Luxon Calls OECD Warning On Government's LNG Plans 'Load Of Rubbish'

Tuesday, 12 May 2026, 3:17 pm
Article: RNZ

Craig McCulloch, Deputy Political Editor

Prime Minister Christopher Luxon has dismissed the OECD's warnings about the government's LNG plans as "a load of rubbish" and says he remains "very interested" in setting up an import facility.

In its annual economic survey of New Zealand published last week, the Organisation for Economic Co-operation and Development (OECD) said the LNG proposal risked locking in fossil dependence and instead recommended investment in non-gas generation like biomass or pumped hydro.

Speaking to reporters at Parliament on Tuesday, Luxon said he was "not interested" in the OECD's findings or recommendations.

"The report's a load of rubbish," he said.

Luxon said the coalition government was not going to tolerate "bumper sticker" policies or the sort of "kumbaya and mush" that Labour pursued while it was in power.

"We're the ones that are dealing with a failed energy policy from the last administration."

In February, the government announced a "definitive decision" to build a liquefied natural gas (LNG) import facility in Taranaki, designed to reduce price spikes in dry years and the associated risk premium built into power bills. The whole-of-life cost was to be spread across all electricity users through a new levy.

Luxon later softened his rhetoric, after conflict flared up in the Middle East, and said no final decisions had been made on the proposal: "If it doesn't stack up, we won't be doing it."

On Tuesday, however, Luxon said the government remained "very interested" in the plan.

"We're continuing our procurement process. We said that we'd come back in the middle of the year having looked at the business case for it. We are very interested in it," he said. "It's just making sure the commercials stack up."

Luxon said the government was pursuing an "and-and-and" strategy by also encouraging a "renewables boom" and strategic reserves in Huntly and Marsden Point.

Speaking separately, Energy Minister Simeon Brown said the government would take into account the situation in the Middle East when making final decisions on its plan of action.

But, asked about the OECD's findings, Brown said the government had considered all the alternatives and had identified the LNG facility as its "preferred option".

He then turned his sights on the Labour Party, accusing its leader Chris Hipkins of being "the man without a plan". He said Labour's Lake Onslow hydro proposal was a "boondoggle" which would not have delivered any energy till 2037.

"We cannot stand by and wait till 2037 to resolve this issue. It needs to be resolved much faster than that," Brown said.

"Look, there will be alternatives that companies continue to invest in - more renewable energy generation, geothermal and others. But we need to solve the dry year risk."

Hipkins told reporters the LNG import facility was a "gold-plated bad idea" which would cost New Zealanders more through a new gas tax.

"It's going to cost every New Zealand household more money in their power bills. It's going to raise the price of power in New Zealand, and it's going to make us more dependent on highly volatile fossil fuels."

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