Gas (Market Transparency) Amendment Bill

Committee of the whole House Part 1 Main amendments to principal Act CHAIRPERSON (Barbara Kuriger): Members, we come to the Gas (Market Transparency) Amendment Bill. Members, we come first to Part 1. This is the debate on proposed new clause 3A and on clause 4, “Main amendments to principal Act”. The question is that Part 1 stand part. STEVE ABEL (Green) (09:42): Thank you, Madam Chair. It’s nice to see you again this morning. CHAIRPERSON (Barbara Kuriger): It’s nice to see you too. STEVE ABEL: Before I ask some questions on Part 1, I’d just like to refer to the explanatory note, because it’s useful for us to get a broad view of where the Minister for Energy sees the problem and what the nature of that problem is. The explanatory note, on the first page, is very clear that the bill is designed to make more efficient decisions for market participants and “to require industry … to disclose relevant market information to the chief executive of the Ministry of Business, Innovation, and Employment or to the industry body for gas, the Gas Industry Company”. The language is interesting, because “Those regulations are intended to facilitate the collection of additional, accurate, and complete information”—it’s interesting that it uses all three of those words, not just “additional” or “complete”, but “accurate” is a notable word. The implication of the use of that word is that we’ve had inaccurate information to date. “The power will allow the Government to address key gaps in information”—i.e., has the industry being somewhat economical with the information that it’s made available? “This approach is necessary because much of the information available about gas markets is incomplete”—to quote again the explanatory note of this bill. The problem with that is that “Poor information leads to inefficient decisions about the constrained supply of gas and, ultimately, to higher costs for New Zealanders.” There is the key point—if we don’t have this accurate information, we’re going to get higher costs. My question for the Minister regarding the broader objectives of this document, as elucidated in the explanatory note, is: what advice has he received on the New Zealand gas industry overstating, overbooking, overproving, or overestimating its reserve volumes? Have you received information about the inaccuracy of what the gas industry has been providing to the public, to its users, and to the Government? The reason I ask that very specific question is because we know, as I elucidated in my speech, that, unfortunately, the oil and gas industry globally has form for overstating, overproving, or overestimating its gas reserves, because that relates to the value of their industry. Could you please answer that question, Minister? Have you had advice on the New Zealand industry overstating, overbooking, overproving, or overestimating its reserve volumes? Thank you. Hon Dr MEGAN WOODS (Labour—Wigram) (09:46): Thank you, Mr Chair. I have a series of very short questions for the Minister, but, in this call, I just want to ask an overarching question about the option that the Minister has chosen to go for, Option 4, as set out in the regulatory impact statement (RIS), which is to amend the Gas Act to create a new regulation making power for information gathering, as opposed to the other options which range from the status quo through to a more hard-wired legislated requirement to collect the information and publish it, which would have taken us closer to the Australian regime. What we can see from the regulatory impact statement is that going for Option 5, which was amending the Gas Act to collect and publish information via notice, actually could have been implemented faster. It seems to have had a six-month implementation window, as opposed to the 12 months that the option that he’s chosen to go with, Option 4, is taking. Now, given the case that is made in the explanatory note and in the regulatory impact statement on the need for this legislation, why has Minister chosen to go for the lighter-touch option that will take longer to implement? Hon RACHEL BROOKING (Labour—Dunedin) (09:47): Thank you, Mr Chair. I’m interested, with what I was saying in my second reading speech and my first reading speech, for the Minister to clarify at a very high level that this these regulations are not just about what’s happening in New Zealand’s reserves but that it is about all the gas that is coming to New Zealand, wherever it’s originated from. I think it’s useful for the Minister to clarify that when talking about “domestic consumers”, it is defined in the Gas Act as talking about households. We’re thinking of households differently. These regulations don’t apply to households, but they do apply to companies and businesses that are using gas. It’s my second question. Then I’m very interested in clause 4, new section 56AA(1)(a)(i)—“petroleum reserves and resources within the meaning of the Petroleum Resources Management System:”. This petroleum resources management system, if we look to the next page, is defined at new subsection (4), which says, “In this section, Petroleum Resources Management System means the system of that name developed and published by the Society of Petroleum Engineers and available on the Society’s Internet site.” Now, Minister, I’ve gone on to that internet site—and I’m sure the Minister will know much more about this international society, and I’m sure these are good international standards that everybody uses—but it’s interesting that to access the document, you have to put in your email address, and then they email it to you. But I’m interested in the fact that New Zealand law is going to have a definition that is based on an international society’s definition somewhere on their website that you have to have emailed to you. This seems like a very unusual way to make laws, and primary legislation, in particular. I’m interested—and I couldn’t see in the regulatory impact statement if there was anything on this point. I’m not disputing the importance of the society or the rigour that’s gone into that document or any of those issues. It’s just that our law is now referring to an internet site, when, actually, the documents—you can’t access it from the internet site. Then, also, whilst we’re still on Part 1, I think would be useful if the Minister could explain to us the link between petroleum reserves and gas reserves. I know that there is some chemistry and physics there and that they are, of course, interrelated. But if he could explain how petroleum reserves are relevant to this amendment and these regulations, because, of course, these amendments are going into the Gas Act and gas is defined in the Gas Act, and gas means a gas, as we all learnt about in—I don’t know—standard 4 science, something like that—different states. How is liquid form relevant? Is it relevant? That’s all I’m asking, and if he could answer that very simple question that would be useful. Hon SIMON WATTS (Minister of Climate Change) (09:51): Thanks, Mr Chair. Morning, everyone. We’re working our way through a six-clause bill, and we’re talking about clauses 4 and 5. In regards to the question from the Hon Rachel Brooking around the Government’s plan to get New Zealand businesses off gas, market-led transition. Private businesses are best to determine their own energy sources and whether they transition away from gas or not. You will be aware that we’ve launched a loan guarantee scheme that will help firms switch away from gas to electricity. That’s one mechanism that is in play, particularly those that are constrained by capital and have the ability to transition, acknowledging that about one-third of manufacturing firms in New Zealand do not have a pathway to transition off gas—think coffee-bean roasting or bread production, which is quite critical to your morning breakfast. In regards to some of the questions just raised in the second reading which are relevant to this clause around maximum penalties—$200,000, Lawrence Xu-Nan. There is also a $10,000 per day ongoing penalty for noncompliance. That’s in addition to that other charge. In regards to the point raised by Rachel Brooking around the Amendment Paper, it responds to minor and technical issues identified by officials after the bill was approved by legislation. In regards to Megan Woods’ question around why so much discretion, the exact types of information will be provided from whom, and we couldn’t and didn’t wish to seek that out in primary legislation, but we will soon through regulation, and we’ll look to pass the regulations as soon as practical, once this bill is passed. Australian provisions noted by Megan Woods and Lawrence Xu-Nan—most, if not all, of the items of information Australia requires could be required under this legislation under our regulation powers. Hon Dr DEBORAH RUSSELL (Labour) (09:53): Thank you, Mr Chair. I noticed that the Minister has said it’s only a six-clause bill; we are nevertheless going bit by bit through clause 4, which is the substantive clause of this bill and does all the work. I want to just focus on new section 56AA(1)(a), and it’s the information that’s required and is given is “an industry participant or a consumer (other than a domestic consumer)”. Now, I can understand why domestic consumers are not required to provide the information. They are at the end of the chain on this gas stuff. But one of the things that is happening in terms of the gas supply in this country is a sense of unease for domestic consumers as to whether or not they are going to continue to have gas supplied to them, partly it’s gas for barbies, if you go and get your gas canister filled up at the petrol station, but it’s also whether or not they will continue to have sufficient gas to supply stoves, heaters, hot water, and so on. I’m looking from the Minister for what advice he has received around domestic consumers, the extent to which they will get reassurance about their gas supply. There’s another issue, of course, the extent to which we continue to hook new buildings up to gas. That’s entirely separate from this bill, but I do think that existing domestic household consumers of gas could do with some reassurance as to whether or not they will continue to get gas supply. Actually, there’s a good reason for this. As we know, New Zealanders are keen renovators, they change their houses around, they redo their kitchens. It would be good for people to understand whether or not this would be a good time, if they’re in the process of redoing their kitchens—maybe this is the time to go to an electric hob rather than a gas hob. If they’re redoing a bathroom and so on, maybe this is the time to make the move. So a little bit of reassurance for domestic consumers, please, Minister. Hon SIMON WATTS (Minister of Climate Change) (09:55): In regards to households and domestic consumers, it represents about 7 percent of total gas usage. Households as a whole use so little gas that it would be too disruptive to impose such obligations that we’re referring to here, on to them. In regards to the certainty of their supply, we’re not aware of any concerns in that regard. However, we do know that the pure economics of gas versus electricity mean that many consumers are transitioning off gas and on to electricity because it is cheaper, if they have ability to do so. A question in regards to petroleum and the definition from the Hon Rachel Brooking: gas is a subset of petroleum; petroleum includes both gas and oil products. SCOTT WILLIS (Green) (09:56): Thank you, Mr Chair. My question relates to clause 4, new sections 56AA and 56ABB. I think my point or the question I’ve got for the Minister in the chair, given that the Minister also holds the responsibility for climate change, is about emissions. We have a fantastic opportunity here, if we’re thinking about transparency in general, thinking about transparency in the availability of gas, we should also be thinking about transparency in the emissions that that gas releases if we use it. I’ve got a proposal for the Minister that I’d hope the Minister might consider, and it’s an amendment that we’ve put in called “Gas (Market Transparency) Amendment Bill proposed amendments”: in clause 4, new sections 56AA and 56AAB and cross-heading, insert after clause 4 new section 56AA(1)(a)(vii); page 2, after line 32, insert “(vii) information on emissions emitted by gas.” Now, a very simple amendment, but a very useful amendment because, as the Minister will know, as Minister of Climate Change, we do need to count our emissions. This is just about transparency and it’s about improving legislation to make sure that we have legislation that does the job that we would expect of it, which is to give us the data that we need to understand what our emissions profile is, to understand our risk as our emissions grow, and the cost to the economy if we do not act to reduce those emissions. A very simple amendment, and a proposal that I hope the Minister can respond to, that I would hope that the Minister would accept that this could be adopted—slid in there to make sure that we are able to take note of the emissions and give greater transparency to what we can see in front of us. Thank you. Hon SIMON WATTS (Minister of Climate Change) (09:58): Yeah, with respect, on this side of the House, we’re not into slipping and sliding around amendments. The amendment the member’s proposing, in my view, is out of scope because this bill is putting in place regulation-making powers. What the member is trying to do is put in the detail of what those regulations would be, and that would be for the Government to determine. That’s not in scope. We’re simply looking at the powers to put in place a regulation-making ability for Government. Hon Dr MEGAN WOODS (Labour—Wigram) (09:59): Thank you, Mr Chair, and thank you to the Minister in the chair for going through and answering questions. As my colleague Deborah Russell alluded to, there really is just one clause that does the heavy lifting, well does all the lifting, apart from the amendment in this. We will be going through subclause by subclause around this. There was an answer to a question from Deborah Russell where the Minister rightly said that we wouldn’t be trying to collect information off domestic users of gas. No one is suggesting that is what we are doing, but in that clause 4, 56AA (1)(a)(ii), “forecasts of supply and demand”, has the Minister given any thought to how new connection data for gas connections could be built into those forecasts? Because one of the reasons that we’re putting in place this regulatory power to get this information is for policy making. It’s not just for commercial use; it’s for policy makers to use it. So actually having good sight into the rate of connections and any trends that are happening in there—so what thought has been given to how we might do that? More broadly, new section 56AA(1)(a) goes through the kinds of information that is going to be collected: petroleum reserves and resources; forecasts of supply and demand; information on how much gas; information on any risks; agreements to trade, including volumes, prices, parties—all the kinds of things that you’d expect would be collected in there. I want to know, in making the policy decisions around this legislation, what categories of information will be prioritised first. What thought has been given to this list in terms of prioritisation? Is the list as it appears? I know it’s a list that says “for example”, but is this indicative of the kind of prioritisation that may be given, in terms of the information that is asked for when the regulations are set? How will the Minister make those decisions against each other? The reserves, outages, near-term production contract data—these are all vital pieces of information. Some will be more important for others, some will be more pertinent to policy makers, some will be more pertinent for gas users. In making the choices around regulation, how will the prioritisation be carried out by the Minister? Hon SIMON WATTS (Minister of Climate Change) (10:02): Just in regards to the question on clause 4, new section 56AA(1)(a)(i) to (vii), and questions in regards to prioritising and other aspects and whether that list is representative of the priority in which Government will look at what that list represents as the scope of the areas in which the regulation-making powers will be within, it will be for Cabinet and the Government, subsequent to this law passing, to put in place the detail of what those regulations are and work their way through that. It would be fair to say that the concerns have been noted by members around the Chamber on the need for more transparency, and that is absolutely something that is shared across the House in the context of that information, and that will be the intent. We’ll obviously take on board what other players and other jurisdictions are doing in this area to ensure that our issue is fit for purpose. But the fundamental issue here is that the information that we are currently receiving is not sufficient to make informed-based decisions in regards to policy and other matters, which is at the detriment of our ability to effect and take action as a Government and ensure that we mitigate the risk of the implications of less gas availability and the flow-through impacts of that on the economic growth of the country. So that is the intent. It’s not within—just giving that as background context because the scope of this bill is only to establish the regulation-making powers. When we start getting into what’s going to be included in those regulations, that is not in the scope of this bill. But I think just for context for the members—just to explain it. CHAIRPERSON (Greg O'Connor): Hon Megan Woods. At this stage, we’ve obviously got a well-informed and participating Minister and members, so quite happy for members to go back and forth if we can facilitate that. Hon Dr MEGAN WOODS (Labour—Wigram) (10:03): Thank you, Mr Chair. Just in response to the Minister’s answer, and I thank him for it—absolutely appreciate that this is a piece of legislation putting in place regulation-making power, and I do remind the Minister that we haven’t had a very fulsome response. We haven’t really had a response to why it is that the policy decision was made to go with a regulatory-making power piece of legislation over legislating for the powers that would be collected. So I think going back to first-principle questions is really important and the terms of this committee stage. The other piece of information that the Minister said that it will be Cabinet to decide the detail, and it is a job of this House when granting regulatory-making powers to an Executive is to understand, through the course of that legislation, the criteria and the weightings that will be given in making those decisions to bring in the regulation. So that’s what I would like to hear from the Minister. I appreciate the problem definition statement the Minister has given us again, but what we haven’t heard is any discussion informing this policy around this legislation in terms of what relative weightings will be given by Cabinet when they make the decisions about making the regulations. I’m not asking the Minister to spell out what the regulations will be. I’m asking him to tell us, from a policy-formation perspective, what the relative weightings and criteria will be, and in terms of how that will differ if they’re seeking for information gathering for public policy purposes or whether it is information gathering for commercial gas use purpose. Hon SIMON WATTS (Minister of Climate Change) (10:05): I mean, two calls ago, I did provide a high-level overview in regards to why we’re not putting more information in primary legislation. As I said, the exact types of information to be provided, and from whom, would be too detailed to set out in primary legislation. There is also significant movement in the gas market, and the kinds of information necessary to inform market and Government policy is changing rapidly. We need the ability to move fast in regards to that, hence the ability to do so through regulations. If we had regulations here and now today, we could have addressed the issues of updating the regulations without having to use House time. But the legislation currently that we have and why we’re doing this change is not sufficient to gather the information we require. Hon Dr MEGAN WOODS (Labour—Wigram) (10:06): Thank you, Mr Chair, and I thank the Minister for that. In terms of moving through new section 56AA(1), and if we look at (b) through (d) now in there, I think one of the things that still—I appreciate the Minister’s answer, but I still don’t have a good sense in that area, (b) through (d), of what the design principles and any policy discussions that have sat behind that, that will guide the frequency and format of the information that will be sought when regulations are put in place. And the other question that I think the House needs to know from this committee stage is whether there will be—what measures will be put in place by the executive when they are making those regulations to look at existing reporting and seeing how that may crossover. Will there be duplication? Will that be something that will be taken into account when those decisions are made? And what reassurances can the Minister give, given that it is an executive power that is going to be used to do this, in terms of the predictability of the information, in terms of the content, but also in terms of the timing? Because one of the things is if we put this against the Australian system, which has a more hard, baked-in system, it has a Gazette system and people have that predictable knowledge of when their information will be available to them. How will the New Zealand system operate in those terms? Hon SIMON WATTS (Minister of Climate Change) (10:08): I refer the member to new section 56AA(2), which sets out the criteria related to the points that the member is raising around considerations that the Minister has the ability to make in terms of considering the implications—the member specifically talked about where there may be a duplication around process. We had another question before around new connections, for members interested—the gas industry group already publish the data on new collections. STEVE ABEL (Green) (10:08): Thank you, Mr Chair, and thank you to the Minister for his questions and responsiveness. In new section 56AA(1)—in Part 1, still—in terms of the disclosure of that information, Minister, I wonder if you could, in regard to petroleum reserves and resources, give us a quick answer to my initial question today as to if you have any advice on the extent to which the industry may have been providing overstated or overbooked or overproven estimates of their reserves. It will be useful for us to understand that and for the public to understand that, as means of clarifying the necessity for this legislation—which we all agree it is. In terms of the information that has to be disclosed in new section 56 AA(e), you require the contents of gas market information to be independently assessed for accuracy and certified by a person who’s approved by the industry body or secretary. I wonder, Minister, how does he envisage that that accuracy will be assured? There is evidence from overseas examples where there’s been overproving or overbooking of reserves, that whistleblowers from within industry, such as reserve engineers, are a vital path to getting accurate information. Because of course it is a challenge for those who work within an industry that wants to keep information close to its chest to get that information accurately reported. For example, a person by the name of Lea Frye—who was the former reserve engineer who blew the whistle on the Anadarko executives in 2016—said that the executives rejected and hid internal drilling reports from engineers when reports showed that the Shenandoah field had far less oil than previously predicted. I wonder, has the Minister considered the way that he will verify the accuracy of the information that he is requiring the industry to provide? It says that it will be “independently assessed for accuracy and certified by a person who is approved by the industry”. How does he protect those people from the influence of that industry should it wish to not be transparent about the status of its reserves? Thank you, Minister. Hon SIMON WATTS (Minister of Climate Change) (10:11): I’ll refer the member, just for background context, to the Frontier review that the Government undertook in regards to the electricity market. In that review it says, and I quote, “information published on the New Zealand gas market is fragmented and incomplete.” That’s the underlying feedback and recommendation why we are here to ensure that we mitigate. In regards to the way in which we will mitigate the points around how we ensure that we get the right information and how me make sure that there are mechanisms for ensuring the information we get is true and accurate, most if not all of those items of information and processes that can and could be required are the ability of the regulation-making power that we are doing here. The fact that this bill would allow us to put in place more comprehensive information-gathering powers and requirements than currently is the status quo, or potentially than Australia, is absolutely within the guise of the Government of the day. What we’re doing here is the regulation-making power in order to do that. Some examples of that maybe, which are in play in Australia, are around seven-day look-ahead production forecasts, weekly and monthly pricing data for contracts under 12 months, and disclosures on volumes of uncontracted gas Those are examples in the Australian model where, again, I’m just signalling to you that when we get this law passed today, we’ll be able to start progressing at pace those regulations and get those into play into the market. We need that in play in the market as fast as possible because we need better information to make more informed decisions. Hon Dr MEGAN WOODS (Labour—Wigram) (10:13): Thank you, Mr Chair, and thank you to the Minister in the chair, Hon Simon Watts, for methodically working through the questions. I just do point the Minister to the fact that still outstanding is the design features that will guide the frequency and format, so if we could have an answer to that one as well. I just want to move on now to clause 4, new section 56AA(1)(e), and this is the clause that my colleague Steve Abel just talked about, which is requiring the “contents of gas markets information to be independently assessed for accuracy and certified by a person who is approved by the industry body”. In the regulations or in any other instruments that the Government has, will there be any guardrails put around who can be approved by the industry body, or is it entirely left to the industry body around who they can use to do that independent assessment of the accuracy of the data, or will there be any prescription that will go in there? The other question is, in this subclause, will that certification apply to all data, or will there be a threshold around, say, for example, high-impact data, around reserves—things that are seen to make a material difference? Does the Minister envision that it could—if there were to be, for example, new connections data that would come through in the supply and demand forecasts, could it apply there? Going back to the list of examples that are given in 56AA(1)(a)(i) through (vii), does he see that independent certification applying equally through all of those kind of measures, and has there in policy making been any consideration of thresholds? Hon RACHEL BROOKING (Labour—Dunedin) (10:15): Thank you, Mr Chair. I’m still on my states of matter question, and thank you to the Minister in the chair, the Hon Simon Watts, for saying that petroleum can be a gas. I just want clarification that this is only in the state of being gas and not as a liquid, or are there some definitions somewhere else that somehow bring in the liquid form? That was my question about clause 4, new section 56AA(1)(a)(i). Also, the Minister hasn’t answered any of my questions about the use of a foreign internet site for a definition in New Zealand law. Then, going on, I’m interested in—at 56AA(1)(a)(iii) and (v), there’s information about agreements or information about how much is being supplied or being supplied to consumers. I realise that, for the wording for subparagraph (iii), there’s Amendment Paper 634 there. My question here is: could that information be about a specific agreement? That’s the question. Does it have to be general, or are these coming into the specifics, noting, of course, that subparagraph (vii) says domestic consumers aren’t included? Then, moving on to subsection (2) and those safeguards that are included in subsection (2), there’s talk there at paragraphs (b) and (c) that it’s assisting “the Government in overseeing, monitoring, or regulating any gas market:”. Is that wide enough to include planning and policy settings? At paragraph (c), it’s also to assist in the “co-regulation of the gas industry by the Government and the industry body.”—but that’s the co-regulation, which is an interesting part of this gas bill. The question there is: are these regulations going to be made in a way that can inform the planning and the policy settings that we’ve been talking about? So that’s four questions. My next question is to the relevance of biogases—and apologies for not knowing everything about the Gas Act, but where do they fit with this? Is that something that can be included? Then I’m also interested in the Minister’s reference that a third of manufacturers or businesses in New Zealand don’t have a pathway to transition away from gas. The example he used was coffee roasters, and I’m wondering if he gave that example because it’s Saturday morning and we were here till midnight last night. That is a cruel way to remind us that we’re not sitting around having a nice Saturday coffee—not that that often happens. But, the third that don’t have the transition, is the point here to get the two-thirds that he says do have a transition pathway off gas? Or is that not the point, and then what happens to that third? If he would like to make some more remarks about that. To remind him: are we dealing with liquid states of petroleum somehow through this? Why is there reference to an international internet site where you have to send an email to get the document? What is the relevance of biogas? Are these regulations going to be set in such a way, or can they be set in such a way given the safeguards, to inform planning and policy settings? And will part of that be to enable the two-thirds of users who, he says, can transition to do that transition, and will it help with that remaining one-third? Thank you. Hon SIMON WATTS (Minister of Climate Change) (10:19): Thank you very much, Mr Chair. Biogas would be included, in regards to the member Rachel Brooking’s question. I had a question earlier from the Greens in regards to the protection of whistleblowers. This is covered under the Protected Disclosures (Protection of Whistleblowers) Act 2022. The Hon Megan Woods had a question around the frequency and format of regulations. No decisions have been made in regards to that. We’ll decide on the frequency and format after consultation with the gas sector once this bill is passed today. I had another question in regards to information about a separate agreement. Yes, the bill could require information on specific agreements. The New Zealand gas industry includes a few large users, which the members will be aware of, and in some cases specific agreements may be requested as part of the information-gathering process. However, that’s why we’ve got the ability to have information that will be retained as being confidential to a Government, because some of that will be commercial and in confidence. SCOTT WILLIS (Green) (10:20): Thank you, Mr Chair, and I appreciate it. I’ve got quite a number of questions, but I’ll try and keep it simple. But before I do, I’d just like to address the point about coffee-roasters. At the Carbon and Energy Professionals conference earlier this week, we did see examples of coffee-roasters that had been electrified, and this doesn’t seem like it should challenge us on a Saturday morning. We can have electrified coffee, Mr Chair, and for the Minister, and so let’s celebrate the small wins. While we’re doing that, I want to address in Part 1, clause 4, subparagraph (vii), because what we’re talking about here is the “information to help other industry participants or consumers (other than domestic consumers) to make informed decisions in connection with the gas markets:”. This is really important, as the Minister has indicated, but I want a little bit more detail, if he would. We can see the gas network going cash-flow - negative in a very short space of time, and, as a consequence, I’m really interested in how this information is going to pass through to the electricity distribution businesses (EDBs), who, in addition to electrons, also have the gas supply responsibilities. How is this information going to pass through and how rapidly will this pass through? I can follow up with another question, but we have a five-year reset on gas regulation happening right now, and that’s likely going to result in some accelerated depreciation. As a consequence, Minister, we will likely see homeowners out in the cold or being hit with a $50,000 cost to refit their homes away from gas when those gas lines get turned off. I know that this isn’t going to be declared to homeowners, but the EDBs, who are responsible for the gas networks, are making decisions right now, and I’m wondering about the pathway through which they will get that information. How will that information flow through to the electricity distribution businesses, and will those consumers who are households or businesses down the supply chain have access to that information through the EDBs or some other way? A little follow-up question—I don’t want to waste the Minister’s time, but I think this is really, really important. We were wondering whether there is any other legislation that’s going to be proposed that would assist, perhaps through the Commerce Commission, with the accelerated depreciation of gas assets at the same time as this bill, or swiftly following this bill. Is this something that the Minister would be considering, as well, because we really do need some certainty at the EDB level? I’m concerned about households here with regard to the gas supply—the longitudinal supply. We all know that it’s not there, but just what is there, before we have that decommissioning under way, and households have no idea of what’s happening and they are hit with heavy, heavy costs—$50,000 costs—to refit their homes. Thank you, Mr Chair. Hon SIMON WATTS (Minister of Climate Change) (10:24): Thank you very much, Mr Chair. I’m just going to say that if the member Scott Willis could refer to the clause number, then I can answer the question, but on the general policy, I feel like I’ve provided significant detail already around that. But clauses are helpful for me to answer. In regards to the questions from Deborah Russell in regards to regulations planning and policy: yes, under new section 56AA(2), it includes planning and policy for overseeing the gas market and regulating entities. I’ve covered that clause a number of times now. To the Gas Industry Co. point, I can certify that they have the technical expertise to do so. The timing of when that information will be available: again, under new section 56AA(1)(i) to (vii), the information will be made available as soon as possible after consultation with the gas sector. Hon Dr MEGAN WOODS (Labour—Wigram) (10:25): Thank you, Mr Chair. Just while there are still some outstanding questions on new section 56AA in clause 4—I’ll allow the Minister to catch up on those—I’m going to refer now to Amendment Paper 634, which was tabled yesterday, and come back to go through the clause once the Minister has caught up on those outstanding questions. This is an Amendment Paper that arrived yesterday, and I guess that the first question for the Minister around this is that this is a bill with one clause. What was needing to be fixed, in terms of the Amendment Paper? I appreciate that this Minister in the chair is acting on behalf of and that it’s not the Minister whose bill this is, but I think that the committee needs to know why a bill with literally one operative clause needed a ministerial Amendment Paper to be dropped 24 hours after the primary piece of legislation was tabled. On going through the explanatory note of the Amendment Paper, I think that it would be useful for the Minister to explain why some of these changes needed to be made. In the explanatory note, the second bullet point says that it “extends the power for regulations to require the supply of information about how much gas is supplied. Currently, this is limited to gas supplied to consumers. This is extended to include gas supplied to any other person or persons (including for the purposes of resupply);”. What was the policy decision behind this amendment, why does that need to be, and was there a feeling that there needed to be far more rigour around resupply? We’ve, obviously, seen over the last couple years a number of businesses who were on curtailment contracts. They’ve curtailed their use of gas and they’ve on-sold it in a tight gas market. Is that what this amendment is trying to capture? It would be good to know from the Minister around that. Also, one of the bullet points in the explanatory note says that it “allows the regulations to prescribe limits or restrictions on the publication of information [collected] under new section 56AAB;”. The committee needs to know what the thinking is there. What are these limits and restrictions that this Amendment Paper is seeking to put in place, and why are there limits and restrictions that are being sought to be put in place? How did this come about? We know—we can see through the regulatory impact statement—that gas producers are of the opinion that this information isn’t necessary, and they didn’t want these powers put in place. The regulatory impact statement, at paragraph 61 through to paragraph 63, has made clear what gas producers’ perception of this information is. Is that what this clause is seeking to address? Then, the last bullet point in the explanatory note says that the Amendment Paper “provides that information may be published under new section 56AAB despite any legislation or rule of law to the contrary, but subject to any limits or restrictions prescribed under that new regulation-making power.” Why does this need to be put in place? What is the purpose of this amendment? Why wasn’t it in the bill that was tabled? Why has it been added so much later? What is the purpose of it? There’s quite a lot of detail that the committee needs to understand around this Amendment Paper. These are just some of the top-lying questions, and, as I’ve said, our moving on to the Amendment Paper doesn’t mean that we’ve fully worked our way through clause 4. We’re just allowing the time for the Minister to catch up. Hon SIMON WATTS (Minister of Climate Change) (10:29): Thank you very much to the member. This Minister doesn’t need time to catch up. If the member had listened to my opening statement, I provided an explanation—so now I am repeating, Mr Chair—the Amendment Paper responds to minor and technical issues identified by officials after the bill was approved by the Cabinet legislation committee. Again, I’ve repeated that. We have got a number of tabled amendments which is growing, which seems to be a technique by some members to chew some time. But in regards to amendments by Scott Willis, (1), not a matter for the Gas Act; the Gas Act is about the market. Steve Abel’s amendment, (2), it’s a retrospective amendment; it’s not appropriate we’re going to be doing that. Scott Willis’ amendment, (3), again, retrospective: it’s impossible to do this; complying with this can make the regulations in the past. Scott Willis, (4), again, retrospective. Steve Abel, (5), contrary to the policy intent about publication. We won’t be accepting any of those amendments. CHAIRPERSON (Greg O'Connor): I will say to the Minister: leave it up to the Chair and the clerks to judge the amendments. Hon Dr MEGAN WOODS (Labour—Wigram) (10:30): Thank you, Mr Chair. I appreciate that the Minister in the chair has tried to write off an Amendment Paper by “minor and technical amendments”. But if we go through these explanatory notes, in this committee of the whole House stage, there are some things that this committee needs to understand around this Amendment Paper, Amendment Paper 634: why it is here, why it was so late, why it wasn’t included in the initial one-clause piece of legislation, why errors had already been made that needed to be fixed. But with all due respect to the Minister’s answer, allowing the prescription of limits and restrictions about the publication of the information collected under this bill that will be collected once the regulations are put in place to collect this information, that we are now having an amendment that is going to allow limits and restrictions. The committee deserves to know: what are those limits and restrictions? When do they apply? Why is this being inserted into the legislation as an amendment? To simply write this off as “minor and technical” isn’t the kind of discussion that this committee deserves when a piece of legislation is being put through under all stages under urgency, and this is the one opportunity we get to consider this. I think what we’re seeing in this debate is a careful consideration of this legislation and an informed debate, so understanding the meaning of the limitation and restriction of the information that will be published is vital to the committee’s understanding. STEVE ABEL (Green) (10:32): Thank you, Mr Chair. I just want to respond to the Minister in the chair’s accusation that we’re clogging the system with amendments. We’ve got around half a dozen amendments and they’re reasonable ones. I wondered if he could explain or at least point out why he doesn’t agree there would be value in new section 56AA(b), inserted by clause 4, after new subsection (e), which requires “the contents of gas markets information to be independent”, to put in a proposed subsection (d) to protect whistleblowers of any industry participant or a consumer—other than a domestic consumer. As I elucidated earlier, whistleblowers are a thing that are helpful in us getting transparency around the industry. I wondered if he’d respond to the specifics of that proposed amendment. But, also, I want to ask in new section 56AAB, inserted by clause 4, “Industry body or Secretary may publish information”. “The industry body or … Secretary … may publish any information disclosed under regulations”. Why has the Minister opted for “may” rather than “must”? I have an amendment that proposes that it should, in fact, be “must”. Why would it not be in the context of “requiring”—is the language used—the industry to be transparent? Why would the Minister not go for “must” publish information disclosed under regulations made under new section 56AA? Thank you. Hon RACHEL BROOKING (Labour—Dunedin) (10:34): Thank you, Mr Chair. I’m interested to ask the Minister in the chair for an example of—and this relates to, to take the Minister there, new section 56AA(1)(b), inserted by clause 4, which is “prescribing the circumstances in which gas markets information must be disclosed … (when requested, at a specified time, or on the occurrence of a specified event):”. I’m wondering if the Minister could give us some examples of what a possible “specified event” might be. I just don’t know what that is, and there might be an example—I understand a specified time—but is there a likely specified event or a type of specified event? What is the range? This is going on the Hansard; that would be useful to know about. Also, very quickly—great that the Minister’s going to get up—reminding the Minister when he gets up, he hasn’t answered my liquid question; he hasn’t answered my internet site question; and he hasn’t answered the question around new section 56AA(2) and those safeguards, which is the regulations can happen only if the Minister is satisfied that the disclosure is necessary for one of the following—(a), (b), and (c)—and whether (b) in particular is wide enough to enable regulations that will inform good planning and policy-setting. Questions, going backwards: are the safeguards wide enough for policies? What about the internet site? What about the liquid state? And can he give us an example of what a specified event might be that would be prescribed in the regulation? Thank you. Hon SIMON WATTS (Minister of Climate Change) (10:36): A specified event, for example, may be the decision to close Maui, which is a significant gas reserve, and the implications of that obviously have broader implications on the industry and other players as well. In regards to the question from the Hon Dr Megan Woods, on Amendment Paper 634 around what are the limits, restrictions, or why we are limiting the restrictions on information. Primarily, this is about ensuring that the Government has the ability to protect the confidentiality of information provided to us. Some of that information the Government collects will be for publication, obviously, but some of it will be for Government information only and we want to make sure that the information that is only for Government is properly protected. That’s the background of that portion in the amendment. In regards to the last question that we have around thresholds on the information requirements verification, again—I answered this before, but again—we’re not going to be determining whether any thresholds should be included here. This will be worked through in consultation with the gas sector once this law has passed. CAMERON LUXTON (ACT) (10:37): I move, That debate on this question now close. CHAIRPERSON (Greg O'Connor): Most of these sections have got a name beside them where questions have been asked. However, I’m aware there hasn’t been any select committee and this is a new bill, but we need to be starting to get fairly specific. Hon Dr MEGAN WOODS (Labour—Wigram) (10:37): Thank you. The Minister in the chair’s answer around new section 56AAB, inserted by clause 4—he gave the answer to that, and I think that has opened up some very important questions for the answer that the Minister just gave us. The reason why this has been added in an Amendment Paper: is this because either Ministers or officials received any representations, correspondence, or contact from gas producers after the bill was published in terms of limiting information that would be published? Between the bill being tabled and this Amendment Paper being issued yesterday, what contact has there been with the gas industry in terms of either Ministers or officials in that regard? I think that is an important piece of information that the committee needs to know. Because to have an Amendment Paper that that does seek to limit—I mean, I would have thought, and it as a fair assumption, when it is a one-clause piece of legislation, that officials and the Minister would have worked through the publication when this is a bill about disclosure, that would have been a well-thought-out and well-worked-through clause in the legislation—why it is that there are eleventh-hour changes is a very important question that this committee needs to know. If this was going through select committee, members of Parliament would have heard any representations from the gas industry. But given this is going through all stages under urgency, the committee needs to know: has an industry body or the gas industry been in touch around this clause and made any representations or any suggestions? Furthermore, in the Amendment Paper—a question that I asked the Minister: in that amendment was a clause that we just want to understand what the purpose of it is, what it’s seeking to achieve, where it says it “applies despite any legislation or other rule of law to the contrary;”. Why is that clause in there? What is it seeking to do? It’s not a usual clause for us to see in a piece of legislation, so to understand exactly the purpose and why it is in there is something that is vitally important. And then, furthermore, around the disclosure, since we are on this disclosure section—which, for the Minister’s elucidation, that’s new section 56AAB—I’d be interested to know before the amendment, but now, since the amendment, even more, what framework will be used to decide what is published and what the level of aggregation will be in terms of the published information. Will the aggregation be designed to minimise transparency, so it’s hard to see down to a very granular level—what suppliers, for example? Or will the design be to maximise the transparency that can be seen there so that you can see at that very granular level in terms of whether it’s supply or demand, actually? And what weight will be given to protecting commercial sensitive data on the part of the gas producers, and what weight will be given to the vitally commercial data that the gas users are going to need in terms of making their commercial decisions? So even before we move to the public policy aspect of this and what information is needed for making good public policy, there are two buckets of commercial sensitivity here. How is weighting going to be divvied up between the two of those? Hon SIMON WATTS (Minister of Climate Change) (10:42): Thanks, Mr Chair. For the third time, the Amendment Paper responds to minor and technical issues identified by officials after the bill was approved at the Cabinet legislation committee. It is a clear indication that officials have identified changes, and any statements that the member is making are not consistent—for the third time—with the reason why I’ve outlined why we’re doing an Amendment Paper. Again, the question is asked of the Minister for the second or third time. The information and the consideration around the degree of how far we go will be done subsequent to this bill passing, in consultation with industry. SCOTT WILLIS (Green) (10:42): Thank you, Mr Chair. To the Minister, I’d just like to encourage the Minister to not rush through amendments, given that the other Minister has clearly put an amendment in to fix legislation. We are going through all stages in urgency. We are having a useful discussion here today, and we want to make sure we can get the best out of it, Minister—and I don’t think that the amendments that the Minister referred to are minor or technical. They are serious amendments. We want them considered. For the Minister, we have an opportunity here—I think it’s in new section 56AA(2), down between clauses 4 and 5—for a proposed amendment, because what we’ve got here is something that doesn’t have a useful date in it. This is a really simple amendment. If I want to take the Minister’s word that this is serious and it’s important and we need to move fast and we need to get things done, we need to have some clarity. My amendment is to move the following amendment: “ ‘Clause 4 New sections 56AA and 56AAB and cross-heading inserted’ After clause 4, new section 56AA(5) (page three, after line 24), insert: (5A) Despite subsection (1), any initial regulation must be made by 1 October 2026.” The reason for that, Minister, is to make sure that we get moving. The reason we want to see this amendment, Minister, is to make sure we have transparency and we get moving on it. So rather than suggesting that we are using time in urgency to waste time, we are after the Minister to take action and to move at pace, and this is what this amendment will do. So I would ask the Minister to consider an amendment that will be helpful, improve the legislation, ensure we move at pace, and ensure we have greater transparency in the gas market, to make sure we can help electricity distribution businesses plan for what’s coming and to make sure we can help businesses and industry and stop with the deindustrialisation. Thank you, Minister. If the Minister could respond, I’d appreciate that. CHAIRPERSON (Greg O'Connor): The Hon Megan Woods—but I would have to say, Ms Woods, on the Amendment Paper, that the Minister has explained, and looking for a “gotcha” moment—I don’t think it’s going to happen. We’ve probably exhausted that one. Hon Dr MEGAN WOODS (Labour—Wigram) (10:45): OK, but—Mr Chair, thank you—I still am waiting for the Minister to explain, on “applies despite any legislation or any other rule of law to the contrary;”, what the purpose of that is in the Amendment Paper; what it is intended to do. It is a question that the House needs to know. If we were at a select committee, that would be something that we would be asking officials about—given we are doing this under all stages in urgency. I am taking from the Minister that he has confirmed to the House that there have been no representations from industry around this Amendment Paper. That’s what the Minister is on record as saying. I will then return to new section 56AA(6), which is “Regulations made under this section are secondary legislation”—and that is the whole purpose of what we’re doing. This is a piece of legislation that is seeking to make regulation. What is unclear from the legislation: in making those regulations, will there be public consultation? Will there be regulatory impact analysis released or made for the regulations when they are made? Will that be released? Because these are very wide powers. There’s going to be some very specific powers given through regulation, and understanding the regulatory impact of what is put in place is going to be vital for the operation. So: public consultation and whether or not there will be regulatory impact analysis for regulations when they are made. Hon SIMON WATTS (Minister of Climate Change) (10:47): I thank the members for the questions. Just in regards to the last point, yes, the Government are interested in feedback on the level of and implications around the regulations, which we will look to propose, and that transparency will be appropriate. We obviously haven’t made any decisions about that, but they’ll be worked through once this bill is passed today. CHAIRPERSON (Greg O'Connor): Dan Rosewarne—sorry, Dan Bidois. I need some more of that coffee, I think. DAN BIDOIS (National—Northcote) (10:48): I move, That debate on this question now close. CHAIRPERSON (Greg O'Connor): Um— Hon Members: Deborah Russell. CHAIRPERSON (Greg O'Connor): The Hon Dr Deborah Russell. Hon Dr DEBORAH RUSSELL (Labour) (10:48): Thank you, Mr Chair. It sounds like you need the coffee. CHAIRPERSON (Greg O'Connor): Yes, that’s a good observation. Hon Dr DEBORAH RUSSELL: The Minister has not answered one very important question that my colleague the Hon Dr Megan Woods has made. Has there been any representations from gas industry members or representative bodies about this bill after the bill was tabled that resulted in the Amendment Paper? It’s actually a very important question, because that particular Amendment Paper contains what could be a somewhat egregious clause. I really, really want to be sure: have any representations been made by industry bodies? There’s a particular name I’m tempted to name, but I won’t in this House because that’s maybe just taking it a little bit too far—but have representations been made? Can the Minister guarantee that no representations have been made by gas industry body representatives about the content of this Amendment Paper? STEVE ABEL (Green) (10:49): Thank you, Mr Chair. I, similarly, am concerned at the lack of response to the specific questions around the Amendment Paper. I will not repeat those of my colleague—that would be repetition—but I do wish the Minister would very simply answer, under “Subsection (1)” in clause 4(2) of his amendment—the prescribing limits or restrictions will apply “despite any legislation or other rule of law to the contrary”. We should have a right to know what other rule of law is specifically being spoken of there, because that is a substantial restriction on basic principles of democratic law. Where and what would be the rule of law that would be overridden by gas transparency legislation? CAMERON LUXTON (ACT) (10:50): I move, That debate on this question now close. Hon Dr MEGAN WOODS (Labour—Wigram) (10:50): Thank you, Mr Chair. In terms of reiterating, again, the outstanding questions that we do have, it is around this Amendment Paper. When Amendment Papers get dropped quite late in the process, it is custom for the committee to be able to have a good explanation from the Government Minister in the chair around what the purpose and the intent is. It’s not a very long Amendment Paper, so understanding exactly what the intent of that legislation or other rule of law to the contrary means—we simply don't understand. This is legislation that Labour, for its part—and, I think, other Opposition parties—have voted for. But we do need to understand what the purpose of the amendment is. The Minister has his officials with him. He can ask why that was included; what it means. Does it substantially change the way in which the Act will operate, or is it a very minor and technical amendment, as we’ve been told? But simply telling us it’s a minor and technical amendment doesn’t really give the committee the explanation that it requires. So that is a very, very significant, outstanding question that is lying on the floor of this House that does need to be addressed. One of the interesting pieces of information that was provided in the regulatory impact statement is the proposed categories of information considered to be sought. In Annex Two, there was a very large table that was produced, which was very useful, and I thank officials for providing that because I think it is good. The information that is provided currently that has inconsistency in it was the explanation to changes to 2P reserves and 2C reserves—so this is the reserves of gas. This is really where the crux of it is. How much gas is there in production? How much do people think is going to come on board in terms of that inconsistency of information? Was that inconsistency across fields, or was that inconsistency across particular companies that were doing the production? In what way does the Minister think this regulation is going to prevent that? Is that where the certification comes in to call? Hon SIMON WATTS (Minister of Climate Change) (10:53): Thanks, members, for the questions. In regards to the question around time limits, we do not see any end date to the need for good information on the gas market. So it would not be appropriate to put a time limit on those powers. To the Greens’ call, a question in regards to the gathering of information powers: the clause number I don’t have in front of me, but, basically, as a result of this, we’re going to increase the amount of power to gather information that is currently able to be done. The point raised by the Hon Dr Megan Woods in regards to the inconsistencies: I mean, as I noted in a response back with the quote from the Frontier report, the problem that we are looking to address through this legislation today is that we’ve got incomplete and fragmented information. As a result of this, we will have more consistent information which deals with the point there. In regards to the member’s questions, again, in regards to the Amendment Paper—and I will reinforce, for the fourth time—the Amendment Paper and the issues identified within the Amendment Paper, while minor and technical, were identified by officials after the bill was approved by the Cabinet legislation committee. DAVID MacLEOD (National—New Plymouth) (10:54): The question is, That debate on this question now close. A party vote was called for on the question, That debate on this question now close. Ayes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Noes 46 New Zealand Labour 29; Green Party of Aotearoa New Zealand 15; Ferris; Kapa-Kingi. Motion agreed to. CHAIRPERSON (Greg O'Connor): The question is that Steve Abel’s tabled amendment to Amendment Paper 634 amending clause 4 to delete new sections 56AA(1)(f) and 56AAB(2) be agreed to. A party vote was called for on the question, That the amendment to the amendment be agreed to. Ayes 46 New Zealand Labour 29; Green Party of Aotearoa New Zealand 15; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment to the amendment not agreed to. CHAIRPERSON (Greg O'Connor): The question is that the Minister’s amendments to Part 1 set out on Amendment Paper 634 be agreed to. Amendments agreed to. CHAIRPERSON (Greg O'Connor): The question is that Scott Willis’ tabled amendment to clause 4, new section 56AA(1)(a) inserting new subparagraph (viii) “information on emissions emitted by gas” be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 46 New Zealand Labour 29; Green Party of Aotearoa New Zealand 15; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): Just ensuring that there are no comments during voting, please, just so the Clerk is not distracted. The question is that Steve Abel’s tabled amendment to clause 4, new section 56AA, inserting new subsection (5A) relating to 1 April 2025 be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 46 New Zealand Labour 29; Green Party of Aotearoa New Zealand 15; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): The question is that Steve Abel’s tabled amendment to clause 4, new section 56AA(2) inserting new paragraph (d) relating to whistleblowers be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 46 New Zealand Labour 29; Green Party of Aotearoa New Zealand 15; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): Scott Willis’ tabled amendment to clause 4, new section 56AA, inserting new subsection (5A) relating to 1 October 2025, is out of order as not being in the correct form of legislation. The question is that Scott Willis’ tabled amendment to clause 4, new section 56AA, inserting new subsection (5A) relating to 1 July 2024 be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 46 New Zealand Labour 29; Green Party of Aotearoa New Zealand 15; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): The question is that Scott Willis’ tabled amendment to clause 4, new section 56AA, inserting new subsection (5A) relating to 1 October 2026 be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 46 New Zealand Labour 29; Green Party of Aotearoa New Zealand 15; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Motion not agreed to. CHAIRPERSON (Greg O'Connor): The question is that Steve Abel’s tabled amendment to clause 4, new section 56AAB, replacing “may publish” with “must publish” be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 46 New Zealand Labour 29; Green Party of Aotearoa New Zealand 15; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. Part 1 as amended agreed to.