New Zealand Reverses Ardern-Era Ban on Oil and Gas Exploration

New Zealand’s current government has reversed a ban on oil and gas exploration, scrapping a flagship policy introduced by the former Ardern Labour government in 2018.

The bill passed its final reading in Parliament on July 31.

The three-way right-leaning coalition government between the National Party, libertarian ACT, and New Zealand First had signalled the move before coming to power in 2023.

Resources Minister Shane Jones—a senior NZ First MP known for saying “drill baby, drill” in response to questions about repealing the ban—called the Ardern 2018 regulation “the most destructive decision in the history of New Zealand’s industry.”

He was not in Parliament to see the law passed; instead, moving its third reading was left to Climate Minister Simon Watts, who said the ban had caused power prices to increase.

“The ban sent a chilling message to the investment community, halting the very exploration that underpins our energy security and leading directly to the supply constraints and price volatility that we see today,” he told MPs.

Announcing $200 million in funding to support new drilling for fossil fuel fields in the national budget in June, Watts said the country remained committed to its climate targets.

“With falling domestic production presenting as a real risk to our future energy needs, the government has been looking at all options to extend the supply of gas as a critical energy source,” he said.

“This includes repealing the current ban on offshore oil and gas exploration and the setting aside of a tagged contingency of $200 million over four years for co-investment in new gas fields.”

Kicked Out of International Grouping

But the Beyond Oil and Gas Alliance, of which New Zealand had been a member, warned that the country would no longer be eligible to be part of the group, as the 2018 ban was the basis of New Zealand’s status as an associate member.

BOGA describes itself as “an international alliance of governments and stakeholders working together to facilitate the managed phase-out of oil and gas production.”

France, Denmark, Sweden, Ireland, and Spain are among the nations that are members, along with several Pacific Island nations deemed to be threatened by climate change, including Samoa, Tuvalu, and the Marshall Islands.

The bill passed 68 votes to 54, with all coalition parties in support and the opposition parties all opposed.

In January 2024, the Ministry of Business, Innovation and Employment (MBIE) estimated New Zealand had about 8.5 years worth of gas reserves (1,300 petajoules) at 2023 rates of consumption.