The New Zealand government announced on Monday its intention to lift the ban on offshore oil and gas production by passing a corresponding law later this year.
The proposal aims to build investor confidence and strengthen New Zealand’s oil and gas sector. Accordingly, one of the main impacts of the proposed amendments to the Crown Minerals Act 1991 (CMA) for 2024 will be the lifting of the 2018 ban on mining exploration in the onshore Taranaki area. This will remove the 2018 restrictions preventing new petroleum permit holders from accessing Taranaki’s conservation areas. The areas protected under Schedule 4 of the CMA will nevertheless remain protected.
The plan to improve New Zealand’s energy security comprises five steps. First, the government under Christopher Luxon wants to streamline the approval process for CMA Amendment Bill by the end of the year. Second, it aims to remove regulatory barriers to “urgently needed facilities” to import LNG in response to energy shortages. Third, the government intends to ease restrictions on energy generation and sales companies (“gentailers”). Fourth, the government will allow gentailers to have hydropower backup. This means gentailers will have access to hydropower lakes to manage risk and ensure the reliability of electricity supply when there are uncertainties or disruptions in hydropower generation. Fifth, the government aims to “improve electricity market regulation”.
Greens energy spokesperson Scott Willis has said the rise in electricity prices and shortages are due to “profiteering”. He believes the government should reinvest profits in renewable energy rather than gentailers to break the monopoly in the energy market. Labour spokesperson Rachel Brooking has also spoken out about the potential socio-environmental impacts of this plan. She believes the plan and the law could override environmental protections and pose a significant threat to the natural taonga (treasures) of New Zealand’s Aotearoa. Various environmental groups, experts and iwi have also expressed their concerns about the damage the plan will cause.
