Prebble Richard: Electricity and Gas Industries Bill — In Committee 
Prebble Richard: Electricity and Gas Industries Bill — In Committee 
[Volume:620;Page:15992] 
Hon RICHARD PREBBLE (ACT) 
: 
 I rise on behalf of the ACT party to speak to the Electricity and Gas Industries Bill. We are debating Part 5 and members have accurately identified that the most significant clause is the one that requires the disclosure of petroleum reserves and production information to the chief executive and their publication by the chief executive. When we hear about shortages of petroleum products that measure sounds sensible but I say to the Committee that it is just another case of people thinking: “Here’s a problem. Let’s pass a law.” 
Let me give an example. In the whole time that I have been a member of Parliament the field that has dominated has been the Maui field. It appears to me—I have some sort of theory about it—that about every 2 years the size of that field changes. Right at the moment it is on a downward slope and people are deciding that there is nothing there. I say to the Committee that I would not be at all surprised if the petroleum industry drilled a couple more holes and people came back in a year’s time and said: “Forgive us for saying that. We have found some more.” One might think maybe they have engaged in shenanigans—and there might have been a bit of that—but this is not a science. The size of petroleum reserves is not an easy thing to judge. 
At the moment the Shell company a mighty oil company is being hammered for having misstated its reserves. 
Gordon Copeland 
: It overstated them. 
Hon RICHARD PREBBLE 
: It overstated them and by quite a substantial amount. But it may be as I was reading in a different article that the overstatement of the reserves is actually correct and that the company got hammered because it had not actually drilled enough to be able to state its assessment with the sort of certainty that the stock exchange wants. When I look at this bill I see that there is nothing set out in this regulation as to how an oil company is to decide what its reserves are. This law is actually meaningless. It could not be enforced. One would not be able to prove anything. 
I am sure that Mr Copeland who comes from the oil area has had the experience I have had of various enthusiastic people coming to me to tell me that New Zealand is the next Saudi Arabia of the world. They are sure that there is oil out there. 
Gordon Copeland 
: It would be great wouldn’t it? 
Hon RICHARD PREBBLE 
: I actually think it is and I can tell the member when we are going to discover it: on the day that someone comes up with a workable hydrogen-powered car! Then we will discover that New Zealand has been sitting on huge hydrocarbon reserves and if successive Governments had had a better tax regime we might have found that out—though it may well be that the style of our reserves is very much different from the sort of geology in Texas and that is why we never found them. One might ask “Why is that?”. Well the people who actually make the decisions whether to drill here are based in Houston rather than Auckland or Wellington. 
But I just say to the Committee that my objection to this part is really my objection to the whole bill. The Government thinks we can answer this problem by law and regulation and by the wisdom of the chief executive of the department whereas in fact the answer is the market—and it always has been. If we had had a freer market in oil and petroleum products I personally have no doubt at all that we would have found much more substantial oil reserves. I say to the member Mr Copeland who I know was in the oil industry and who has talked about fears of a rise in the price of petroleum products that yes we do see that China even though it is the fifth-biggest producer of oil is now a very substantial importer but there is no doubt in my mind that the market will actually produce an enormous quantity of oil products. It is just a matter of time for the market signals to go through. 
But here is a clause that actually states to people: “If you go to the trouble of finding oil of investing money this Government will make you give away that piece of proprietary information to someone who has not spent a dollar.” Why would people bother looking for oil when a socialist Government would socialise the advantages that they gained from their efforts in drilling for oil? I suspect that this clause will work as many laws do in the exact opposite way than members hope.