New Zealand wants to enforce law to lift ban on oil and gas production

26 August (Reuters) – New Zealand said on Monday it would pass legislation by the end of the year to lift a ban on offshore oil and gas production and take urgent steps to remove regulatory hurdles to importing liquefied natural gas (LNG) amid energy shortages.

The bill would end a 2018 ban on exploration outside Taranaki, an energy-rich region on the country’s North Island, as the right-wing government plans to attract investment to the country’s oil and gas sector.

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Prime Minister Christopher Luxon said severe shortages in recent weeks had pushed up energy prices sharpen some of the highest values ​​among developed economies.

“We are responding to a situation that, as I said, New Zealand should never have experienced,” Luxon said during a press conference, calling for resistance Parties to support the bill.

“It would be the most sensible and true thing to do if they really cared about New Zealand’s energy security.”

The previous centre-left Labour-led government banned offshore oil drilling.

Natural gas production fell 12.5 percent in 2023 and another 27.8 percent in the first three months of 2024, leading to a nationwide energy shortage as generators switched to more coal and diesel to power the grid, Energy Minister Simeon Brown said.

Renewable energies such as hydroelectric, solar and wind energy could not compensate for this shortage, the government said.

“Lake levels are low, the sun isn’t shining, the wind isn’t blowing and our natural gas supply isn’t enough to meet demand,” Brown said.

In addition, the government will make the approval, construction and maintenance of renewable energy generation facilities as well as the distribution and transmission of electricity easier and more cost-effective.

The permitting and re-permitting phase for most renewable energy projects will be completed within a year, and the government will seek to initiate a first round of feasibility permitting for offshore renewable energy projects in 2025, Brown said.

(Reporting by Renju Jose in Sydney; editing by Lincoln Feast.)