New Zealand to Allow Offshore Gas Production Due to Lack of Electricity
New Zealand will lift the ban on the development of offshore oil and gas fields due to a serious shortage of energy resources. This was announced by the country’s Energy Minister Simeon Brown.
According to him, due to the acute shortage of electricity, the Cabinet of Ministers of New Zealand was forced to quickly approve several measures aimed at eliminating a serious risk to the country‘s energy security.
“The water level in the lakes is low, the sun does not shine, the wind does not blow, and we have too little natural gas to meet demand. The country has the highest wholesale electricity prices among countries comparable to us, and this has a devastating effect on the production and export sectors of the economy, many companies are reducing production or closing down altogether,“ the text of the message published on the website of the New Zealand government says.
The head of the department noted that in order to replenish the country‘s energy reserves, the authorities intend to lift the ban on offshore oil and gas exploration and production by the end of 2024, and remove barriers to the construction of infrastructure for the import of liquefied natural gas. In addition, the government plans to lift several restrictions for enterprises engaged in the production of power transmission lines and owning generation, provide producers with access to hydroelectric power plants and improve regulation of the electricity market.
Brown also said that in 2023, natural gas production in New Zealand decreased by 12.5%, and in the first three months of 2024 it decreased by another 27.8%.
“This led to a reduction in industrial production, and generating companies began to use more coal and diesel fuel to power the power supply system,“ he said.
It is expected that a full report on all options for reducing sovereign risks in the field of LNG and domestic gas production will be submitted to the Cabinet of Ministers in October.
