The Government’s own advice on repealing the oil and gas exploration ban says no new gas fields are likely to be discovered and developed in the next 10 years.
The latest modelling, urgently released under the Official Information Act and obtained by RNZ, says in the short term repealing the ban is unlikely to significantly bolster gas supplies from existing fields, either.
That makes the climate impacts of the law change smaller, but also any expected impact on the energy market.
According to the modelling, the main short-term impact of allowing companies to explore for new supplies of fossil fuels off the New Zealand coast appears to be giving them the confidence to extend the life of their existing gas fields in the future. Those fields are already operating under existing permits.
The public was given just four working days to make submissions on the law change and it’s now less than two days before submissions close.
The Ministry for Business, Innovation and Employment (MBIE) said it planned to publish the updated modelling on its website where submitters could see it, however, it was not immediately findable there when RNZ checked on Monday morning.
Little short-term boost to gas supplies means smaller climate impact
The analysis shows Government officials believe that undoing the ban will encourage fossil fuel companies to release more of the gas available to be extracted from their existing fields.
That’s because officials think those companies will have more confidence in investing in oil and gas, without the ban.
The Crown Minerals Amendment Bill reverses a 2018 ban on exploring for new oil and gas fields, and makes other changes to make fossil fuel exploitation more attractive.
Carbon emissions from the law change are now projected to be much smaller than previously suggested, because of the long timeframe before any significant boost to gas dig
Originally, MBIE’s climate impact assessment found undoing the ban would result in an extra 51 million tonnes of planet-heating emissions being pumped into the atmosphere in the years to 2050.
That is almost as much greenhouse gas as New Zealand’s economy as a whole produces in a year.
Short term, MBIE originally estimated that between now and 2035, moves to encourage oil and gas extraction would add 14 million tonnes of carbon dioxide emissions to the country’s tally, roughly the amount of greenhouse gas New Zealand’s cars and trucks produce in a year.
However, the latest modelling estimates just 1.6 million to 2.4 million tonnes of extra emissions – total – could be released out to 2035 as a consequence of undoing the ban.
Officials tested the impacts of two scenarios: companies successfully tapping 30% of what is known as “contingent reserves” of gas (gas in existing fields, that can be extracted under existing permits) versus companies extracting 60% of those reserves.
The lower emissions figure is if 30% can be extracted and the higher figure is if 60% of those reserves are produced.
New Zealand’s emissions are expected to rise as a result of undoing the ban, even after taking into account the fact that electricity companies may burn less coal if they can secure more gas.
That’s because the added emissions from burning more gas outweigh any savings from burning less coal.
New supply ‘unlikely’ before 2035 – MBIE
In MBIE’s words, “the repeal of the oil and gas exploration ban may lead to greater investment in existing gas fields.”
The analysis concluded: “The repeal may also mean that new gas field supply is discovered and developed, increasing supply further. However, this is unlikely to happen before 2035 and is outside the scope of this exercise.”
As a result of the longer timeframe to see any significant boost to existing gas fields, the analysis says impacts on greenhouse gases are also smaller than previously estimated, in a climate analysis prepared in May.
“The key difference is the expected timing of when contingent reserves can be converted to supply. We have assumed that contingent reserves may extend the lifespan of existing fields but are not likely to significantly raise short-term production,” said MBIE.
The analysis said in all scenarios, the modelling assumed gas prices would rise “to within the range of the cost of importing LNG”.
rnz.co.nz
