New Zealand’s journey towards a low-emissions future is complex, requiring a delicate balance between sustainability, energy security, and affordability. At the helm of these conversations is John Carnegie, Chief Executive of Energy Resources Aotearoa. Since taking on this role in 2019, Carnegie has witnessed significant changes in the country’s energy landscape, including a sharp reduction in emissions within the oil and gas sector.
In an interview with CarbonWire, he shared insights on the future of energy resources, the ongoing role of natural gas, and the challenges of balancing climate ambitions with energy needs.
Emission Reductions
New Zealand’s oil and gas industry, often at the centre of climate change debates, has seen substantial progress in reducing its carbon footprint. Based on publicly available data, the emissions intensity of the oil and gas sector has significantly decreased, with overall emissions more than halving by 2022. This trend reflects the effectiveness of market mechanisms like New Zealand’s Emissions Trading Scheme (ETS) in encouraging the adoption of low-carbon technologies.
“Through collective commitments like the Energy Resources Sector Net Zero Accord, we’re seeing the industry work together to explore new ways to expand the energy system of the future,” Carnegie noted, citing the sector’s collaborative efforts to meet both climate and energy goals.
New Zealand has been globally recognized for its renewable energy achievements, with around 80% of its electricity generated from renewable sources. However, Carnegie cautioned that political aspirations to lead in climate action must be balanced with the need for affordable and reliable energy. He pointed to the 0.15% contribution of New Zealand to global emissions and emphasized that while the country must participate in global climate solutions, its energy policies should not come at the cost of energy security.
“We’ve seen how policies from the previous Labour-led government, such as restricting natural gas exploration, led to energy price spikes. It’s essential to ensure we take people along on the journey, by balancing energy security, affordability, and sustainability,” Carnegie stressed.
This balance, referred to as the “energy trilemma,” remains at the core of New Zealand’s energy discussions. Carnegie emphasized that natural gas would continue to play an essential role in stabilizing the country’s energy system, especially as it transitions to a more electrified economy.
Role of Natural Gas in New Zealand’s Energy Mix
While renewable energy is central to New Zealand’s long-term vision, Carnegie believes natural gas will remain a critical part of the energy landscape. He explained that natural gas provides the necessary stability to complement the intermittent nature of renewable sources like wind and solar.
“Natural gas will continue to be an enabler of our transition,” he said. “It helps to ensure that as we move toward electrification, we can maintain energy security and affordability.”
In addition to natural gas, Carnegie pointed to new technologies such as carbon capture and storage, and the development of green gases like biomethane and hydrogen, as promising solutions to further reduce emissions. However, he acknowledged that the transition would take time, and that reliance on natural gas would persist for the foreseeable future.
Carnegie also highlighted the importance of collaboration between the energy sector and the government to achieve New Zealand’s low-emissions goals. He referred to the Energy Resources Sector Net Zero Accord as a key platform for this partnership, facilitating industry-driven progress on emissions reductions. According to Carnegie, the sector has made notable strides, including a 90% reduction in carbon emissions from venting and flaring since 2010.
However, the challenges of transitioning the energy sector are not solely technical. Carnegie underscored the need for political stability and bipartisan agreement on energy policy, stressing that the industry needs clear and consistent frameworks to support long-term investment.
“We’ve been advocating for cross-party consensus on energy issues to create a stable policy environment,” he explained. “This would help secure the energy future for all New Zealanders, regardless of political changes.”
Building the Future Workforce
Public perceptions of the environmental impacts of energy production remain a key issue for the sector. Carnegie noted that Energy Resources Aotearoa frequently engages in public debates and consultations to provide an industry perspective on these concerns. While NGOs often dominate the public discourse around energy and climate, Carnegie stressed that an industry voice is also necessary to present a balanced view.
At the same time, Carnegie recognized the need to prepare the workforce for future challenges. The energy sector is undergoing rapid change, and there is an increasing demand for new skills. To address this, Energy Resources Aotearoa has been working with educational institutions and offering programs to develop talent. These efforts include the Energy Sector Industry Skills Action Plan, which focuses on attracting future talent, retaining the existing workforce, and building partnerships with local educational institutions.
“We’re collaborating with schools and the Western Institute of Technology to ensure that New Zealand has the skilled workforce it needs to meet future energy demands,” said Carnegie. Additionally, the organisation has launched programs for younger students to introduce them to science and engineering concepts early on.
Transition to a Low-Emissions Future
Carnegie acknowledged that the energy transition comes with significant challenges. He cited the 2018 ban on new oil and gas exploration permits as an example of a policy that has hindered the sector’s progress. According to Carnegie, the ban has not only harmed investor confidence but also contributed to higher emissions and weakened New Zealand’s energy security.
Looking ahead, Carnegie expressed hope that upcoming legislative changes, including a potential repeal of the exploration ban, would help restore investment confidence in the sector. He also pointed to the fast-tracked energy projects currently in the pipeline as a positive step towards bringing new, low-emission energy sources to market.
Despite the challenges, Carnegie remains optimistic about the future. “Realising our objectives for a balanced, low-emissions energy future will require a strong economy alongside a dependable energy system,” he concluded. “There is no transition without secure and affordable energy.”
As New Zealand continues its journey towards a low-emissions future, the role of natural gas, the development of new technologies, and the importance of collaboration between industry and government will remain central to the country’s energy strategy. While progress has been made, challenges remain in ensuring that the transition is both sustainable and equitable.