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New Zealand Cites Climate Change in Banning New Offshore Drilling

April 12, 2018

The government said it would allow the existing 22 active offshore permits, covering more than 38,000 square miles, to run until their expiration, which is “as far out as 2030.”

Companies that find more oil and gas reserves where they already have permits could drill for decades, and new onshore permits could be issued.

The Petroleum Exploration and Production Association of New Zealand criticized the government for not consulting the industry, saying that alternative energy sources were not yet ready to meet demand and that oil would have to be imported from other countries at a higher cost.

“The decision is a lose-lose for New Zealand’s economy and environment, likely to threaten jobs and mean higher prices for consumers,” said Cameron Madgwick, the association’s chairman.

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The mayor of New Plymouth, the largest city in Taranaki, the area where the country’s oil and gas exploration is concentrated, called the decision “a kick in the guts” for the regional economy.

“This announcement sends a message to some of Taranaki’s major investors and employers that they do not have a long-term future in New Zealand,” Mayor Neil Holdom said.

Simon Bridges, the leader of the center-right National Party, New Zealand’s main opposition party, said on Twitter that the decision to end oil and gas exploration was “a wrecking ball” that could only hurt the country.

The Govt’s decision to end oil and gas exploration is a wrecking ball through regional NZ. It also doesn’t make any environmental sense.

— Simon Bridges (@simonjbridges) April 12, 2018

The government said that “no current jobs” would be lost, as it was “honoring all agreements with current permit holders.”

Government figures show that in New Zealand’s crude oil production declined in 2016 to the lowest level in a decade, and spending on production had fallen in line with a global drop in prices stemming from the shale revolution in the United States.

New Zealand imports more oil than it exports, and it is a small player on the world stage, with industry figures putting the value of exports at $1.1 billion a year.

A page on the New Zealand Trade and Enterprise website — a government agency that promotes international trade and economic development — says the government’s aim is “to increase the value of New Zealand petroleum exports tenfold” by 2025.

In Australia, plans to drill for natural gas offshore in the Great Australian Bight, known as Australia’s Galápagos, have drawn criticism from the fishing and tourism industries, which the potential of a spill is too great a risk.

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