Straterra opinion

Click on the links below to opinion pieces by Straterra, published in the media

<One-sided (March 2012)>

<Don't believe fracking scare stories (Aug 2011)>

3 August 2012, The Greymouth Evening Star

Regulatory improvements needed

Improvements to New Zealand's regulatory framework must be made if Government efforts to attract investment are to succeed, and this will require engagement from industry, according to Straterra chief executive Chris Baker.

New Zealand’s regulatory processes are too complex and often inconsistent when it comes to minerals prospecting, exploration and mining. While the Government is actively encouraging minerals exploration, which is great, this complexity discourages investment.

The industry wants and needs a high standard in regulation, in consent conditions, in health and safety, but if we are to be successful in growing the sector, in making the most of our resource endowment, consenting processes must be streamlined and rationalised. Progress is being made, but more is required.

Take for example the current proposals to replace the Historic Places Act 1993. The concept and some aspects are attractive; statutory time frames for processes; clarity around governance; alignment of information requirements between this Bill and resource consent processes to name a few. However, the previous ability to gain authorities to cover a set of sites has disappeared, potentially creating new administrative hurdles for minerals explorers and miners.

Further, if a company wants to prospect, explore, or mine, they may or will need approvals from: the Ministry of Business, Innovation and Employment (MBIE),; landowners, iwi, councils; Department of Conservation (for concessions, access to land, and Wildlife Act permits); and Heritage New Zealand Pouhere Taonga. Then there are consents required in relation to health & safety legislation, hazardous substances, buildings and construction, and, in some cases, overseas investment.

Some positive changes have already been actioned by the Government, such as resourcing the permitting regime through NZP&M and the High Hazards Unit of the Department of Labour that is now part of the new Ministry of Business, Innovation and Employment. (MBIE). Work on aligning the concessions system with RMA processes, and, separately, with access arrangement application processes is underway. That said, there is more to be done.

New Zealand ranked comparatively poorly (particularly compared to Australia) in the Fraser Institute’s 2010-11 survey where 76% of mining companies surveyed said they would be deterred from investing based on uncertainty concerning environmental regulations in New Zealand. This survey represents the opinions of executives and exploration managers in mining and mining consulting companies operating around the world and is one of the few indicators available that provide a rating of the effectiveness, or impact, of policy across different jurisdictions. The survey also showed 49% of respondents would be deterred from investing in New Zealand because of regulatory duplication and inconsistencies. On the positive side we ranked highly in other indicative areas, such as policy potential, political stability, and corruption.

Higher levels of co-ordination between agencies in the order applications are processed, in avoiding duplication of information and process, and reducing the time taken to get approvals is necessary.

Standardisation of treatment of activities under the RMA, for example, via a national environmental standard for prospecting and exploration, would help achieve consistency of treatment across council boundaries. Running processes in parallel to gain consent (with conditions) for access to the minerals, access to the land , resource consents, any Conservation Department concessions and/or Heritage New Zealand authorities, would also greatly improve matters, for regulators, the company applying, iwi and other affected parties.

While it is important to retain the right to appeal a decision to a court, more effort must be made to deal with frivolous or vexatious appeals. The Minister of Energy and Resources, the Hon Phil Heatley, made positive reference to this issue in a recent interview.

To conclude, industry does not want lower standards. How we as an industry manage environmental impact, rehabilitation, health and safety, how we consult with and work with our communities, the broader public and NGOs, is vital to our future. If we are to attract investment in exploration from New Zealand based companies and from overseas, if we are to grow our resource sector through responsible development, we need a stable and integrated regulatory environment where the processes are lucid, administratively manageable, and well informed.

25 July 2012, Northern News

Straight Talk

R M Molloy of Kerikeri likens Straterra to the tobacco industry! Looking around, I would be happy in a world without tobacco, but I certainly can't see how the world could function without minerals and mining. Mr Malloy is welcome to contact us at Straterra if more information is of interest.

24 July 2012, The Northern Advocate

Responsible mining is sustainable

Firstly, I suggest to Dean Baigent-Mercer that if he is confused about any political party's policy on mining he take it up directly with the party concerned, and kindly leave misinformation out of the public domain.

Mr Baigent-Mercer's use of the term "toxic mining" is unhelpful. No one wants toxic mining. What the Government and industry both want is environmentally and socially responsible mining, in which risks are managed, and effects are mitigated, while providing jobs and other economic benefits for New Zealand.

Mr Baigent-Mercer is correct in saying that not all mining techniques are equal. But that goes without saying. Consider the age in which we live - the technologies used in New Zealand are highly specialised, of a high and modern standard, and are managed under the Resource Management Act (1991), which is world-leading legislation.

Yes, cyanide is used in the processing of gold. It is not dangerous; there are thousands of gold mines around the world using cyanide safely. Issues in relation to heavy metals and acid mine drainage are contextual - relating to the nature of the host rock, and are, therefore, managed case by case.

As well, cyanide can occur naturally within the geology, as it does on the Coromandel Peninsula. Cyanide is not toxic in all forms or concentrations; it does not persist in the environment, is not cumulative, should not be confused with acid drainage, is not a heavy metal and can be manufactured, stored, transported, used and disposed of in a safe manner. If that weren't the case, it would not be used.

Take Newmont Waihi Gold's tailings management in Waihi as an example - the river into which treated mine water is discharged, the Ohinemuri, is a top North Island trout fishing stream.

This shows that engineering and monitoring can minimise the risk of contamination or any other problems that may arise from mine tailings.

- Of course mining is sustainable, or, more accurately, not-mining is not sustainable.

The key point I am making is that although any engineering endeavour is not without risk, in New Zealand, those risks are successfully reduced, managed and monitored to levels that are acceptable to society. That is as it should be.

10 July 2012, The News-Westport

Must start somewhere

I was interested in the perspective your article ‘Scepticism over seabed mining’ (July 9) took. Of course we should be sceptical about all new proposals – to argue otherwise denies the very nature of mining. It is very difficult to prove the viability of a mining project. Significant technical, scientific, engineering and financial input is required, over many years and with many millions spent. But we must start somewhere and it is great to see companies such as Ironsands Offshore Mining, Trans Tasman Resources and others are prepared to make the relatively high risk investment required. These investments are not for the faint hearted! If exploration can prove feasibility, the company puts its case to the Environment Court, or the EPA, at some time in the future. That is the stage at which we can debate the merits, or otherwise, of the proposal, informed by facts, and tested by the consenting regime. In the meantime, welcome the interest, the investment and the vision, that might open such an opportunity. Buller Mayor Pat McManus is on the mark when he says, “If it comes off, and they can tick off all the environmental effects then it’s got to be a good thing for the West Coast and the New Zealand economy.”

6 July 2012, The Bay Chronicle

Big benefits from gold mining

New Zealand Petroleum & Minerals has recently invited tenders from mineral exploration companies interested in Northland’s metallic mineral prospects.

So it is fitting to envisage what a gold mine would look like in the region and to get an idea of the economic benefits that would flow from activity, writes Chris Baker, CEO, Straterra

This vision of opportunity for Northland depends on the discovery of a gold (or other mineral) deposit that is economically viable to mine, and a company that is willing and able to invest in such a venture.

That would be a desirable outcome, however, it is not possible to predict what will come of the tender process at this stage – there are too many unknowns.

What we can predict is that if a gold mine is established in the Far North substantive economic benefits would follow.

We also know that gold, at all stages, can be and is currently being mined in New Zealand in an environmentally and socially responsible way.

The economic benefits flowing from a gold mine are sizeable.

If, say a medium-sized mine were developed, it would add 100 or more jobs to the area, many more during construction, and benefit the local economy by way of increased demand for services and supplies.

The mining sector employs a mix of skill levels, like most businesses, with many highly-skilled and varied roles such as geologists, engineers, operators, planners, health & safety experts.

The mining, resource and energy sector is the highest in terms of average annual salaries and in 2008 the median wage for a mining employee was 70 percent higher than the New Zealand median.

Any mining project entails spending large sums of money.

A reasonable estimate of expenditure at a (medium-sized) mine would be upwards of $110m a year, 80 percent or more of which would remain in New Zealand as salaries, taxes, rates, payments for electricity, transport and other services, royalties, and payments to meet regulatory requirements.

Because many people, understandably, don’t know what gold mines look like or how they work it is often easy to assume projects impose on others.

The fact is that disturbance from a gold mine is usually considered minimal to people living nearby.

There are two ways to mine for gold: an open-cut, above-ground operation, or tunnelling underground; Mother Nature – Papatuanuku - determines which option is feasible.

There isn’t much to be seen of an underground mine. It may have a footprint in the order of tens of hectares, with a small opening at the surface, and processing facilities.

On the other hand, a typical medium-sized open cut mine, such as OceanaGold’s mine near Reefton, may be up to a few 100 hectares, which is still a small footprint.

To compare, a medium-sized dairy farm is around 500 hectares.

Before a mine is developed companies must prospect - to find a deposit - and then explore, to prove the resource is economically viable.

These stages are often lengthy and always expensive. Any mine will take years of investigation and planning to get to the point of development, so it is important to remain realistic about the probability and timeframes of a mining project.

The exploration phase involves various low-impact activities, the most obvious being drilling. These activities have negligible or no environmental impacts.

If a commercially-attractive resource was identified, and that would only happen after tens of millions of dollars had been invested in economic and environmental assessment, a gold mining project could then be developed.

The reality of how financially and technically difficult it is to find a viable deposit to mine, let alone get a mining operation underway is often lost in translation. The low levels of probability and high levels of financial risk are why high commodity prices are driving resource-based investment.

All stages of mining are subject to the Resource Management Act’s consent criteria meaning any associated effects or risks would be well managed. Modern day industry standards would also ensure any effects from gold mining are well managed. It is in companies’ interests to ensure that is the case. When mining stops the site is rehabilitated to a high environmental standard, under RMA consents.

To conclude, there is every reason to be upbeat about the prospect of gold mining being a part of the Northland region’s economy.

Should there be an appealing deposit of minerals, any activity could bring with it economic benefits and be managed in a socially and environmentally-responsible way.

3 July 2012, The Dominion Post

Mining advocate backs the survey

OPINION: It was refreshing to read a sensible contribution to the New Zealand mining debate (Editorial 'It won't hurt to have a look', June 27). Indeed, there is no harm in looking, and there are benefits.

Information is power and though aeromagnetic surveys offer only an early indication of what's in the ground, the more we know about New Zealand's geology and mineral resources, the better we can consider options.

If there is to be a debate, that debate needs to be about a proposal to mine, and case by case.

If we were lucky enough to find a new mine, and that would not be easy to do, then we should have a debate about that proposal, what the value will be, the environmental impacts, how many jobs, taxes and the net benefit to New Zealand.

That's surely a better approach than the speculation and misinformation that often occurs in the absence of facts.

15 June 2012, The Press

Coal helps fire economy

Coal is essential to the New Zealand economy, and mining should be encouraged, writes Chris Baker.

The Environment Court has reached the logical decision that coal miners cannot be held responsible for carbon dioxide emissions arising from later burning.

Now the matter is being appealed to the High Court in what can only be considered a frivolous attempt to stymie coal mining.

What gets lost in the debate on coal is that New Zealand's coals play a vital role in our economy and society. It is not good enough for climate change campaigners to cry "keep coal in the hole", without offering realistic alternatives.

New Zealanders could hardly live a day without using something that has had coal input - buildings, medical equipment in hospitals, trains, cars, bicycles, shampoo, toothpaste, computer chips, solar panels, and wind turbines. All rely on the sort of coal found on the West Coast.

New Zealand's high- quality coking coal is an essential component in steel- making, carbon fibre, silicones, and related products and chemicals. It attracts premium prices in the global market because of its low ash and its physical properties in a furnace.

The Glenbrook steel mill employs 1200 staff, injects $80 million a year into the South Auckland economy, and produces steel for domestic and export markets using New Zealand non-coking coal and ironsands.

Our coals are also used as a low-cost and effective source of heat for many industrial processes, where there is no cost-effective alternative.

Consider that in terms of heat value average and industrial coal prices are around one- fifth the price of electricity.

The conversion of milk into milk powder, drying of wood and timber, hothouse horticulture, cement and lime manufacture, are among industries that rely on coal (or at places natural gas), as do freezing works, wool processors, hospitals, schools, and many other facilities.

As a result, a high proportion of New Zealand's export income continues to be dependent on competitively-priced coal.

I wonder if these facts are generally known in New Zealand. They should be, considering the implications.

If coal were not available, we would be significantly less competitive in the export industries mentioned, so exports would decrease, cement would need to be imported, and costs of infrastructure would rise.

Reduced tax revenue from reduced exports would impact adversely on education, health, social welfare, and every other service the State provides to New Zealanders.

Solid Energy's activities create directly and indirectly 10,000 jobs throughout New Zealand. On that basis, the figure for all coal is 12,500 jobs.

The above figures will increase further depending on the pace and level of:

lignite development in Otago and Southland;
new coal production on the West Coast;
gas development from deeply-buried coal seams in the Waikato.

Coal and gas play a vital role in the national electricity supply. With 73 to 77 per cent of our electricity being renewable (over the last three years), fossil fuels provide base load capacity that prevents power cuts or brown-outs when the sun's not shining, when it's not raining, or when the wind is not blowing.

Even if New Zealand did achieve a 90 per cent renewables target by 2025, we will still need fossil fuels to make electricity.

On that basis, no government will ever ban coal mining in New Zealand, or anywhere else in the world - until, or unless, there are economically-viable technology alternatives. Of course, coal use has implications for the world's climate.

Consider that 85 per cent of the world's population has on average one-tenth of our standard of living, and that these people reasonably want what we have, and are doing what they can to get it - running water, food, electricity, resources. To satisfy this demand, the world uses five billion tonnes of coal a year and this is growing.

Carbon capture and storage (CCS) will inevitably be part of the mix of technologies to manage emissions arising from fossil fuels.

The International Energy Agency has said CCS could account for 19 per cent of emissions reductions by 2050, however, there is much work still to be done for commercial-scale implementation of this technology - as there is for any technology with similar potential for emissions reduction.

Investigations have shown that CCS is feasible in New Zealand, subject to better regulation, and further development work. That is a relevant consideration for future lignite development.

To conclude: it is, with respect, unrealistic and irresponsible to advocate for a halt to coal mining in New Zealand.

What is required is a debate based on full information, including the role of coal in the economy, including CCS and other technologies, not a perpetuation of unhelpful slogans.

29 May 2012, The Press

Not our responsibility

No one would disagree with Forest and Bird’s Debs Martin that New Zealand needs to meet our international climate change obligations (Climate change curbs should be law, May 25). But to make New Zealand responsible for the burning of coal overseas would be like making the people who sell us oil responsible for the emission coming out of our vehicles. To avoid such nonsense, there is an international framework for climate change issues, and in that context New Zealand has a Climate Change Response Act. The fact of the matter is that very little is being done overseas to combat climate change to the extent that the New Zealand Emissions Trading Scheme is a world leading scheme, for which successive governments deserve congratulation. The real issue that Ms Martin studiously ignores is the round one trillion tonnes of coal worldwide that will be burned, for making steel, cement, electricity and a host of other essential products. Carbon capture and storage technologies must be made cost-effective to address this reality, and Ms Martin is invited to join the New Zealand coal industry to help make that happen, in New Zealand and worldwide.

07 March 2012, The Dominion Post

Jumping through hoops to get at NZ's minerals

New Zealand urgently needs to ease red tape over exploration and mining, writes Chris Baker.

New Zealand is rich in minerals – gold and other metals, coal, aggregates – yet access to them relies on tortuous regulatory processes that are no-one's fault, and do no-one credit.

We have a system about which the Ministry for the Environment says: When viewed as a whole, evolution [of the resource management system] has resulted in inconsistencies and misalignment between core legislative frameworks.

Translating this advice to the incoming minister: If you want to prospect, explore, or mine for minerals, you may, or will need consents from: the Ministry of Economic Development (New Zealand Petroleum & Minerals); landowners; iwi; councils; Conservation Department (for concessions, access to land, and Wildlife Act permits); and the Historic Places Trust.

That is all fine. However, the applicant is often forced to do this in sequence, often more than once, entailing years of effort, and many millions of dollars in processing costs, before a cent is earned.

It is easy to lose sight of what our resource management system is supposed to achieve, when it comes to minerals.

Consider the steps: look for minerals over a large area (prospecting), find a promising ore deposit within a smaller area (exploration), assess economic viability of extraction at a site (with costs including environmental management), and then, all going well, develop a mine. Typically, costs met for this work before the decision to develop a mine will be in the order of tens of millions of dollars.

Only once the mine is built, if that stage is reached, does the income begin to flow. Only at the last stage are there significant effects at a site on the environment, and on communities, to be considered, and managed to acceptable standards.

Meantime investment capital must be raised, in progressively increasing amounts, against progressively increasing expectations of a return, to finance prospecting, exploration, and mining. This is challenging, at every stage.

The current regulatory system takes little account of the investment challenge, and, as a result, less prospecting and exploration occurs in New Zealand than it could, and should. The system must be reformed to reduce costs, and promote investment, to maximise benefits from minerals.

Yes, more mining should occur – subject to a debate on location and environmental conditions for specific proposals – because mining is an economic and social good.

In 2008 minerals and petroleum employed directly and indirectly 14,800 people, and contributed $2.15 billion to GDP, including in taxes and royalties, and foreign exchange earnings. As well, coal and gas are a key energy source for our dairy, wood and timber processing industries, horticulture, and other industries, for example, making cement. Our coal and ironsands are used to make steel at Glenbrook (some of which is manufactured into wind turbines). Peak load electricity is still produced by Genesis at its coal-fired plant at Huntly. Most New Zealand mines are quarries, most of which produce aggregates for roading and construction.

Having dispensed with the benefits, the debate goes to the costs. While prospecting and exploration have negligible or little effect, mines do have effects, potential or actual, on biodiversity, landscapes, air and water quality, recreational opportunities, historic heritage, wahi tapu, landowners, communities, society.

These effects need to be assessed, along with proposals for managing them – no argument there. It is also accepted by industry there may be special places where some or all types of mining should not occur.

Our plea is twofold: Let's make a better distinction between the regulatory treatment of prospecting/exploration, and mining; and develop efficient, and integrated regulatory processes for both sets of activities. There are several things New Zealand could or should do.

Standardisation of treatment of activities under the RMA, for example, via a national policy statement and national environmental standards, or via a guidance notice for planners, would be a great help, especially in situations where a proposed activity falls across council boundaries. For example, prospecting and exploration could be classified as permitted, or controlled activities, subject to rules in plans, or to non-notified resource consents, respectively.

To clarify: Public consultation on a proposal to drill exploration holes is unnecessary because this activity has, in almost all cases, very low environmental impact. Currently it can take years, and millions of dollars in costs, for the applicant to get a resource consent to drill a dozen 10 centimetre-wide holes in a paddock, which is ridiculous.

Running processes in parallel to gain consent (with conditions) for access to Crown minerals, access to land (in particular, Crown land), resource consents, any Conservation Department concessions and/or Historic Places Trust approvals, would greatly aid matters, for regulators, the company, iwi and other affected parties.

Mandatory time limits on regulatory processes are essential for efficiency and effectiveness, and not just for initial consents. Consider that companies often seek multiple approvals for changes to work programmes, or extension in duration of activities, as projects evolve.

Better co-ordination between decision-makers is essential. Too often we hear from a regulator, "Go and get consent from them and come back to us". That is simply not good enough in 21st century New Zealand.

Britain has a Department for Environment, Food and Rural Affairs, which would be equivalent to MfE, DOC, the agriculture, forestry and fisheries ministry, Land Information New Zealand, and potentially MED merging into one. Not that New Zealand should do the same thing, necessarily. However, the British system is surely worth investigating for solutions at home.

To their credit, these very agencies, including Te Puni Kokiri, have already thought on these weighty matters.

The Natural Resource Sector, as these agencies are called, advised the incoming Government that New Zealand needs to build enduring institutional arrangements that are transparent and informed, and which inspire confidence and investment certainty.

This requires investment and new policy and practices in information, capability and capacity building, and in institutions. Go for it, the sooner, the better.

08 March 2012, Ashburton Guardian

One-sided

Forest and Bird’s portrayal of Bathurst Resources’ proposal to develop a coal mine affecting one percent of the Denniston plateau is one sided (Speak out to stop the destruction, February 25). If what photographer Rod Morris told a meeting in Ashburton were remotely true, Bathurst would never have gained a resource consent for the project. The fact is that Bathurst did meet West Coast Regional Council’s requirements, with proposals for environmental and biodiversity management having the support of the Department of Conservation. The plan includes rehabilitation of all disturbed material by returning or replanting native vegetation on site, a trust fund for biodiversity conservation on the West Coast, and a multi-species predator control programme over 5600 ha of great-spotted kiwi habitat in Kahurangi National Park. If anything, the net result of Bathurst’s activities on the Denniston plateau will be a net gain to native flora and fauna in the area, delivered, granted, over time. That is as it should be. It must also be borne in mind that the Dennison plateau is a mosaic of original and modified ecosystems, inhabited by wild goats and other pests, and criss-crossed with historic roads to many, scattered, and now closed underground mines.

23 February 2012, Nelson Mail

Responsible coal mining

Aaryn Barlow is entitled to his views on coal (Fight to keep coal in the hole, February 17). I ask him to stick to the facts. I visited the New Vale lignite mine yesterday, to view farmland that had once been mined for lignite, and to view the existing operation that is all but invisible a short distance away. The mine’s main customers are Invercargill and Dunedin Hospitals, and Fonterra. Solid Energy has gone to great pains to explain that any expanded activities in Southland would not remotely resemble the experiences of an Australian brought to New Zealand to discuss coal mining in his country. Solid Energy has always said it would take responsibility for any increased greenhouse gas emissions. The company also produces biofuels, a business whose growth depends partly on more people supplying feedstock. Bathurst Resources’ proposal for coal mining will affect a very small proportion of the Denniston Plateau, and the company has comprehensive plans to rehabilitate land. Their coal will be used for making steel, a key ingredient in, e.g., wind turbines. Responsible coal mining is part of the green economy that Mr Barlow espouses, and I invite him to support it.

26 January 2012, Southland Times

Mining results in huge benefits for society

I would like to correct Green MP Julie-Ann Genter on her bizarre claim that no mining town in New Zealand has ever enjoyed benefits (Mataura split on mining benefits, January 25). In 2010 the New Zealand Institute of Economic Research reported that the median wage for a mining employee, including in oil and gas, was $57,320 in 2008, compared to the New Zealand median of $33,530. It is wrong to use Waihi as an example of a mining town because people in that industry in Waihi also live at Waihi Beach, Katikati and elsewhere. Consider also the benefits to users of resources. As matters stand, New Zealand gas and coal are essential inputs into the dairy, wood and timber processing, horticulture and other industries. Indeed, if there were no energy and minerals, whether imported into or produced in New Zealand, there would be no hospitals, no transport, no schools, no electricity, no food, no clothing, no phones. Seen this way, the benefits of mining to society are infinite.

26 September 2011 The Dominion Post

Coal is the key to development

Debs Martin of Forest and Bird is entitled to her views on Bathurst’s proposal to mine coal (Mining will destroy unique plateau and harm planet, September 23). But her contention that coal mining in New Zealand will harm the planet is preposterous. The International Energy Agency has determined that 47 percent of new electricity generation globally in the last decade is based on coal. This is because five-sixths of the world’s population has on average one-tenth of our standard of living, and they would like to have what we have. To develop, you need energy, and coal is cheap. There is nearly one trillion tonnes of the stuff worldwide, and it will be burned, even with more renewables. That is the real issue with coal, not whether New Zealand mines 5 million tonnes a year. A key solution for coal (and petroleum) is to develop cost-effective carbon capture and storage technologies (CCS). Billions of dollars of investment are going into this worldwide, and New Zealand government and industry are playing our part. We in industry are serious about New Zealand developing a realistic and meaningful climate change response, and invite others to also take the issue seriously.

08 August 2011, NZ Herald

Fraction too much fiction about fracking

Armchair experts should base arguments on real evidence, writes Bernie Napp, a senior policy analyst at Straterra.

Arguments that conflate emotion and reason have been ever the stuff of politics and public debate. This is human but does not make it right.

The debate on fracking (hydraulic fracturing) technology is a case in point. Concern is being expressed in Taranaki, the East Coast, Canterbury, and elsewhere, over the possibility of fracking being used to extract natural gas, raising fears of earthquakes, water and air pollution, and risks to human health.

I would like to separate the facts from the conjecture in the interests of informed debate, and good decision-making in this country.

Fracking is the pumping of mainly water and sand through a well into deeply-buried gas-bearing rock, to open up fissures in the rock, and increase the flow of gas. Two per cent of the fluid is chemical additives to make the process work.

In New Zealand, in the concentrations used, fracking fluid is non-toxic to humans, just as swimming pools contain toxic chemicals yet people safely swim in them.

In the same vein, sleeping pills can definitely kill a human being but are fine if used safely.

In New Zealand, industry believes there are the technology, the laws and regulations, and the geological conditions to carry out fracking safely. If it wasn't safe or lawful, we would not do it. We have our reputations to consider for a start. We also have families and wish to live in a sustainable and prosperous New Zealand.

There have been less than 20 fracking operations in New Zealand in the last 40 years of petroleum development, with no incidents of any kind. All of these operations were deep below the water table. The possibility of fracking fluids getting into the drinking water is extremely remote.

Nonetheless, the New Zealand industry is facing outrageous accusations from people who, seemingly, read a couple of reports and then consider they are well informed.

Columnist Tracey Barnett alleges that fracking fluids are "potentially carcinogenic" with no evidence presented, and that these fluids are "laced with chemicals". Well, so are coffee, tea, beer and wine, for goodness sake.

Just to make it absolutely clear, the toxic BTEX chemicals, which include benzene and toluene, are not used in fracking in New Zealand.

The next concern is that fracking causes earthquakes. This comes from a report prepared for the European Parliament of June 2011. The reference for the Blackpool earthquake is a newspaper article, and that for earthquakes in the Fort Worth area are unpublished, making these difficult to assess at this distance.

The reference for the Arkansas earthquakes is the local geological survey which has been recording earthquakes in that area for more than 100 years, including swarms of earthquakes that occurred before fracking in the area started. The present swarm may or may not be connected with fracking. Granted, more work on this may be needed.

Your columnist says of Arkansas that "drillers had put so much residual water, sand and chemicals back down old wells it would have created the equivalent of a 12ha underground lake". That implies a huge hole filled with fluid has been created underground.

Think, rather, of rock underground being like a sponge. Filled with fluid or not, rock is rock.

The $60 million project in Switzerland referred to by your columnist had to do with geothermal energy, not fracking.

Then there is a Russian paper, which says with no evidence that in 1963 the filling of a hydro dam in India caused a magnitude 7 earthquake nearby. The paper does say hydros and oil and gas wells can change the state of stress of rocks underground and that small earthquakes can result in response, and that may be relevant for Arkansas.

But any seismic activity as a result of fracking or hydros would be a different phenomenon than earthquakes caused by the massive forces of nature such as have occurred recently in Christchurch. To conflate the two would be highly misleading.

Now to the specular issue of residents in the United States setting fire to their tapwater.

Official investigations in Colorado and Pennsylvania have shown that affected water bores had been drilled through shallow coal seams and that the lining of the bores have corroded. As a result thermogenic methane migrated from the coal into the drinking water.

This has nothing to do with fracking.

Having looked at the US material, it appears there are legitimate concerns about air quality in places, in that country, and that has been admitted by authorities. New Zealanders need have no concerns because the practices and chemicals used in the US, as portrayed, are not legal in New Zealand.

It may be too much to hope that we can convince the "armchair experts" in this debate to distinguish between fact and innuendo. But we do ask the general public and our political leaders to consider carefully all of the information before leaping to any conclusions.

08 August 2011, The Press

Don't believe fracking scare stories

Straterra makes a plea for reason over fracking - hydraulic fracturing to open up fissures in rock and increase the flow of gas.

The New Zealand gas industry is facing a medieval witch hunt over fracking. Perhaps, we are at fault.

We believe fracking (hydraulic fracturing) is a tried and reasonable technology, after 40 years of experience in New Zealand without incident, using our methods, and under our laws. But we haven't come out and said so in these words. Now it is clear a lot of people do not agree. They have concluded, on their reading of the available evidence, that fracking creates risks of earthquakes, water and air pollution, and to human health.

I would like to address these concerns.

To recap, fracking is the pumping of mainly water and sand through a well into deeply buried gas-bearing rock, to open up fissures in the rock, and increase the flow of gas. Two per cent of the fluid is chemical additives to make the process work. At the end of the process, some of the fracking fluids return to the surface, which then have to be disposed of.

Let's start with earthquake risk, a matter close to the hearts of Cantabrians. The concern stems from a report prepared for the European Parliament in June this year about fracking in the United States, where the technology appears to have gone badly wrong. Let's look at the evidence.

The reference for an earthquake in Blackpool, England, is a newspaper article, and that for earthquakes in the Fort Worth area is unpublished, making these difficult to assess at this distance. A $60 million project in Switzerland that is sometimes referred to has to do with geothermal energy, not fracking.

There is a Russian paper which says, with no evidence, that in 1963 the filling of a hydro dam in India caused a magnitude 7 earthquake nearby. The paper does say hydros and oil and gas wells can change the state of stress of rocks underground and that small earthquakes can result. This is interesting, and may be relevant for Arkansas.

The Arkansas reference is the local geological survey which has been recording earthquakes in that area for more than 100 years, including swarms of earthquakes that occurred before fracking in the area started. The current swarm may or may not be connected with fracking.

It is conceivable that a change in the state of stress of rock could lead to low-level shock waves that would be picked up by a seismic detector. I suppose you could call that an "earthquake". But this is nothing like the massive forces of nature at depth, which, when unleashed, cause earthquakes of the sort suffered in Christchurch.

By all means let's consider seismicity when carrying out fracking operations, but let's not get the matter out of all proportion.

Turning now to the issue of environmental contamination.

A US documentary, Gasland, which has been doing the rounds in New Zealand, presented spectacular scenes of residents setting fire to their tapwater. The allegation was that fracking is the cause. The reality is more complex, however.

Official investigations in Colorado and Pennsylvania have shown that affected water bores had been drilled through shallow coal seams and that the lining of the bores had corroded. As a result, thermogenic methane migrated from the coal into the drinking water. This has nothing to do with fracking.

Having looked at the US material, it appears there are justifiable concerns over air quality at places.

New Zealanders need have no concern on that score because we do not use the volatile, toxic chemicals that have been used in the US, and we have different methods for disposing of waste fracking fluids.

Just to make it absolutely clear, the toxic BTEX chemicals, which include benzene and toluene, are not used in fracking in New Zealand.

In our country, in the concentrations used, fracking fluid is non-toxic to humans, but that's not an invitation to drink it, any more than you would drink dishwater.

I labour the point because it can seem paradoxical that a chemical that is toxic in high concentrations can still be used safely in the right circumstances.

For example, swimming pools contain toxic chemicals yet people safely swim in them, and sleeping pills can definitely kill a human but are fine if used safely. Ditto for alcohol.

Fracking operations occur deep below the water table. The possibility of fracking fluids getting into the drinking water is extremely remote. Certainly, it has not occurred in New Zealand.

To consider now the disposal of waste fracking fluids. There are various ways of doing this, for example, reinjection back into a disused well, deep below the water table. But the methods do not include forced evaporation of volatile chemicals from ponds, or dumping into waterways, as portrayed in the US documentary.

In summary, we believe we have the technology, the laws and regulations, and the geological conditions to carry out fracking safely in New Zealand. We would only pursue this technology if it was reasonable to do so.

We have our reputations and the future of our businesses to consider for a start. We also have families, and wish to live in a sustainable and prosperous New Zealand.

Our plea to New Zealanders with an interest in fracking is this: please get adequately informed.

This is a complex issue. It's not just a matter of reading a couple of reports and reaching a quick conclusion. Fracking calls for careful deliberation.

We have the ability to debate issues in a mature and informed way. That would be in everyone's interests. That would be democracy in the 21st century.

23 June 2011, Gisborne Herald

World hungry for resources

Finally some clarity from the Green Party: the world is “addicted” to resources, the implication being, we must overcome this addiction. I am being facetious, of course. At the What Lies Beneath public forum on oil & gas, held last week in Gisborne, I had said the world is “hungry” for resources.

Five-sixths of the world’s population of 7 billion have on average one-tenth or less of New Zealand’s standard of living, they want what we have, and they will strive to get it. This is about food, running water, energy, sanitation, health care, heating, transport, education, telecommunications, you name it. To do this, you need resources, of every description.

Is the Green Party suggesting that 5.8 billion people on planet Earth do not need these things? Surely not. Perhaps, it is suggesting it’s fine to mine overseas, and we will just blindly import goods and services - in which minerals are in every case an essential input.

Even the “green economy” - whatever this is – needs resources. Consider: China is the world’s biggest producer of wind turbines, and for that you need steel, made out of iron and coking coal. Then you have got to transport the turbines.

New Zealand is well endowed with some resources, e.g. water, soil, lignite, minerals, and can use these to supply the world, and, at the same time create domestic wealth and jobs. It is a fact that the wealthier a country is, generally speaking, the better the state of its environment, let alone the whole set of social indicators.

The resource sector employs directly and indirectly 15,000 people in New Zealand. It could employ four times that if properly encouraged and managed. I include in “managed” mining companies’ contribution to biodiversity conservation in New Zealand which is already considerable, and, with more opportunity, could be greatly increased.

The Department of Conservation has not remotely the resources to combat possums, stoats and rats over the vast area where they exist. It needs all the help it can get. Mining over New Zealand’s 24 million ha occupies some 4000 ha, and our legislation governing environmental impact and rehabilitation is as robust as anywhere in the world. The footprint of mining in New Zealand is minute compared to practically every other land use, while the economic benefits per hectare dwarf practically any other economic activity. Why would anyone not wish to encourage mining? Bear in mind, a mine is very hard to find, and even harder to develop.

The climate change issue bothers people, and so it should. But it is a global issue, demanding a global response. Our challenge is to de-carbonise our economy and we have no choice but to burn a lot more fossil fuel in the pursuit of de-carbonisation.

The solutions are obvious – new technologies for the world to advance renewable energy, energy efficiency, carbon capture and storage (CCS) – but getting there is less obvious. What is certain is that banning mining of energy resources in New Zealand, or anywhere, is not a solution, at any level.

Oil spill risk from deep sea drilling is also a serious issue, demanding serious attention. The concerns are legitimate. New Zealand needs to address this, and get it right – and this will be about risk assessment and management, not unilateral banning.

An informed approach to the mining debate would be to ask: what are our global responsibilities, national goals, where should we allow mining, under what conditions, how do we achieve best advantage for the economy, society, communities, iwi, the environment and conservation, and how to reconcile these often competing demands.

16 April 2011, Gisborne Herald

Police right to act against protesters

THE Petrobras affair has been unfolding in extra-ordinary fashion.

A petroleum company authorised to carry out a seismic survey offshore of the East Coast has been prevented from doing so by protesters, many representing Greenpeace NZ and local iwi. The police are now enforcing a 200m buffer zone between the Orient Explorer and the protesters.

At issue is where to draw the line between upholding the lawful right of protest and upholding the right of a lawful business not to have costs imposed on it through violent action.

Yes, the protests are violent because they arbitrarily impose costs on another — almost to the point of blackmail.

On April 12 Greenpeace’s Steve Abel said on National Radio: “We don’t support their activities and wish them to cease,” and in answer to a question if they would keep going, he said: “That’s our intention until they do all of those things.”

One may debate whether the protesters should be held accountable for their actions, or whether some of the protesters are justified in their belief their rights have been trampled on without consultation. Incidentally, both local iwi were consulted prior to the permit being awarded.

But there is a bigger issue that should concern the Government and all New Zealanders.

If it is fine to obstruct a petroleum company going about its business, then presumably it is fine to prevent commercial fishers hauling in their catch, marine farmers collecting their mussels — in short, to obstruct any lawful business.

If nothing had been done to protect Petrobras’ legitimate interests, the message would have been delivered that it is lawful to sabotage our economy, with the risk of less future investment in New Zealand.

The police are right to intervene because the potential economic consequences of inaction over the Petrobras affair are serious.

New Zealand has significant resource potential offshore: oil and gas, iron sands, other metals, phosphates, methane hydrates, and perhaps others as yet unknown. We are not alone in this, however, and need to be attractive for this type of investment. Therefore, how we manage this issue is important.

I accept there are legitimate concerns in New Zealand about petroleum and offshore resource development, but the Government is actively addressing these, with public input.

It is reviewing our systems for managing the risk of and dealing with oil spills. It intends to introduce environmental legislation for the Exclusive Economic Zone. It is considering a Waitangi Tribunal report on improving the Crown petroleum regime to take better account of iwi interests. It is active on the global response to climate change issues.

It would be difficult to identify anything more the Government could do or should do in this area. It is important we get these issues right, particularly new legislation, but we must also be aware that Petrobras and other companies in oil, gas and mineral exploration will be looking for a clear and reasonable pathway to progress their assessments in the EEZ. Surely, in our society the right thing to do is to work with our Government in defining and achieving objectives for the nation’s benefit.

Instead of vilifying Petrobras, an innocent bystander, Greenpeace NZ and others might draw lessons from, for example, the Environmental Defence Society who are working actively with the Government on freshwater and oceans governance, and who are convening a conference this year on coastal issues.

I believe the protesters should immediately cease their interference with a lawful business, and apologise to Petrobras. They should also apologise to the people of New Zealand for putting at risk legitimate, and much needed, economic activity.

03 March 2011, Policy Quarterly, Institute of Policy Studies, Victoria University of Wellington

A mining industry view

Executive summary

Media coverage in the lead up to and during the schedule 4 debate presented anti-mining advocacy with no analysis of their arguments, to the exasperation of the resource sector.^{1, 2, 3, 4, 5}Despite our attempts to set the record straight, little notice was taken – by opponents or the media. The only conclusion to be drawn is that environmental NGOs shunned rational debate in order to pursue a harmful campaign.

I will be arguing in this paper that mining in New Zealand today is a modern, 21^st Century activity, and that it is a serious and legitimate activity. It benefits the economy, supports communities, manages effects on the environment, and is committed to conservation. If this is were not the case, mining could not, would not and should not be approved.

A rational debate on mining is called for; the Institute of Policy Studies’ initiative is welcome. For this, adequate information is needed, and this is costly to obtain. Only if the economics, including the costs of environmental and conservation management, stack up can the investment in information be made by a firm. It is at the local scale that the debate should be, and, indeed, is held. I am referring to Resource Management Act processes, and to future opportunities for public input into Crown Minerals Act processes.

I invite all New Zealanders to have open minds, and to work together to achieve sensible outcomes for the economy and the environment from mining.

Should we let a few facts get in the way of a good protest?

A political debate can run to a conclusion with few or no facts; that’s one lasting lesson of the schedule 4 debate. Emotion reigned; dialogue was absent. This should concern all New Zealanders.

The Government has been borrowing $250 million a week to keep the nation afloat⁶, a fact of which most Kiwis are probably unaware. The public’s aspirations for services, and for National Parks, demand that we examine options for economic activity that allow us to afford those things. The economy is, therefore, a key issue for New Zealand.

Any transition to a new economy will take time⁷, and lies outside this discussion. For now New Zealand has a trading economy, a growing and ageing population in need of services, and debt to pay. For now economic growth is the paradigm. Within that, it is valid to find ways of generating wealth and jobs. The mining debate sits squarely within this context.

Many New Zealanders say the environment is the nation’s key issue, and the resource sector agrees. Freshwater quality and quantity concerns are paramount, as is the future of threatened native biodiversity⁸, as are the scenic beauty and recreation opportunities enjoyed by New Zealanders and overseas visitors⁹. Arguably, all of these issues are also economic issues, taking a broad view of “economy” – the stewardship of resources.

When economic issues intersect with environmental issues, as they did over Schedule 4, it is important to debate them, and we had an outpouring of public opinion in recent months.

Of the 37,552 submissions on the Government’s discussion document, there was an overwhelming call for Schedule 4 land – in national parks, marine reserves, Great Barrier Island and the Coromandel – to remain off-limits to mining¹⁰. An estimated 40,000 people protested on Queens St in Auckland, saying “no to mining”¹¹, and around 50,000 people signed a Green Party petition in the same vein¹².

"2 precious 2 mine” ran a web campaign to encourage pro forma submissions, and the strategy worked. Some 30,000 of the written submissions were of this sort¹³.

Forest & Bird’s arguments broadly represent the theme: “plans to mine Schedule 4 land failed to recognise the intrinsic, scenic, recreation and conservation values loved by New Zealanders”¹⁴. Any economic benefits of mining from these areas would be more than eroded by the damage done to the nation’s 100% Pure image¹⁵.

The media joined in. The commentators crowed the Government would be foolish to proceed; the public had spoken¹⁶. All of this was enough for the Government to back down¹⁷. This has been called a victory for the environment and New Zealanders.¹⁸ In the words of Forest and Bird blogger Nicola Vallance: “They say Mine, we say OURS.”¹⁹

“In war, truth is the first casualty,” wrote Aeschylus, a specialist in Greek tragedy, 2500 years ago. It’s still true today, as we observe with Forest & Bird’s 20^th Century, us-and-them positioning. It is a sobering lesson for the resource sector and the 14,800 who work directly and indirectly in it – chiefly oil and gas, coal, gold, ironsands, and aggregates.

(For the record, the resource sector does not say “mine”, more on this later, and we and our families also enjoy, appreciate and use public conservation land.)

If the people of New Zealand were to believe, as a matter of informed principle, that Schedule 4 land and, perhaps, other public conservation land, should remain off-limits to prospecting, exploration and, potentially, mining, then fine.

But it’s not that simple - as media, politicians and campaigners would have us believe. It is appropriate that New Zealand hold an informed policy debate, to supersede the emotionally-charged, fact-deprived hysteria presented to date.

Rebuttal of anti-mining advocacy

Let’s first examine the problem as defined, as the opponents to mining see it, which is in summary: schedule 4 (and possibly other) lands are too precious to be dug up; mining makes a mess; doesn’t deliver economic benefits to New Zealand; it’s a one-off activity, so, not sustainable; and the New Zealand public does not want mining, not on Schedule 4 land, and, perhaps, not on any public conservation land. These are serious charges, and I will answer them at length.

Discussion

So, where does this leave the schedule 4 debate, or the policy debate on the future of mining on public conservation land in New Zealand?

As Straterra sees it, the chief issues are about where to mine, and under what conditions. (It is taken as agreed that mining is a legal and legitimate activity in our country.)

The “where” will depend on the economics, and on the environmental values. Only if the economics warrant - and that includes managing the environmental effects - would mining go ahead. Otherwise, it would not. Places with outstanding values would remain off-limits to mining. There are criteria for identifying places with outstanding values, and for assessing proposed environmental management. No doubt, further work could be done to refine these, drawing on our collective experience. The Government is leading such work and the resource sector is happy to participate.

But it is only when specific proposals are considered that the investment will be made (by the applicant) in detailed mineral and environmental information. It is in this theatre that an informed debate can be had, and indeed, is had, under the RMA. This is world-leading environmental law (noting there is always room for improvement)⁴⁴, and the requirements on mining companies are strict, as they should be.

In 2007 Toronto-based mining writer Stan Sudol wrote: “Past industry practices that were detrimental to the environment are still highlighted by the anti-mining crowd today ... yet, the reality of mining in the 21st century is quite the opposite. Strict environmental regulations are enforced on all new projects. Mining companies must develop closure or decommissioning plans that require the restoration of all lands to their natural state when the operations are finished. Over the past 20 years the industry has made tremendous strides at reducing the environmental footprint of their operations.”⁴⁵

Stan Sudol was thinking of mining in Ontario, Canada, however

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