Prime Minister Christopher Luxon has written to Labour leader Chris Hipkins urging him to commit his party to supporting offshore exploration for natural gas for at least the next 10 years, in an effort to achieve a “credible, bipartisan approach”.
But Hipkins has called it a “political stunt rather than a genuine attempt at building bipartisan consensus”.
The letter, obtained exclusively by the Herald, includes a warning from Luxon that the possibility of a future Labour Government reinstating a ban on offshore gas exploration may “pose an insurmountable barrier for some investors”.
“You have said previously that, if elected, Labour will not spend its time ‘pausing, cancelling, and reviewing everything’,” Luxon wrote to Hipkins on Monday afternoon. “But bipartisanship must be more than a political slogan.
“I am writing to seek a commitment from the Labour Party to support offshore exploration for natural gas for at least the next 10 years.”
Labour has said it will bring the ban back for new exploration, with its finance spokeswoman last week calling it just a “small part of the equation” when it comes to energy.
Hipkins was critical of the letter getting out publicly so soon after he personally received it and shortly before the Government is due to announce energy market reforms, which he said “they have neither consulted or even discussed with the Opposition”.
“It’s clear this is a political stunt rather than a genuine attempt at building bipartisan consensus,” he told the Herald.
“In keeping with his Government’s well-established approach, Christopher Luxon is trying to get his blame in early for what is likely to be another failure to deliver by his Government.
“New Zealand hasn’t had a significant new discovery of gas for over 20 years. Rather than doubling down on past failure, we should be focused on developing renewable energy, which is cheap and abundant.”
Energy is expected to be in the spotlight this week as the Government prepares to unveil its “significant but surgical” response to a recent review of the electricity sector.
It’s become a hot political topic as polling shows increasing concern from New Zealanders about their power bill and some of the country’s top business leaders say the security of energy supply is among their top issues.
The coalition’s reversal of the ban on new offshore gas exploration was intended to address a lack of confidence by investors in the sector and shore up supply. However, critics argue any new exploration may not lead to much gas being found, and if it is, it could take years to come into production.
Gas reserves have been depleting quicker than predicted, with Ministry of Business, Innovation and Employment (MBIE) data showing that, as of January 1, 2025, reserves had reduced 27% compared to last year.
A March briefing to ministers said domestic gas supply “is not adequate to meet demand and reserves are falling faster than anticipated”. It said this was primarily down to a “significant negative perception of the risk of investing” in New Zealand’s petroleum sector, as well as “poor drilling results in our ageing gas fields”.
In his letter, Luxon said New Zealanders had for decades prospered “thanks to an economic backdrop of abundant, affordable energy”.
“But with existing gas reserves falling, New Zealand is in the unenviable position of importing vast quantities of coal to keep the lights on. And with prices rising, manufacturers in regional New Zealand are being forced to contemplate their future, putting jobs and livelihoods at risk.”
He said he was “hopeful” the recent reversal of the ban on new offshore gas exploration would lead to additional reserves of gas being found in the years to come, “ensuring a secure supply of fuel to support our energy transition”.
Luxon said that under “even the most ambitious plans for New Zealand’s renewable transition, a secure supply of fuel remains a cornerstone of our energy landscape – underpinning stability and affordability for families and businesses alike”.
“Securing that supply is a significant issue that deserves a credible, bipartisan approach – ensuring the political certainty necessary to achieve the investment New Zealand needs.”
National and Labour have been calling for more bipartisanship, including on infrastructure. However, both parties have also been critical of each other’s commitment to that.
Hipkins told the Herald on Monday night that bipartisanship “is about working together on solutions to our country’s biggest problems”.
“We’ve offered to work with National on RMA, infrastructure, housing reform and just today, supported their plans to look at the standards for earthquake-prone buildings.
“But we will not sell out future generations of New Zealanders who expect us to tackle the challenge of climate change just to score cheap political points.”
During last week’s Mood of the Boardroom debate, Labour finance spokeswoman Barbara Edmonds said gas exploration was “only a small part of the equation”, confirming the ban on new exploration would be back under her party.
“There is a wider part to the energy strategy that is needed. We want to work with the Government on the energy strategy,” said Edmonds, adding that it took a long period of time before any gas would come into operation.
Finance Minister Nicola Willis said Edmonds’ comments didn’t reflect “real bipartisanship” and the sector had called for the Government to address fuel supply issues.
“It would give huge certainty to the country if Labour were able to say, of course, pragmatically, a bit of gas exploration is needed for energy policy certainty.”
Jamie Ensor is a senior political reporter in the NZ Herald press gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist this year for Political Journalist of the Year at the Voyager Media Awards.