Oil fields – Evening Report

Bryce Edwards’ Political Roundup: A bolder and greener government

Bryce Edwards — Mon, 16 Apr 2018 07:07:16 +0000

Bryce Edwards’ Political Roundup: A bolder and greener government

[caption id="attachment_13635" align="alignright" width="150"] Dr Bryce Edwards.[/caption] The Labour-led government is looking bolder, smarter, and greener than it did a week ago. Its announcement of the ban on new gas and oil exploration in the seas around New Zealand has been viewed as a defining moment for the new government. But critics insist the policy is either intrinsically flawed, or doesn’t do enough. [caption id="attachment_16195" align="alignleft" width="400"] Sedco Rig off Port Taranaki, New Plymouth with Paritutu Rock and Mt Taranaki in the background. Image courtesy of Oil and Gas New Zealand.[/caption] Richard Harman has an excellent analysis of the new policy, saying “It may turn out to be a defining moment for Ardern’s Government; a bold rebranding that turns Labour a greener shade of red” – see: Defining moment for Ardern. As Jacinda Ardern put it to Harman, “We are bold… That will be a defining feature for us… We will be willing to take bold action, to take action, to take risks on the big stuff.” Harman compares the policy to when Labour was last in government. At that time Ardern was working for Associate Minister of Energy, Harry Dynhoven, who “presided over an aggressive Government policy which saw it chase big international players, dangling tax incentives and reduced royalties in an attempt to kick-start interest in areas like the Great South Basin.” Labour is now very much targeting the youth vote, which takes climate change very seriously. Harman says the latest announcement “was a relatively cheap policy to implement as it cemented in its youth vote base and paid its dues to the Greens.” And he points out that the exploration ban comes on the heels of the “Government Policy Statement on transport and ending of large-scale irrigation subsidies”. The exploration ban is applauded by conservative commentator Martin van Beynen, who says “it demonstrates this Government is prepared to make uncomfortable changes we all know need to happen” – see: Government’s oil move atones for our environmental sins. He argues that such boldness, based on principle, will be respected by the public even if it is painful, because “the electorate can be surprisingly forgiving on points of principle”. According to van Beynen, if this policy is successful it might well push the Government to go even bolder: “The stance also has the benefit of not appearing as a major cost item on Grant Robertson’s coming budget. With an important environmental notch on its belt, the Government might feel emboldened to deal more bravely with income inequality and poverty next. This will involve some real pain and might force the Government to throw off the shackles of the budgetary rules regarding spending as proportion of GDP.” This article by van Beynen, like many others, emphasises Ardern’s claim that climate change is her generation’s nuclear free moment. Nadine Higgins says the decision is a “line in the sand” that will be challenging to many people, because this is a rare case of real “leadership” rather than the usual “reflectorship” that Labour and other parties typically practice, whereby they do what is popular rather than what is right – see: Jacinda’s ‘nuclear-free moment’ puts Government one step ahead of the public. Higgins says, “There have been many reforms that went against the tide of public opinion at the time but were later lauded as a seminal moment in history that happened not a minute too soon… In the decades to come, I envisage us looking back on this week’s decision about oil and gas through a similar lens.” Similarly, an editorial in the Wanganui Chronicle says that, although there is plenty of criticism of the new policy, “it may be that we look back on this ban the way we look back at our nuclear free stance, or being first to give women the vote, or the 1981 Springbok tour protests. Divisive at the time but we ripped the scab off and they’re now a source of pride” – see: Ripping the scab off oil exploration. Is the policy really such a big deal? Although the articles by Richard Harman and Martin van Beynen emphasise the boldness of the new oil and gas ban, they also make some very good points about its shortcomings. Harman suggests the Government might have simply made a virtue out of reality, as offshore exploration applications appear to have dried up anyhow: “the offshore petroleum exploration industry in New Zealand has been in the doldrums now for the past two years and that it may well have turned out that even if the Government had offered up blocks of ocean for exploration, there may have been no takers.” He quotes a recent industry report: “Interest in New Zealand’s annual oil and gas block offers remains at an all-time low, declining from a peak of 15 new exploration permits awarded in 2014, to just one in each of the past two rounds.” And van Beynen points out how slowly the change will occur, and that under the Government’s policy there might yet be a boom in offshore oil extraction: “The oil change was a bit like the last National Government announcing it was raising the age of superannuation to 67 in a year so far away that it was academic for most people. Radical change to the oil industry, it is not. About 30 existing exploration permits will continue until at least 2030 and viable oil and gas finds made under those permits could mean production for years after that. We could still have a massive oil industry off the coast of Canterbury and Southland and more onshore wells in Taranaki.” Will the policy have any real impact? The oil and gas extraction industry claims the change will do nothing for climate change, saying the problem can only be tackled at the “demand side” rather than the “supply side”. If New Zealand stops producing oil and gas, this will not necessarily reduce its use – but instead just lead to importing more energy. This is also a point made by Hamish Rutherford: “This will feel good for environmental activists, but unless there are more significant moves to dampen demand, all this will do will be to grant more geopolitical power to countries in the Middle East and of the likes of Venezuela, holder of the world’s largest oil reserves” – see: A knock for the regions, but exploration end won’t curb NZ oil demand. Rutherford says the ban will have “little or no impact on motorists or fliers. Until the Government takes steps to tax users of fossil fuels, the impact on the climate will be limited.” He argues that the policy “seems moderate”. It is for this reason the National Party has been using the term “virtue signaling” about the ban, which is defined by an editorial in The Press as used to “refer to pious but empty gestures by the Left” – see: The virtues and vices of oil. The newspaper also criticises National for opposing the policy, even though The Press agrees the ban may have little impact: “a position must sometimes be taken because it is the right one. A moral example can be set. In this case, it is an example that has left the Opposition confused about whether to call it an empty gesture or wholesale destruction of a regional economy. It cannot be both.” National has also argued the ban could be counter-productive, with Judith Collins alleging that it will actually lead to more coal being burnt, which is worse for the environment. For a discussion of this, see Dan Satherley’s Ending oil and gas extraction – what scientists think. Another criticism that is gaining more resonance is about what the Government failed to do in announcing the new policy. According to Jo Moir, “It’s understood some in the Government executive are frustrated the announcement wasn’t made in the region most affected and that there was no clear strategy for explaining what comes next” – see: Shane Jones looked a little green, and it wasn’t with envy. Having no transition plan for either the regions or for energy use seems unforgivable to Moir: “if you decide to mess around with one, you sure as hell need a good plan for the other. And that’s where the Government got it wrong this week – the messaging about why New Zealand needs to do its bit domestically by moving away from oil and gas exploration was fine, but the explanation of what it was being replaced with was non-existent.” Moir adds: “Wanting to lead the way on the next big technology is one thing, but having a plan is another… a situation not too dissimilar to being told we’re moving you out of your house but we don’t have another one for you to move into.” Political analyst John Armstrong also has concerns about the “failure of the Government to address a crucial aspect of the ban on offshore exploration”, explaining that “Ardern and her Administration were too busy basking in the glow of self-satisfaction when preaching to the converted” – see: More than a touch of irony if Andrew Little becomes Jacinda Ardern’s Mr Fixit. Nonetheless, Armstrong says “Ardern deserves credit for sticking to her principles and delivering something of real substance in the struggle to cut greenhouse gas emissions. She also deserves praise for managing to forge an agreement with Labour’s partners in government which produced compromise on all sides and a meaningful end result.” Finally, to see satire about oil and gas exploration and drilling, see my blog post, Cartoons about the environment and mining.]]>

New Timor treaty will finally set borders to resolve oil, gas row

Pacific Media Centre — Wed, 07 Mar 2018 05:05:25 +0000

ANALYSIS: By Tom Clarke

Timor-Leste and Australia has signed a maritime boundary agreement at the UN headquarters in New York today, putting their long-running border dispute to rest.

Although the finer details of the treaty remained under wraps, all reports suggest that the Timorese will secure their permanent maritime boundaries and a fairer share of government revenues from the Greater Sunrise gas field.

Such an outcome will be testament to the determination of the Timorese people and their governments to stand firm in the face of a neighbouring bully and claim their sovereign rights.

This debate has never been about charity, it has always been about justice and what the Timorese are legally entitled to.

The new boundaries, according to an Australian government supplied map.

Successive Australian governments, wanting to keep the riches of the Timor Sea to themselves, have deliberately and persistently frustrated Timor-Leste’s attempts to establish permanent boundaries.

Even though all of the oil and gas fields contested over the years are located closer to Timor than to Australia, the federal government has doggedly tried to short-change the Timorese at every opportunity.

After Australia had unilaterally tapped the Laminaria Corallina fields – without the Timorese receiving a single cent, it jostled Timor into a temporary resource-sharing agreement, the Timor Sea Treaty, that allowed it to take a slice of the revenue from the Bayu-Undan fields, which were the fledgling nation’s most important source of revenue.

Miserly Australian proposal
Australia then set its sights on the massive Greater Sunrise gas field. Its initial proposal was to allow Timor a miserly 18 percent of the government revenue.

The prevailing legal consensus is that if permanent maritime boundaries were established in keeping with current international law, then most, if not all, of the field would be located within East Timor’s exclusive economic zone.

Timor Sea disputed boundaries prior to the new agreement. Map: ETAN.org

But international law was of little relevance to Australia. Just two months before Timor-Leste became independent in 2002, the Australian government withdrew its recognition of the maritime boundary jurisdiction of the International Court of Justice.

Put simply, the Australian government turned its back on the independent umpire signalling that it had no intention of playing by the rules.

So despite Timor-Leste wanting to establish permanent maritime boundaries, in 2006 the Australian government managed to walk away with another “temporary” agreement.

This one, CMATS, would postpone for 50 years discussions about sovereignty – ie. which nation actually owns the area – and would see the government revenue from Greater Sunrise split 50/50.

Exactly how Australia managed to get such a deal was exposed in 2013 when a senior intelligence officer revealed that an AusAid project was used as a cover to bug the Timorese cabinet room during the negotiations.

Timorese upset
The Timorese government was understandably upset and triggered a conflict resolution mechanism set out in the Timor Sea Treaty, to prompt mediation in The Hague.

But just days before the meeting was to take place, an ASIO raid was ordered on the Canberra offices of Timor’s legal team and the passport of “Witness K” was seized preventing him from travelling to The Hague to present evidence.

This allowed Timor to take legal action against Australia and in a provisional judgement, the International Court of Justice slammed the heavy-handed actions and issued an unprecedented order for the Australian government to stop interfering with Timor’s communications.

With the upper hand in what would have been a long and embarrassing legal battle for Australia, Timor-Leste finally had some bargaining power. But in an extraordinary act of good faith, Timor traded that away – it withdrew its case in return for Australia agreeing to return to the negotiating table to discuss permanent boundaries.

But true to form, Australia soon reverted to its belligerent tactics and the talks were on a road to nowhere.

Eventually in 2016 with nowhere else to turn, the Timorese launched a “compulsory conciliation” procedure at the UN. This is a mechanism that had never been used before and exists specifically for when one country refuses to recognise the jurisdiction of the independent umpire that would normally settle such disputes.

The Australian government’s long held stonewalling tactics began to crumble after its undignified attempt to wriggle out of the process was soundly rejected by the UN-constituted commission.

The new treaty
The resulting treaty will set a permanent boundary along the median line halfway between the two coastlines. This is great news, but the exact placement of the all-important lateral, or side, boundaries which will determine the scope of Timor’s exclusive economic zone, is still unknown.

Recent media reports claim the treaty will give a much larger share of the government revenue from the Greater Sunrise field to Timor: 80 percent if the gas is piped 450 km to Darwin for processing where Australia will reap the downstream economic benefits of jobs and related activities, or 70 percent if the gas is piped 150 km to East Timor.

Even if the new treaty turns out to be less than ideal in regards to the size of Timor’s sovereign territory, it gets the job done in that it delivers what the Timorese have always wanted – permanent maritime boundaries – and it appears that the revenue share reflects the likely outcome had the maritime boundaries been set in keeping with contemporary international law.

It seems that it has also managed to do so without Australia having to concede territory it had not already conceded to Indonesia in 1972. So the politicians on both sides of the Timor Sea have saved face.

Whatever devils might be in the detail, there is little doubt that this new treaty will be a far better deal for East Timor.

This is a big win for the Timorese and also a reminder of the importance of the UN’s peaceful arbitration processes.

It is also a win for the Australian citizens who stood up in solidarity with the Timorese people to demand that the federal government do the right thing. It’s been a long time coming.

Tom Clarke is a spokesperson for the Timor Sea Justice Campaign.

More Timor-Leste stories

Article by AsiaPacificReport.nz

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