern's Mr Fixit.

Nonetheless, Mr Armstrong says “Ardern deserves credit for sticking to her principles and delivering something of real substance in the struggle to cut greenhouse gas emissions. She also deserves praise for managing to forge an agreement with Labour's partners in government, which produced compromise on all sides and a meaningful end result.”

Finally, to see satire about oil and gas exploration and drilling, see my blog post, Cartoons about the environment and mining.