Quick! Shoot the messenger!
It’s hard to imagine a more egregious example of shooting the messenger than Trump firing the head of the Bureau of Labor Statistics in response to employment data that didn’t suit his political narrative.
But this is hardly out of character for our times. Just last week, we witnessed a Climate Change Minister leading the charge on repealing a ban on oil and gas exploration. In doing so, he sought to set up a pretty obvious trap for opposition parties. By calling for Labour, the Greens and Te Pati Māori to commit not to reintroduce the ban, he sets the stage for later claiming that their inevitable refusal to do so is the source of uncertainty that makes exploration financially risky.
This is of course nonsense, but is far more political palatable for the fragile coalition that is the present government than acknowledging that firms had already stopped prospecting in New Zealand by the time the ban was introduced in 2018. Indeed, MBIE’s Regulatory Impact Statement on the changes even acknowledges this, saying:
“Globally, investment in upstream petroleum exploration has been declining since the oil price crash of 2014. Oil and gas companies that are investing in new exploration are prioritising lower-cost reserves. New Zealand also has inherent geological and geographical disadvantages, being remote and making it costly to do business…Repealing the ban by itself may not achieve the desired impact of increasing petroleum investment and, therefore, gas supply.”
Like the then Bush Administration’s search for mythical weapons of mass destruction, achieving the stated objective isn’t the point. This initiative is not designed to appeal to the “reality-based community”. It is designed to create its own reality in the mind of the target audience, that New Zealand could have abundant, low cost energy from local gas fields, if only the naysayers and climate totalitarians would just get out of the way! That this won’t and can’t happen - or that it would be deeply harmful to our planet if it somehow did - is besides the point.
The funny thing about creating one’s own reality is that it’s really easy to trip yourself up with internal inconsistencies. The reality you need in one moment might be quite different to what you need in another. One the one hand, the Government would have us believe that oil and gas exploration can drive down local energy prices. But on the other, where we have a genuine abundance of another export good (dairy products), local prices for butter are higher than ever before because prices are set overseas.
So if you’re banking on energy prices being lower due to the repeal of the oil and gas exploration ban, don’t hold your breath. Increasing oil and gas production - if that were even possible - wouldn’t do that. Of course, the Government could reserve a portion of domestic production for the domestic market. But then, if you can do that for gas, you could do it for food too…
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