{"id":64313,"date":"2024-06-13T22:00:23","date_gmt":"2024-06-13T10:00:23","guid":{"rendered":"https:\/\/www.greenpeace.org\/aotearoa\/?p=64313"},"modified":"2025-05-20T12:56:54","modified_gmt":"2025-05-20T00:56:54","slug":"global-plan-revive-offshore-exploration-doesnt-add-up","status":"publish","type":"post","link":"https:\/\/www.greenpeace.org\/aotearoa\/story\/global-plan-revive-offshore-exploration-doesnt-add-up\/","title":{"rendered":"Global demand for oil could peak soon \u2013 Luxon’s plan to revive offshore exploration doesn\u2019t add\u00a0up"},"content":{"rendered":"\n

This week\u2019s announcement of the government\u2019s plans to reopen New Zealand\u2019s territorial waters to oil drilling<\/a> comes as no surprise. All three coalition parties campaigned on reversing the 2018 ban on offshore oil exploration.<\/p>\n\n

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But it flies in the face of projections that demand for oil could peak as early as this decade.<\/p>\n\n

Minister for Resources Shane Jones has confirmed the government plans to reverse the ban later this year and seeks to incentivise<\/a> oil investors by paying them a bond in case their drilling rights are cancelled by future governments.<\/p>\n\n

The government is also considering weakening a law that requires oil and gas permit holders to pay for the decommissioning and clean-up<\/a> of wells. This law was passed in 2021 in response to taxpayers having to pick up a NZ$400 million bill<\/a> for decommissioning the Tui oil field after the financial collapse of the oil company.<\/p>\n\n

The government\u2019s decisions go against projections by many sources, including the International Energy Agency, that demand for oil will decline soon as we electrify the global transport fleet. Consequently, investment in oil exploration is projected to decline too.<\/p>\n\n

Peak oil demand<\/h2>\n\n

The use of fossil fuels is due to decline this decade, according to several major oil companies. A 2023 report<\/a> by Shell projects fossil fuel use dropping rapidly in coming decades, while BP thinks<\/a> oil demand for combustion has already peaked.<\/p>\n\n

Many large organisations<\/a> think peak oil demand will happen this decade<\/a> or the 2030s<\/a>. This includes the International Energy Agency (IEA<\/a>), which has predicted<\/a> demand for oil will peak before 2030.<\/p>\n\n

The Organisation of Petroleum Exporting Countries (OPEC<\/a>) and Exxon Mobil are bullishly stating they see oil growth continuing<\/a>, albeit at a slower rate, into the 2040s. But at the same time, Exxon Mobil is investing significantly in renewable energy, lithium mining and carbon capture technology.<\/p>\n\n

Even if oil demand peaks later than forecast, the progression from prospecting to exploration and mining can take decades<\/a>. Projects prospected now may not yield fuel until demand is already in decline.<\/p>\n\n

We have enough oil to make the energy transition<\/h2>\n\n

We\u2019ve known for some time that remaining fossil fuels must stay in the ground<\/a> to meet the Paris Agreement<\/a> goal of keeping the world below 2\u00b0C above pre-industrial temperatures.<\/p>\n\n

The last UN climate summit \u2013 COP28<\/a> held late last year \u2013 agreed to \u201ctransition away from fossil fuels\u201d and signalled the \u201cbeginning of the end\u201d of the fossil fuel era.<\/p>\n\n

But further to this, the IEA has stated we don\u2019t need any new fossil fuel exploration or development<\/a>, with enough projects already in existence or planned to meet global energy demand forecasts to 2050. New research<\/a> agrees, saying governments around the world should stop issuing new oil, gas and coal licences.<\/p>\n\n

In line with decreasing oil demand, BP also projects<\/a> declining investment in new oil and gas infrastructure globally in coming decades. The IEA\u2019s World Energy Investment report<\/a> notes an ongoing hesitancy about oil and gas investment comes partly from concerns about downward long-term demand projections.<\/p>\n\n

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