Dean Jacqui; Kuriger Barbara; Woods MeganPart 2 Amendments to other Parts of principal Act and Schedules 1 and 2.CHAIRPERSON (Hon Jacqui Dean): Members we now come to Part 2. This is the debate on clauses 8 to 27 and Schedules 1 and 2 Amendments to other Parts of principal Act". The question is that Part 2 stand part.BARBARA KURIGER (National—Taranaki - King Country): I thought the Minister in the chair Megan Woods was going to take a call and I was prepared to let her take one but she hasn't stood up so I'm going to take my first one. My first one is speaking to my Supplementary Order Paper (SOP) 90 and it is around clause 17. In this clause we want to replace the words "The Minister must" with the words "The Minister may". There are too many incidences in energy at the moment where the Minister wants to have her hands and her fingers in the gearbox around everything and we can see the results were actually going to be leading to a lot of energy insecurity in this country. So we want those words removed because the mandatory imposition of financial security requirements on permits and licences is not something that the Minister should be putting her fingers into. Amending the word to "may" allows discretion to be used by the Minister but requiring financial security without a risk assessment would be disproportional to the actual risk. I don't believe in terms of reading the information that I've seen on this bill and listening to the submissions that the Minister has been listening on this at all and I would be quite concerned about putting a clause in any energy bill where the Minister "must" rather than the Minister "may".So that is my first SOP and perhaps the Minister when she's ready to take a call may want to get up and tell us why this is going to be a power which she's going to impose on the current energy Minister or future energy Ministers and why she feels this is necessary to impose herself and others on this industry when they are going to be decommissioning anyway.Hon Dr MEGAN WOODS (Minister of Energy and Resources): Thank you Madam Chair—happy to take a call to answer questions as they arise. I will address just a couple of the introductory comments around the requirement and the purpose of the legislation that the member who's just taken her seat raised in her first contribution. She claimed that this was a piece of legislation that there was no necessity for—it was not required and we didn't need it. I'd like to point this committee to the fact that the New Zealand taxpayer has been left with a bill of $349 million cleaning up a decommissioning cost that should've been borne by somebody else. I do not think it is fair I do not think it is right and I do not think it is just that the New Zealand taxpayers should be left to clean up after a commercial operator has been in and they simply absolve themselves of what is required after the permit.This is not a theoretical concern. The purpose of this bill was born out of what we have seen happening in Taranaki with the Tamarind situation in the last few years. When we first came into Government in 2018 one of the first things I did as the Minister of energy was to clean up the loophole that the previous Government had left that allowed the situation with the Tamarind to exist. So we've closed that down but we have an obligation to the taxpayers of New Zealand to further protect them from being left with the bill for cleaning up and the decommissioning after someone has finished their activities in exploration and drilling work.The member also said that this was retrospective legislation and something that should be considered carefully and on this point I absolutely agree with her. This is something that we have taken seriously that it is something that we do have to make sure we are ensuring that we are working within the usual conventions of how it is this House would legislate on these matters.One of the things that was pointed to in the advice that we heard was that the licences that are issued under the Petroleum Act of 1937 are subject to an explicit statutory obligation to remove any chattel machinery or any other property placed on land through the course of the licence. So in terms of making sure that you do fulfil what is set out in that 1937 Act and those licences are issued under this is just putting in law what is required of the companies anyway and protecting the New Zealand taxpayer. Permit commissions can further specify holders' decommissioning requirements and most permits do include some form of decommissioning obligation though conditions can vary between permits. So it is not an unreasonable expectation that someone who holds a permit for oil and gas exploration in New Zealand should expect that they will have an obligation to remove any chattel machinery or any other property placed on the land throughout the course of the licence. Of course post-1937 and the passage of that we did also move to offshore exploration and drilling within our oil and gas sector. So this is not unusual.In developing this proposed legislation we consulted the Legislation Design and Advisory Committee guidelines and these state that the starting point is the legislation should not have a retrospective effect and should not interfere with accrued rights and duties. But we note that legislation should generally have prospective and not retrospective effect. The proposed provisions in this bill will apply prospectively but are designed to affect what the fiscal risk to the Crown is the greatest from rather than future petroleum mining exploration permits. So this consideration was something that was given due consideration during the course of the bill.In terms of the member's SOP that she spoke to in her contribution we will not be voting in favour of the Supplementary Order Paper that the member has put up. We consider that acquiring a financial security from a permit holder is an important risk mitigation that needs to be put in place to protect the taxpayers of New Zealand. Now the taxpayer already has obligations under the Crown Minerals Act in respect to decommissioning but so do those who hold the licences and that is what this financial security is about. It's about making sure we're putting in that risk mitigation so not only is the Crown responsible for its obligation under decommissioning but so are those who have commercially operated these permits and have received profit from doing so.There is flexibility built into this legislation and that's one of the critical elements that is in the bill that we're debating in the House. The amount and kind of security is decided by many factors allowing a risk-based approach to the implementation. It's for that reason that we have already embedded within the framework of this legislation this risk-based approach that is flexible that we won't be supporting the member's SOP."