Why the government’s LNG terminal is the wrong decision for Aotearoa.
Aotearoa can and should be powered by NZ-owned, cheap and clean energy like wind and solar – not dirty imported fossil fuels.
Fossil fuels like LNG are a dead end. They’re driving high power prices and fuelling the climate crisis behind the floods, storms and droughts we’re already living through.
Every additional tonne of fossil fuel burned makes climate change worse. In just six weeks, eight severe weather states of emergency have been declared. Communities are still cleaning up. Families are facing rising insurance costs. Power bills are already stretched.
Yet instead of accelerating affordable renewable energy, the Luxon Government is pushing ahead with a multi-billion-dollar LNG import terminal.
And they want us to pay for it. The plan is to slap a $2-$4 per megawatt hour tax on electricity – which will end up on the power bills of households and businesses.
You don’t make electricity cheaper by taxing power bills to fund fossil fuels.
Even the Government’s own commissioned Frontier Economics review warned that building an LNG terminal just to manage occasional “dry year” risk “would make no economic sense”.
This is a clear political choice – to double down on fossil fuel subsidies that will enrich power companies and overseas gas giants, at the expense of Kiwi families and the climate.
And it’s the wrong choice.
What exactly is an LNG terminal and who is going to pay for it?
New Zealand doesn’t currently import LNG. This Government wants us to start.
LNG – liquefied “natural” gas – is fossil gas cooled to around -162°C so it can be shipped across oceans. To use it here, we’d need a specialised import facility – likely in Taranaki – to unload tankers, store the LNG, regasify it and pump it into pipelines.
It’s complex. And expensive.
The Government is talking about costs “north of $1 billion’, with lifetime costs potentially reaching $2.7 billion over 15 years. That’s already a huge price tag – but almost certainly an underestimate because large complex projects like this rarely come in on budget.
That’s just the cost of building the terminal itself.
Imported LNG is expensive – it currently costs nearly double the domestic gas price. Plus this new terminal would expose New Zealand to an extremely volatile international gas market – the same market that saw massive price spikes after Russia invaded Ukraine.
There is clear evidence that exposing us to this market is a bad idea. Once Eastern Australia was exposed to international gas prices the cost of gas electricity generation tripled.
Then there’s the way the New Zealand’s energy market is rigged in favour of profiteering power companies. As soon as an expensive fossil fuel starts getting burnt, the power companies bump the prices up across the board and charge fossil-fuel-level prices even when the electricity cost them almost nothing to make because it came from hydro dams.
Dams that we the taxpayers built and previous governments privatised and sold off to those same power companies now raking in record profits.
We Don’t Need LNG
We do need to change the energy system in New Zealand. But we do not need LNG.
A 2023 Concept Consulting report found onshore gas reserves alone can supply all needs out to 2050 if just one company – Methanex – closed. Methanex uses up to a half of the country’s gas and it doesn’t even use it for energy. It makes methanol out of it and exports it offshore.
Methanex paid no tax in New Zealand for the last two years but it still found the cash to pay a $70 million dividend to its Vancouver-based parent company in 2025.
So, Luxon wants Kiwi families to pay a new tax on their power bills to build an LNG terminal that we don’t need, so that Methanex, a company contributing zero dollars in tax themselves, can keep sending their profits offshore.
We actually don’t need any new fossil fuels to maintain our energy security out to 2050. That was the clear finding from a 2024 MBIE report which also confirmed wind and solar are the cheapest sources of new electricity generation.
For $2.5 billion, we could roll out enough rooftop solar and hot water heat pumps to produce/save the same amount of electricity as the entire LNG terminal. And it would save households a whopping $6.8 billion on their power bills over 15 years.
What about the ‘dry year risk’?
The ‘dry-year risk’ happens when the hydro lakes are low due to a combination of a lack of rainfall and too much power being drawn from the dams.
Building lots of new renewables helps fix this, because every solar panel and windmill that goes up – means less energy is needed from hydro and more water stays in the dams. That along with increased battery storage, grid upgrade, and energy-efficient homes and water heating to reduce the peaks would help solve the ‘dry year’ risk.
The previous government had several initiatives in place to start getting the country off gas. But the Luxon Government has dismantled them and this has made the dry year risk issue worse, not better: Since taking power this government have:
- Scrapped the industry decarbonisation fund (GIDI);
- Ditched the NZ Battery Project;
- Stopped the Gas Transition Plan;
- Introduced $200m in oil and gas exploration subsidies
A homegrown clean energy future is possible
True energy security means investing in infrastructure that will serve us for decades without locking in climate pollution.
We deserve affordable power bills and a stable climate. We deserve investment in clean, homegrown energy that keeps money in our communities instead of sending it offshore. We deserve leadership that plans for the future, instead of staying locked in the past.
Aotearoa has a long history of people standing up to short-sighted and damaging ideas like this terminal – and winning. When enough people speak up and take action, politicians change
It’s time to take back control of our power bills and protect the climate. We’re not going to let this government lock us into decades more fossil fuels without a fight.
Join us. Sign the petition. Tell the Government to drop the LNG terminal and invest in clean energy instead.
We call on the Luxon Govt to embrace a Clean Energy Future for NZ by investing in solar and wind generation, and rejecting new fossil fuel generation, new oil and gas exploration and all plans for a new fossil gas import facility.
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