1 00:00:00,080 --> 00:00:02,080 Speaker 1: In an oil and gas lobby group has written to 2 00:00:02,240 --> 00:00:06,000 Speaker 1: Energy Minister City and Brown asking him to consider underwriting 3 00:00:06,080 --> 00:00:09,719 Speaker 1: oil and gas exploration by private companies. The argument mounted 4 00:00:09,720 --> 00:00:12,840 Speaker 1: by Energy Resources Altered Or is that we need something 5 00:00:12,880 --> 00:00:15,120 Speaker 1: like this to get oil and gas prospectors back to 6 00:00:15,160 --> 00:00:18,200 Speaker 1: New Zealand after the last governments offshore oil and bass 7 00:00:18,239 --> 00:00:22,520 Speaker 1: exploration gan ban scared them off. Green Party Colia Chloe 8 00:00:22,560 --> 00:00:25,759 Speaker 1: Swarbricks has gas production peaked in twenty fourteen and underwriting 9 00:00:25,840 --> 00:00:30,640 Speaker 1: exploration for more would be quote deranged. John Carnegie as 10 00:00:30,720 --> 00:00:33,479 Speaker 1: chief executive of Energy Resources Altered Or and he's with 11 00:00:33,560 --> 00:00:34,519 Speaker 1: us now, Hi John. 12 00:00:35,000 --> 00:00:36,760 Speaker 2: Hey jackire do yeah, well think so? 13 00:00:36,760 --> 00:00:40,240 Speaker 1: So just explain to us what exactly were you proposing. 14 00:00:41,440 --> 00:00:46,080 Speaker 2: Well, actually, just before getting into that, we're a pan 15 00:00:46,360 --> 00:00:51,320 Speaker 2: energy sector group. We represent the entire value chain of 16 00:00:51,400 --> 00:00:54,520 Speaker 2: the energy sector, so we proudly represent the oil and 17 00:00:54,560 --> 00:00:58,880 Speaker 2: gas sector, but we also represent electricity producers and distributism 18 00:00:58,960 --> 00:01:06,080 Speaker 2: fueled distributors. But look in terms of your question, but 19 00:01:06,400 --> 00:01:08,360 Speaker 2: I actually think in terms of for your listeners, it's 20 00:01:08,400 --> 00:01:13,200 Speaker 2: important to put what we've asked for in context. And 21 00:01:13,240 --> 00:01:15,840 Speaker 2: they're two points. The first is we've actually got an 22 00:01:15,920 --> 00:01:19,160 Speaker 2: energy shortage and some in fact, might call it a crisis, 23 00:01:19,200 --> 00:01:22,679 Speaker 2: and we felt that during the winter it's cause havoc 24 00:01:22,720 --> 00:01:27,560 Speaker 2: to industry and households. And actually we might think we 25 00:01:27,600 --> 00:01:30,040 Speaker 2: didn't have blackouts, but we did because they were managed 26 00:01:30,080 --> 00:01:33,840 Speaker 2: behind the scenes by two of our major exporters. So 27 00:01:34,840 --> 00:01:37,520 Speaker 2: you know, now, what we need now is policy settings 28 00:01:37,560 --> 00:01:42,200 Speaker 2: that encourage investment and new exploration and appraisal to unclog 29 00:01:42,319 --> 00:01:46,160 Speaker 2: the closed pipeline and deliver affordable, secure energy. And the 30 00:01:46,240 --> 00:01:50,520 Speaker 2: second point is actually that gas producers were actually damaged 31 00:01:50,680 --> 00:01:55,440 Speaker 2: badly by the twenty eighteen exploration ban, and so what 32 00:01:55,520 --> 00:01:59,840 Speaker 2: we're talking about is actually just re leveling the playing field. 33 00:02:00,000 --> 00:02:04,840 Speaker 2: Governments all over the developed world are setting fixing settings 34 00:02:04,840 --> 00:02:08,120 Speaker 2: to ensure they've got a reliable pipeline of secure and 35 00:02:08,120 --> 00:02:11,239 Speaker 2: affordable energy. And in fact, I think just last week 36 00:02:11,320 --> 00:02:14,760 Speaker 2: or the week before, this government invested sixty million dollars 37 00:02:15,320 --> 00:02:19,519 Speaker 2: in deep geothermal research. And while that's great, it doesn't 38 00:02:19,600 --> 00:02:22,320 Speaker 2: solve the now problem and we need natural gas for that. 39 00:02:22,639 --> 00:02:26,040 Speaker 1: Yeah, okay, So to exectly what you asked of the minister, 40 00:02:26,240 --> 00:02:29,160 Speaker 1: just explain to us what you proposed in terms of 41 00:02:29,160 --> 00:02:30,919 Speaker 1: the government underwriting exploration. 42 00:02:31,880 --> 00:02:34,760 Speaker 2: Well, look, we didn't have a firm view on the 43 00:02:34,800 --> 00:02:37,720 Speaker 2: type of mechanism the government could choose. But look, the 44 00:02:37,760 --> 00:02:41,160 Speaker 2: Minister has for months been talking about the need to 45 00:02:41,200 --> 00:02:46,040 Speaker 2: offer gas produces some form of protection via bonds or 46 00:02:46,919 --> 00:02:50,519 Speaker 2: I think the Minister mused publicly about long term contracts, 47 00:02:50,880 --> 00:02:54,520 Speaker 2: and actually for months we've been publicly agreeing so in 48 00:02:54,520 --> 00:02:56,680 Speaker 2: fact that only Radio and New Zealand seemed to be 49 00:02:56,720 --> 00:02:59,800 Speaker 2: surprised by our letter and our suggestion that the Minister 50 00:03:00,080 --> 00:03:03,320 Speaker 2: the government do what he has been suggesting. In fact, 51 00:03:03,360 --> 00:03:06,760 Speaker 2: actually we're mystified why it's taking so long. I mean, 52 00:03:06,800 --> 00:03:10,360 Speaker 2: the bottom line for us Jack is that oil and 53 00:03:10,400 --> 00:03:14,280 Speaker 2: gas expiration companies are worried that any investment they make 54 00:03:14,320 --> 00:03:16,880 Speaker 2: in New Zealand could be eroded or stripped away if 55 00:03:16,880 --> 00:03:20,840 Speaker 2: the government changes. So you know, this isn't a To 56 00:03:20,880 --> 00:03:24,320 Speaker 2: call it a subsidy would be a complete mischaracterization. It's 57 00:03:24,360 --> 00:03:29,600 Speaker 2: effectively like the government taking an insurance policy out against itself, 58 00:03:30,280 --> 00:03:35,320 Speaker 2: against its future self that promises no adverse rule changes 59 00:03:35,680 --> 00:03:38,160 Speaker 2: that would again damage the sector. 60 00:03:39,160 --> 00:03:43,280 Speaker 1: But what would happen if you didn't find anything? Who'd 61 00:03:43,280 --> 00:03:43,720 Speaker 1: be on the whole. 62 00:03:43,840 --> 00:03:47,480 Speaker 2: That's the risk that would be borne by the sector. 63 00:03:48,680 --> 00:03:49,840 Speaker 1: Born by the textpayer as well. 64 00:03:49,920 --> 00:03:52,600 Speaker 2: Right, No, no, not at all. This is this is 65 00:03:53,000 --> 00:03:57,760 Speaker 2: this is an underwright that would only protect the sector 66 00:03:58,440 --> 00:04:04,320 Speaker 2: from pernicious future policy changes. This government has said, and 67 00:04:04,360 --> 00:04:06,400 Speaker 2: in fact they're in the process of reversing the oil 68 00:04:06,440 --> 00:04:10,440 Speaker 2: and Gas band, which we applaud, but we've already had 69 00:04:10,480 --> 00:04:12,600 Speaker 2: the opposition saying they're going to put it back in. 70 00:04:13,040 --> 00:04:20,600 Speaker 2: Now who would invest under those conditions? So the problem is, well, well, 71 00:04:20,680 --> 00:04:24,000 Speaker 2: you know, there's certainly plenty of gas out there and 72 00:04:24,279 --> 00:04:29,359 Speaker 2: New Zealand is ripe to be explored. Investors are loath 73 00:04:29,560 --> 00:04:32,000 Speaker 2: to invest. They have no confidence to invest that their 74 00:04:32,040 --> 00:04:35,960 Speaker 2: investment today will be kept whole tomorrow if a new 75 00:04:36,000 --> 00:04:40,279 Speaker 2: government comes in. And so actually, again the beauty of 76 00:04:40,320 --> 00:04:48,040 Speaker 2: this is that there's no if policies don't change, then 77 00:04:48,360 --> 00:04:52,480 Speaker 2: this is a completely costless policy. It would never get triggered. 78 00:04:53,480 --> 00:04:55,960 Speaker 2: But it is, as I said, like a guarantee. 79 00:04:56,080 --> 00:04:57,560 Speaker 1: So okay, I'm just going to read the letter here, 80 00:04:57,600 --> 00:05:01,000 Speaker 1: so quote this is what you say. Our preferred option 81 00:05:01,320 --> 00:05:04,159 Speaker 1: is for the Crown to prioritize new gas exploration. The 82 00:05:04,200 --> 00:05:07,080 Speaker 1: most efficient means of covering the security of supply risk 83 00:05:07,560 --> 00:05:10,760 Speaker 1: is some form of risk reward arrangement. This would entail 84 00:05:10,760 --> 00:05:14,680 Speaker 1: the government underwriting gas exploration and appraisal, whereby the government 85 00:05:14,720 --> 00:05:17,760 Speaker 1: takes part or all of the risk if natural gas 86 00:05:17,800 --> 00:05:21,480 Speaker 1: should not be produced, while sharing some of the reward. 87 00:05:21,640 --> 00:05:25,880 Speaker 1: If it is so, Just to be totally clear, under 88 00:05:25,920 --> 00:05:29,440 Speaker 1: that wording, if you were to explore for gas and 89 00:05:30,000 --> 00:05:33,440 Speaker 1: not find any, wouldn't the government then be on the hook? 90 00:05:34,680 --> 00:05:40,359 Speaker 2: Well, no, the idea is that you know, here's because 91 00:05:40,360 --> 00:05:42,840 Speaker 2: here's the risks are quite nuanced. 92 00:05:42,560 --> 00:05:46,560 Speaker 1: Jack, Sorry, just to be totally clear, because you were 93 00:05:46,560 --> 00:05:50,720 Speaker 1: saying that you were saying you want to stop like 94 00:05:51,440 --> 00:05:53,680 Speaker 1: a government of the day in the future saying, oh, 95 00:05:53,760 --> 00:05:56,200 Speaker 1: you found gas, sorry to bear, we're not going to 96 00:05:56,279 --> 00:05:58,719 Speaker 1: let you extract that gas because we're going to reintroduce 97 00:05:58,760 --> 00:06:01,599 Speaker 1: this thing. Yeah, but the of that would suggest that 98 00:06:01,640 --> 00:06:04,800 Speaker 1: the word this is that should natural guess not be produced, 99 00:06:05,080 --> 00:06:08,800 Speaker 1: but it wouldn't be produced if you didn't find it, right, Well, 100 00:06:08,839 --> 00:06:11,200 Speaker 1: that's right, So the text player would be potentially be 101 00:06:11,240 --> 00:06:12,520 Speaker 1: on the hook for that risk as well. 102 00:06:13,120 --> 00:06:14,720 Speaker 2: Well. I mean, this is one of the one of 103 00:06:14,760 --> 00:06:17,400 Speaker 2: the options that we've put forward. It's one of a 104 00:06:17,480 --> 00:06:18,200 Speaker 2: number of options. 105 00:06:18,200 --> 00:06:20,120 Speaker 1: I mean, you haven't found you haven't found gas in 106 00:06:20,120 --> 00:06:22,000 Speaker 1: the past though, eh like there was. 107 00:06:22,960 --> 00:06:27,320 Speaker 2: Last time found. In fact, the most recent discovery was 108 00:06:27,839 --> 00:06:32,200 Speaker 2: the Tutor Way field in twenty twenty, so there is 109 00:06:32,240 --> 00:06:34,520 Speaker 2: penny of gas there. And part of the problem with 110 00:06:34,560 --> 00:06:38,440 Speaker 2: the band is that there are gas rich basins off 111 00:06:38,480 --> 00:06:42,320 Speaker 2: the east coast of both islands that were effectively sterilized 112 00:06:43,279 --> 00:06:48,159 Speaker 2: by the ban, preventing the future expirations. So you know that, 113 00:06:48,279 --> 00:06:50,400 Speaker 2: as I said, Jack, the damage to the sector has 114 00:06:50,440 --> 00:06:58,159 Speaker 2: been severe, and you know, it's it's actually extraordinary that, 115 00:07:00,600 --> 00:07:05,800 Speaker 2: you know, what other country would the future of a 116 00:07:05,920 --> 00:07:11,680 Speaker 2: sector be banned. And then the country, having realized that 117 00:07:11,720 --> 00:07:14,760 Speaker 2: we need the product, has come back to the sector 118 00:07:14,840 --> 00:07:18,120 Speaker 2: to say come and help us out. We need you 119 00:07:18,160 --> 00:07:20,840 Speaker 2: to secure our energy future. And so the sector is 120 00:07:20,880 --> 00:07:25,720 Speaker 2: standing by ready to help. It's just gun shy. 121 00:07:26,600 --> 00:07:29,240 Speaker 1: So how has the Energy minister responded? 122 00:07:31,560 --> 00:07:37,600 Speaker 2: Well, well, the energy well, in fact it's the Resources minister. 123 00:07:38,640 --> 00:07:42,880 Speaker 2: Minister Jones, like the Energy Minister, he's committed to keeping 124 00:07:42,880 --> 00:07:47,920 Speaker 2: the lights on an energy affordable. We haven't heard back 125 00:07:47,960 --> 00:07:49,960 Speaker 2: from the ministers at this point, but I do know 126 00:07:50,040 --> 00:07:53,720 Speaker 2: that Minister Jones has publicly and often said he's keen 127 00:07:53,760 --> 00:07:56,360 Speaker 2: to atone for the harm the oil and gas ban 128 00:07:56,440 --> 00:07:59,200 Speaker 2: has done to the industry, And I guess that was 129 00:07:59,240 --> 00:08:02,600 Speaker 2: the point I was making. What other industry has its future, band, 130 00:08:03,120 --> 00:08:06,960 Speaker 2: has its investment pipeline strangled, and then it's called on 131 00:08:07,080 --> 00:08:09,240 Speaker 2: to help when a country realizes it needs their help 132 00:08:09,240 --> 00:08:11,960 Speaker 2: to ensure reliable, affordable energy. 133 00:08:12,040 --> 00:08:14,640 Speaker 1: It's like a compensation for the way in which that 134 00:08:14,680 --> 00:08:17,240 Speaker 1: band was introduced, is what you're suggesting. 135 00:08:17,400 --> 00:08:20,280 Speaker 2: Pretty much. And you can't make this stuff, you know. 136 00:08:20,280 --> 00:08:23,400 Speaker 2: I couldn't make this stuff up. Yeah, you know. It's 137 00:08:23,520 --> 00:08:28,160 Speaker 2: the damage has been severe, and now the country realizes 138 00:08:28,600 --> 00:08:32,240 Speaker 2: how much we need natural gas to help us actually 139 00:08:32,280 --> 00:08:35,240 Speaker 2: as we journey towards the low emissions future. 140 00:08:35,720 --> 00:08:38,080 Speaker 1: Hey, thanks for your time, John, We appreciate it. That 141 00:08:38,200 --> 00:08:42,240 Speaker 1: is our energy resources Altered or chief Executive. For more 142 00:08:42,280 --> 00:08:45,600 Speaker 1: from Heather Duplessy Allen Drive, listen live to news talks. 143 00:08:45,640 --> 00:08:48,839 Speaker 1: It'd be from four pm weekdays, or follow the podcast 144 00:08:48,920 --> 00:08:49,920 Speaker 1: on iHeartRadio.