New Zealand’s natural gas reserves are depleting faster than previously forecast, posing challenges for households relying on it.
According to the Ministry of Business, Innovation and Employment’s earlier projections, annual gas production would drop below 100 petajoules (PJ) by 2029. However, updated forecasts now suggest this threshold will be reached as soon as next year.
Powerswitch general manager Paul Fuge explained that residential gas accounts for just around 4% of the nation’s total gas consumption. Therefore, household gas supplies are unlikely to be depleted, although he noted that prices are expected to rise gradually over time.
“As more households disconnect from gas, the cost of maintaining the gas infrastructure is spread across fewer users, pushing prices up further and encouraging even more to leave,” he said.
“Lower-income households and renters may be left behind on the gas network, facing rising costs, while wealthier households can afford to transit.”
Fuge also mentioned that 46% of households use some form of gas and anticipated an average gas price increase of 10% this year.
“Retailers cite rising wholesale and network costs as the main drivers of price increases. A significant factor is higher gas network charges – the cost of transporting gas to homes – which typically account for about a third of a household’s bill.”
Nova and Megatel, Fuge said, were the only providers offering gas as the only product, while other companies required customers to subscribe to a combined gas and electricity package. This means gas customers might face restricted options and be unable to take advantage of more affordable or innovative electricity plans and providers.
GasNZ chief executive Jeffrey Clarke stated that there will be sufficient gas supply for both household and commercial users for many years to come.
“To put a 100PJ supply into perspective, about 290,000 homes are connected to natural gas in the North Island, and they use just 7.3PJ annually.”
He said that the estimated untapped potential for biogas production from organic waste is 9.5 PJ in the North Island and 9.1 PJ in the South Island.
“With sufficient investment to expedite the development of the renewable gas market in New Zealand, there’s every expectation that all residential natural gas consumption could be replaced by renewable biogas over this timeframe,” Clarke said.