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Oil & Gas Policy - What to expect from Drips

We all want carbon emissions reduced and fast – well all of us apart from the few Neanderthals that have an ideological opposition to the science of human-induced climate change.

But the Green Party-sponsored ban on oil and gas exploration is about the most dumbed-down, ineffective intervention that it is possible to come up with. it pays no regard to collateral damage to New Zealand and fails on all fronts apart from the justifiable claim that it is virtue-signalling, a “look-at-me I really care” declaration of nothing.

The Greens have a dogmatic opposition to using market-based mechanisms and have demonstrated further levels of economic illiteracy with this blanket ban on exploration. It is dumber than dumb for the simple reason that their far left ideology allows no room for economic efficiency.

The clever way to deal with carbon emissions is to price them and then allow the most efficient emitters of carbon to be the last to survive. Similarly with fresh water – price it and allow the market to operate. That way the most wasteful processes are the first to be closed down – or improved.

The ban on exploration will do nothing to the global supply of fossil fuels. New Zealand is such a minuscule source that the global price will be unaffected. Our sales will simply be replaced by the next most expensive source – it too will be minuscule in the global context. The only economic impact I can see is that New Zealand producers of fossil fuels will be denied that opportunity. Too bad Taranaki.

There will be however – in our own minds if nowhere else – a fair dollop of self-congratulatory satisfaction in our belief that we’re showing the world the way forward. It’s laughable to anyone who’s not in that coterie of Far Left Kiwi Greenies, but nevertheless the smug satisfaction from having dealt a blow to the business pariahs that trade oil and gas will be enough.

Be there no mistake – all of the harm will be felt by New Zealand. And where’s the benefit? Apart from the gratuitous satisfaction there is none – certainly nothing economic.

What a waste of effort. New Zealand could have made a long overdue advance on emissions by simply pricing carbon properly through setting quantitative targets for reducing emissions and using a market mechanism to ensure they’re met. It’s called an emissions-trading-scheme and it should never have been corrupted by the National Party all those years ago when they got re-elected.

This effort from the Left to do anything meaningful about New Zealand’s contributions to global emissions is pathetic, so far away from evidence-informed policy that it deserves all the derision it gets. Unless Labour is going to insist that the Far Left Greens adopt market mechanisms to further their environmental objectives, New Zealand has little to look forward to from this coalition by a reduction in well-being from poorly constructed policy.

 

Gareth Morgan

Gareth@top.org.nz

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    • Andrew Skerrett
      commented 2018-04-21 10:31:49 +1200
      Hey I am a keen TOP supporter . The best strategy for TOP is to adopt the Greens environemnt protection policy in my view. I would have voted Green last election (much as I can’t stand the people involved, I thought that the major parties would be forced into environmental protection by voter loss over time). I changed to TOP for its sound evidence and economics approach.

      I think there is a real risk of New Zealand finding a significant oil reserve (why else would companies be drilling?). Once found, there would be overwhelming pressure to use it. A new oil reserve means a falling price surely? That leads to a longer transition from fossil fuels. Maybe we only find enough oil for NZ for the next 50 years. Then NZ is slow to transition and contrubutes more unpriced carbon pollution. Finally we could find next to nothing but have the benefit of the drilling activity. Then the economic loss is low and maybe the sybolism is good? Other like minded countries might do the same and significant finds they had would be lost.

      I totally agree about the emissions trading scheme. However look at the moaning that has occured here where the loss con’t be quantified. I think the ETS is absolutley critical but it is a hard strategy to implement – real cost impacts on voters. Is it realistic to think Labour/Greens/NZ First is a strong enough coalition for this? I think it will take a party like TOP and a stronger mandate/margin of voters behind it.

      I think the environment issue is a long game and we need to take the wins wherever we can.
    • Oliver Krollmann
      commented 2018-04-21 09:06:16 +1200
      China seems to get it, though. Last year they produced and sold more than 600,000 electric vehicles within their borders, and they’re about to introduce 70,000 electric buses into their major cities. They have also secured rights to materials needed for battery and vehicle production for the foreseeable future. Their political system might not be democratic, and while that poses a big risk it’s also an opportunity to make quick decisions and take swift action, without years of proposals, submissions and reviews, while we keep whinging and moaning about a bit of future job loss and the fact that we might have to adjust our comfortable lifestyle a bit.
    • Jesse Duffield
      commented 2018-04-21 03:09:51 +1200
      I think the negative comments here show a lack of understanding of climate change and economics, not that I claim to know much about either, but completely agree with everything here. But I feel more opposed to the ban on ethical grounds: we can and will continue to burn all the fossil fuels we like, so long as they are drilled or mined in totalitarian dictatorships (the Nats are particularly close with Saudi Arabia, Labour with China, and I’m not sure which is worse) where the people won’t complain – or rather aren’t allowed to complain – about their environment being damaged instead our own back yard. If NZers want to continue driving cars and being “nuclear free” then we should do our own dirty work, in this case dirty drilling. And as Gareth says we are all affected by climate change anyway, though sadly the people affected the most are usually in the poorest countries which burn the least.
      I was torn between TOP and the Greens last time, and ended up voting for Greens because of the lack of animal welfare policy at TOP. The more I read here and the more I follow the current govt (and their lack of action on animal welfare) the more I think I made the wrong decision.
    • Brian Ward
      commented 2018-04-20 20:43:21 +1200
      With the greatest respect Gareth if you need to humiliate others to make your point I am gone from your party. If you are prepared to debate without attempting to humiliate I will stay.

      Market dynamics will not solve climate change matters at least until the thought dust settles. Leadership is more than advocating market based solutions.

      regards
      Brian
    • Steve Abel
      commented 2018-04-20 17:40:45 +1200
      It’s funny that you call yourself a movement and dis an actual successful national movement involving hundreds of thousands against offshore oil. TOP is not a movement but a vanity project. How about calling a spade a spade as you’re purportedly so courageous at doing GM?
    • Steve Abel
      commented 2018-04-20 17:35:15 +1200
      Wrong on pretty much all counts Gareth. If you’re dealing with a finite resource then blocking the oil and gas industry from accessing 4 million sqkms of EEZ ensures they can’t access a claimed 30 billion of oil and gas that now can’t be burnt and will never enter the global atmosphere. That is exactly what climate science tells us we need to do – keep the oil and gas in the ground. Some of us are concerned with stopping climate change not messing around with price signals. This act is a death knell for the foreign oil and gas industry in NZ. Shell, Anadarko, Chevron, Statoil, OMV, etc – Lets be clear these are not NZ companies and the Govt just called game over on their exploration. And of course stopping that does not preclude putting a decent price on carbon. the two are not mutually exclusive. We need a multi-pronged approach. Of course I know you’re just virtue signalling yourself by dissing the greens because they’re the best source of possible votes for your futile political party.
      How about doing some long term work yourself for the climate rather than behaving like a spoiled rich kid and dismissing a 7 year movement to end offshore exploration. Sad.
    • Nick Taylor
      commented 2018-04-20 17:04:52 +1200
      It’s this sort of old-fashioned smeary bollocks :

      “it is virtue-signalling, a “look-at-me I really care” declaration of nothing.”, “Far Left Kiwi Greenies” etc

      That lost you my vote.
    • Lewis MacKinnon
      commented 2018-04-18 23:22:31 +1200
      Isn’t the idea behind banning it about the environmental and economic impact of a spill, not the normal and functional operation of an oil well? I don’t think they ever pretended that it was going to effect the global oil market, or provide us with economic gains. It just to avoid the cost of a fuck up.
    • Oliver Krollmann
      followed this page 2018-04-18 17:05:42 +1200
    • Benjamin Farrelly
      commented 2018-04-17 20:38:13 +1200
      Wow Gareth… Im a supporter of the Opportunities Party and also a member. But on this I couldn’t disagree more… This is big ,and whilst I see your point on economic impact, I do not see how this does nothing for the environment. I mean you put the environment on the top of your policy list. This is a virtue signalling statement, so what? Its also an opportunity to show the world that we can put the pressure on investors such as yourself and other wealthy entrepreneurs to fill the coming void with something better. So stop bitching about the economic losses that will come from this and do something about it. For all the good policies and clever well worded challenges to opposition stuff ups, you’ve done stuff all to make this party any different than the rest. Just like the rest of them you don’t actually lead by example.. Have you invested or started a alternative farming industry that leads the way in environmental sustainability and new economic opportunities for a greener better country? Have you invested or started a company that provides zero carbon transportation? Have you invested or started a company that provides affordable clean energy? Have you sought out people in this country who have made efforts in these many areas on a business level and supported them and brought them in as members of this party to demonstrate an example of a party that leads by example? Until you get a little more creative and a little less “clever” this party will never get over 3%. So inspire confidence from the nation that your party can actually make a difference by filling it with people who make a difference. Especially if the best you can do is make lots of money and do a clever job of picking apart other peoples poor efforts. If that’s the case find people who do more than that to be the face/faces of this party.
    • Daniel Hill
      commented 2018-04-17 19:39:53 +1200
      The greens don’t really care, If they cared, about people and the environment they wouldn’t force us to buy fuel from dictators like the Saudi’s, Maduro, Putin, or Xi Jinping.

      The fact of the matter is we need fuel, and we need it now, to keep the economy going, but instead of a “pay it forward” policy where the riches from oil sales are put in to R&D for green energy, they much rather pay money in to the pockets of dictators, who fund ISIS and constantly violate human rights.