A bold move is underway in New Zealand's energy sector, and it's sparking a heated debate. An Australian company, EnZed Energy, is making waves by applying for an offshore oil and gas exploration permit, the first since the ban was lifted in 2018. But here's where it gets controversial: this company, formed just weeks before the ban's reversal, is now the sole applicant for a block off the coast of Taranaki.
EnZed Energy's application has triggered a three-month competitive process, but surprisingly, no other companies have stepped forward. Despite the lack of competition, the permit is not a done deal. The Ministry for Business Innovation and Employment (MBIE) will conduct a thorough assessment, examining the company's technical and financial capabilities, compliance history, and ability to meet health, safety, and environmental standards.
The potential exploration area overlaps significantly with the West Coast North Island Marine Mammal Sanctuary, which prohibits seismic surveying. However, EnZed Energy's work program suggests they will reinterpret existing seismic data, avoiding new surveys.
Resources Minister Shane Jones defended the ban reversal, citing medium-term energy security. But climate advocates and energy experts have criticized the move, warning that a large new find is unlikely. Professor Barry Barton, an energy law specialist, believes it could be years before any drilling occurs, if at all.
"The first few years are often spent on desk work and analysis," Barton explains. "EnZed Energy is offering to reevaluate existing seismic data. This could lead to a decision on whether to drill an exploration well."
Even if something is found, Barton adds, "Bringing an offshore drilling rig to New Zealand is incredibly costly. It's not a guarantee."
New Zealand's geology has been a challenge for companies, and the oil and gas ban may have exacerbated this. However, the ban's lifting doesn't necessarily mean the geological challenges have disappeared.
EnZed Energy's Australian registration, just before applications reopened, raises questions. The company shares governance and premises with Australian Carbon Vault, a carbon capture and storage firm. While CCUS technology captures and stores carbon dioxide from the extraction process, New Zealand's regulations for this are still in development, and a planned scheme at Kapuni gas field was recently canceled.
EnZed Energy's work program is silent on carbon capture. The company has not responded to RNZ's requests for comment.
As this story unfolds, it raises important questions: Is New Zealand's energy future at stake, or is this a risky venture with uncertain rewards? What are your thoughts on this controversial move? We'd love to hear your opinions in the comments!
