Responsible use and increased royalties

August 30, 2011

Responsible use of resources is one of the guiding principles behind the Energy Strategy and Energy Efficiency and Conservation Strategy which were released today by the Acting Minister of Energy and Resources, Hekia Parata.

Anotther very important part is the potential for $12.7  billion in royalties from oil and gas.

“New Zealand is blessed with an abundance of energy resources,” says Ms Parata.

“Our Government’s goal is to make the most of all the assets we have – hydro, wind, geothermal, oil, gas and minerals.

“We want to use those resources responsibly to secure our energy future and to lift our standard of living.  That is why the Government is taking a balanced approach to building a sustainable energy and resources future.”

On the renewables side of the energy and resources portfolio, New Zealand’s renewable energy levels are the second highest in the OECD, behind Iceland.

“Renewables and energy efficiency are a big part of our energy picture,’’ says Ms Parata.

”Renewables made up 79 per cent of our total electricity generation in the March 2011 quarter. New Zealand has a target of 90 per cent of electricity generation to be from renewable sources by 2025, and we are well on our way to achieving that.’’

Maximising the use of renewable resources gives us a natural advantage which we need to make the most of, although that doesn’t mean damming every river and putting windmills on every hill.

Fossil fuels will continue to play an important role in the global economy. Around half of the energy we currently consume is from petroleum,’’ says Ms Parata.

“We can’t just turn off the tap in our journey to a lower carbon economy. We also can’t ignore the major economic opportunity that continuing global oil demand could provide New Zealand. Petroleum was our fourth biggest export earner in 2010.’’

In addition to the energy strategies, the Minister today released an independent report assessing New Zealand’s oil and gas potential.

The Woodward report shows that New Zealand is set to earn more than $3 billion in royalties from oil and gas fields already in production.

That could increase to $12.7 billion with future discoveries, which would help pay for schools, hospitals, broadband and roads.

“People want to be sure that the environment is protected and they also want jobs and growth,’’ says Ms Parata.

“We have seen the difference the oil and gas industry has made in Taranaki, employing over 5,000 people (in 2009) and contributing $2 billion to our country’s GDP.’’

Sales of crude oil were one of the factors which led to last month’s trade surplus.

The full energy strategies are here. the Woodward Report on future royalty income is here.


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