In the early months of the new Luxon-led Coalition Government, Simeon Brown, Minister of Energy, cancelled two critical policies to reduce demand for fossil gas. These policies were designed to manage the transition away from fossil gas, which was facing constrained supply and was climate polluting. In the two years following the cancellation of the policies to manage the gas decline, gas shortages drove uncontrolled price spikes causing mayhem in the manufacturing sector.
The first policy to go, in December 2023, was the scheme which provided financial support for businesses to switch from fossil fuels to clean energy – the Government Investment in Decarbonising Industry (GIDI). Then in March 2024 Brown cancelled the Gas Transition Plan (GTP), a plan to reduce fossil gas use over time.
The decision to cancel these two policies would prove to be a monumental mistake.
The reversal – too late
After more than two years of energy policy chaos and industry closures, in May 2026 Simeon Brown was forced to into a humiliating reversal and introduced a Gas Transition Loan Guarantee Scheme, a half-baked replacement for the policies he had earlier cancelled.
But for many businesses driven into bankruptcy by chaotic energy policy and high gas prices, it was too late. Gas demand had been reduced, not as part of a managed transition, but through a string of business failures, unemployed workers and families living on welfare.
And while the whole Luxon Cabinet carries the responsibility for the energy policy crisis rippling across the nation, Brown, as the Minister of Energy, bears particular responsibility. Brown embraced his portfolio as a partisan of the fossil fuel industry, whose lobbyists celebrated his ending of the policies to reduce fossil fuel use.
Brown blamed the gas shortages in 2024 on the 2018 decision to stop issuing new offshore oil and gas exploration permits. Yet oil and gas exploration is a gamble, and even if a large gas field is discovered, it takes ten to fifteen years or more for an exploration permit to result in new gas in the pipes. The last major new gas reserve discovered was Pohokura in 2000, in spite of intensive exploration efforts.
The problem was not that fossil gas was in decline, the problem was that Brown cancelled the plan to manage the decline in a controlled manner. The result was chaotic, as businesses scrambled to access increasingly expensive gas in short supply, and many of them simply folded.
The Government gambled the country’s energy system on buying a Lotto ticket; a Lotto ticket that, in the highly unlikely event that it won, could only be cashed in 10 to 15 years time. It was a reckless gamble based on magical thinking, a bias towards fossil fuels, and total disregard for climate change.
It didn’t have to be this way
The Gas Transition Plan (GTP) was a Government led process, agreed to by Cabinet at the end of 2021, to create an orderly pathway to reduce and ultimately eliminate fossil gas use. The basic idea was that businesses that could be moved easily to non-gas energy sources would be supported to do so, and this would leave more gas for those who needed a longer transition pathway until they too were moved off polluting gas.
The GTP was driven by two basic realities: the need to cut greenhouse emissions due to climate change; and shrinking gas reserves, as no significant new gas fields had been found in 20 years of exploration.
The Gas Transition Plan was the corollary of the pivotal 2018 decision to stop issuing new offshore oil and gas exploration permits. That decision needs to be seen through two dimensions: climate and energy. From a climate perspective, Greenpeace and others ran a long and ultimately successful campaign to end offshore oil and gas exploration for climate change and pollution reasons. But looked at from an energy policy perspective, the 2018 decision forced the energy system to directly confront the impending gas shortage.
Before 2018, the fruitless search for new gas had dragged on for years and the New Zealand energy system was sleepwalking towards crisis. Existing reserves ran down, no new reserves were found, but the search for new reserves and hope of finding them blocked any serious efforts to move the energy system away from fossil gas dependence.
Once the exploration ban came into place in 2018, the reliance on magical thinking had to come to an end – there was not going to be another massive Maui gas field. It was an inflection point and the Government Investment in Decarbonising Industry fund and the Gas Transition Plan became part of mapping out a new pathway.
A critical part of the transition was to support those businesses which could immediately start reducing their use of fossil gas. The GIDI fund, established in 2020, subsidised new investments that replaced gas and coal with electricity and biomass. Collectively GIDI-funded projects reduced annual gas use by 3 to 5 PJ, or about 3% to 5% of 2025 annual gas usage, while also slashing emissions by 1.4m tonnes CO2e. The Fund had only committed a third of its budget when it was closed to new projects by the Luxon Government in December 2023.
Had the GIDI and the GTP continued, we could have assisted more businesses both directly, by helping them transition off fossil gas, but also indirectly by reducing demand and hence controlling the spike in fossil gas prices for those still dependent.
Simeon Brown and the rest of the government, living in a fossil fuel parallel universe, imagined that if they cancelled the GIDI, reversed the exploration ban, and stopped the Gas Transition Plan, they could redirect the energy system back to fossil fuels. But the laws of physics said otherwise and exposed industries and workers went to the wall because of Brown.
And now many of those energy exposed manufacturing businesses have closed up shop and it will be hard to get them back. Brown is pressing ahead with his Liquified Natural Gas import terminal but as the OECD has warned, this will only make New Zealand dependent on expensive and polluting global fossil fuels, linking the price of energy in New Zealand to swings in global oil and gas prices. One fools errand after another, wasting billions of our money to pointlessly subsidise fossil fuels – in the middle of a climate disaster.
An unstoppable transition
The positive side of this story is that, in spite of all the nonsense policy coming out of the current government, the New Zealand energy system has passed an inflexion point because of the 2018 oil and gas exploration ban. Outside of Simeon Brown’s magical thinking, no one expects a resurgence of fossil gas. There is little interest in new exploration, in spite of the current government overturning the ban and offering $200m subsidies to oil companies.
On the other hand new renewable generation is going gangbusters as, starting in 2021, we saw a lot of new wind and then utility solar and batteries surged under the Covid fast process (the Covid fast track retained environmental guardrails unlike the Luxon fast track that removed them). There is more coming down the line through the current fast track – though most of it would have been easily consented under normal RMA processes.
Brown can’t win with his efforts to place fossil gas back at the centre of the energy system. He is against the laws of physics and economics and he is against the climate movement. He and his fossil fuel allies will keep trying of course, because.. well.. money.
A second inflection point
We have reached a new inflection point in the New Zealand energy system, once again driven by the green movement.
The first inflection point was back in 2004/5 when Mighty River Power tried to set up a new coal fired power plant at Marsden B near Whangarei. Greenpeace and others ran a terrific campaign to stop it. They occupied the site for nine days in February 2005, faced legal action from the company and threats of massive debilitating costs, took legal action against the company, activists were arrested and convicted. But they won and Marsden B coal plant was never built.
After being thwarted by Greenpeace and the wider green movement at Marsden B, Mighty River turned their attention to geothermal instead. Over the course of the following decade they spent a billion on new geothermal generation, effectively doubling the amount of geothermal generation in NZ. The company was redirected by the green movement away from fossil fuels – they closed their last fossil fuel plant in 2015. And now the renamed Mercury Energy only runs wind, geothermal and hydro generation. The company that wanted to be a new coal generator is now renewables only – and that was because of people like us.
If you want to understand how civil society, activism, and groups like Greenpeace fundamentally change the course of history, this is a great example.
But now we have another inflection point driven by civil society activism.
The Greenpeace led campaign to end new offshore oil and gas exploration, that was finally successful in 2018, has driven the turn away from fossil gas. It’s true that fossil gas in New Zealand was in trouble anyway, but the ban on new exploration permits closed the door to a fossil gas future. It’s true that the current government has produced a torrent of confusion and disinformation during this transition period. It’s depressingly true the current government has cost thousands of people their jobs, completely unnecessarily, by having a chaotic set of policies.
But fossil gas isn’t coming back. The ban on new offshore oil and gas exploration permits was the inflection point and we are now on the other side, as messy as it is. Fossil fuels are being replaced by low carbon, low cost competitors. New solar, wind, and geothermal generation combined with storage, efficiency, and demand side management are leaving fossil fuels behind. The decarbonisation of transport is coming at us fast too.
And get this – because our movement defeated the attempt to mine the seafloor off the south Taranaki coast, we now have the possibility of large scale base load offshore wind generation. It still needs to go through a normal consenting process but if seabed mining had progressed we would never have had the choice as seabed mining is incompatible with offshore wind gneration.
And friends, we did that. You, me and everyone who laid their hand on the tiller of history to turn the ship towards life not death.
Still more to be done
But of course every tonne of greenhouse pollution counts, whether in the energy system or the food production system. As events in Nepal remind us, we are in the age of consequences and need to move as fast as possible to cut climate pollution.
