11/06/25
Q&A: New Zealand to keep gas focus for energy security
Singapore, 11 June (Argus) — Argus spoke to New Zealand's resource minister
Shane Jones on 10 June about the country's energy policy plans, given that it is
currently facing a natural gas shortage. Edited highlights follow: The
government indicated in 2024 it will reverse the 2018 ban on new offshore oil
and gas exploration. Is there a timeline on the repeal of the ban? Yes, the
legislative changes are going through parliament at the moment, and they should
be done within 4-6 weeks, maximum. There was a delay because one of the most
challenging portions of the reform of the ban was the decommission, and
decommissioning requires a balance between liability being borne by the owners
of the assets, but the final shape and form of the decommissioning not being so
severe that it's a disincentive to do anything. That's good news for investors,
because some private firms seem to have lost a bit of confidence in investing in
New Zealand. Yeah, it's a sad story, really, because New Zealand, for the last
30 or 40 years has been a very outward focused, open economy. All nations get
nervous about protecting sensitive assets, but unfortunately, back home, our
climate change rhetoric galloped too far ahead of economic rationalism. So once
the ban was introduced, it had a chilling impact upon the investment community
in southeast Asia and other such places. So that's why we've established the
NZ$200mn fund to take the jagged edges off sovereign risk anxieties, and also to
convey that there has genuinely been a 180-degree turn from the ban… It's
difficult to see what a government could do that's more emphatic than that. New
Zealand's latest proven and probable gas reserve estimates have fallen quite
significantly. Has the government has received any official approach from
utilities interested in LNG imports? So I've had about 15 meetings today and
yesterday, and some of those firms are keen to work with the government and
create an import facility to bring gas into the country. We have a port called
Taranaki... and there is a very durable set of distribution assets at that port.
So there's every prospect that we could, in a relatively short period of time,
create an import facility, and the officials are engaged with potential
partners. Our government hasn't signed that off, but the government is willing
to pass legislation to allocate the necessary statutory permits to enable such a
development to be stood up in a short period of time. New Zealand already has
over 80pc of its electricity created from clean, green sources. All economies
and governments have to ask themselves, how much pain are you willing to endure
for the last five or 10pc, and that's not surprisingly where we are. Solar,
wind, maybe bioenergy and more geothermal will be welcome, but fossil fuels are
essential to keeping the lights on. Unless there is a roadmap or a pathway that
is technologically feasible, it is lunacy to jettison fossil fuels. You need to
take a long and gradual approach to build up some more clean green energy, but
at the same time maintain a contingency that's fossil fuel. On that note,
because you say that natural gas is a transition fuel, are you looking at it as
a long-term solution or a stopgap solution, and is there a plan for phasing it
out eventually? We pride ourselves being a market economy, but there's no point
setting arbitrary dates phasing any fuel out if the economy cannot cope with the
costs associated with an unplanned transition. All transitions sit upon costs
and benefits. If society cannot bear the cost, then they don't believe in the
benefits, and the energy adjustment that we're going through at the moment has
caused us to go through the 180-degree turn because we do not have the ability
to maintain energy security without gas. We are already dependent on Indonesian
coal, and we need to respect the fact that we can still maintain an energy
system using coal. But there's a clear appetite from the public to move towards
gas, yes. Does the government have any plans to incentivise biofuels or biofuel
production? Yes, so we are exploring creating an economic zone next to our
largest fuel importation port, Marsden Point. We closed down our refinery about
three years ago, and we're keen to create an energy precinct around that port to
create an ecosystem to attract innovative risk-takers, including bioenergy. New
Zealand has a prodigious forestry resource. So the feedstock, the bioenergy, may
very well be a forest resource. But once again, the government, while it's
promoting it, we only we have limited resources. And some critics have said, why
didn't you dedicate the $200mn towards bioenergy? But even if we did it with
bioenergy, it doesn't solve the problem in the short term of having a
contingency, that's why gas has been pursued. And let's face it, the processes
of gas production, gas exploration, gas distribution, are well and truly
understood. It's just that investment has declined over the last 10 years, and I
come as a politician on behalf of our prime minister and our cabinet,
figuratively wearing pom-poms to incentivise inward investment. So how does your
vision balance energy security with your climate commitments, especially now
that you're looking at oil and gas exploration again? As a country, we are
committed to our obligations in the Paris Accord. The three parties that make up
our government will go back to the electorate in October 2026 and I suspect that
each party will campaign differently on how New Zealand should meet those
obligations. The party I belong to, we're a kind of economic nationalist party,
and we realise that we're a food-producing nation, and in the Paris accord,
there is an exemption for food-producing nations. To date, we have not triggered
that exemption, but the footprint of our agricultural sector is very positive in
terms of how efficiently we farm. So these are intensely political issues, and
we need to get a mandate from our electorate as to what changes there might be
in the future as to how we respond practically to Paris Accord obligations. By
Prethika Nair Send comments and request more information at
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