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Is the government’s energy strategy a giant leap backwards? By Andy Kenworthy.
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Is the government’s energy strategy a giant leap backwards?

The government’s draft New Zealand Energy Strategy aims to make the development of the oil and coal industries our nation’s number one priority.

Yep, according to our go-ahead government we should cast off the final fig leaf of ‘clean, green New Zealand’ and leap head-first into the oil and coal age, just at the moment when the rest of the sane world is desperately trying to get out of it.

Introducing the plan, Minister of Energy and Resources Gerry Brownlee says, “Most New Zealanders know that we have an abundance of renewable energy resources. We continue to be a world leader in geothermal energy. Our rivers and lakes have long provided clean hydro-electricity. Our wind resources are world class. New Zealanders are exploring how to harness the waves, the tides, and the sun in order to generate power.”

So far so clean and green. But then the emphasis shifts rapidly and firmly into the realm where many see Brownlee reaching out for the forbidden fruit in the Eden he just described.

“What is less well known is that along with our renewable resources, we also have an abundance of petroleum and mineral resources,” he says. “More than 1.2 million square kilometres of our exclusive economic zone are likely to be underlain by sedimentary basins thick enough to generate petroleum. Recent reports put New Zealand’s mineral and coal endowment in the hundreds of billions of dollars.

“For too long now we have not made the most of the wealth hidden in our hills, under the ground, and in our oceans. It is a priority of this government to responsibly develop those resources.”

This is not a one-off. In its Petroleum Action Plan, released in November 2009, the government also states its strategic objective to “ensure New Zealand is a highly attractive global destination for petroleum exploration and production investment” and its intention of “explicitly positioning the government as pro-active and pro-development of petroleum resources”.

Even so, the first time I read this latest strategy I had to double-check the dateline. This is 2010 we are talking about, right, not 1975? I half expected there to be grainy images of Brownlee joining other businessmen smoking cigars on Concorde to illustrate a glamorous use for all our lovely Kiwi crude.

Politics, like comedy, is all about timing. So you have to say it was either ballsy or bananas for the slick operators at the Ministry of Energy and Resources to publish the energy strategy just three months after the spectacular immolation of BPs Deepwater Horizon rig in the Gulf of Mexico.

On the day the strategy was published, July 22, world headlines were liberally coated in scenes showing millions of barrels of oil swirling their way towards hundreds of miles of ineptly defended coastline. This was accompanied by multibilliondollar estimates of how much was about to be wasted attempting to scrub clean endangered turtles and put entire beaches through the washing machine.

Of course the government and the oil industry will assure us it could never happen here. The idea is to welcome the likes of BP as well as the birdwatchers, and hope for the best. New Zealand hasn’t had an oil spill incident since 2002, when the beached cargo ship Jody F Millennium contaminated eight kilometres of beach around Gisborne with just a 25-tonne sprinkling of oil.

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photo: getty images

Looking at computer visualisations of the Gulf of Mexico spill , if this had happened off New Plymouth, where there are currently oil fields, it would have turned the entire coastline from Te Waitere to Wanganui into toxic molasses

But maybe our government doesn’t think we’ve been trying hard enough— because it would seem impossible not to increase the risk if you increase the activity. Looking at computer visualisations of the Gulf of Mexico spill, if this had happened off New Plymouth, where there are currently oil fields, it would have turned the entire coastline from Te Waitere to Wanganui into toxic molasses. That sort of thing could put a fairly serious dent in our $20 billion tourism industry, not to mention the Central West trevally, gurnard and flatfish fisheries, with a total allowable catch of about 1.8 million kilograms of fish a year. It could also see conscious consumers all round the world abandoning the increasing number of Kiwi brands resting on the rickety platform of the nation’s environmental credibility.

On the other hand, the fact that Deepwater Horizon was boring a mile into the Earth to get at the black stuff in the first place is a perfect illustration of how global reserves of easily accessible oil are dwindling. And if New Zealand can start pumping, the government seems to be reasoning, we could be coining it. It would be like strapping a big old outboard motor to New Zealand to help with the government’s stated intention to ‘close the gap’ with Australia.

And with China building hundreds of new coal-fired power stations, it seems our ministry has decided a low-carbon global economy, while increasingly vital for the stability of our climate, still looks like a long shot. Somebody, somewhere is still going to be buying oil and coal in years to come. But can we really pin our national pride on being one of the last fossil-fuel pushers on the block, servicing the dirty junkies who just can’t quit?

Perhaps the most confusing part of the strategy is that reducing energy-related greenhouse-gas emissions is also listed as a priority, albeit way down near the end. The strategy also maintains the previous government’s target of increasing the renewable portion of the nation’s power from its current 73 percent, to 90 percent by 2025. And, despite no firm promises to support cleantech advances, there are some mentions of substituting oil in transport “to some extent” by biofuels and electricity.

Presumably then, like other pushers, we do not intend to get high on our own supply. We don’t need to because we have plenty of the clean stuff available.

As he’s a former woodwork teacher, I am certain Brownlee is amply qualified to handle the complexities of an industrialised nation’s energy supply. And I am sure he has plenty of technical advice for the strategy. But, just in case, I tracked down some other authorities to see what they thought.

Speaking at a recent Science Media Centre briefing, Tim Davin, director of policy at the Institution of Professional Engineers, and associate professor Bob Lloyd, director of energy studies at the University of Otago, both said the strategy’s vision of the future was, at best, unrealistic.

For example, Davin described two approaches from the Electricity Commission for making the growth in renewables happen. One requires almost threequarters of Huntly power station to be shut down and the loss of 500 megawatts of current generation, while the other would shut half of Huntly and close two major gas plants. But he saw nothing in the strategy that gave any hint as to how this might occur.

“On the one hand the government has set a target,” he says. “But on the other hand they are not doing anything to achieve the target.”

Lloyd was even more scathing. “I think it’s a major step back from the past policy,” he says. “The government is trying to increase growth and increase energy consumption. It’s just not going to happen. The priorities are completely round the wrong way. The strategy moves in the direction of assisting oil company profits, not the New Zealand people. It’s clearly partial to vested interests in the fossil fuel industry. It’s completely inadequate for a transition to sustainability.”

I have heard rumours that the S-word has been all but banned in government circles since the new government took over. Interestingly, searching the strategy I found only four uses of any variant of the word in 30 pages of text, and not one use of it in full.

But the strategy does explicitly link the environmental debate with an economic imperative. So a key question is whether the government is asking us to invest in a bum steer, betting on black when those in the know are betting on green. On his recent visit to Auckland, I asked Lord Stern, former chief economist of the World Bank and economic advisor to the British Government, what he thought about prioritising fossil fuels at this point in the game.

“Fossil fuel investment is risky and getting riskier, cleantech investments are risky and getting less risky””

“Any country investing in hydrocarbons is going to have to think about all the risks there might be,” he said. “But the global changes mean that these investments are going to become more risky. Anybody making long-term investment needs to assess where that is going. The very expensive methods of extraction are likely to become more and more unprofitable.

“To talk of hydrocarbon growth as a growth scenario is to fly in the face of what would happen in the long term. Hydrocarbon growth will kill itself as a result of a hostile environment. It will create hundreds of millions of displaced. Likely consequences are extended, severe and global conflicts. Fossil fuel investment is risky and getting riskier, cleantech investments are risky and getting less risky.”

This seems particularly true of New Zealand, which has an emissions trading scheme in place. This, at least in theory, is supposed to have been specifically designed to make the fossil fuels the government is seeking to prioritise less economically viable.

I can’t help worrying that this strategy is the energy market equivalent of buying last-minute tickets for the Titanic.

Submissions closed on the draft energy strategy on September 2.

Andy Kenworthy is a contributing editor at