Owen Glenn: Dig deep and we can be luckier than Oz

Our underground minerals are worth billions. Photo / Greg Bowker

Opinion

Our minerals can make us rich without having to give up '100 per cent pure', writes Owen Glenn in a series of pre-election articles.

Australia calls itself the lucky country because of its mineral wealth. We could be even luckier. New Zealand agriculture generates $20 billion a year. Our competencies in the high-tech arena are improving and the top 10 exporters alone contribute $3.9 billion.

Now imagine if we added our mineral riches to this wealth creation mix.

Going down a more traditional route of energy exploration doesn't mean abandoning the development and responsible exploitation of renewable resources.

If we can sensibly and responsibly add another pillar to our road to economic recovery and wellbeing, surely such an option is worth exploring. Who says we can't have a protected environment as well as jobs and growth?

Renewables will be a big part of an energy portfolio. They make up 79 per cent of our total electricity generation and New Zealand's renewable energy levels are the second highest in the OECD, behind Iceland. Our challenge is to ensure that "environmentally friendly" is always the guiding principle for how the resources are managed.

The added opportunity for us is that fossil fuels - now our fourth biggest export earner - will continue to play an important role in the global economy.

New Zealand's commercial advantage remains in being environmentally as close to the 100 per cent pure mark as we can be.

Responsible drilling may sound like an oxymoron, but as with our agribusiness and manufacturing sectors, technology and science can make the difference.

The Gulf of Mexico disaster shows how short cuts can destroy environments and international brands.

Similarly, the Pike River tragedy reminds us that people's lives must not be exposed to unacceptable risk. Only responsible organisations that have the reputation and respect for our human and natural resources should be invited to partner with New Zealand.

How big is the opportunity awaiting us? Doug Gordon, chief executive of the New Zealand Minerals Industry Association, says we're second only to Saudi Arabia in terms of natural capital per capita. Some of our minerals - gold, other metals and low-rank coals - are valued at more than $250 billion.

Add in oil and gas, and the earning capabilities become even more encouraging particularly in the context of the size of New Zealand's ocean estate.

It spans more than five million square kilometres, and recent research and exploration findings estimate that a quarter of it is capable of producing oil and gas. Trillions of dollars could be on tap.

In its Energy Strategy the Government says New Zealand could earn up to $12.7 billion in royalties if current oil exploration rates were to double.

The 2009 petroleum action plan has set the bar on lifting the value of petroleum exports to $30 billion by 2025.

While oil is the seabed mineral resource most Kiwis would think of first, the potential goes far further.

Nothing else is into production yet, but a Niwa publication entitled Ocean's Treasures says that New Zealand's 12 nautical miles of territorial waters and 200 nautical miles of exclusive economic zone contain substantial mineral reserves, notably phosphates, sulphides and iron sands.

If tapped that creates the capacity to significantly bolster earning power and revenues.

This is an opportunity that we should investigate. If we can retrieve these resources in an environmentally safe fashion, then I believe we should take this next step.

Owen Glenn is a Kiwi businessman and philanthropist and an Officer of the New Zealand Order of Merit.