Straterra opinion

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

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

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, his comments are equally valid for New Zealand. There is much activity in this area in our part of the world. In August 2010 AusIMM, the Australian Institute of Mining and Metallurgy, hosted a conference entitled Sustainable Mining 2010, in Kalgoorlie⁴⁶. The Global Mining Initiative, which advances the mining industry’s commitment to sustainable development worldwide, has been working in this area since 2001⁴⁷. Newmont, the miner in Waihi, is a founding member.

Advancements are continuing in the way mining is done and managed. In 2008 Pike River Coal won an award from DOC for its environmentally-friendly mining and road infrastructure⁴⁸. The State-owned coal miner Solid Energy is seeking to have a “net positive impact on the environment” from its activities⁴⁹, and is working with DOC and international leaders in the field of “biodiversity offsets”⁵⁰. There is a long way to go but the commitment is there.

The “condition” issue has an environmental aspect, as noted, and an economic aspect. Mining companies also have conditions. For example, New Zealand would have to be attractive to foreign investment for companies that need to access overseas capital. In this, improved certainty of process and improved knowledge of our mineral resources are important, as are economic stability and well-functioning capital and financial markets. Our Government is working hard in these areas⁵¹, and this is appreciated by the resource sector.

Conclusions

I started this discussion, provocatively, with the question: “should we let a few facts get in the way of a good protest?” I have provided more than a few facts, too many to wrap up in a swift sound bite. But here are some final reflections on the mining debate.

New Zealand, as a society, will make better decisions with all the facts on the table. This is difficult to achieve on a national scale. The point is underscored that the mining debate is best had on specific proposals, where the information is available. Mining is a local issue.

Mother Nature, economics, the regulators (and NGOs) will guarantee there will be no rush to mine. If we as a nation can agree that mining is a valid pursuit, in places where it is economic, and environmentally appropriate, then there is the basis for a rational debate. 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.

References

Straterra press release. “Natural resource industry brands Mt Aspiring speculation as scaremongering”. 1 December 2009: http://www.straterra.co.nz/Natural+resource+industry+brands+Mt+Aspiring+speculation+as+%93scaremongering%94
Straterra press release. “Conservation groups attempting to spread panic”. 15 March 2010: http://www.straterra.co.nz/Conservation+groups+attempting+to+spread+panic
Straterra press release. “Straterra calls for rational approach”. 19 March 2010: http://www.straterra.co.nz/Straterra+calls+for+rational+approach
Straterra press release. “Greenpeace scaremongering criticised”. 23 April 2010: http://www.straterra.co.nz/Greenpeace+%27scaremongering%27+criticised
Straterra press release. “Natural resource industry moves to dispel myths”. 21 May 2010: http://www.straterra.co.nz/Natural+resources+industry+moves+to+dispel+%22myths%22
Prime Minister John Key, post-Budget speech to Trans-Tasman business Circle. 21 May 2010: http://www.johnkey.co.nz/archives/956-Post-Budget-speech-to-Trans-Tasman-Business-Circle.html
Sustainable Development Commission, UK, “Prosperity Without Growth”. March 2009: http://www.sd-commission.org.uk/publications.php?id=914
Ministry for the Environment, “Environment New Zealand”, state of the environment report, December 2007: http://www.mfe.govt.nz/publications/ser/enz07-dec07/
Tourism Industry Association of New Zealand submission to the Ministry of Economic Development on “Maximising our mineral potential: stocktake of Schedule 4 of the Crown Minerals Act and beyond”. May 2010: http://www.tianz.org.nz/content/library/Mining_on_Schedule_4_land__21_May.pdf

10. Minister of Energy and Resources Gerry Brownlee/Minister of Conservation Kate Wilkinson, press release. 20 July 2010: http://www.beehive.govt.nz/release/no+land+be+removed+schedule+4

11. New Zealand Herald. 1 May 2010: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10642083

12. TVNZ news. 23 June 2010: http://tvnz.co.nz/politics-news/nearly-50-000-sign-anti-mining-petition-3607039

13. Minister of Energy and Resources Gerry Brownlee/Minister of Conservation Kate Wilkinson, press release. 20 July 2010: http://www.beehive.govt.nz/release/no+land+be+removed+schedule+4

14. Forest and Bird web site: http://www.forestandbird.org.nz/what-we-do/campaigns/too-precious-mine-/mining-our-top-conservation-land

15. Ibid

16. New Zealand Herald editorial. 21 July 2010: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10660113

17. Minister of Energy and Resources Gerry Brownlee/Minister of Conservation Kate Wilkinson, press release. 20 July 2010: http://www.beehive.govt.nz/release/no+land+be+removed+schedule+4

18. Forest and Bird web site: http://www.forestandbird.org.nz/what-we-do/campaigns/too-precious-mine-/mining-our-top-conservation-land

19. Forest and Bird blog, Nicola Vallance. 20 July 2010: http://blog.forestandbird.org.nz/power-to-the-people/

20. Newmont Waihi Gold submission on the Government discussion document “Maximising our mineral potential” (op cit). 18 May 2010: http://www.marthamine.co.nz/PDF/NWG_Sch4_submission.pdf

21. Ministry of Economic Development, Department of Conservation, “Maximising our mineral potential: stocktake of Schedule 4 of the Crown Minerals Act 1991 and beyond: discussion paper”, March 2010: http://www.med.govt.nz/upload/71967/Schedule%204%20stocktake%20-%20Discussion%20paper%20_without%20maps_.pdf

22. Ibid

23. Newmont Martha mine social licence to operate: http://www.marthamine.co.nz/martha_com.html

24. Solid Energy New Zealand’s Cypress extension to the Stockton mine: http://www.coalnz.com/index.cfm/3,293,838/cypress-factsheet-0409-web.pdf

25. Department of Conservation annual Report 2009, Director-General’s foreword: http://www.doc.govt.nz/publications/about-doc/annual-report-for-year-ended-30-june-2009/director-generals-overview/

26. Department of Conservation, pers. comm. Paul Stigley. August 2010:

27. Office of the Parliamentary Commissioner for the Environment, “Making difficult decisions: mining the conservation estate”. September 2010: http://www.pce.parliament.nz/assets/Uploads/Reports/pdf/Mining-Report-FINAL.pdf

28. Department of Conservation, pers. comm. Paul Stigley. August 2010:

29. Another view web site, on Newmont Waihi gold: http://www.anotherview.co.nz/text/tourism.html

30. NZIER report to Straterra, “Diamond in the rough: the current and potential economic contribution of New Zealand’s mineral resources sector”. May 2010: http://www.straterra.co.nz/Straterra%27s+Submissions

31. Ministry for the Environment, New Zealand Biodiversity Strategy 2000-2020: http://www.mfe.govt.nz/publications/biodiversity/nz-biodiversity-strategy-feb00.html

32. Ministry for the Environment, “The state of New Zealand’s environment 1997”: http://www.mfe.govt.nz/publications/ser/ser1997/

33. Ministry for the Environment, “Environment New Zealand”, state of the environment report, December 2007: http://www.mfe.govt.nz/publications/ser/enz07-dec07/

34. Department of Conservation, “The synthesis report: turning the tide? Review of the first five years of the New Zealand Biodiversity Strategy”, November 2006: http://www.doc.govt.nz/publications/conservation/a-review-of-the-first-five-years-of-the-nz-biodiversity-strategy/

35. Department of Conservation, “Saving our kiwi”, December 2006: http://www.doc.govt.nz/publications/conservation/native-animals/birds/saving-our-kiwi/

36. Office of the Parliamentary Commissioner for the Environment, “Making difficult decisions: mining the conservation estate”. September 2010: http://www.pce.parliament.nz/assets/Uploads/Reports/pdf/Mining-Report-FINAL.pdf

37. Straterra submission to the Ministry of Economic Development on “Maximising our mineral potential: stocktake of Schedule 4 of the Crown Minerals Act and beyond”. May 2010: http://www.straterra.co.nz/Straterra%27s+Submissions

38. Ibid

39. Another View website, providing information on Newmont Waihi Gold: http://www.coalnz.com/index.cfm/1,278,0,0,html/Your-Community

40. Overseas Investment Office decisions. May-July 2010: http://www.linz.govt.nz/overseas-investment/decisions/index.aspx

41. Wine Institute of New Zealand statistics 2009: http://www.nzwine.com/statistics/

42. Shape NZ poll commissioned by the New Zealand Business Council for Sustainable Development. May 2010: http://www.nzbcsd.org.nz/story.asp?id=1201

43. Statistics New Zealand: http://www2.stats.govt.nz/domino/external/web/prod_serv.nsf/htmldocs/Population#latestest

44. OECD, “Environmental performance reviews: New Zealand (2007)”: conclusions and recommendations: http://www.oecd.org/document/10/0,2340,en_2649_34307_37915274_1_1_1_1,00.html

45. Stan Sudol, “Good green news in mining”, Entrepreneur Magazine, article originally published in Northern Life, Ontario, Canada. June 2007: http://www.entrepreneur.com/tradejournals/article/165681557.html

46. AUSIMM Sustainable Mining 2010 conference: http://www.ausimm.com.au/sustainablemining2010/home.asp

47. Global Mining Initiative: http://www.globalmining.com/

48. Pike River Coal conservation award from the Department of Conservation in 2008: http://www.pike.co.nz/environmental_performance.php

49. Solid Energy New Zealand environment policy: http://www.coalnz.com/index.cfm/1,278,0,0,html/Your-Community

50. The Business and Biodiversity Offsets Program Learning Network Newsletter. January 2008: http://bbop.forest-trends.org/newletter/20080123.htm

51. Ministry of Economic Development. Crown Minerals Annual Report 2009: http://www.crownminerals.govt.nz/cms/pdf-library/about/Anual%20Report%202008-2009.pdf

15 February 2011, NZ Energy News

Open minds needed on Exclusive Economic Zone

As new law is being prepared for New Zealand’s Exclusive Economic Zone, the energy sector must urge the Government to avoid zoning large areas off-limits to development, writes Chris Baker

It’s soon crunch time for the Exclusive Economic Zone. A proposal for EEZ legislation covering environmental issues is due to go before Cabinet in April. Environment Minister Nick Smith has said he is keen to introduce a Bill into Parliament this year. There’s much at stake.

The Ministry for the Environment has identified several issues for new legislation to resolve: tension in approach between planned allocation of resources and market-driven development; competing demands for space between sectors, e.g. windfarms v. marine farms; whether to adopt a precautionary approach (do nothing until perfect information is available) or adopt an adaptive management approach (learn as you go along).

This is a sensible list – society is confronted by the same issues on land. They are addressed in the Resource Management Act 1991. Nonetheless, battle lines for a debate are being drawn.

We attended a symposium convened by the Institute of Policy Studies, Victoria University of Wellington, in November last year, and shared a platform with the petroleum sector (PEPANZ), MfE, and WWF New Zealand. The audience comprised mainly academics, students, environmental NGOs, and officials.

A strong push was made by the NGOs for spatial planning - zoning of areas that would be either available for economic development or off-limits to such activity, for the protection of biodiversity. They argued this is a worldwide approach; some 20 other countries with EEZs are moving in this direction. What’s good for them should be good for us.

WWF New Zealand argued we have enough information on the living resources, and on the mineral resources to make decisions on creating marine reserves, World Heritage areas, benthic protection areas, protected seamounts and the like.

We have a different perspective.

Clearly there are areas that we can agree deserve to be protected, whatever the economic potential. Perhaps, parts of the Kermadecs fall into this category; certainly on dry land national parks do.

However, in most cases, and particularly in these new frontiers, we lack the information to make these decisions in a robust way. Mineral resources, be they metals, oil and gas or industrial minerals, are difficult, time consuming and expensive to find. Against that, the global demand for commodities and resources is high – hence high prices and strong incentives to consider new options.

Zoning is, therefore, entirely the wrong approach to any policy that takes into account more interests than biodiversity. It is also unnecessary in the case of minerals because when a resource project is developed, in the event we are lucky enough to find one, the footprint, the area actually impacted by the project, is typically very small.

At 4.3 million square kilometres, the EEZ is 15 times New Zealand’s land mass in area. Currently there are five producing oil and gas rigs off Taranaki, each having a footprint of around one hectare. Even if this were increased by 100 times, the environmental impact of petroleum operations would be minuscule, noting that a policy process is underway to consider the effects of seismic surveying on marine mammals.

Where petroleum is concerned, the environmental debate has honed in on the risk of oil spills, in the wake of the Deepwater Horizon disaster in the Gulf of Mexico in April 2010. The consequences of such an event are major so it is fair to be concerned, even if one bears in mind that there are some 2900 oil and gas rigs in the Gulf of Mexico.

Here is where the zoning argument could get serious political traction. If the consequences of a big oil spill are so massive, the environmental NGOs say, then our most important areas for biodiversity should be set aside from petroleum development.

This refrain was echoed in a comparative review of the health, safety and environment (HSE) legislation for offshore petroleum operations, commissioned by MED, in the wake of the BP spill. This was released in December last year for public feedback by mid-February. While the review is generally sound, in our view, some of the recommendations to the Government are not.

Of particular concern is that the reviewers - New Zealand law firm Atkins Holm Joseph Majurey and international consultancy Environmental Resource Management - recommended HSE issues to be considered at a high level at the resource allocation stage. Part of their rationale was that oil spills, even if they originate as health and safety (H & S) incidents, also have environmental effects.

If implemented, Crown Minerals, the division of MED responsible for the allocation of Crown minerals, or the Minister of Energy and Resources, could find themselves with no option but to withhold large areas of the EEZ from petroleum development, based on a cursory analysis of the HSE issues.

Again, we have a different perspective. Applying the naysayers’ argument more broadly, we should ban motor vehicles, aeroplanes, alcohol, junk food. We prefer a risk management approach. Rather than bring oil spills into an environmental spatial planning framework, it would make more sense for New Zealand to bring the environmental aspects of oil spills into the H & S context.

The reviewers proposed better plans for H & S, better monitoring and inspection of those by the regulator, and better provisions for insurance and liability cover. These are good ideas - in this way, New Zealand can reduce the risk of oil spills, and have better ability to manage them in the unlikely event they occur.

To return to the bigger picture, MfE has been working on EEZ environmental legislation for some years now. In 2007 it issued a discussion document proposing, among other things, that governance of the EEZ should entail: exploring, exploiting, conserving and managing living and non-living resources. Guiding principles for management included: greatest national benefit, sustainable management, safeguarding of ecosystems, and maximisation of opportunities for New Zealand. This all sounds fine.

This is important because these principles include economic considerations. The EEZ debate should focus on how the competing interests can be managed fairly and for the benefit of New Zealand Inc, with acceptable environmental impacts to our society. The environmental impacts of mining would be better considered on a case-by-case basis. This is because it is only for specific proposals that there will be sufficient information on all of the values present – otherwise the company would not invest in obtaining the information.

On land and in the marine environment out to the 12-nautical mile limit, the RMA provides the legislative regime that allows these competing interests to be considered. A similar approach could be taken when Parliament considers the EEZ Bill.

What would new legislation and an administrative structure look like? There is room for useful speculation. MfE has given indications, and the HSE legislation for petroleum reviewers made some logical recommendations.

Currently there are 18 laws, 14 agencies, six government strategies, and 13 international conventions applying to the EEZ. As was pointed out in the now-defunct Oceans Policy process in the early 2000s, there is room for consolidation.

Both MfE and the reviewers of the HSE legislation for petroleum have suggested the environmental aspects could be overseen by a single agency, possibly an expanded Maritime NZ, in terms of policies and planning. This sounds sensible. Presumably, the new Environmental Protection Authority would issue consents and monitor compliance, in line with what’s intended for it on land.

In terms of how are issues should be treated, there is no doubt plenty of room for useful discussion. One option might be to have Crown Minerals to continue to allocate the resources, and H & S remain the province of the Department of Labour and Maritime NZ, or of one or the other. But there may be other formulas that could also work well.

Straterra is submitting on the review of HSE legislation for offshore petroleum operations and will submit to the select committee on any draft legislation for the EEZ.

14 February 2011, NZ Resources

With a voice of one

Straterra's chief executive Chris Baker has got on the soapbox to tell industry people of the need for an unified voice on several issues this year

Straterra was set up in 2008 by a number of companies who shared the view that the sector’s contribution to the economy could dramatically increase, and shared sector concerns that mining and resources were poorly represented in the political and public arenas. The vision for Straterra Inc was that we would provide a common, unified voice for the sector as a whole. We have made substantial progress, but have not yet achieved that vision. It is imperative that we do.

We face a number of issues. The Pike River tragedy hangs like a pall across the sector – our hearts and sympathy go out to the families. We have a Government who understands the value of the resource sector, and the need to encourage economic activity. We have an empowered green sector, fresh from their success in opposing Government plans to assess the mineral potential of selected conservation land. Next on the agenda appears to be to lock up more public conservation land from minerals access, and extend this into the marine environment, out to the 200-nautical mile limit and over the extended continental shelf.

We know this because we have participated in the public forums where these issues have been under discussion - at university symposia, in Select Committee, in the media.

Straterra has stepped up its presence in this and other debates, in submitting on government policy processes, in our relations with government, and in the media. We represent 84 percent by value New Zealand’s minerals production (except for oil and gas, and geothermal); we work closely with the petroleum sector; and we have developed initial links with geothermal.

We have employed staff to provide in-house policy analysis, communications and office management. We have created an industry hub at our leased premises in Central Wellington, bringing together interests in coal, gold, ironsands, phosphate, oil and gas, electricity and climate change. We helped launch and now represent the NZ branch of Austmine, an Australian mining equipment, technology and services association.

We have revamped the web site, www.straterra.co.nz and this is now our principal channel for communications.

Almost all of these results have been achieved in the last six months with three staff.

Crucially, opinion leaders and decision-makers in New Zealand are seeking Straterra’s views or are open to hearing and considering them. A key theme of our advocacy has been decision-making based on good and balanced information, and an understanding and consideration of the competing interests. We believe in a collaborative approach to resource debates, to maximise the benefits for the economy and NZ Inc, in an environmentally-responsible way.

To be successful long term, we need to build substance and effectiveness. Straterra has done much to build the critical mass to influence policy and legislative debates. We can and must do more, and for that, we need to build our support base within industry. The stronger our membership and affiliations with other entities, the more resources we have at our disposal, and the more achievable our goals.

24 December 2010, Southland Times

Lignite won't hurt planet

Calls for a ban on lignite mining are irresponsible, and dodge the real issues on climate change, writes Chris Baker

The anti-lignite lobby is struggling to understand reality. We can help in defining that reality by stating the obvious – prohibiting lignite mining in New Zealand will have no effect on the world's climate.

Until China and India (and many other developing and developed countries) find a way of producing electricity for less than 6 cents a kilowatt-hour using something other than coal, those countries will burn coal. We can agree that coal is a "transition" fuel, but there is no shortage of coal available in the medium term, and all the negotiations in the world will not alter this fact. Of course, the use of lignite does produce significant CO2 emissions, as Parliamentary Commissioner for the Environment Dr Jan Wright recently reported in "Lignite and climate change: the high cost of low-grade coal".

But I take exception to Dr Wright's dim view of proposals for mitigating these emissions, notably, carbon capture and storage (CCS) technologies.

According to the International Energy Agency, up to US$36 billion has been invested in the last two years on research and in 80 large-scale CCS projects worldwide, including Australia with contribution from New Zealand. This is a serious investment, and shows the potential of CCS to reduce emissions is being taken seriously internationally.

Green Party MP Catherine Delahunty was quoted in The Southland Times this week: "[Locals] don't want Southland to be known as the greatest greenhouse gas emitter in New Zealand." She is missing the point.

Any developer of lignite would require a credible and effective greenhouse gas mitigation plan in line with New Zealand legislation and society's expectations. That is as it should be and CCS could well play a role in that plan.

CCS encompasses a range of technologies for capturing the CO2 emissions from, say, a coal-fired power station, transporting the CO2, and storing it long-term. It is not new – methods for CO2 extraction from gas streams and storing it in liquid or solid form have been available since the 1960s or even earlier. We extract CO2 from Kapuni gas now, and pumping CO2 into oil fields is common practice internationally. The challenge, globally, for CCS is deploying these technologies at the scale required to significantly reduce GHG emissions.

A joint initiative between the New Zealand Government and industry contributes directly to the world-leading Otway Basin storage research and demonstration project.

The abject failure of international negotiations to date means that to consider GHG mitigation without CCS is a guarantee of failure.

Therefore, New Zealand's lignite resources could be developed in an environmentally-responsible way. It is of massive importance to our economy that we do this. There are around 9 billion tonnes of lignite that can be recovered, with an estimated energy content of 30-40 Maui gas fields. At likely future prices, this resource could be worth $3 trillion.

A Solid Energy and Ravensdown project to convert lignite into fertiliser could be worth $377 million a year to the Otago and Southland economies, and create up to 2344 jobs.

Let's not forget the broader context to coal. Coal in the South Island is the chief energy source used to convert milk into milk powder, the basis of a multi-billion dollar export industry. Fonterra's Edendale processing plant alone employs 400 staff and produces 230,000 tonnes of product a year.

New Zealand coal and ironsands are used to make steel at Glenbrook, which employs 1200 staff and injects $80 million a year into the South Auckland economy.

Coal and gas also make a vital contribution to our electricity supply. We are blessed with renewable sources of energy, wind and rain, and we have considerable untapped potential for additional geothermal. But we still need Huntly, and EP3, and will do so in the medium term.

Even as the contribution of geothermal and wind increases over time, New Zealand's total demand for electricity will rise to match, as the Government's economic goals are met and our economy and population continue to grow. New Zealand will be using coal, lignite and petroleum for the foreseeable future, as part of the mix of energy sources including hydro, wind and geothermal electricity generation.

We will need to mitigate fossil fuel emissions, as does every ot

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Scaremongering ignores recent mining practices

Posted in: Perspectives: Monday, 10 May 2010
New Zealand Herald � 10 May Modern techniques and the RMA make mining feasible, writes Chris Baker. ...

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