Rosemary Penwarden

Wanganui Chronical: Many holes in Norway fairytale

6 April 2015

NEW ZEALAND OR NORWAY? Actually, it’s Fiordland, New Zealand. We may look similar, but we can never get rich through oil and gas exploration the way Norway did. PHOTO/DEREK ONLEY

WE COULD be like Norway, say oil industry proponents. Norway is rich because of oil and gas. If New Zealand wants a model from a similar-sized country, they say, it need look no further than Norway.

I’m reminded of a childhood fairy tale; remember the goose that laid the golden egg? Jack’s mother was aghast when he exchanged their cow for a few useless beans, but the beans were magic. After a number of near-misses, not without their health and safety risks, Jack got the goose, became wealthy beyond his wildest dreams and he and his mother got bigger digs and reportedly lived a happy, high-consumer lifestyle ever after.

Simon Bridges thinks oil and gas are going to be New Zealand’s golden goose, the way it was for Norway.

But he’s too late. Back in the 1970s the Norwegian Government made a calculated decision to tax the oil companies at 90 per cent. To their surprise, the companies paid the high taxes and kept coming. Norway got rich.

Norway still charge one of the highest tax rates, around 78 per cent, while New Zealand charges oil companies 42 per cent tax – one of the lowest tax takes in the world.

What Norway did in the 1970s is impossible to achieve today. Saudi Arabia and other Middle Eastern countries still have large reserves of “easy” oil. Their production is not at full capacity, so they still have the ability to influence world oil prices. Ramping up Middle East production volumes can bring prices down and make unconventional and marginal oil production uneconomic. This is far from the full explanation of the current oil price crash, but it’s been cited as a part of the puzzle.

Even before the 50 per cent drop in Brent Crude (the North Sea oil pricing benchmark), no oil company today could afford the royalties/taxes that Norway demanded back then. For deep sea drilling in New Zealand, described by the industry as a “frontier” region, margins are tight.

Back in Norway, it’s not all golden eggs. At current prices, more than half the offshore fields being developed along the Norwegian continental shelf are uneconomic [1].

In the past six months Norway’s kroner has dropped 20 per cent against the dollar. Norway’s partially state-owned oil companies Statoil and its service companies have cut thousands of jobs, and Norwegian unions are calling for government measures to protect the industry [2].

The fairy tale is ending, but Hilde Opoku of Norway’s Green Party says Norwegians are still blind to the coming change. “When we wake up from this oil bubble,” he said, “we will realise we will never have a fairy tale like this again.”

No one will. Climate change now dictates our future, a future where, if we are to keep global warming to the agreed 2C limit, most of our known reserves of oil and gas cannot be burned. Why on earth are we looking for more? Oil and gas will never be New Zealand’s golden goose. It’s time to stop believing in fairy tales.

References:

1) http://www.ctvnews.ca/business/oil-price-plunge-leads-to-lifestyle-shift-in-norway-1.2250550

2) /www.bloomberg.com/news/2015-01-08/norway-on-alert-as-oil-losses-have-government-exploring-options.html

-Rosemary Penwarden is a freelance writer and member of several environmental and climate justice groups. In between projects, she divides her time between her 3-year-old grandson and elderly mother.

– Wanganui Chronicle

By Rosemary Penwarden

More Marketing Than Science

Opinion piece by Rosemary Penwarden, published in the Wanganui Chronicle.

What kid doesn’t love dinosaurs? A big black dinosaur truck parks in the centre of town and smiling young people offer free bottled water and sign you up for some fun stuff.

You get your own ID card, swipe it at each display and are welcomed personally to learn about science. How exciting to learn that the exhaust fumes coming out of dad’s car used to be a dinosaur.

Only they didn’t. And it’s not science.

Fossil fuels were not formed from dinosaurs and most of the fossil fuels in the Taranaki region, where this truck has been touring, were laid down in the Cenozoic period after dinosaurs became extinct around 65 million years ago. Taranaki’s oil and gas is produced from decayed plant material, not dinosaur carcasses.

There is some science in the truck and some of the exhibits, along with the truck itself, are hired from the National Science-Technology Roadshow Trust, which New Zealand Oil and Gas (NZOG) sponsors to the tune of $50,000 a year and which has been travelling around New Zealand schools since 1990.

To any unsuspecting parent – and to the kids – it looks like the same old National Science-Technology Roadshow, but when I visited the “What Lives Down Under?” show in Wanganui, NZOG’s external relations manager John Pagani explained that this roadshow is a joint effort by NZOG, Canada’s TAG Oil and Australian company Beach Energy.

About 900 Wanganui kids visited the truck, and the roadshow is visiting Taranaki schools.

Each display emphasised our need for oil and gas and how safe it is, reinforced with images of sleek, shiny cars, expensive boats and planes. My impression of the displays was that they were done by marketing people, not scientists.

For example, the seismic testing display used a cute picture of a bat to explain the sonar technology. There was no mention, or aural examples, of the seismic explosions that have been shown to harm marine life.

There was a lot missing from NZOG, TAG Oil and Beach Energy’s version of “science”, notably any mention of climate change and the effect on the climate of exploring for and burning more oil and gas.

Why tour Wanganui and South Taranaki? Next year the companies will be drilling an exploratory well, Kaheru, 12km off Patea at a water depth of 20-30m in a previously unexplored part of the South Taranaki Bight just north of Wanganui.

The industry knows it hasn’t always managed its external relations well and this, Mr Pagani said, was a way of “trying to start a conversation”.

Why target children? Why not have a public meeting and explain to the adults what you’re planning? He said public meetings didn’t bring people in, while a roadshow would. It brings the parents, too, and staff were there to answer questions.

A young employee in the truck said she had been a bit concerned about the industry targeting children, but her boss thought public meetings disruptive, so they were going for something positive. Does being positive allow you to alter scientific facts?

It takes roughly six to 10 years for a newly-discovered oil or gas field, like Kaheru, to reach full production and, depending on its size, production might last a further 40 years. By then, around mid-century, most of the children at the roadshow will be taxpaying adults and parents.

By then – according to 97 per cent of the world’s climate scientists – we need to have stopped burning CO2.

If we are to take the science seriously, most of the assets on the oil and gas companies’ balance sheets must remain unburned. Only then, scientists say, is there a chance of preserving a habitable future climate.

Mr Pagani said he does not think it fair, all this talk about the destruction of our children’s future. He thinks there is a wonderful future ahead for them.

I agree but it has to be founded on a truthful understanding of climate science, and on the essential but short-term role of his industry as we transition to a low-carbon future.

As long as Mr Pagani and industry investors continue to push – even to kids – their version of a future more related to increasing profit than reality, there is little hope.

Rosemary Penwarden is a Dunedin grandmother, freelance writer and member of Oil Free Otago.

http://www.nzherald.co.nz/wanganui-chronicle/opinion/news/article.cfm?c_id=1503423&objectid=11212754&ref=rss

What gift horse?

by Rosemary Penwarden
Published in The Star

http://digital.thestar.co.nz/olive/ode/str_daily/

“Don’t look a gift horse in the mouth” was one of my mother’s favourite sayings, a swift reminder of our luck. My mother was our family’s undisputed gift horse. MP Michael Woodhouse thinks Anadarko and Shell are Dunedin’s gift horses. In his recent “MP’s View” he reminds us of our collective luck to have these oil giants circling Otago’s deep oceans.

Mr Woodhouse asked deep sea drilling opponents five questions, admitting that some might consider them facetious but asking them nevertheless. Such dedication to one’s constituents deserves a considered response.

Why do opponents continue to refer to “oil exploration” when they know that if viable deposits are found it will be gas not oil?

Mr Woodhouse may know more than the oil companies, who can’t yet tell what’s in the Canterbury and Great South Basins. We must accept the claim that gas is more likely than oil, but the companies don’t rule out oil, as Mr Woodhouse appears to.

In a Dunedin meeting last year Shell emphasised the benefits of gas as a “green” fossil fuel, but when asked if they would therefore leave any discovered oil in the ground, answered that since they are a profit-making corporation, of course they would be pleased to strike oil. It would, after all, provide a much easier and larger profit than gas.

As for gas being “green”, burning gas releases about 75% the greenhouse gas emissions of crude oil, doing the same damage to the climate in four years that oil does in three. Gas is like the low tar cigarette version of fossil fuels – takes a bit longer but has the same effect in the end.

Is it [Oil Free Otago] opposed to deep sea drilling, any sea drilling, or any drilling whatsoever?

Human-induced climate change is a fact, as Mr Woodhouse appreciates. Of course we can’t suddenly stop using fossil fuels tomorrow. But to delay the transition in a wilfully blind dismissal of reality is only narrowing our grandchildren’s chances of survival.

Opponents of deep sea drilling are choosing to respond to the science. We want progress, using the fossil fuels we can safely use, keeping within the two degree limit of global warming agreed to by the world’s governments, to build a low carbon future.

How does it [Oil Free Otago] reconcile its protest last weekend with the use during the protest of fossil fuel-powered vehicles, petrochemical product-produced kayaks, wetsuits, oars, life jackets and other technologies that re the product of oil and gas extraction?

The argument that it is hypocritical for deep sea drilling opponents to use fossil fuel products diverts us from useful discussion. We all live in the same world. It’s a world that has been maxing out on cheap fossil fuel energy to the point where a limit is now making its presence felt from the Australian tennis open to California’s driest year on record.

While many Oil Free Otago members choose to cycle, drive electric cars and grow our own food, Mr Woodhouse’s government’s policies make a mockery of individual attempts to limit greenhouse gas emissions. The emissions trading scheme (ETS) invites the country’s largest polluters to use the atmosphere as a free carbon sewer. Fugitive methane emissions from a newly discovered gas well in the Canterbury Basin would cancel out all the individual emissions reductions of the ‘greenest’ Dunedin residents in one foul swoop.

Oil Free Otago members are calling for change. In the meantime we will happily make use of all fossil-fuel tools and products at our disposal in our opposition deep sea drilling.

How does it [Oil Free Otago] reconcile Green MP Gareth Hughes flying around the country in fossil fuel-powered airplanes protesting against the very thing he relies on to articulate his message?

Until government and policymakers take climate change seriously, beginning with transferring the $46 million subsidy from the fossil fuel industry into clean tech industries, put a realistic price on carbon and begin the other changes needed for a low carbon future, there can be no better use of fossil fuels than to fly Gareth Hughes around the country building the movement against deep sea drilling. Far better that Gareth takes the seat than an oil executive.

What is unethical about a product that the whole world relies on for its social and economic prosperity and is vital for developing countries to grow?

My first suggestion is for church-goers to attend an Anglican service, and discuss with their Anglican colleagues the reason for their decision to divest from fossil fuels. Learn why we have a moral duty to preserve the planet, not only for future generations but for all of creation. If that’s not your thing, try looking at the hard economic facts surrounding the “carbon bubble” and why it is economically irresponsible to invest in fossil fuels long term.

To continue digging up and burning oil, gas and coal in the way Mr Woodhouse’s government intends is to condemn the next generations to an unsurvivable future. Those in developing countries stand to suffer more than us. Unfair but true.

Some of us want to make damn sure our back yard is not contributing to that unsurvivable future. There’s a hell of a lot of work to be done, jobs to be had and money to be made building solutions instead of adding to the problem. Oil Free Otago want to be part of that solution.

The future is in renewable energy jobs and industries, Mr Woodhouse. I can hear my mother now: don’t look a gift horse in the mouth.