Pattrick Smellie: Changing times and policy use-by dates

Prime Minister Jacinda Ardern, pictured here with Cabinet Minister Megan Woods, this week described the pumped hydro scheme as a "branding opportunity" for the country. Photo / NZ Herald

Opinion

COMMENT

You know you're getting old when a once-in-a-generation law reform reaches its use-by date and you remember its birth.

The Resource Management Act gestated under Environment Minister Geoffrey Palmer in the late 1980s but took until 1991 to become law under his National government replacement, Simon Upton.

It was a beast of a thing.

As a youngish Press Gallery reporter at the time, I turned down a lucrative side-hustle from an Australian legal publisher who wanted this leviathan summarised, slipping the work to Catriona McLennan, who was already half-way out of journalism and en route to becoming a lawyer.

So this week's release of the 531-page blockbuster from a working group led by retired Environment Court judge Tony Randerson felt like a come-uppance. You dodged this thing the first time round, laddie, but you're on the hook for Round Two.

Randerson's door-stopping tome, 'New Directions for Resource Management in New Zealand', is both an anchor for the aspects of the RMA that have worked and a major shift in emphasis.

The RMA put 'sustainable development' at the heart of all planning and environmental decision-making and spawned a generation of case law and legal careers dedicated to working out what the heck it meant in practice.

Eventually it grew so large and unwieldy and so easy to blame for New Zealand's chronic tendency to take ages over infrastructure both large and small that a consensus for its repeal emerged.

Even environmentalists agreed – it turned out the RMA didn't do that great a job of protecting the environment either.

The reform package proposed this week would create two new laws - a new Natural and Built Environments Act that would cover much of the detail of the resource consent process the RMA now covers, and a Strategic Planning Act, which is arguably the more important part of the reform.

The SPA would finally enshrine the concept of 'spatial planning' – a fancy way of saying where things will and won't go in the future – in environmental management and economic development.

That should, in theory, stop a lot of the arguments that today are only addressed in individual resource consent applications.

And while sustainable development is still in there somewhere, the whole package reorients decisions away from a focus on stopping environmental harm to encouraging positive outcomes – both environmental and economic.

That might not sound like much, but it is a big part of the reason why the reform proposals announced this week have received support from across the political spectrum and from both environmental and business lobbies.

There will still be huge battles. For example, the Green Party's statement welcoming the proposals is suspiciously light on bones of contention, citing only the treatment of significant urban trees as needing clarification.

A betting person might predict that Business New Zealand and the greenest wing of the Green Party will turn out to have very different views when it comes to the real-world application far greater central government of broad environmental priorities.

However, the degree of consensus is important. Reform will likely happen quickly after the election, whoever is the government.

Proposals emanating from David Parker's office are not always so widely embraced.

Take, for example, last Sunday's surprise announcement by Parker and Energy Minister Megan Woods that the government will spend $30 million investigating a massive 'pumped hydro' electricity scheme in Central Otago.

Costed at roughly $4 billion, the project would fill the natural basin available at Lake Onslow – already an artificial lake created in the 1890s – to create the one thing that the country's hydro-reliant electricity system lacks: a big storage facility.

While about 65 per cent of the country's electricity comes from hydro in a normal year, New Zealand's hydro lakes can only hold about six weeks' worth of water. In hydro-rich Norway, by contrast, storage capacity is measured in years.

Existing Lake Onslow hydro scheme, dam and lake. Photo / Supplied

The result is that New Zealand's electricity system is always hostage to a year when it doesn't rain.

At the moment, we use coal-fired electricity from the Huntly power station, which is near the end of its life, and from natural gas-fired 'peaker' plants that kick in fast when power needs peak and wind farms and hydro plants can't meet total national demand.

Meridian Energy's first chief executive, Keith Turner, is behind the pumped hydro idea. It feels like an extension of his visionary decision to make Meridian a renewables-only electricity generator right from the word go.

To sceptics, however, it also looks like a Mark II version of Meridian's Project Aqua – a plan to divert water from the Waitaki River into canals and build six new hydro-electric plants that Turner abandoned in 2004. As with the Lake Onslow project, Aqua provoked strong emotion.

Some loved it, others hated it.

What is intriguing about the Onslow proposal is the alacrity with which ministers have pounced on it, despite it being a hugely expensive way to potentially achieve 100 per cent renewable electricity – a goal the Interim Climate Change Commission has already pooh poohed as too costly.

A rational approach to decarbonising the New Zealand economy would embrace 85 per cent renewable electricity as a massive achievement. A huge lump of that will also shortly be coming to market anyway when the Tiwai Point aluminium smelter closes.

Filling in the gaps by burning relatively low-carbon natural gas for a couple of decades yet makes far more sense than building another huge, new government-owned hydro scheme at the wrong end of the country.

If there's $4 billion of government funding slopping around to invest in lower carbon emissions, there are far better options in the national transport fleet, residential, commercial and industrial energy efficiency, and electrification of industrial heat processes.

Instead, Labour ministers appear to be barrelling down the same virtue-signalling path as produced the politically popular ban on offshore oil and gas exploration, which has done nothing to reduce global carbon emissions while stifling New Zealand's economic potential.

The Prime Minister this week described the pumped hydro scheme as a "branding opportunity" for the country. But unless it also makes some commercial or economic sense, it risks being the sort of opportunity that wearies today's journalists: writing for free in return for 'profile'.

Put together the government's enthusiasm for grand gestures in energy policy and a suspicion that Parker regards his 2008 electricity reforms, still-born when Labour lost that year's election, as unfinished business, and the groundwork appears laid for post-election policy upheaval.

Add in the fact that Meridian is in the gun with the Electricity Authority for spilling water last year and driving up prices and that small electricity retailers who thrived when electricity over-supply depressed prices mid-decade are complaining their models are broken now that supply is tighter.

And for good measure, stir in the fact that heavy industry is either leaving the country or threatening to downsize, citing internationally uncompetitive New Zealand electricity prices as a core problem.

Put that all together and the efforts of the last 30 years to create settled electricity market arrangements look far less solid than might be presumed.

Just like the RMA, those arrangements may also be reaching their use-by date.
However, there is nothing like the same unanimity about what the solutions might be.