Shaw James; Williams PotoHon JAMES SHAW (Minister for Climate Change): Thank you Madam Deputy Speaker. I'd like to start my contribution on the Crown Minerals (Petroleum) Amendment Bill by acknowledging the previous speaker Barbara Kuriger MP and her colleague in the Taranaki region Mr Young who I think have advocated strongly and well for their local constituencies and their constituents and the industries that are represented there.So I'd like to start in that spirit responding to a question that Ms Kuriger raised about what is the future of the energy system. I think that there are a number of things that have been conflated here. One is the present and the other is the future—those two things have been conflated. So right now there is a problem and part of it is due to the fact that there is gas infrastructure that is damaged and so supply is not getting through. Now what that demonstrates actually is that gas infrastructure isn't always resilient so the answer isn't necessarily more gas infrastructure to solve a problem of the existing infrastructure.Ms Kuriger is absolutely correct that one new wind farm will not be able to solve our energy requirements in the year 2050. That's right. Over the course of the next 30 years we need to build a lot more generation as we have in the last 30 years and the 30 years before that and actually in the 30 years before that. Something that we tend to do when there is a requirement for more generation is we build more generation. So the fact that there is only one new wind farm announced this year is absolutely no indicator that there will be no new generation for the next 30 years. There will be plenty of new generation. Yes as we simplify our fuel supplies towards electricity and away from fossil fuels that will mean a lot more electricity generation is required. There are vast amounts of new energy and new investment going into this field right now.If we were to transition our car fleet to electric vehicles—the easiest way to solve that problem is through rooftop solar and battery the price of which is coming down enormously. So there won't be any additional drain on the grid because you'll be actually generating your electricity at the point of use which is at your carport or on your garage at home.We do have an issue in this country due to the unique sort of pattern that we have where we have this winter dip. It's a very valid question: what happens during that three-month winter period? A battery isn't going to keep us going for the three-month period. You don't have to use fossil fuels to cover that dip. I was at an energy conference in Wellington the other day which Mr Young was also at. One of the options that was being put around there was the idea that actually what you do is you massively overbuild wind—right—so that you've always got that baseload even in the winter. Then you use the spare capacity in the other nine months of the year to create hydrogen which you then export to Japan and other countries that are making a major play in hydrogen and you turn energy into an export market in New Zealand for the first time.At the moment we import something like $5.5 billion of fossil fuels to cover our energy needs—we import that—and that is almost exactly the same as our balance of payments deficit. We could turn that around. We could actually turn energy into an exporter reverse out our balance of payments deficit and actually turn energy into one of the great wealth creators for this country entirely from renewables.The next question that was raised was: what about the idea of gas as a transition fuel? I have to say at the energy conference—DEPUTY SPEAKER: I'm sorry to the member but we are actually speaking to a particular piece of legislation. Just because issues are raised we're still focused on the third reading of this bill. So if the member would then relate all that back to the bill in front of us that would be extremely helpful.Hon JAMES SHAW: Certainly Madam Deputy Speaker. So one of the questions that was raised in the debate prior to me taking the floor was the question: will this bill prevent gas from being used as a transition fuel? So the question is: what does that transition look like?One of the points that we have made a number of times—so many times I've lost count—is that we actually over the course of the next 30 years still have a huge amount of exploration and extraction of fossil fuels in this country. There are 100000 square kilometres of existing permits that are being explored. Onshore exploration is still open. If any of the existing exploration permits come up with a find then those can turn into new extraction which is in addition to the current extraction and that could go out for decades—decades and decades well beyond 2050 and well beyond I might say when the world will be wanting it.So when the National Party says that we need to keep exploring on the basis that we need to use this as a transition fuel—if you think about it as a transition a transition has an end point. And my question to the National Party is: when were you planning to stop exploring and extracting fossil fuels? What year did you have in mind for when we were going to stop that?DEPUTY SPEAKER: Actually first of all you're using you" and you're bringing the Speaker into the debate. And second of all I refer you to Speakers' rulings 121/6 and 121/7. The third reading is the summary of the bill. We are summarising the bill on the floor of the House—not what another party might do in place of that but the bill on the floor of the House. I've given you six minutes and I really would like you to discuss the third reading of the bill in front of the House.Hon JAMES SHAW: Certainly Madam Deputy Speaker. My point about gas as a transition—DEPUTY SPEAKER: No don't argue with me. Would you please comply with what I'm asking of you.Hon JAMES SHAW: My point about gas as a transition fuel is that this bill actually starts the transition. It actually says "We need to make that transition." It actually gives an incentive to companies to start doing things other than what they were doing last year.I have to say at the energy conference over the course of the last few days it was extraordinary the number of proposals that were floating around for liquid biofuels for new hydrogen exploration for a number of different ways that we can solve this problem—the point being that all of those things can come on stream over the course of the next decade or two while we phase out the use of fossil fuels which is the whole point of this bill.I have to say one of the other criticisms that's been levelled at this bill is the idea that New Zealand should be a fast follower rather than a leader. I have to say that we are a fast follower. France went first and they actually have gone further than New Zealand. We are following them fairly quickly so we are by definition a fast follower. France's version of this legislation is not just to phase out exploration but also to phase out extraction by the year 2040. We've actually put no end date on when extraction would finish. What we're saying is that we need to start this transition simply by not looking for more fuel.One of the other criticisms that's been levelled at this bill is the idea that it somehow does nothing about climate change. The question has been asked a number of times: do you know how much this is going to change global temperatures? I can tell you this: 100 percent of the fossil fuels that you do not burn will not add to global warming and 100 percent of the fossil fuels that you do burn will add to global warming. That is the nature of fossil fuels.The recent Intergovernmental Panel on Climate Change report into where the world was at in relation to our target of holding global warming to 1.5 degrees said that we literally have 10 years to turn this around and the fastest thing that we need to bring down is fossil fuel use. That is what we have to do in the next 10 years. That is a shorter time frame than what this bill envisages. You cannot burn something like 80 percent of the world's existing reserves of fossil fuels and remain anywhere close to within the temperature goal that we have set of between 1.5 degrees and 2 degrees of global warming. The idea that you want to supplement those existing reserves by going and looking for new reserves when you cannot burn all of the existing reserves—and we know that. It is absurd to actually consider that you would say "Actually it's a good idea to go and add to those reserves on the off chance."I have to say some of the submissions talked a lot about the risk of stranded assets. I'm really worried about the risk of stranded assets because we know that we cannot burn our existing reserves and remain under 1.5 degrees to 2 degrees of global warming. We cannot. What that means is that those assets are already stranded and the idea of adding to that asset base contributing to it and saying we're going to expand the pool of stranded assets—that is the most economically absurd idea and argument that I've yet heard.So I have to say that I understand the concerns that have been well represented—ASSISTANT SPEAKER (Poto Williams): I apologise to the member. Your time has expired."