Exploration looking more field of dreams

So, New Zealand’s energy sector is poised for a reset now the National-led coalition has reversed the offshore oil and gas exploration ban.

The opening up to widespread searches for what is more commonly called fossil fuels sits nicely alongside another scrapped Labour climate change measure with the passing of legislation that repeals restrictions on the building of new coal and gas-fired power plants.

While it might sound a bit dire, try not to worry yourself; no one will be knocking down the door with an offshore rig or a drill bit just yet.

It may have escaped the public’s attention, and possibly the attention of those in Wellington, but the New Zealand energy sector is quite small, and unless there is a large deposit of either oil or gas buried somewhere in our waters just waiting to be found, the chance of a foreign explorer coming all this way to have a poke around is slim, at best.

This leaves the domestic energy sector with the prospect [forgive the pun] of trying its luck. The industry record thus far would suggest they might have more success finding something in an oversized red stocking on December 25.

It was a rather large bit of luck that got the New Zealand energy sector underway.

In early 1865, gunsmith Edward Smith collected what he believed were samples of oil he found among boulders at Ngāmotu Beach, on the New Plymouth foreshore. He promptly sent them to Britain for closer scrutiny. On receipt of the sample analysis, the Taranaki provincial government offered a handsome £400 for the discovery of a commercial find of petroleum. You can imagine the scramble to be first to find the treasure.

In 1865, a well was dug at Moturoa, also on the New Plymouth foreshore, and in 1866 it struck gas at seven metres and oil at 20 metres. Other wells soon appeared, but only a few barrels of oil were recovered in the first years. In 1904, some exploration-hardened Australians brought the first steel drilling rig to New Zealand, and two years later they struck oil and gas. Typical.

The find hardly produced a gold rush of Otago proportions and it wasn’t until the 1950s that some pumps sold Peak Petrol [named after Mt Taranaki], and the local council used Taranaki diesel in its vehicles.

Not a particularly auspicious beginning.

However, new technology, such as seismic profiling, was key in locating the Kapuni gas-condensate field in onshore Taranaki in 1959. The Kapuni gas reserves were sufficient to support the North Island gas transmission network and to foster natural gas reticulation within connected urban centres.

Still in Taranaki, an offshore exploration found the giant Maui gas condensate field in 1969. Its size was such that, from 1985 to 2005, low global oil prices and abundant cheap Maui gas reduced anxiety over the price and supply of oil, and actually discouraged exploration. That seems like a lifetime ago now.

And that, one or two small discoveries notwithstanding, is largely it, in the fossil fuels sector. Hydro power is critical, of course, but susceptible to drought, so gas will have a role to play for a while yet.

But long enough to encourage a BP or a Shell to come and have a look? I don’t think so.