Govt pitches greener growth alongside oil and gas push

The government is committing to improving the quality of New Zealand's natural resource base while also pushing intensive agriculture and more extraction of minerals, oil and gas to accelerate economic growth.

The latest update on its economic growth agenda, released today by Finance Minister Bill English and Economic Development Minister Steven Joyce, appears to heed growing criticism of the government's apparent willingness to sacrifice environmental priorities for economic needs.

It articulates a new goal, saying: "The quality of our natural resources base improves over time while sustaining the growth needed from key sectors to meet our 40 percent exports to gross domestic product target."

The key sectors identified are farming, forestry and fisheries and extractive industries, such as gold and coal mining, and oil and gas field development, with a section that considers the potential economic impact if New Zealand found "another Taranaki" among its 17 relatively unexplored petroleum basins.

The report was released as the government was today preparing to announce the outcome of tenders for oil and gas exploration blocks that encompass both the mature Taranaki oil and gas field and a range of other offshore and onshore fields.

"The primary sector and the energy and minerals sector, for example, will need to make a major contribution to export growth to meet the target and both of these sectors depend heavily on New Zealand's natural resource base," the report, titled Building Natural Resources, says.

The goal sits along a clutch of other high level targets, which includes an "ambitious" target of increasing exports to 40 percent of GDP by 2025, and is cited as the reason for the need to make further reforms to both local government decision-making and the Resource Management Act.

"Meeting this challenge will require better and faster decisions around resource allocation", including for infrastructure development as well as primary industry needs, such as efficiently allocated access to freshwater.

The report cites the Land and Water Forum collaborative process as an example of how shared decision-making can help balance the complex mix of economic, environmental and social uses for natural resources.

"If we do not do this, we risk resources being poorly or over used, leading to unexpected, large and irreversible consequences."

Greening growth

On the subject of "greening growth", the report says the government is investigating a new set of regularly reported measures of progress on greener growth and a more sophisticated regime that would reward investments in biodiversity projects to offset environmental impacts of economic activity.

The report dwells on the progress being made to improve freshwater management and allocation, saying farmers are getting better at managing run-off from land into freshwater bodies and that "continued innovation will be necessary".

"Some land use changes may nevertheless be needed in some catchments, depending on the sensitivity of water bodies in the catchment and the transition time allowed for meeting water quality limits."

In a section entitled Another Taranaki, the report says royalties from oil and gas production could quadruple from current levels "if levels of exploration can be increased and oil prices rise further, resulting in more commercially developed fields".

"This sector represents one of New Zealand's best opportunities for growth in investment", including through new technologies, such as onshore hydraulic fracturing.

"Oil, gas and coal can also help us during the transition to a low-carbon economy, especially if used efficiently and as we take advantage of lower-carbon fossil fuels such as gas."

The report also devotes a section to the significant potential for Maori-owned natural resources, including farmland and forestry, to accelerate economic growth.

One of the few new initiatives in the report is the establishment of a forum for Maori and private-sector interests to explore opportunities and an investment fund for commercial discovery processes from Maori collectively owned assets.

(BusinessDesk)