Energy Strategy sets direction for New Zealand’s energy future

The New Zealand Energy Strategy and the New Zealand Energy Efficiency and Conservation Strategy released today by the Acting Minister of Energy and Resources, Hekia Parata, show an energy future that delivers for all New Zealanders.

"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."

Like the rest of the world, New Zealand needs a range of renewable and nonrenewable energy sources to meet its energy needs in the immediate future.

"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.''

Environment Minister Nick Smith last week introduced legislation to manage the environmental effects of activities in New Zealand's Exclusive Economic Zone and Extended Continental Shelf and announced interim measures to manage the environmental effects of activities before the new law is passed.

Labour Minister Kate Wilkinson has also announced the establishment of a High Hazards Unit of eight inspectors specifically dedicated to the petroleum and mining industry.

The Minister of Transport is also reviewing the liability insurance requirements for the industry and is looking to raise it above the current level of NZ$30 million.

"Together these measures provide assurances that the industry operates within a sound regulatory and operational framework.''

Ms Parata also announced today proposed changes to the way permits are issued for oil and gas exploration. Currently companies can apply to explore any area in New Zealand, the proposed approach would see the Government open up a limited range of specific areas for tender.

"The proposed approach would allow us to focus on areas of greatest potential, and will be more transparent for the public, who would know which areas are available for permitting and which are not. Communities and iwi would have an opportunity to comment on the proposed areas to be opened up," says Ms Parata.

There is a 40-day working period for which people can make submissions on the proposed change to the permitting system.