Why Energy Minister Megan Woods thinks MBIE is wrong about the oil ban

Megan Woods on Newshub Nation. Credit: Newshub Nation.

Energy Minister Megan Woods says it's "common knowledge" the oil and gas exploration ban will reduce New Zealand's greenhouse gas emissions, despite advice to the contrary.

Earlier this year the Government announced it wouldn't be offering new permits to find fossil fuels, as a part of New Zealand's commitment to reducing its carbon footprint.

The Ministry of Business, Innovation and Employment (MBIE) warned last month that could cost the country between $1.2 billion and $23.5 billion in lost royalty returns over the next 23 years, with the likely figure somewhere around $7.9 billion.

MBIE warned it would have a "negligible impact" on reducing domestic emissions and would "likely increase" global emissions - because the methanol produced by Methanex using gas from New Zealand would be replaced by methanol produced using coal in China.

Ms Woods told Newshub Nation on Saturday she disagreed.

"What it assumes is that if you cease production in New Zealand, that producers will just move production to a country where you can just burn fossil fuels without any controls over it - ie China, and that simply isn't the case.

"If you have a look what's happened in China in the last couple of years, they've got a more rigid [Emissions Trading Scheme] than we have coming in to play. They have a cap-and-trade system, so production that moves there means that other production has to come offline."

Megan Woods. Photo credit: Newshub Nation.

Asked by Newshub Nation host Simon Shepherd if she had research to back that up, Ms Woods said it was "very common knowledge" that was "widely held".

"It's not an interpretation. It's a matter of fact."

She said MBIE's analysis failed to take into account the "rapid change" in technology happening around the world.

"It's not the first or last time that a minister won't agree with all the advice they receive. Let's remember, this is advice, not instruction."

Ms Woods also dismissed MBIE's claim there is only 10 years of gas left, with not enough renewable energy ready to replace it when it runs out.

"That 10 year prediction of gas is what we've always said. For the last few decades, we've always said there's 10 years of gas. It's just the way the calculations work, and that gets routinely updated."

She said there is a "large amount of consented but not built thermal capacity" that could make up for the loss of gas, if MBIE is proved correct.

There have been around 2000 submissions made on the proposed ban.

Newshub.

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