Woods MeganHon Dr MEGAN WOODS (Minister of Energy and Resources): Thank you Madam Chair. I'd just like to take a call to respond to some of the questions that have been put by members in the committee. The first question that was asked—one of the fundamental questions that has been asked—was what is the policy objective that the Government is trying to achieve here. Well that's something that is very straightforward and something that we have been talking about since before we made the announcement back in April of this year and that is that we cannot afford an economic shock in this country. What we need to do is we need to put in place the long-term transitions where we know there are economic changes ahead that climate change is bringing and that is what this is about. This is about making sure that we don't pull the rug out from underneath communities and individuals but instead we are putting in place now the planning and we are starting that transition. One of the things that we are very aware of as a Government is that a transition has to start somewhere. A transition isn't just a continuation of the status quo. A transition means that things need to change. Members on the other side have rightly raised questions around the jobs and where jobs are going to come from. The member from Taranaki Jonathan Young has talked about the 4500 people who are directly employed in the Taranaki region and the 11000 indirectly employed. Well one of the things that I know that that member is aware of is that actually this is an industry—particularly the indirect jobs—that has been shedding jobs over the last few years. We have seen a number of engineering works shut down in the Taranaki region as a downturn in a market as volatile as the gas industry hits. So what we want to do is make sure that we don't go through what this country went through in the 1980s by not putting in place the planning early enough but that we can get on the ground in Taranaki—as we are—and we can put in place the replacement industries. That goes directly to one of the issues that both Maureen Pugh and Andrew Falloon raised. They talked about lost opportunity in relation to the Barque prospect. I think one of the things that I would like members in the Opposition to understand is that all the existing exploration permits will be honoured and that includes the Barque prospect. It means that that can still be progressed from exploration to mining. Now I have also made some comments in recent weeks about how we will work with individual permit holders around hitting a bit of a pause button on the drill or drop provisions. We understand that there has been some change and that companies might need a year or two in which to readjust themselves to the new environment. I have invited all permit holders to get in touch with us—and many have—around hitting the pause button around those. So in terms of the concerns of those members I can understand those concerns that Maureen Pugh and Andrew Falloon were outlining but I'd like to reassure you that those permits will not be dropped. I think something everybody has to realise is that we could still see drilling for oil and gas from the 100000 square kilometres that we already have in exploration permit off the coast of New Zealand for decades to come and that's something that we have to bear in mind. Now another issue that was brought up was the issue around the security of supply. The Opposition members seem to be labouring under a false assumption that this Government's plan once we stop using oil and gas is to burn other fossil fuels. That certainly isn't our plan or our intention but what we are embarking on—and the Government is doing the work—is around making sure that we are putting in place the planning to get to 100 percent renewable electricity. I would point members to work that has been done like a recent meta-analysis of 18 large-scale post - carbon economy transition strategies. It found that looking at 18 of these in a meta-analysis way showed that technology and costs are not the key barriers to making these transitions. They listed three of the major roadblocks as being climate change denial the fossil fuel lobby and political inaction and those are things that we cannot be guilty of in this country. We've heard Nick Smith talking about what happens in the UK and Germany. Now New Zealand is in a very very fortunate position in the abundance that we are blessed with in terms of the access to renewables. Not only do we have the hydro which has been invested in over many decades in this country but we also have wind we have solar we also have geothermal and we actually at times have an abundance of renewable energy which opens up real economic opportunity for us in things such as hydrogen. Countries that have an abundance of renewable energy can certainly make use of those. Todd Muller brought up the lost—Hon Members: Mull-er".Hon Dr MEGAN WOODS: Muller—sorry to the member. He brought up some of the lost opportunities there in terms of the ability to export. Well I'd like to just point out to that member that at the moment we don't export our gas. We do not have LNG facilities in New Zealand and in fact the latest LNG facility that was installed in Australia cost tens of billions of dollars. Now in the entire history of the oil and gas industry in New Zealand no one has been willing to invest in that infrastructure to put in place an LNG facility so that we can export. So I think to say that these are things that sit out there in the never-never is something that we need to move past. But what I also want to address is a really real issue and that is the issue around the fact that somehow we're too small to do anything as a country in terms of—Hon Dr Nick Smith: Never said that. Hon Dr MEGAN WOODS: No. Jonathan Young in his contribution said that we were very small and what we did didn't make—well what I'd like to point out to Jonathan Young is that the 197 countries who signed the Paris Agreement create less than 1 percent of the world's emissions but together collectively we make up 20 percent of the world's emissions. That's as much as Europe or China. No country can sit back and say they don't have to do their bit. [Interruption] Well Jonathan Young was saying that we were too small to matter. The other question that has been put is about carbon leakage and the fact that we'll simply transfer production from New Zealand to a country where there are higher levels of emissions. Now this is an argument that's come through a lot in this debate both from the Opposition and from the oil and gas industry but I think one of the things that we have to realise is that the world is changing even from 12 months ago. What we see is that China is currently trialling seven different versions of emissions trading schemes which they have said will move to be comprehensive schemes in a very short space of time. China is ahead of its Paris peaking target and is already moving to shut down coal in some of its cities. I think what we have to move to understand is that when China does roll out its comprehensive cap-and-trade system—which will be in place by the time that New Zealand finally gets to not be producing oil and gas—what we won't be able to do is simply put in place production in China without taking something off because they will have that cap-and-trade system which in many ways is more comprehensive than our own emissions trading system which does not have a cap on it. So there are many reasons for us to be very optimistic about our future and to think about what opportunities sit in front of us and renewable energies offer us key opportunities. But one of the things that I want to leave this committee of the whole House with is to realise that transitions have to start somewhere. They aren't just the continuation of the status quo. Continuing to do the same is not a transition; it's just keeping on doing the same. What we are doing in this Government's bill—what our object is—is to make sure that we are beginning that long-term managed transition."