The Inside Story in a newspaper last weekend featured an interview with Hamish Rutherford and Gabriel Selischi, OMV’s head of operations for Australia and New Zealand. The interview was one of the better pieces of journalism rarely seen in this newspaper. It illustrated the reality of what is required in the energy sector in the future on the basis New Zealand can’t bank on renewables filling the gap left by dwindling oil and gas supplies. This is in contrast to the path the Government is taking the country on which is based largely on ideology.
Mr Selischi likened the situation facing New Zealand’s energy system to a child which enjoyed a nice lifestyle inherited from its parents but was now facing difficult choices as the situation changed: declining gas supply. He said that since the discovery of the massive Maui field, a series of large gas discoveries relative to the country’s demands meant supply was plentiful. Mr Selischi pointed out that with no commercial discoveries since 2006 the buffer that was there does not exist anymore. He says the Government made a risky bet when it called symbolic time on the industry with a ban on new offshore permits despite the economy remaining dependent on petroleum products.
OMV has budgeted $500 million for an exploration campaign off the coast of Taranaki and in Otago’s Great South Basin. Mr Selischi makes the point that the fact there is so much attention on exploration is, somehow, illogical as exploration will just tell you you have something you could use. Yet everywhere OMV looks, Greenpeace is there. These idiots, (my description), according to Mr Selischi, have blockaded it’s New Plymouth offices, boarded a drilling support vessel and climbed the Wellington building housing their Australasian headquarters where they were eventually met by Police. In Mr Selischi’s words “And immediately released.” Greenpeace describes the drilling as “reckless”.
So what is the Government’s response? From Energy and Resources Minister Megan Woods, nothing more than an acknowledgement that OMV was legally within its rights to operate in New Zealand. “We are seeing globally an increase in protest against fossil fuels as people become more aware of the need for transition. This is a fact of life for these industries and one they need to acknowledge. Here in New Zealand, there is a right to protest and for our citizens to make their voices heard, but also a legal right for permit operators to conduct their business.”
So is Megan Woods condoning the sort of protest described by Mr Selischi? If she is then I’m surprised he hasn’t decided to put his $500 million back in his pocket and leave. That type of protesting is not legal and Ms Woods should be ordering the Police to arrest those involved, which I thought was part of their job description. Mr Selischi said, “ I don’t see myself being able to operate as today, and commit large amounts of money if this disruption will become more systematic.” That statement is probably beyond Ms Wood’s comprehension. He goes onto say “ And by the way, government, you don’t pay. You pay nada for it. It’s just me risking the money, just to prove there is something possible there.”
The Government should be backing OMV as its own officials warn that the offshore permit ban could be counterproductive to global climate targets, as methanol from New Zealand tended to displace higher – emitting fuels, such as coal, globally. Ironically, because of a lack of gas, we are now importing a million more tons of coal from Indonesia, the highest level since 2006. According to energy analyst John Kidd, that’s 500,000 thousand Corollas on the road. Kidd has written a lengthy report where he comes down firmly on the side of OMV describing the potential financial rewards from a successful drilling campaign but also has grim warnings about the impact on the industry if the campaign fails.
The bottom line here is the story OMV tells (disputed by the Government) that New Zealand does not have enough gas, or more precisely, not enough to smoothly move away from petrol products without sending industrial activity elsewhere, possibly less efficiently than here. That, of course, counts for nothing when you have a Government whose policies are driven by ideology and not reality. A Government where, in the area of protesting, anything goes without any consequences. Scaling buildings, boarding boats, vandalising property, all apparently fine by Megan Woods.
This Government of buffoons would probably celebrate if OMV left. Neither commonsense nor intelligence has been a hallmark of their tenure so far. A look at those in the ranks will tell you this situation is not about to change anytime soon.