New Zealand to Reverse Offshore Oil and Gas Exploration Ban Amid Energy Shortages

The previous Labour-led government had imposed the ban on offshore petroleum exploration.

Wellington: New Zealand announced on Monday that it will introduce legislation by the end of the year to overturn the 2018 ban on offshore oil and gas exploration. The move aims to address energy shortages and remove regulatory obstacles to importing liquefied natural gas (LNG).

Details of the New Legislation

The new law will lift the restriction on offshore exploration beyond the onshore Taranaki region, a significant energy-producing area on the North Island. This shift is part of the right-of-center government’s strategy to attract investment to the oil and gas sector.

Prime Minister Christopher Luxon highlighted the urgent need for this legislative change. “We are responding to a situation New Zealand should never have seen in the first place,” Luxon stated during a media briefing. He urged opposition parties to support the bill, emphasizing, “It would be the sensible, common-sense thing to do if they genuinely cared about New Zealand’s energy security.”

Energy Crisis and Government Response

The previous Labour-led government had imposed the ban on offshore petroleum exploration. Since then, natural gas production has dropped significantly—by 12.5% in 2023 and an additional 27.8% in the first quarter of 2024. This decline has led to a nationwide energy crisis, with increased reliance on coal and diesel to meet electricity demands, according to Energy Minister Simeon Brown.

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Brown noted, “The lakes are low, the sun hasn’t been shining, the wind hasn’t been blowing, and we have an inadequate supply of natural gas to meet demand.” The government’s response includes making it easier and less expensive to consent, build, and maintain renewable energy projects, as well as improving electricity distribution and transmission infrastructure.

Future Plans

The government plans to streamline the consent process for renewable energy projects, aiming to complete most within one year. Additionally, it will initiate the first feasibility permit round for offshore renewable energy projects in 2025.

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