The Government has announced plans to lift the ban on oil and gas exploration outside onshore Taranaki, part of a broader strategy to address New Zealand’s energy security challenges.

This decision is part of a series of proposed amendments to the Crown Minerals Act, Resources Minister Shane Jones revealed.

Jones highlighted the importance of natural gas in maintaining the country’s electricity supply and economic stability, especially during periods of peak demand and when renewable sources like wind, solar, and hydro fall short.

“Natural gas is critical to keeping our lights on and our economy running,” he said.

The previous government’s 2018 ban on exploration, Jones noted, not only halted the discovery of new sources but also led to a decline in investment for further development of existing gas fields.

“Without this investment, we are now in a situation where our annual natural gas production is expected to peak this year and undergo a sustained decline, meaning we have a security of supply issue barrelling towards us,” Jones explained.

To rebuild investor confidence in New Zealand’s petroleum sector, the Coalition Government is proposing further legislative changes.

These amendments aim to make New Zealand an attractive destination for international investment.

The changes, agreed upon by the New Zealand First and Act coalition agreements with the National Party, include modifications to the way petroleum exploration applications are tendered and allocated, aligning the petroleum decommissioning regime with international best practices, and enhancing regulatory efficiency.

Resources Minister Shane Jones Photo: RNZ / Samuel Rillstone

“Our job as the Government is to provide the right policy settings to enable the sector to get to work, and that’s exactly what we are aiming to achieve through these amendments,” Jones stated.

He acknowledged that some current policies are barriers to attracting investment due to their costliness and complexity. “Some obligations lack necessary flexibility, and compliance obligations are uncertain and unclear,” he added.

The proposed changes also reflect the significant economic contributions of the petroleum and resources sector. According to Jones, the sector contributed $1.9 billion to GDP in 2020-21 and generated $236 million in Crown revenue in 2022-23.

Additionally, mining employed around 6,000 people in 2023, predominantly in regional communities.

Jones emphasised the need for a thoughtful discussion on the use of natural resources to enhance energy security and affordability, stimulate regional economic development, and increase New Zealand’s self-sufficiency in the face of volatile international markets.

“I want a considered discussion about how we use our natural resources to improve the security and affordability of energy and resources supplies,” he said.

The Crown Minerals Amendment Bill, set to be introduced to Parliament in the second half of 2024, represents the latest legislative effort by the Government to reduce red tape and enable crucial resources and infrastructure projects across New Zealand, with anticipated benefits for local communities.