New Zealand’s 2026 election is shaping up around one defining issue: Cost of Living. The argument is simple — The biggest factor influencing the cost of living is the huge increase in energy prices. Yes it is the Iranian War, but it is also that the last Labour Government “castrated” the New Zealand economy with Jacinda Ardern’s ban on oil and gas exploration.
New Zealand’s prosperity was built not just on agriculture,
but also on cheap, abundant electricity generated from hydro power.
For decades, affordable energy underpinned industry, exports, wages and living standards. However, that model is now under pressure as gas reserves decline, electricity demand rises, and hydro storage becomes increasingly vulnerable in dry years.
Current political responses lack realism. Wind and solar can help, but cannot fully guarantee supply during peak winter demand. Breaking up electricity companies or subsidising power bills does not create more generation.
My major criticism is based on Labour’s 2018 offshore oil and gas exploration ban, described as a pivotal decision that reduced future energy security without a credible replacement strategy.
Jacinda Ardern’s oil & gas ban has done
irreversable damage to the New Zealand economy.
While the current National-led Government has repealed the exploration ban, it has yet to make energy abundance central to its economic growth agenda. As gas availability declines, demand for electricity is rising sharply. Population growth, electric vehicles, decarbonisation and AI data centres all require more power. Our system has a structural weakness. Hydro dominates. In dry years, the lakes do not fill. Without gas, New Zealanders face shortages.
The responses are political statements, not grounded in reality. Labour says renewables are the answer. Wind and solar will help, but they cannot be relied on to produce electricity on a cold, still winter night when the lakes are low.
The core political choice presented is stark: pursue abundant, reliable and affordable energy to support economic growth and living standards — or accept a future of constrained supply, higher prices and weaker competitiveness.
The bottom line is that abundant energy is needed for growth and a high standard of living. This country has to choose - voters must understand what was at stake. On one side (National), a future of abundant, reliable, affordable energy — the foundation of high wages, competitive exports and rising living standards. On the other hand (Labour & the Greens), a future of managed scarcity — constrained supply, higher prices and declining competitiveness.
“No country ever became wealthier
by making energy scarcer.”
Key Takeaways
The US, Japan, and OECD Europe are the next-largest holders, reflecting decades of preparation for major oil supply shocks.
New Zealand sits near the bottom of the OECD for both oil inventory resilience and hydrocarbon self-sufficiency. While IEA members are required to hold emergency oil stocks equivalent to 90 days of net imports, New Zealand relies heavily on “ticket” arrangements (offshore contractual reserves) rather than large physical domestic stockpiles.
The closure of the Marsden Point refinery and declining Taranaki oil and gas production have materially weakened New Zealand’s energy security position.
New Zealand’s domestic oil production now covers only about 12% of oil demand, while gas reserves are also declining sharply. The country is expected to begin LNG imports from 2027, ending decades of gas self-sufficiency.
This leaves New Zealand unusually exposed within the OECD to major global supply disruptions, shipping interruptions, or geopolitical shocks affecting refined fuel imports.
“No country ever became wealthier
by making energy scarcer.”
Key Takeaways
The US, Japan, and OECD Europe are the next-largest holders, reflecting decades of preparation for major oil supply shocks.
New Zealand sits near the bottom of the OECD for both oil inventory resilience and hydrocarbon self-sufficiency. While IEA members are required to hold emergency oil stocks equivalent to 90 days of net imports, New Zealand relies heavily on “ticket” arrangements (offshore contractual reserves) rather than large physical domestic stockpiles.
The closure of the Marsden Point refinery and declining Taranaki oil and gas production have materially weakened New Zealand’s energy security position.
New Zealand’s domestic oil production now covers only about 12% of oil demand, while gas reserves are also declining sharply.
The country is expected to begin LNG imports from 2027, ending decades of gas self-sufficiency.
This leaves New Zealand unusually exposed within the OECD to major global supply disruptions, shipping interruptions, or geopolitical shocks affecting refined fuel imports.
“Reliable, affordable energy is the foundation
of every advanced economy.”
Fatih Birol (Executive Director of International Energy Agency)
