Young Jonathan: Estimates Debate — In Committee 
Text is incorporated into the Bound Volume 
Young Jonathan: Estimates Debate — In Committee 
[Sitting date: 14 August 2012. Volume:682;Page:4364. Text is incorporated into the Bound Volume.] 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I am very pleased to stand and speak in this estimates debate regarding energy and resources. The Government has set ambitious economic goals for New Zealand and that requires a significant improvement in our economic performance. Productivity improvements are incremental as we gain efficiency but the highest area of productivity gain that we see in this country happens through oil and gas exploration. Oil and gas production brings to this country a return of $525000 a year per fulltime-equivalent worker. That is a significant lift. In fact when you look at the top four export earners in this country—dairying meat timber and oil and gas—we note that when the Tui Area field which is just offshore from Taranaki came into production that one field lifted the industry to third place. So we see the significance that just one significant oil discovery can bring to the economic return to this country. 
Regarding the economic development of this country we have put together a business growth plan that will grow more and bigger businesses in New Zealand and provide the standard of living New Zealanders aspire to. This business growth plan touches on six key areas: capital markets; innovation and ideas; skilled and safe workplaces; infrastructure which includes electricity broadband and transport; export markets; and the utilisation of natural resources. Obviously the oil and gas sector relies heavily upon all six of these. Oil is our fourth-largest export earner with a value of around $2.2 billion a year. It contributes to the employment of approximately 7700 within our country 3730 of which are direct jobs from that sector and another 3900 of which are jobs in other parts of the economy. We know that gas is an important contributor to domestic industries and electricity generation. We found this out so very clearly last year when the Maui Gas pipeline north of New Plymouth was out of commission for a week with the effect that had on the economy of New Zealand particularly in the north. We also know that gas generated 18 percent of New Zealand’s electricity supply in 2008. 
All of that is to say that energy is a very important area in our economy and in the way of life for ordinary New Zealanders. Energy underpins economic growth. Global energy demand is forecast to increase by 40 percent between 2009 and 2035. So this is a very important area. It is also very important to understand that in order for this growth to happen it has to happen in a manner that is well managed and consistent with the wider values and the environmental values we hold as a nation. The Government is supporting the development of the oil and gas sector which is set out in our petroleum action plan. The aim of the plan is to make the most of New Zealand’s promising potential and maximise the gains from sector growth in the petroleum area. Work is well under way to streamline the management of the petroleum sector and to make it easier for exploration companies to establish operations in New Zealand whilst all the time having stringent cautionary behaviours and activities around such exploration and production. 
We are currently reviewing the Crown Minerals Act regime. The Act governs management of the Crown’s minerals estate which includes all oil and gas. The review aims to encourage development of our resources so they contribute to economic growth. We aim to streamline the current regime and make it better able to deal with future developments. We are reviewing health and safety regulations for petroleum operations and are advancing new environmental legislation governing our exclusive economic zone beyond the 12 nautical mile limit from our coast. All of these measures are put in place in order for us to maximise the advantages and the gains but by the same measure to fulfil the obligations that these opportunities give us. From this year the Government will be seeking a work programme for bids for 20 to 30 blocks annually. This is an important step forward in the way New Zealand is going to strategically manage exploration interests. The block offer strategically involves exclusively using an annual competitive tender process to allocate permits for oil and gas exploration and will no longer use “first in first served” permitting known as priority in time. This allows strategic management of the resource focusing on areas of greatest potential and this of course ensures that we have the very best of international practice regarding this particular area of development in our economy.  
I am very happy to speak in support of our energy and resources programme which we have put forward as a Government and believe that this is in the best interest of the economic growth and development of our nation as we alongside that ensure that we have stringent and very careful environmental practices to support those opportunities. Thank you.