New Zealand Reverses Course on Fossil Fuels, Prioritizes Gas as Energy Minister Dismisses Climate Concerns
Wellington, New Zealand – In a significant shift in energy policy, New Zealand’s Associate Energy Minister Shane Jones has announced a renewed focus on oil and gas exploration and production, dismissing concerns about climate change as “largely moral hysteria.” The move signals a dramatic departure from the previous government’s commitment to phasing out fossil fuels and comes amid growing anxieties about energy security and rising costs for businesses.
The announcement, made following a recent ruling by the International Court of Justice (ICJ) regarding states’ obligations to prevent genocide through climate change, underscores the new coalition government’s prioritization of economic stability and energy independence. Jones stated the ICJ judgment would not impede legitimate New Zealand industries and vowed to defend the nation’s “sovereignty” against what he perceives as external pressure to abandon fossil fuel development.
This policy reversal directly impacts several key initiatives previously underway. Plans to assist fossil fuel workers in transitioning to low-emission industries have been shelved, and a broader transition away from natural gas has been halted. This contrasts sharply with the previous Labor government’s ambitious goals, including a target of 100% renewable electricity generation by 2030.
Instead, the government is positioning natural gas as a “transition fuel” to reduce reliance on Indonesian coal imports – currently supplying approximately 18% of New Zealand’s thermal electricity generation – and to ensure a stable energy supply.Simultaneously,plans are in place to double geothermal energy production,leveraging New Zealand’s significant geothermal resources,particularly in the Taupō Volcanic Zone and around Wairakei.however, critics argue that relying on gas is a short-sighted solution.While renewable energy projects are in development – including several wind farms detailed in the Electricity Authority’s Generation Investment Pipeline – their completion is not expected to keep pace with increasing demand, especially as businesses electrify and decarbonize their operations. The pipeline currently includes projects like the proposed 540MW Waipipi Wind Farm in South Taranaki and expansions to existing hydro facilities.
A recent open letter from a coalition of concerned organizations, including Greenpeace Aotearoa, Forest & Bird, and the Environmental Defense Society, urged the government to intervene in the energy market to accelerate renewable energy development. The letter highlighted the delays in investment and the resulting high energy prices contributing to an ongoing energy supply crisis.Specifically, the groups pointed to bureaucratic hurdles and a lack of clear government signals as key impediments to investment.
The lack of a complete national energy strategy is a recurring concern. Consumer advocate Jon Duffy of Consumer NZ stated bluntly, “There’s no Plan A,” emphasizing the urgent need for a long-term vision. Industry leaders echo this sentiment. Blair, a representative from an unnamed manufacturing sector, warned of potential industry closures if energy supply issues are not addressed swiftly, stating, “I don’t see a plan B for a lot of industries in New Zealand.”
The impact of rising energy costs is already being felt by businesses. John Burling, owner of a bakery utilizing gas-fired ovens, reported being unable to pass increased gas bills onto customers, resulting in reduced profitability. he faces a difficult situation, as switching to electricity would be even more expensive given current pricing. burling’s bakery,located in the Manawatu region,exemplifies the challenges faced by businesses reliant on gas in a rapidly changing energy landscape.
This policy shift raises questions about new Zealand’s commitment to its international climate obligations, including its Nationally Determined contribution (NDC) under the Paris Agreement, which aims to reduce greenhouse gas emissions by 50% below 2005 levels by 2030. the government maintains that its focus on geothermal energy and potential future development of carbon capture and storage technologies will mitigate the environmental impact of increased gas production. However, environmental groups remain skeptical, arguing that continued reliance on fossil fuels will jeopardize New Zealand’s climate goals and its reputation as a global leader in environmental sustainability.
