Hot Topic Reporting season
Hot Topic Reporting season
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Bluegreen agenda trips oil drillers

The government's new Environmental Protection Agency is unlikely to pinch much of the Green vote while raising more fears for business.

Thu, 02 Jun 2011

The government’s “bluegreen” creation of the new Environmental Protection Agency is unlikely to pinch much of the Green vote while raising more fears in business that this is a further setback to mining the country’s riches.

The EPA will approve oil, gas and mining exploration permits within the Exclusive Economic Zone, which runs out to 200 nautical miles. Though an EPA was government policy, and is designed to bring resource consent techniques to offshore activities, it coincides with agitation against any exploration.

This based on an emotional case using the BP spillage in the Gulf of Mexico last year ago and that played out as a major disaster in media worldwide. Yet, 13 months and $US20 billion later, the facts are in. Ken Feinberg, the man appointed by President Obama to oversee the compensation fund for victims of the disaster, has paid out just a fifth – some $US4 billion.

The Daily Telegraph looks back and, lo, finds the crisis was vastly exaggerated and that chief executive Tony Hayward, who lost his job, was close to giving the most accurate description when he said, at the height of the frenzy,

"It is impossible to say and we will mount, as part of the aftermath, a very detailed environmental assessment, but everything we can see at the moment suggests that the overall environmental impact will be very, very modest."

It is, of course, typical of the environmentalists to over-state their case and wind up public fears, just as Sue Kedgely was doing again this week with calls for labelling of cancer-causing cell phones. These scare tactics carry a huge economic cost that fails to concern (possibly even delights) the Greens.

The Telegraph report says BP’s share price plunged from well above 600p a share to as low as 300p as President Obama demanded the "British" company be made to pay. The shares have still only recovered to 460p, although that could have as much to do with the company's problems in Russia as with any residual downward pressure from the 2010 disaster.

At one stage shareholders were facing a loss of £50 billion when just 1356 "oiled ccreatures" had been found dead along the affected coast, which roughly equates to $US36.6 million per animal.

They don’t know how happy they are
These lyrics came to mind when reading a survey that finds Australians are ungrateful for their good fortune to live in the world’s largest country of wealthy people and among the world’s worst politicians.

That is a summary of a 16-page report in The Economist (subscription required for some articles), which among many choice quotes says:

Many Australians do not seem to appreciate that they live in an unusually successful country. Accustomed to unbroken economic expansion - many are too young to remember recession - they are inclined to complain about house prices, 5% unemployment or the problems that a high exchange rate causes manufacturing and several other industries.

Some Australians talk big but actually think small, and politicians may be the worst offenders. They are often reluctant to get out in front in policymaking - on climate change, for instance - preferring to follow what bigger countries do.

Its current political leaders, with notable exceptions, are perhaps the least impressive feature of today's Australia. Just when their country has the chance to become influential in the world, they appear introverted and unable to see the big picture.

The interest for New Zealanders is that most of the reasons for Australia’s progress have also been ours for the taking. Reaction to The Economist is unlikely to noticed outside the business elite – and that could be the problem.

New Zealanders know Australians better than anyone else – and they probably won’t take any notice of us either, The Economist’s prescription for Australia – “a case for action” – is valuable and everyone on this side of the Tasman could learn from it.

Defending big pharma, big oil responds
Two topics I have commented on lately –Pharmac’s impact on the lack of clinical drug trials in New Zealand and the retailing efforts of global oil companies – have brought valuable feedback from subscribers.

Brent Ogilvie, managing director of a biotechnology company, writes:

Large pharmaceutical companies have essentially abandoned investment into New Zealand. By contrast, pharmaceutical exports is Australia’s top high-tech manufacturing exporter earning more than $A4 billion per annum, led by massive investment by the same large global companies that New Zealand appears to sometimes wish to attack.

If we want high-value jobs and exports from either our own home-grown biomedical companies or through encouraging the investment in New Zealand of global companies we need to have a rational conversation with big pharma. One that doesn't start with the assumption that because they are very big they wish to exploit us.

Di Papadopoulos, external affairs manager of BP Oil NZ, writes:

The business has been reshaped several times in the past 10-15 years to ensure it was able to adapt to changing economic circumstances, very tight margins and increased taxation.

BP was the first oil major to invest significantly in its Wild Bean retail convenience offer and the resulting growth of this part of the business has been justified many times over. It sets the industry benchmark and Infratil is presumably using it as the yardstick to develop its new retail offer [Z Energy, formerly Shell].

We were the first oil company to champion premium fuels (Ultimate petrol and diesel) and we are currently investing significantly in new storage infrastructure – far in advance of our competitors. We also have invested heavily in our independent network – either through our BP 2go brand or wholesale arrangements.

Di has also responded to my request that the company could lift its profile. She has announced:

Alison Holst is launching her new range of food at BP 2go Halswell [today]. This is the first site in what will be a national rollout. Dame Alison’s range is a continuation of the Kiwiana-branded experience in BP 2go dealer stores across the country which was introduced in 2010. The BP 2go stores are owned and operated by independent local business people.

The new food range consists of fine Kiwi fare – lamingtons, ginger crunch, bacon and egg pie, Sunday roast lamb pie, muffins, sandwiches. It is the fresh food that Kiwis have grown up with, rather than plastic-wrapped pies.

This in a week when Mobil announced a tie-up with Subway.

Bobos in London
A Canadian-born columnist in the New York Times with a Jewish background, Anglophile interests and neo-conservative instincts has become latest darling of the ruling political class in the UK.

The Guardian, no less, describes David Brooks’ latest book, The Social Animal, as seeming to

…promise answers to some of western society's deepest problems: how to generate social mobility and reform a non-society devoid of mutual trust and bristling with security cameras.

Brooks is best known for coining the term Bobo (bourgeois bohemian), as in Bobos in Paradise (2001), to describe what we know as baby-boomer chardonnay socialists. As The Guardian’s Stuart Jeffries tells it (with the usual condescension it has for any conservative thinker):

First, Brooks argues misplaced faith in human rationality has underpinned policy-making for too long. Second, research in neuroscience, behavioural economics and psychology stressing the importance of our non-rational minds can, if applied, create a better world.

The style and substance will be familiar to readers of pop psychology bestsellers such as Malcolm Gladwell's Blink or Jonah Lehrer's Proust Was a Neuroscientist: for Brooks the unconscious isn't a seething Freudian netherworld of sexual urges, but where we make the key decisions of our lives – whom to date and marry, how to vote.

Both of Brooks' books are available in Kindle editions for $US9.99 at

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Bluegreen agenda trips oil drillers