The New Zealand government has reversed a six-year ban on offshore oil and gas exploration, a policy initially enacted by former Prime Minister Jacinda Ardern in 2018 as part of the country’s commitment to combating climate change. The decision, which officially took effect in May 2025, comes amid growing concerns over energy security and declining natural gas reserves.
The original ban, which prohibited new offshore exploration permits outside the onshore Taranaki region, was hailed by environmental groups as a significant step toward reducing carbon emissions. Ardern had declared at the time that “the world has moved on from fossil fuels,” positioning New Zealand as a leader in climate action.
However, the current center-right coalition government, led by Prime Minister Christopher Luxon, argues that the ban has contributed to energy shortages and increased reliance on imported coal and diesel. Natural gas production fell by 12.5 percent in 2023 and a further 27.8 percent in early 2024, leading to nationwide energy shortages and rising prices.
Resources Minister Shane Jones emphasized the need to address these challenges, stating, “We are already feeling the pain of constrained supply.” In response, the government introduced the Crown Minerals Amendment Bill to Parliament, aiming to lift the offshore exploration ban and attract investment in the oil and gas sector.
The 2025 budget includes a provision of NZ$200 million over four years to co-invest in new gas field developments, signaling the government’s commitment to revitalizing the sector. The investment is intended to restore investor confidence and ensure that new projects proceed without undue risk to private partners.
Government officials acknowledge that new gas fields are unlikely to be developed before 2035, but they argue that lifting the ban provides a contingency plan to address future energy needs. Jones stated, “We must be pragmatic. Energy security and economic development can – and must – go hand in hand.”
Civil servants from New Zealand’s foreign and trade ministry have advised politicians that reversing the ban on offshore oil and gas exploration could harm the country’s international reputation and relationships, anger Pacific nations, and risk lawsuits over climate change.
Environmental groups and opposition parties have criticized the move, arguing that it undermines New Zealand’s climate commitments and poses risks to marine ecosystems. Greenpeace New Zealand warned that resuming offshore drilling could lead to catastrophic oil spills and exacerbate climate change.
The government’s decision has also sparked protests and legal challenges from eco-conscious groups and Indigenous communities, who argue that the move threatens biodiversity and undermines efforts to combat climate change. Greenpeace New Zealand described the reversal as a “disaster for the climate and the ocean.”
As New Zealand grapples with the complexities of energy security, economic development, and environmental protection, the reversal of the offshore exploration ban underscores the challenges of balancing competing priorities in the face of a changing climate. New Zealand’s experience demonstrates that relying on fossil fuels, even as a stopgap measure, can undermine progress toward net-zero goals and send conflicting signals to investors and the public. Clear, consistent, and forward-looking climate policy is essential to avoid backsliding, especially as the world races to keep warming below 1.5 degrees Celsius. As New Zealand navigates these complex issues, the long-term impacts of this decision remain to be seen.
The key lesson is that a successful transition to a low-carbon economy must be underpinned by robust investment in renewable energy, comprehensive plans to phase out fossil fuels, and strong international cooperation to support countries in making the shift without compromising energy security or economic stability.