No cost benefit analysis, just virtue signalling on oil and gas exploration ban

Oh dear, the government really is in the kack with the revelation that there was no cost benefit analysis done on the prime minister’s decision to ban oil and gas exploration.

Jenna Lynch at Newshub reports:

The decision to ban future oil and gas exploration was made without a cost benefit analysis to back it up, Newshub can reveal.

It’s one of a number of admissions revealed in parliamentary written questions pointing to a lack of evidence behind the decision.

I am not aware of a cost-benefit analysis using the Treasury’s CBAx tool being undertaken in relation to the decision to grant no further offshore oil and gas exploration permits,” Megan Woods said.

Treasury developed the CBAx tool as a common way to assess the pros and cons of policies across government agencies.

Dr Woods’ office told Newshub officials did not think it was appropriate to use the Treasury tool in this case as there were too many unknowns about how much gas and oil was actually out there.

“Searching for petroleum offshore is a low probability of success event but high impact if found, so trying to model the costs and benefits in a traditional option analysis spreadsheet would have required substantial assumptions to be made,” a spokesperson for the minister said.?End quote.

What a load of hogwash. Their spin is unravelling with facts. Quote:

But Act leader David Seymour thinks that’s rubbish.

“If Treasury is seriously saying they can’t anticipate how much investment will go into discovering oil and gas reserves, then they should all be fired,” he said.

“Regulatory impact analysis requires that before any policy is done, the Government works out if it’s going to benefits that outweigh the costs. If the costs are greater than the benefits it should not continue. This Government is ignoring this whole process for what sounds good rather than what works.”?End quote.

Seymour is right, they should be fired, starting with the minister. It also seems that not only was there no cost-benefit analysis done, they also lied about consultation with industry. Quote:

The Energy Minister has also admitted no formal consultation with the Petroleum Exploration and Production Association of New Zealand (PEPANZ) took place.

No formal consultation was undertaken with PEPANZ in relation to the decision to grant no further offshore oil and gas exploration permits. However, I have spoken publicly about the Government’s direction to transition away from fossil fuels and my office has had open dialogue with PEPANZ before this announcement.”?End quote.

So the claims of consultation were rubbish. I’m told that the industry was told of the moves at about 0730 on the morning of the decision. That isn’t consultation, that is government dictating to business. This won’t go down well with any sector of New Zealand business. But, wait, it gets worse. Quote:

There’s also been no estimates on whether global greenhouse gas emissions will fall as a result of the decision.

No specific estimate has been provided to me. I have been advised by officials that the effect on global emissions depends on the response of New Zealand’s large gas users.”

Seymour says that’s the most damning revelation.

The worst part of this policy announcement is they haven’t even figured out if it will achieve its intentions,” he said.

They don’t know how much substitution of coal should occur, and if the net result is people moving to coal, net emissions will be even worse than they are now. I’ve seen some own goals in my time in politics. This Government is an expert.”

Advice or estimates on increases or decreases to gas prices are also missing from the background work on the policy.

No specific estimate has been provided to me on the price impact on gas of the decision to grant no further offshore oil and gas exploration permits. Officials have advised that gas prices have risen in the past when the supply of gas has been constrained,” Dr Woods said. End quote.

Oh dear me. Another inept minister and further proof that the prime minister is unfit for office.

It seems that all it takes is a few hippies and a petition and you can wreck a whole industry. This proves that the Labour party and the Greens are economic saboteurs.

The list of inept ministers is growing. Megan Woods can now join Clare Curran and Kelvin Davis in the witless protection programme.

Listen to this post:
Voiced by Amazon Polly