The Crown Minerals (Petroleum) Amendment Bill has passed its third reading in Parliament.
New offshore oil and gas exploration has now officially been banned, while onshore exploration will be limited to Taranaki until at least 2020.
Green Party Co-leader James Shaw said: “This is a significant day for our transformation away from fossil fuels, and towards a clean, green, low carbon future.
“This Bill is an essential first step in winding down offshore exploration for new sources of fossil fuels.”
Meanwhile National's Energy and Resources Spokesperson Jonathan Young reiterated his commitment to revoking the ban if elected into government, citing the need for gas in the transition to a low carbon economy.
Questions remain unanswered
Some hours before the Bill was passed, debate between Energy and Resources Minister Megan Woods and Young heated up.
Woods was unable to specifically tell Young how many megawatts of new renewable generation would be needed to reliably replace coal, gas, and diesel generation.
Instead she said: “We have hundreds of megawatts of consented but not yet built renewable energy.
“We also know that technological change to store the roughly 6 terawatts of surplus energy we produce in summer, that we can use in winter, is coming, not just through battery power but through things like molten salt, like hydrogen, and a range of other storage facilities.”
Woods couldn’t tell Young how many megawatts of new renewable generation is being built in the next 12 months.
She pointed to Genesis Energy in recent weeks committing to building a "100-megawatt" wind farm in Taranaki, then said it was over to “individual generators” to respond to the signals the government is sending around the demand for more renewable energy.
Woods was again challenged by Young, who said: “Considering that wind generation over the last 13 weeks was just 25% of its installed capacity, what level of investment would be required for wind energy to meet the requirements that she is expecting, particularly around the new Waverley Wind Farm, when she is quoting 100 megawatts?”
Woods responded acknowledging wind energy on its own isn’t sufficient to provide the security of supply.
She then again pointed out: “To ask that question without also including what needs to be done in terms of storage capacity misses the opportunities that sit in front of this country.”
The stand off between Woods and Young followed one on Tuesday when the electricity market was essentially used as a political football.
Wholesale electricity prices have sky-rocketed over the past month in part due to hydro storage levels at New Zealand’s major lake and river systems falling to 62% of the historical average for this time of the year, and in part due to an outage at the country’s largest gas field, Pohokura.
While Young pointed to the situation to highlight the need for gas, Woods said: “What recent events are showing us is what a precarious security of supply situation we're in when we need to rely on gas for peaking.
“That's why this Government is intent on building a resilient energy system with more resilient forms of renewable energy.”
Jubilation and disappointment
Greenpeace responded to the legislation passing, saying: “The science is very clear - we only have 10 years to halve our use of oil, gas, and coal or face the displacement of millions of people, catastrophic sea level rise, more extreme weather, and mass species extinction.
“That’s going to mean massive change - not business as usual - and we need to be prepared to take bold steps like this to protect humanity and the planet.”
The Petroleum, Exploration and Production Association of New Zealand said: "The people most affected by this decision haven’t been listened to and now face real uncertainty.
“The Government’s own advisors say this decision will cost the Crown billions of dollars and will more than likely increase emissions, but it’s the human cost that is most striking…
"Experts warned this move will increase the cost of electricity to New Zealanders but this has been ignored. This is not good news for households struggling with the rising cost of living.
"We need natural gas as a transition fuel towards a lower carbon economy. Turning off the tap when we have nothing concrete to replace it with is dangerous and irresponsible.”