New NZ Government to Overturn Ban on Offshore Oil, Gas Exploration

(L-R) Winston Peters, leader of New Zealand First party, New Zealand's incoming Prime Minister Christopher Luxon, and David Seymour, leader of the ACT New Zealand party, attend the signing of an agreement to form a three-party coalition government at Parliament in Wellington on Nov. 24, 2023. Marty Melville/AFP via Getty Images

New Zealand’s new government will move to overturn a total ban on offshore oil and gas exploration following the formation of a new three-party coalition.

On Nov. 24, New Zealand Prime Minister Christopher Luxon unveiled the country’s government cabinet, composed of politicians from the centre-right Nationals Party, the nationalist NZ First Party, and the libertarian ACT New Zealand.

The prime minister also revealed the agreements between the three parties, which outlined all the policies that the new government would work on during its term.

One of the changes is the repeal of the ban on offshore oil and gas exploration introduced by the former Ardern Labour government in 2018.

The repeal, announced in the Nationals’ “Rebuilding the Economy” policy, will allow energy companies to apply for exploration and mining permits in the Taranaki region and other offshore areas again.

By opening up sea resources, the Nationals plan to reduce New Zealand’s reliance on imported coal while ensuring gas can be used as a transition fuel as the country progresses toward net zero in 2050 (a move it is also reviewing).

So far, the new government has not specified when it will act to revoke the ban.

While New Zealand is an oil producer, the country is a net importer, and most of the oil produced is exported.

According to Energy Resources Aotearoa, a peak oil and gas industry body, the sector contributes around $2.5 billion (US$1.5 billion) to the country’s GDP, of which $700 million comes from oil exports.

The sector also employs 11,000 people and supplies around 54 percent of New Zealand’s total energy.

Labour’s Offshore Oil and Gas Ban

The ban was part of the former Labour government’s plan to accelerate New Zealand’s transition to “a carbon-neutral future” in 30 years.

While the ban prohibited all new permits, it did not apply to existing ones.

It was introduced a month after former Prime Minister Jacinda Ardern accepted a petition from 50,000 Greenpeace supporters who urged the government to phase out offshore oil and gas exploration.

At the time, the Nationals strongly opposed the policy while criticising the Labour government for its lack of rationale.

“This decision is devoid of any rationale. It certainly has nothing to do with climate change,” Nationals MP Jonathan Young said.

“These changes will simply shift production elsewhere in the world, not reduce emissions.”

However, the ban was very well received by climate change groups, who described it as “a huge win” for the environment.