web analytics

Local Bodies: The Great Oil Gamble and Wasted Opportunities

Written By: - Date published: 8:37 am, April 7th, 2014 - 24 comments
Categories: energy, national, same old national - Tags: , , , ,

bsprout at LocalBodies allows us to repost some of his interesting pieces. This one from last thursday asks why National are so fixated on selling our oil and gas exploration rights.

‘Gamble Big’ rather than ‘Think Big’ should be this National Government’s mantra.Opening up huge areas of our land and territorial waters for open slather oil and gas exploration is a gamble on so many levels. When many countries like Denmark are actively chasing a sustainable, clean energy future, this government is throwing all its hopes on a big strike of fossil fuel.

It is a gamble that in the twenty years or so before any worthwhile production will occur, that there will still be a high level of demand for the polluting fuel (given the growing urgency around climate change). It is a gamble that during the most dangerous exploration phase that the Government has limited public scrutiny and involvement in initial consents. It is a gamble to drill at depth of over 1,000 metres – the deeper the drill, the greater the risks. It is a gamble that the Government sees no benefit in ensuring thatMaritime New Zealand is capable of managing a serious spill and Anadarko’s own response plan reveals it would take up to 115 days to get a relief rig on site. We are also gambling with our clean green brand that 75% of our exporters are reliant on, one spill could tip the balance of our already shaky image.

While the Government is prepared to gamble on a fossil fueled future, there are readily available sources of cleaner more sustainable energy under our noses. If the same amount of money that is being spent subsidising oil corporates ($46 million a year) was directed into research and technology to tap into these opportunities we could be self sufficient in energy in the same time it would take for deep sea oil to become productive.

Rather than hoping for a large single source of energy from an oil or gas strike (that we will still have to pay commercial rates for) we should spread our attention to the smaller scale opportunities that could collectively be quite substantial:

  • The bio-waste on farms is a largely untapped energy source that could enable most of our dairy farms to be self sufficient in energy and capturing waste before it enters our water systems and atmosphere. I like the description of letting this waste run off the farm without being properly utilized as ‘energy leakage’.
  • Our timber industry produces a large amount of unused waste as trees are harvested and logs prepared for export. Converting waste wood into bio-fuel is a logical way of managing a generally discarded material.
  • Rather than seeing our sewage ponds as an ongoing municipal cost, the algae found in them could produce an income through the production of bio-diesel.
  • Many of our landfill sites are burning off methane into the atmosphere that could easily be captured as a source of natural gas for local use.
While John Key and his mates may enjoy gambling big with New Zealand’s future, I would rather take smaller risks and invest in longer term, sustainable options.

24 comments on “Local Bodies: The Great Oil Gamble and Wasted Opportunities ”

  1. Lanthanide 1

    I suspect the reason none of the things being suggested at the end of the post are being done basically boils down to profitability. These processes are expensive and in their infancy. No one wants to invest the big up-front dollars in order to capture potentially meagre gains, especially if in 10 years time the technology has improved, rendering the old plant and equipment obsolete.

    • Draco T Bastard 1.1

      The only organisation that has the patience to invest in this type of R&D is government but our government has spent the last thirty years denying that it even has a major role to play in R&D. And all Labour have come up with R&D credits which international have shown usually don’t work (Marianna Mazzacuto, The Entrepreneurial State).

    • Lanthanide, I agree that none of my list would probably attract interest from larger commercial entities except maybe in the production of the technology that supports them. I am talking about multiple small scale projects that meet the needs of individual businesses and local communities. Large scale energy production can actually involve large inefficiencies.

      We should be looking at multiple small scale solutions rather than looking at large, one size fits all, approaches. We don’t need to have these projects returning profits, most will probably just meet immediate needs and be just cost effective. The gains will be: a reduction in reliance on imported energy, a reduction in our current account deficit and, over time, reduce the costs of expensive national infrastructure.

      • Draco T Bastard 1.2.1

        I agree that none of my list would probably attract interest from larger commercial entities except maybe in the production of the technology that supports them.

        Nope, all the larger private entities would be interested in would be when they can come in and hoover up all the gains.

        I am talking about multiple small scale projects that meet the needs of individual businesses and local communities.

        None of which have the capacity to support such R&D. The nation does.

        We should be looking at multiple small scale solutions rather than looking at large, one size fits all, approaches.

        Once the government has done the R&D we can put in place small scale solutions that meet the needs of the local community.

    • Naturesong 1.3

      I suspect that some of these ideas may not seem profitable simply because externalities and subsidies are not accounted for.

      For instance, cost of river pollution, who pays? Currently no one, or occasionally a local community project (volunteers) to clean up a section of the river that has been polluted by either farm runoff or manufacturing waste.

      And if you remove the subsidies from fossil fuels (tax credits, exploration data and research), suddenly the alternatives look more and more competitive.

    • Naki Man 1.4

      Well said Lanthanide. Common sense and some people are not bright enough to work it out.
      USA has been down this road and given up after wasting millions

  2. tricledrown 2

    Nationals fossils (front bench and underlings)
    Have fucked up with mining and drilling.
    So spin
    National irrigation policy is in tatters after trustpower and other private investors are pulling out of hawkes bay dam.
    Farm research restructuring by by Joyce is sabotaging years of intellectual capital built up in Agricultural research.
    Not for the first time National destroyed longterm research when they first came to power completely destroying our world leading wool research unit at lincoln .
    Nactional are a bunch of bean brained bean counters.
    Who are only intetested in image over substance.

  3. Ad 3

    Was very encouraged by Z Energy getting their unsubsidised tallow-to-biodiesel plant up and running.

    Such a huge opportunity for Fonterra to dedicate their waste stream to diesel. They still don’t have enough pressure on their sustainability measures.

    Hopefully the wood waste stream in Kawerau will go into major commercial scale as well.

    What’s Labour and Green policy on biofuel commercialisation?

  4. tamati 4

    Yet even the Greens haven’t ruled out supporting a government that allows off shore oil drilling!

    • Naturesong 4.1

      I think you’ll find that they support any current deep sea wells (currently no deep sea wells) with conditions.

      Those conditions in a peak oil world (here now), are likely to make it unprofitable for deep sea drilling.

      The above consession is due to Labours position, and the Greens having to engage in real politik

      Greens Energy Policy

      D. Deep Sea Drilling, Hydraulic Fracturing (‘Fracking’), and Related Extractive Activities

      The increasing world wide demand for fossil fuels is leading to more extreme measures of fossil fuel extraction, including deep sea drilling and hydraulic fracturing. Both methods have significant environmental risks, and our capacity for dealing with even a small oil spill is very limited. The Green Party will:

      1. Make each of the following activities a prohibited activity:
      a. All new deep sea drilling within territorial waters, the Exclusive Economic Zone and the continental shelf for fossil fuels (with deep sea defined as below 200 metres). Fossil fuel exploration and exploitation in the Ross Sea region.
      b. Underground coal gasification.
      c. Exploitation of gas hydrates (e.g. methane hydrates).
      d. All new coal seam gas projects.

      2. Place a moratorium on hydraulic fracturing for oil and gas within territorial New Zealand, the Exclusive Economic Zone and the continental shelf until it is proven safe.

      I would like to see the Greens promote revaluing any oil and coal found down to 20% of it’s current book value (as per 350.org). At which point alternative energy sources become not merely an alternative, but the default.

      • fisiani 4.1.1

        ie. no jobs under the Greens, no looking for vast wealth, no hope, no future.
        Greens tied to hip with Labour so under Labour no jobs, no wealth, no hope no future.
        And you wonder why 90% of people do not vote Green…..

        • Tracey 4.1.1.1

          nope. and i dont wonder why 99.7% dont vote for act or dunne either.

        • Draco T Bastard 4.1.1.3

          Mining and drilling don’t produce many jobs anyway and the vast wealth will just be sold off leaving us poorer. On top of that it will actually be burned pushing ever increasing AGW which will result in an Extinction Level event meaning that we will have no hope and no future following National’s path.

          The Greens on the other hand push creating more jobs by researching, developing and producing renewable energy assets. This will produce far more jobs and real wealth (as opposed to just money) than anything that National proposes. This would be due to National only being interested in lining their and their mates pockets with money.

          • aerobubble 4.1.1.3.1

            Bridges says we should do both, how naive. Huge welfare assistance goes into maintaining a oil based transport system and once the reality of climate change threats finally dawns on the simpleminded Bridges and his ilk, there will be a huge crash in stocks for oil and a societial shift away from these fuels. Simply put, the huge expense of getting the fuel out of the ground, refining it, transporting it, and then maintain the equipment (and collapse of social addictions to it use) will mean even a surplus of such fuels will be re-purposed to other ends.
            In fact we are already see the rot, as ‘tallow’ and other additions are mixed into petroleum to maintain the current infrastructure, and its ensuing culture of excess. The Greens recognize that the culture of excess, eating several Earths is unsustainable, just Bridges is too think to understand the meaning of that word, unsustainable means his petroleum economy is a modern dinosaur extinction now inevitable.

          • Tamati 4.1.1.3.2

            Yet the Greens still won’t rule out supporting a Government that continues deep sea oil drilling. If they won’t stand up for their policies, are they really policies or more like aspirations or dreams?

            • aerobubble 4.1.1.3.2.1

              That’s dumb. The sooner we all know how much is left, the sooner the reality of the end of oil makes Green policies more applicable. Sure Greens don’t want it, but its not the end of the world looking for these resources, in fact the sooner they get it done…

  5. Tracey 5

    Anadarko has just had to pay out 5.5b (USD) for past cleanup failures… I guess from their point of view it is cheaper to leave behind a mess, take the profit and wait for someone to sue….

    • Tracey 5.1

      nadis has quite rightly corrected me. anadarko inheritted these messes, they didnt create them.

      • Naturesong 5.1.1

        Yes and no.

        They purchased Kerr-McGee with the full knowledge of the lawsuit against the company.
        Then did some really dodgy splitting off of the liability onto a shelf company with no resources in order to avoid having to pay for it.
        So they tried to get the upside of the purchase (plant, contracts etc) and tried to legally separate the downside.

        After the settlement, Anardarco shares rose, as it the settlement is widely believed to be far less than the cost of cleaning up all the sites. And it doesn’t even touch the damage and misery caused to thousands of people who lived (and continue to live) in areas polluted by Kerr-McGee

        Reuters
        Forbes
        NY Times

  6. exitlane 6

    Another massive gamble is that the projected revenue from royalties will actually eventuate in 10 or 20 years time (should any oil actually start to flow). There are huge assumptions from the Govt that royalty rates will remain as high as they are today.

    But with all the big oil companies showing declining production in spite of massive increases in capital, and dwindling profits, you can confidently expect the heat to come on governments for seriously lower royalties rates as this squeeze gets tigher

    The projected royalty revenue may well be a mirage

    http://crudeoilpeak.info/wp-content/uploads/2013/03/IOC-oil_production_1995_2011_Jean_Laherrere.jpg

  7. aerobubble 7

    Agreed. Its coal mining all over again. They get to open cast deniston and then find the coal price has crashed….

    Look at the Great Reagan mantra about revenue, that lowering tax would increase government revenue. Yeah, duh, when the huge massive dump of cheap high density fuel hit the world econmy, the growth in the economy would naturally mean that lower taxes would see citizen take gambles and thus return more revenue. Nothing to do with Reagan, just you’re classic politician getting out in front and declaring that what was about to happen whoever was in power was going to happen anyway.

    And therein lies the problem for conservatives. Now lower taxes do not translate into higher revenues for government because there is no trend of cheap energy.

    In fact lower taxes means parasite industries get to maintain their high energy use processes, and society of waste gets to maintain its lifestyles.

    Now higher taxes means higher revenue, and higher revenue is necessary to protect the wealth of
    the rich as inequality sets to destabilize nations. Its in the interest for the wealth to vote for high taxes as then they retain their relative wealth, otherwise they risk losing it if they let large mobs demand redress. i.e. Key wants more welfare and more taxes if he wants the rich to remain rich.

Recent Comments

Recent Posts

  • Put our most vulnerable first
    Don’t forget whānau and communities most at risk, says the Green Party, as the Government lays out its three-phase plan for Omicron. ...
    1 day ago
  • Boosting our immunity against Omicron
    With Omicron in the community, it’s vital we all do our bit to help to slow the spread, keep each other safe and protect our health system. One of the most important ways we can reduce the risk of Omicron is to get a booster dose as soon as we’re ...
    2 days ago
  • Equitable response to Omicron vital
    The Green Party supports the Government’s decision to move Aotearoa New Zealand to traffic light level Red at 11.59pm tonight, but says its success will depend on the support that is made available to the most vulnerable. ...
    4 days ago
  • How we’re preparing for Omicron
    As countries around the world experience Omicron outbreaks, we’re taking steps now to ensure we’re as prepared as possible and our communities are protected. ...
    1 week ago
  • What’s Labour achieved so far?
    Quite a bit! This Government was elected to take on the toughest issues facing Aotearoa – and that’s what we’re doing. Since the start of the pandemic, protecting lives and livelihoods has been a priority, but we’ve also made progress on long-term challenges, to deliver a future the next generation ...
    2 weeks ago
  • Tackling the big issues in 2022
    This year, keeping Kiwis safe from COVID will remain a key priority of the Government – but we’re also pushing ahead on some of New Zealand’s biggest long-term challenges. In 2022, we’re working to get more Kiwis into homes, reduce emissions, lift children out of poverty, and ensure people get ...
    2 weeks ago

  • Penguin rehab and native forest restoration get helping hand
    A long-running penguin rehab facility which has been hard hit by the tourism downturn, and work to restore native forest habitats in the Catlins are being supported through Jobs for Nature funding, Conservation Minister Kiri Allan says. Otago’s Penguin Place and The Hokonui Rūnanga Catlins Biodiversity Project will receive combined ...
    BeehiveBy beehive.govt.nz
    13 hours ago
  • Resilient economy reflected in Crown accounts
    The Government’s financial accounts continue to reflect a resilient economy that has performed better than expected and puts the country in a strong position to respond to Omicron, Grant Robertson said. The Crown Accounts for the five months to the end of November were more favourable than forecast in the ...
    BeehiveBy beehive.govt.nz
    14 hours ago
  • Government announces three phase public health response to Omicron
    Reducing isolation period for cases and close contacts at Phase Two and Three to 10 and seven days Definition of close contact required to isolate changes to household or household like contacts at Phase Three Increased use of rapid antigen tests with test to return policy put in place for ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • New Ambassador to Thailand announced
    Foreign Affairs Minister Nanaia Mahuta today announced the appointment of Jonathan Kings as New Zealand’s next Ambassador to Thailand. “Aotearoa New Zealand has a long-standing relationship with Thailand, celebrating the 65th anniversary of diplomatic representation between our countries in 2021. We also share much in common at regional and multilateral levels ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government’s Family Package continues to deliver for New Zealanders
    The Families Package helped around 330,000 families in its first year - more than half of all families with children in NZ These families received an estimated $55 per week more from Families Package payments in 2018/19 than in 2017/18, on average Families Package increases to the maximum possible Accommodation ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Zealand retains top spot in global anti-corruption rankings
    Justice Minister Kris Faafoi has welcomed news of New Zealand’s ongoing position as top in the world anti-corruption rankings. The 2021 Corruption Perceptions Index released by global anti-corruption organisation, Transparency International, ranks New Zealand first equal with Denmark and Finland, with a score of 88 out of 100. “This is an ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Testing improvements see New Zealand well prepared for Omicron
    New Zealand’s PCR testing capacity can be increased by nearly 20,000 tests per day to deal with a surge in cases as part of our wider COVID-19 testing strategy, Associate Minister of Health Dr Ayesha Verrall said. “We have continued to adapt our public health response to safeguard the health ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • 5,000 portable air cleaners for schools on their way
    As schools are preparing to return, Education Minister Chris Hipkins has announced 5,000 air cleaners have been ordered for New Zealand schools. “As we know, along with vaccination, testing, good hygiene and physical distancing, good ventilation is important in minimising the risk of airborne transmission of the virus that causes ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • New Zealand to move to Red from 11.59pm today
    All of New Zealand will move to the Red setting of the Covid Protection Framework (CPF) at 11:59pm today as Omicron is potentially now transmitting in the community, Prime Minister Jacinda Ardern says. “Nine COVID-19 cases reported yesterday in the Nelson/Marlborough region are now confirmed as Omicron, and a further ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Mandatory boosters for key workforces progressing well
    More than 5,785 (82%) border workers eligible for a booster vaccination at 6 months have received it so far, COVID-19 Response Minister Chris Hipkins says. “That’s a really strong uptake considering we announced the requirement the week before Christmas, but we need to continue this momentum,” Chris Hipkins said. “We ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • NZ to move to Red
    Nine COVID-19 cases reported yesterday in the Nelson/Marlborough region have now been confirmed as the Omicron variant, and a further case from the same household was confirmed late yesterday. These cases are in a single family that flew to Auckland on 13 January to attend a wedding and other events ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New Zealand to provide further help for Tonga
    Aotearoa New Zealand is giving an additional $2 million in humanitarian funding for Tonga as the country recovers from a volcanic eruption and tsunami last weekend, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. This brings Aotearoa New Zealand’s contribution to $3 million. “This support will ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Quarterly benefit numbers show highest number of exits into work
    The Government’s strong focus on supporting more people into work is reflected in benefit figures released today which show a year-on-year fall of around 21,300 people receiving a main benefit in the December 2021 quarter, Minister for Social Development and Employment Carmel Sepuloni said. “Our response to COVID has helped ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Northland to move to Orange, NZ prepared for Omicron 
    Northland to move to Orange Rest of New Zealand stays at Orange in preparedness for Omicron All of New Zealand to move into Red in the event of Omicron community outbreak – no use of lockdowns Govt planning well advanced – new case management, close contact definition and testing rules ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • RNZAF C-130 Hercules flight departs for Tonga as Navy vessels draw nearer to Tongatapu
    A Royal New Zealand Air Force C-130 Hercules has departed Base Auckland Whenuapai for Tonga carrying aid supplies, as the New Zealand aid effort ramps up, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. “The aircraft is carrying humanitarian aid and disaster relief supplies, including water ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand prepared to send support to Tonga
    New Zealand is ready to assist Tonga in its recovery from Saturday night’s undersea eruption and tsunami, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. “Following the successful surveillance and reconnaissance flight of a New Zealand P-3K2 Orion on Monday, imagery and details have been sent ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Aotearoa New Zealand stands ready to assist people of Tonga
    The thoughts of New Zealanders are with the people of Tonga following yesterday’s undersea volcanic eruption and subsequent tsunami waves, Foreign Affairs Minister Nanaia Mahuta says. “Damage assessments are under way and New Zealand has formally offered to provide assistance to Tonga,” said Nanaia Mahuta. New Zealand has made an ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Record high of new homes consented continues
    In the year ended November 2021, 48,522 new homes were consented, up 26 per cent from the November 2020 year. In November 2021, 4,688 new dwellings were consented. Auckland’s new homes consented numbers rose 25 per cent in the last year. Annual figures for the last nine months show more ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Report trumpets scope for ice cream exports
    Latest research into our premium ice cream industry suggests exporters could find new buyers in valuable overseas markets as consumers increasingly look for tip top quality in food. Economic Development Minister Stuart Nash has released a new report for the Food and Beverage Information Project. The project is run by ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Honouring the legacy of legendary kaumātua Muriwai Ihakara
    Associate Minister for Arts, Culture, and Heritage Kiri Allan expressed her great sadness and deepest condolences at the passing of esteemed kaumātua, Muriwai Ihakara. “Muriwai’s passing is not only a loss for the wider creative sector but for all of Aotearoa New Zealand. The country has lost a much beloved ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Have your say on proposed changes to make drinking water safer
    Associate Minister for the Environment Kiri Allan is urging all New Zealanders to give feedback on proposed changes aimed at making drinking water safer. “The current regulations are not fit for purpose and don’t offer enough protection, particularly for those whose water comes from smaller supplies,” Kiri Allan said. “This ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Planting the seeds for rewarding careers
    A boost in funding for a number of Jobs for Nature initiatives across Canterbury will provide sustainable employment opportunities for more than 70 people, Conservation Minister Kiri Allan says. “The six projects are diverse, ranging from establishing coastline trapping in Kaikōura, to setting up a native plant nursery, restoration planting ...
    BeehiveBy beehive.govt.nz
    3 weeks ago