Local slice of oil, gas royalties advocated

20:37, Sep 01 2014

Local and central government are at loggerheads over whether some oil and gas revenue should be pumped back into Taranaki.

Local Government New Zealand chief executive Malcolm Alexander is arguing for a "local share" programme like that being rolled out in Western Australia, where royalties are returned to the communities where extraction is taking place.

Oil and gas from Taranaki provided the largest amount of royalty payments in 2013 with more than $381 million in oil and gas royalties and a further $22,000 in mineral royalties paid to the Crown.

Alexander said Taranaki should receive a share of the revenue to help alleviate the burden on infrastructure it shouldered as a result of oil and gas.

But National MP Jonathan Young said the Government wanted to disperse revenue in a fair, per capita way.

"While it might sound good for us - we would be the promised land - it would come at the cost of more deprived regions.


"We've got to be more egalitarian."

Taranaki Regional Council chief executive Basil Chamberlain said Young's view was "very magnanimous" but he disagreed.

"Everybody can agree Taranaki people are generous and comfortable to some extent in supporting the rest of New Zealand.

"But I think what's being proposed isn't a huge slice of the revenue, it's a small slice - a slice that makes a difference."

He said a 50/50 split would be silly but 1 or 2 per cent of royalties coming back into the region would be reasonable.

"It's about leaving a little bit of salt on the table."

Amenities like the Tupare gardens and Tikorangi and Waitara sportsgrounds were greatly facilitated by levies from the oil and gas industry, he said.

"If communities are able to point to something that is tangible, that's a point of difference we have.

"It makes New Plymouth a better place to live."

Companies would support returning revenue to the region if it made business move more slickly and gave them more acceptance in the community, Chamberlain said.

Young said the region already reaped the benefits from oil and gas without the need for a regional share of royalties.

Not only were there 5500 people employed in the industry with high wages and who spent money in the region to the benefit of retailers, but New Plymouth also enjoyed perks like Todd Energy's sponsorship of Womad and the Todd Energy Aquatic Centre.

Environmental costs were carried by the oil and gas companies through resource consents, he said.

Methanex was one of the biggest contributors to the GDP in the region but its product was transported by pipe, not tanker, he said.

Taranaki Daily News