27/02/2026
Fact 1. New Zealandâs natural gas reserves are declining faster than expected
This is true: Annual production of natural gas from the Taranaki fields dropped by almost half from 2020 to 2025. This was faster than expected and estimates of the total volume of gas remaining have been reduced significantly. But that does not mean natural gas supply is grinding to a halt.
While some older fields are reaching end-of-life, some younger fields hold significant gas â for example the Turangi field, which alone currently produces almost three times as much natural gas each year as is consumed by all residential users.
And current annual production of natural gas still provides a massive amount of energy â equivalent to the total annual energy used by nearly two million households (thatâs electricity, gas and petrol combined).
Fact 2. New Zealandâs economy will continue to rely on natural gas in the medium term
Natural gas is an important part of our current energy mix. It makes up 14 percent of all energy used in New Zealand, and 28 percent of all energy used by industry.
Our economy needs to transition to lower-carbon energy but during the transition, natural gas will continue to be critical for electricity generation â especially to back-up renewable generation (for when the wind doesnât blow, the sun doesnât shine, or the hydro lakes are low). Currently, 26 percent of annual natural gas production is used to generate electricity. Natural gas will also continue to be important for industrial users who cannot easily switch to electricity or bioenergy.
And as noted by the Commerce Commission, homes and businesses are expected to still be using natural gas for at least the next two decades.
Fact 3. Natural Gas and LPG are different -there are no worries about LPG supply
Although they are used the same way, natural gas is a different gas from LPG (liquefied petroleum gas), and there is no New Zealand shortage of LPG. All the recent discussion about âgasâ shortage, has been discussion about the decline of our natural gas fields.
LPG, delivered in cylinders, is used by around 302,000 customers in New Zealand, 280,000 of which are residential. This number has grown by about 23 percent since 2020.
Natural gas is piped to around 305,000 customers, in the North Island (only), 290,000 of which are residential. This number has grown by 3.7 percent since 2020.
Fact 4. Residential consumers use only around six percent of natural gas production
Residential use of natural gas is small: it accounts for just six percent of total production. Commercial (non-industrial) usage is just slightly higher at around 6.6 percent.
However, residential and small business customers are greatly valued by the gas sector â they make up about 95 percent of the sectorâs customers, and they provide a steady, predictable energy demand.
Fact 5. Renewable gases could gradually replace natural gas for household use
Renewable, low or no-carbon gases, are being developed in New Zealand. Renewable gases include biogas and hydrogen.
Biogas is produced from organic waste and contains biomethane â which is identical to natural gas. Biogas production has the significant environmental benefit of capturing greenhouse gases that would otherwise escape into the atmosphere from the landfill sites, composting, etc.
The government is actively encouraging biogas production in New Zealand. This is already beginning to happen.
The production and use of biogas is much more advanced in many countries around the world than it is in New Zealand. Denmark, for example, has already replaced over 40 percent of its natural gas use with biogas, and is planning to increase this to 100 percent by 2030.
Fact 6. No current or proposed ban on household gas connections or appliances
There is no ban on new natural gas/LPG connections, or the purchase of gas appliances.
Both the current government and the previous Labour-led government have explicitly rejected suggestions for banning either new gas connections and/or gas appliances.
Fact 7. LNG (liquified natural gas) is being considered as a back-up for local natural gas
As New Zealandâs own supply of natural gas tightens, the government is currently considering the feasibility of importing liquified natural gas into New Zealand, primarily as a backup for hydro lake âdry yearsâ. This would effectively boost our natural gas supplies, and would likely be used to ensure supply for electricity generation and/or large industrial use.
So, while it is a fact that total natural gas production in New Zealand is declining more rapidly than the sector expected â the fact is that both the government and regulators expect it to be around for at least another 20 years.
And happily, there is no shortage of LPG. Many domestic gas appliances can be adjusted to use either LPG or natural gas (including renewable gas such as biomethane).
