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The Petroleum Exploration and Production Association of New Zealand (PEPANZ) today urged the Ardern Labour government to rethink its approach to the oil and gas exploration and production sector.
It said with "careful changes to regulations" industry would provide increased royalties and much needed revenue to the government.
"With the government's focus on rebuilding the economy in this year's Budget, our industry can play a major role if we have the right settings," PEPANZ chief executive John Carnegie said.
According to the lobby group, the oil and gas industry had earned the government on average NZ$600 million (A$564M) through taxes and royalties each year, but this could increase if regulations and red tape were wound back.
"There is real potential to grow this and help ease the pressure on the Government's finances," Carnegie said.
The industry body wants the Resource Management Act reformed to provide flexibility for existing exploration and production permits.
It was just two years ago, in April 2018, that prime minister Jacinda Ardern introduced legislation to ban all new offshore oil and gas exploration permits to speed the country's transition to a carbon-neutral future.
At the time, Greenpeace hailed the move as a win that proved the "tide had turned irreversibly against big oil."
However independent research commissioned by PEPANZ shows public support now growing for the oil and gas industry as jobs and livelihoods are under threat from the economic shockwave caused by COVID-19 lockdowns.
PEPANZ also wrote to the government calling on it to abandon its plans to let local councils approve oil and gas exploration and projects.
The lobby group wants the federal government through its Department to consider permits on a case-by-case basis and holds concerns local councils lack an understanding of resources management to make important decisions surrounding approvals.
The peak body said "workable rules" for new decommissioning requirements needed to be introduced too. It did not elaborate on what these requirements should be.