Editorial: Energy security will be an election issue

Wednesday, 22 July 2026

EDITORIAL: When NZ First announced its proposal for the state to underwrite oil and gas exploration, it was responding to an electoral concern that has been building for some time and was accelerated by the conflict in the Middle East: energy security.

NZ First's response has been twofold. First, earlier in the year it promised to break up the electricity gentailers, three of which are majority government-owned. Second, it now wants the Crown to help underwrite new resource exploration.

NZ First is far from alone in searching for solutions. The Government, led by the National Party, has committed to building a multibillion-dollar LNG import terminal to help smooth the decline in New Zealand’s domestic gas reserves and provide feedstock for heavy industry. National has also announced a solar financing scheme allowing councils to fund the upfront cost of household solar installations, with repayments spread through rates over time.

The Green Party this week also unveiled a detailed proposal for a publicly-owned energy company, Kiwipower, to invest in pumped hydro, geothermal generation and batteries to provide clean firming capacity for intermittent renewable generation such as wind and solar. The Greens propose funding it through their planned wealth tax.

Labour has yet to release its broader energy policy, although it too has proposed a solar scheme targeted at lower-income households. In February, the Opportunity Party released its “Abundant Energy” policy. ACT and Te Pāti Māori’s energy-security policies will also be keenly awaited, reflecting demand by voters for solutions at both a national and household level.

Since Marsden Point closed in 2022, New Zealand has imported all of its refined transport fuels, including petrol, diesel and jet fuel. In that respect it is far from unusual; most countries - 74% according to Ember, a global energy think-tank - are net fossil fuel importers.

The Iranian conflict and the disruption to shipping through the Strait of Hormuz triggered a spike in oil prices. Although that has since eased, it revived questions that have been simmering since Covid-19 about the resilience of the just-in-time supply chains on which the global economy has increasingly relied. That supply chain model delivered enormous efficiencies, and flourished during an era of relatively stable geopolitics, expanding trade and China’s entry into the World Trade Organisation.

But, like Covid-19 before it, events in the Strait of Hormuz have highlighted the trade-offs. Lean inventories and dependence on imported fuel mean international disruptions quickly flow through to households and businesses. Yet, even if New Zealand refined its own fuel, it would still need to import crude oil and, absent heavy-handed government intervention, fuel prices would continue to reflect international markets.

Nevertheless, many New Zealanders are seeking to insulate themselves from these global shocks. Uptake of electric and hybrid vehicles continues to grow, households are investing in solar panels and businesses are improving energy efficiency. At the same time, a tangle of regulation, perverse incentives and policy uncertainty in the electricity market, combined with years of underinvestment in new generation and firming capacity, has contributed to rising prices.

The steady electrification of the economy - particularly in households, transport and small businesses - will require substantially more electricity generation. Without it, coal-fired generation at the margins and demand spikes during peak periods will continue to push prices higher.

It should hardly need saying, but few things underpin a prosperous economy more effectively than abundant, affordable energy delivered within a stable regulatory framework. Increasingly, that must also occur in a carbon-constrained world. Yet successive governments have all too often tied themselves in knots over energy policy, failing to deliver what should be one of the most fundamental objectives of any modern economy.

The Post is thus encouraged that a serious debate appears to be under way on these important matters.

Voters should judge parties less on slogans than on whether their policies can achieve the difficult but essential task of providing abundant, affordable and reliable energy while continuing to reduce emissions. That is one of the defining economic challenges facing New Zealand, and it deserves to be one of the defining debates of this election campaign.