New Zealand is confronting the challenge of dwindling natural gas reserves, with less than a decade's worth of supply remaining in its existing fields. The Ministry of Business, Innovation and Employment revealed that the nation's proven and probable gas reserves decreased by 17 percent to 1,635 petajoules by the end of 2022. This decline is attributed to gas consumption of 145 petajoules last year and revisions to reserve estimates.

For the first time, estimated gas reserves have dropped below a 10-year supply based on the average gas usage of 200 petajoules over the past decade. Although gas consumption is currently lower and decreasing, production is projected to fall below 2022 gas usage by 2027. This raises concerns about the security of New Zealand's future energy supply.

To reduce reliance on fossil fuels, New Zealand has been incentivizing the adoption of electric vehicles and the replacement of coal-fired boilers. The government implemented a ban on new offshore oil and gas exploration in 2018 and aims for electricity generation to be 100 percent renewable by 2030.

Currently, more than 80 percent of New Zealand's power comes from hydro, wind, and geothermal sources, with the remaining portion largely dependent on gas-fired generation. Gas plays a crucial role in ensuring energy security during periods of low lake storage levels or unfavorable weather conditions for renewable sources.

John Carnegie, the chief executive of Energy Resources Aotearoa, an organization representing gas explorers and users, emphasized the importance of gas in the country's energy mix. He raised concerns about the lack of a scalable and affordable alternative renewable energy source to fill the projected gap that could emerge in less than eight years.

The Ministry of Business, Innovation and Employment attributed the decline in gas usage in 2022 to factors such as the mothballing of Methanex Corp.'s methanol plant, the closure of the Marsden Point oil refinery, and a decrease in gas consumption for electricity generation due to favorable hydro conditions.

The ministry suggested that future reserve assessments could be improved by converting contingent reserves into proven reserves. However, it also noted a significant 41 percent drop in contingent reserves in 2022, further highlighting the challenges faced in maintaining gas supply in New Zealand.