Virtue signalling deals $28b blow to economy

February 20, 2019

An NZIER report shows that the government’s virtue signalling oil and gas ban will deal a $28b blow to the economy.

Last year’s oil and gas exploration decision could cost the New Zealand economy $28 billion by 2050, according to a new study by the New Zealand Economic Institute for Economic Research (NZIER).

“This is the first proper analysis of the wider impacts this decision will have and it is very sobering. It shows enormous damage to New Zealanders’ standard of living for no apparent environmental gain,” says Petroleum Exploration and Production Association of New Zealand (PEPANZ) CEO Cameron Madgwick.

“Exports are likely to fall by between and $3 billion and $10 billion, and the impacts will be particularly severe in Taranaki where the local economy could shrink by up to $40 billion.

“According to the report, ‘These are large GDP impacts… the decision drives a series of strongly negative economic impacts.’

“This will have real and long-term impacts on New Zealanders, hurting incomes and making us worse off as a nation.

“At the same time, according to the Government’s own advisers, global greenhouse gas emissions are likely to rise as we burn more coal and import more fuel from overseas.

“This is new information which was not available to the Government when the legislation was rushed through Parliament last year. It reinforces the need for an independent review and rethink of this policy.”

The research was commissioned by PEPANZ and is available here.

A government determined to counter climate change would struggle to justify a $28 billion cost even if it was going to have a significant and positive environmental impact.

But the oil and gas exploration ban is just virtue signalling and it’s impossible to justify the huge economic cost while increasing greenhouse gas emissions.


Energy use unsustainable with renewables

September 29, 2018

Current trends of energy use won’t be sustainable when New Zealand relies only on renewable energy:

. . . Energy Research Centre co-director Michael Jack said the infrastructure and market structures needed to change.

“Wind is variable. It’s only generating when the wind blows.

“Solar is generating during the middle of the day, when there’s less demand for it.

Hydro generation is more reliable, except when droughts decrease river flows, but the chances of getting new hydro schemes through the consent process are remote.

“What you need to do is either shift your demand to those time when the renewables are being produced or somehow store those renewables for use at later times,” he said. . . 

Improved technology could provide better storage, but is unlikely to come up with something affordable in the near future.

He said if changes were not made, the switch to completely renewable energy would be costly.

Of course it will be costly and that will hit poorer people hardest.

This is another reminder of how ill-advised the government was to rush into the ban on oil and gas exploration.

Apropos of which, this week we learned that not only did the government rush into the ban, it’s also going to be rushing the select committee process:

PEPANZ says it is undemocratic and deeply unfair for the select committee considering changes to oil and gas legislation to have its consultation period slashed to just four weeks.

“Given the strong public interest and enormous ramifications of this decision, it’s crucial this process isn’t rushed,” says PEPANZ CEO Cameron Madgwick.

“Our industry doesn’t want a Block Offer this year if it means an undemocratic process. This means there should be no reason now for urgency.

“There has already been a shocking lack of consultation since the surprise announcement was made in April. To now slash the consultation time doesn’t seem fair, open or transparent to the communities, workers, and iwi directly affected.

“Given some of the outrageous comments from relevant MPs in the debate tonight, we have little confidence in a fair hearing from the Environment Select Committee. This is especially so in such a short timeframe which gives so little time for MPs to consider evidence and write a properly informed report.

“The legislative changes in the bill involves serious economic and environmental issues and go even further than expected. There needs to be proper scrutiny of the impacts through a normal four to six month select committee process.

“The entire process has been a disgrace with no warning, no consultation and the Government trashing their own expert advice on the devastating impacts of this policy.”

Why the rush?

Because the decision is made and the government has no wish to hear the facts submitters will put up to prove the economic, environmental and social damage the ban will do.

 

 

 


High cost for virtue signalling

September 25, 2018

Government officials estimate the ban on offshore oil and gas exploration will cost $7.9 billion.

. . .Foregone revenue to New Zealand could be higher under high exploration, $14 .3 billion, or as low as $2.7 billion with low exploration.  . .

Even if it is “only” $2.7 billion foregone that is only part of the cost.

. . .The Petroleum Exploration and Production Association of New Zealand (PEPANZ) says it is time for a re-think on plans to end new offshore exploration.

“The Regulatory Impact Assessment (RIS) shows that ending new offshore permits is a disastrous policy for New Zealanders, likely to cost the Crown $7.9 billion in lost revenue and potentially up to $23.5 billion,” says PEPANZ CEO Cameron Madgwick.

“Importantly, this is only a part of the picture. Company profits could also reduce by billions which will cost jobs and investment into New Zealand, and the wider economic costs have not even been modelled.

“At the same time, it is considered more likely to increase greenhouse gas emissions than reduce them. It’s hard to think of a worse overall outcome.

“As well as the lost revenue it will mean higher energy prices for New Zealand homes and businesses, increasing the cost of living and destroying jobs. . .

That is a very high price for a policy that is at best virtue signalling and at worst will not only have a high economic cost, but a high environmental one too.

Good government would ensure there are viable and sustainable alternatives before a policy to knock off an industry and kill off a local supply of energy was announced.

Instead of which, we’ve been given blurt and hope – policy announced without any consideration of the costs and consequences.

That is not a credible way to run a country.

 


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