Gas deal shows fossil fuel ban won’t drive business offshore - Shaw

The AM Show 20/07/2018

Climate Change Minister James Shaw says the signing of a new gas supply deal shows the fossil fuel ban isn't going to hurt the Taranaki economy.

Officials at the Ministry of Business, Innovation and Employment (MBIE) had warned Methanex might quit the country by 2026 if the Government put a ban on future oil and gas exploration as it wouldn't have the supply it needed to operate.

But earlier this week the methanol exporter said it had signed deals "to underpin over half of Methanex's 2.4 million tonnes of annual production capacity in New Zealand for a period of 11 years through 2029".

"Our New Zealand facilities are ideally located to supply the growing Asia Pacific market and these agreements provide a long-term gas supply to underpin a significant portion of our operations," said John Floren, chief executive of the Vancouver-based company.

Mr Shaw told The AM Show on Friday the deal "puts a total lie" to claims the Government's climate change mitigation efforts would drive business offshore.

"You cannot say you're serious about climate change and want to extend out oil and gas and fossil fuels."

National MP Mark Mitchell, appearing alongside Mr Shaw, said his party is serious about climate change, but also "looking after our country's interests and looking after the economy as well".

"There's a lot of uncertainty around that and it's going to push us into a space... where we as a country could be looking at having to import natural gas and going back to coal.

"You know, the advice to the Government on this is very clear - with the current policy settings and the damage that's actually being done to that part of the economy around oil and gas, is that we could be in the ridiculous position where we're going to have an increase in carbon emissions."

Cameron Madgwick, chief executive of fossil fuel lobby Petroleum Exploration & Production NZ, told Stuff the Methanex deal was actually "precisely the warning that MBIE gave in its advice to the Government" because the company would be halving its output.

"It underlines exactly why we need exploration to keep New Zealand homes and businesses running."

Methanex employs 270 people across three plants in Taranaki.

Nearly 15,000 people made submissions on the Government's proposed Zero Carbon Bill, which is yet to be drafted.

"The next part of the job is to sit down with these guys and the members of the other parties in Parliament and start working through what is the final shape of that Bill," Mr Shaw said.

He hopes the final wording will be backed across the House.

"We don't know that for sure, but that's the intention. They've signalled very clearly, and we've signalled as well that we want to make sure it's a bipartisan piece of legislation."

The legislation aims to make New Zealand a carbon-neutral nation by 2050.

Watch the full panel with Mark Mitchell and James Shaw above.

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