Activists vow resistance as Government set to repeal offshore oil and gas ban

Thursday, 31 July 2025

The Government is set to repeal the offshore oil and gas exploration ban on Thursday, dismantling one of Labour’s signature climate policies and reversing the stand Jacinda Ardern took against fossil fuels in 2018. Resources Minister Shane Jones says the move paves the way for more gas supply and lower energy costs, but critics warn it risks damaging New Zealand’s global reputation and could expose taxpayers to future climate-related lawsuits.

Rosemary Penwarden has spent the past four days supporting climate activists camped in a coal bucket at Stockton Mine on the West Coast — New Zealand’s only opencast coal mine, framed by breathtaking views of the Tasman Sea and the Southern Alps.

The Dunedin grandmother is part of a wider network fighting Bathurst’s fast-track bid to extract 20 million tonnes of coal from the Denniston Plateau.

As Parliament prepares to repeal the 2018 offshore oil and gas exploration ban on Thursday, Penwarden vows the communities that once forced seismic testing ships to flee will fiercely resist the National-led coalition Government’s new push — and she has a direct challenge for Resource Minister Shane Jones.

“We fought for more than a decade, all over this country, for an oil-free Aotearoa,” she said. “We kicked those oil companies out. They are not welcome here, and we will make sure they know that.”

The repeal and $200m co-investment in new oil and gas fields

Jones appeared visibly distressed, at times placing his hand over his face, when standing beside Jacinda Ardern as she announced the oil and gas exploration ban in 2018.

Yet at the same time, Jones — then a minister in the Labour-led coalition — insisted “no one has been blindsided” and called the ban part of a “journey” Ardern had signalled since the election.

“We must be prepared to stand up and lead the transition,” Jones said. “I wouldn’t be standing in front of you if I wasn’t going to back, 100%, the prime minister.”

Seven years on, Jones now claims he was blindsided, calling the ban a “captain’s call” and “the most egregious call ever made in respect to energy policy since the Treaty of Waitangi”.

Parliament is expected to repeal the ban through the Crown Minerals Amendment Bill, paving the way for new fossil fuel extraction, on Thursday afternoon. The law change sets the legislative framework for companies to explore and drill, as well as for the coalition’s $200 million co-investment into new gas fields.

Jones revealed the funding at the May Budget, which he described as a signal to the fossil fuel industry that New Zealand is open for extraction and that the Government will share in the financial risk.

He argued this is necessary to attract investors back into the market, find more gas and drive down energy costs — a critical issue as households face escalating electricity bills as well as the uncertainty related to renewable energy resources when the rain doesn’t fall, or the sun doesn’t shine.

While new oil and gas production is not expected before 2035 at the earliest, and more likely to occur in the 2040s, Jones said the Government will also push to cut red tape for geothermal energy and improve industrial energy efficiency to meet energy needs sooner.

Officials in Treasury and the Ministry of Business, Innovation and Employment are still finalising the criteria and organisational structure for the Government’s $200 million co-investment fund into new fossil fuel developments, Jones added.

Inherently risky business

The risks of government involvement in fossil fuel ventures were underscored by the decommissioning of the Tui oil field, which left taxpayers with a $349m bill after the company behind it collapsed.

Labour changed the law to stop this happening, but in a late amendment to the Crown Minerals Bill, Jones moved to change liability rules so that the Government cannot be held responsible for future clean-up costs when oil and gas operators exit the market.

The $200m co-investment also carries significant risks. Gas companies who sunk $1.8 billion into drilling 58 wells over the past five years failed to maintain or increase New Zealand’s gas reserves, highlighting the high risk of failure inherent in exploring mature fields.

Official advice also flags potential reputational and legal risks, particularly from Pacific neighbours deeply vulnerable to climate change and strongly advocating a transition away from fossil fuels.

Repealing the ban comes just days after a landmark International Court of Justice ruling found that countries failing to curb fossil fuel emissions could be held legally responsible for climate-related harm. Green Party co-leader Chloe Swarbrick says this is clear warning countries such as New Zealand could face future reparations claims.

The Green Party commissioned legal advice which found it could violate New Zealand’s trade obligations. The advice, from a King’s Counsel, argues the policy qualifies as a fossil fuel subsidy and as a result may violate agreements including the UK and EU free trade deals, as well as a climate trade pact New Zealand helped launch in 2023, called the Agreement on Climate Change, Trade and Sustainability.

Jones dismissed concerns the policy could trigger trade breaches or legal action. He said the Government is “well within its rights to cover off threats to the resilience of electricity supply”.

“Do I think small nations will stake a claim if we find some more gas, no I don’t,” he said.

He also confirmed he is seeking advice on resuming coal mining at Huntly, calling for “more emphasis on energy security” from electricity generators.

“We need a mix of fuels to continue to boost our GDP,” he said, “and all I am doing by getting rid of the ban is correcting the most egregious call ever made in respect to energy policy.”

When asked how the government plans to ensure any new gas discovered will be used domestically rather than exported, Jones responded with a pro-industry stance.

“If anyone wants to come to New Zealand and take a risk and open up a gas field — which is no different to what is happening in the Middle East — I will be there to cut the ribbon,” he said.