Resources Minister Shane Jones has mentioned Indonesian coal repeatedly in defence of repealing the oil and gas ban. Photo: RNZ / Samuel Rillstone
Analysis - Resources Minister Shane Jones loves talking about Indonesian coal, and is now using it to justify undoing the oil and gas exploration ban, but do his claims stack up?
In May, Jones used coal imports to justify why New Zealand should open up more coal mining, telling Morning Report that the country should develop more of its own coal, rather than importing "dirty" coal from Indonesia "to keep the lights on."
It's always good to fact-check such claims - and when RNZ did, we found the imported coal that Genesis Energy burns at its Huntly power station is of a different, cheaper grade than the stuff New Zealand tends to mine and export.
This week, Indonesian coal is back - and this time it is being used to justify undoing the oil and gas exploration ban.
On Tuesday morning Jones was on Morning Report again, being challenged about whether opening up for exploration was really going to "keep the lights on", as he had said.
Official advice showed no new gas fields were expected to come online until after 2035 and existing fields would also not push out significantly more gas in the short-term, as a result of the reversal.
Jones has mentioned Indonesian coal repeatedly in defence of repealing the oil and gas ban, a reversal which has outraged Pacific and some European countries and which, according to documents obtained by the website Newsroom, likely breaches New Zealand's free trade deal with Europe.
He brought it up twice in the first two days of this week alone - first an interview with RNZ on Monday and again, live on radio, the following day, saying: "No-one in 2018 when Jacinda Ardern cancelled the industry told us that we'd be relying on Indonesian coal, but here we are" and "At no time did Jacinda Ardern share with myself or Winston Peters that her decision was going to lead to an increasing reliance on Indonesian coal."
But is the 2018 ban on exploring for new oil and gas fields off New Zealand's coasts responsible for the gas shortage facing Genesis Energy and other major gas users today, and the reason Genesis is burning that coal from Indonesia?
Official advice from the Ministry for Business, Innovation and Employment (MBIE) puts doubt on that claim.
Gas supplies from existing fields certainly plunged this year.
And MBIE believes that oil and gas operators will feel more confident to invest in their existing fields with the exploration ban gone. The ministry says undoing the ban should lengthen the lifetimes of today's gas fields, presumably by encouraging fossil fuels companies to spend more on getting the last gas out, if they're also able to profit from tapping new fields.
Between now and 2035, MBIE says New Zealand may burn less coal because of greater availability of gas from existing fields - but not enough to outweigh the climate impact of burning the extra gas.
This means there is no climate benefit from undoing the ban (emissions will rise).
Jones might say that at least the gas we'll burn is homegrown, not "dirty" imported Indonesian stuff.
But undoing the ban can't do anything to change the unexpected drop in gas coming from existing fields today - the drop that's driving that coal use.
These gas fields are covered by existing consents and the gas is already contracted to customers.
Pressed on this point by RNZ yesterday, Jones appeared to - almost - concede that today's gas shortage (and today's reliance on Indonesian coal) was a result of "geological realities" and not the exploration ban.
He pivoted to saying undoing the ban was "thinking long-term" and a "contingency".
That's not to say the government that Jones is part of has no impact on fossil fuels imports, from countries which Jones may feel may have lower environmental standards than our own.
Imported petrol and diesel (mainly from the Middle East) is projected to rise because of weaker tailpipe emissions standards, scrapping of EV incentives, and road-heavy transport directives from Cabinet.
The electricity that would have powered alternatives to that imported oil is overwhelmingly New Zealand-made using New Zealand resources - apart from that minority made from Indonesian coal at Huntly.
How big is that minority?
At its high point in April-June this year (when coal use quadrupled on the same period last year, and gas and hydro supplies were low) coal produced just under 8 percent of the electricity supply.
The full exchange between RNZ and Minister Shane Jones on Monday about Indonesian coal:
RNZ: The repeal of the ban has been sold partly on the basis of the shortage we find ourselves in now, and the flow on effect to energy prices. But this is not actually going to solve it, because any gain even from existing fields is going to come at the end of those fields' lives. It seems like the crunch is now, and it will be over by the time these fields come online. Do you think this has been oversold to us?
Jones: No, I don't think you can predict the future in the way Jacinda [Ardern] did. Noone predicted when she made her unilateral decision in 2018 that we would be relying on Indonesian coal. (Note: Jones was part of the government that passed the ban, but now says he regrets it.)
And therein lies the danger of these abrupt ill-informed decisions, you set in train unintended consequences.
At no time did Jacinda Ardern share with myself or Winston Peters that her decision was going to lead to an increasing reliance on Indonesian coal.
RNZ: Well hang on, we're relying on Indonesian coal because the existing fields which are already discovered and already permitted are dwindling way faster than anyone predicted.
Jones: Therein lies the difference between your analysis and mine. The moment the Crown moved unilaterally to disturb confidence in people wanting to continue to take a punt and dedicate their capital to this natural resource exploration, then inevitably it had a ripple-on effect
RNZ: So do you think that existing fields would be producing more gas today if we didn't have the oil and gas ban?
Jones: Well, there the is the geological reality in terms of existing fields.
But my point is that we are reopening the oil and gas opportunities.
At what pace in the future that happens, lies at the centre of a lot of conflicting voices, but there will be no legal ban.
