Energy owners say the proposed legislation, which is designed to tighten rules around the removal of oil and gas wells, risks reducing power generation.
He says the Crown Minerals (Decoration and Other Amendment) Amendment Bill is a reaction to the collapse of Timind Taranaki, owner of the Toi Oil Field, and will scare off significant new investment in the sector.
Tamarind Taranaki collapsed in December 2019, leaving the Crown with a 300 million bill to safely dismantle the Offshore Twi Field.
The government says the bill will close the loopholes that allowed Amli to shirk her responsibilities.
If passed into law, it would hold companies responsible for permanently eliminating costs, even if licenses or licenses had been sold and made the company’s directors criminally liable. He will not fulfill the responsibilities of decommissioning, even if he has left the post.
It will also subject oil and gas companies to strict financial scrutiny and require them to set aside funds to cover expenses.
Andrew Jefferies, managing director of NPZ Oil & Gas, which owns a 4% stake in Kope Gas Field, said new rules were needed, but the bill went too far.
“If you do any activity at any time, you have an immediate threat that can never be removed, so it is very difficult to come and start that activity.
“And that’s not something that’s found in other areas, with the extent of the criminal liability that is being talked about here.”
Jefferies said the bill could also have unintended consequences for protecting the power supply.
“When the hydro-storage lakes were low, the sun didn’t shine and the wind didn’t blow – something else was needed,” he said.
“If we don’t want to burn coal, we will need gas, otherwise you will have to build more or build capacity in some other way that will be very expensive for the people and a lot of money, a lot of cost to the people. Will come. Electricity bill.
Jeffries said the legislation, as it was written, would intimidate the investment needed to extract well-known gas resources from the earth.
He said that this would also deter investors on renewable energy such as offshore wind, as they too would be subject to these risky decommissioning costs.
OMV is New Zealand’s largest gas producer and owns 74% of the Pohokora gas field and owns Mao.
In a statement, General Manager Henrik Mosser said no other country had done so.
“Field owners may be forced to invest in securities for many years, and they will also face additional operating costs through the new levies.
“All of these additional layers could jeopardize investments that could otherwise be made to extend the life of gas fields.
“It is important to note that no new foreign permits have been issued since 2018, and the last Anshur permits were issued this year.”
Moser said the Climate Change Commission has acknowledged that gas will be key to the transition to a low-carbon economy, while power generators Meridian and Genesis have said that gas will be needed to generate electricity by the 2030s.
Todd Energy, New Zealand’s largest insurer gas player, declined to be interviewed, but his legal lawyer Stuart Barclaw clarified the company’s position on the bill during recent select committee hearings.
He also said the proposed legislation frightens investors concerned about sovereign risk or national risk, a condition that defined a government that unexpectedly changed the rules.
“There is a great need for investment,” Barclays said.
“The existing infrastructure there is not enough to know the gas reserves off the ground. If not billions of dollars, then over the next decade there is a need to invest through licensed individuals.
Barclays said it was widely agreed that natural gas would support the transition to renewable energy, but that gas-powered electricity – including peak plants – would be needed for many years during the monsoon season. Support the power grid where renewable energy sources were conflicting.
“Todd Energy believes that the shortage of natural gas will affect the cheapness and safety of electricity, which will lead to power outages and potentially increase the cost of electricity to consumers.”
Sarah Roberts, spokeswoman for Taranaki Energy Watch, supported the bill.
“Given that the oil and gas industry is saying that they are good corporate citizens, I think it is reasonable to expect the Crown Prince to fulfill his dismissal obligation and I think that It’s been a long time coming, and it’s been a long time coming, and it’s been a long time coming.
He said the proposed legislation is fit for purpose and Cherry is one of the best such regulations in the world.
The Economic Development, Science and Innovation Select Committee will present the report of the bill in Parliament before its second reading in November.