Trans-Tasman Opportunities from New Zealand Energy Strategy

Wednesday, 07 September 2011

Background

Australia must position itself to promote its strong energy credentials with New Zealand, as Wellington commits to the long-term future of hydrocarbons for energy production. Conversely, as Australia makes a greater commitment to renewable power generation, New Zealand can provide the requisite expertise and experience.

Comment

In late August 2011, the New Zealand Government released its updated Energy Strategy 2011, detailing key objectives for the security of its future energy requirements. In meeting these objectives, the government intends to take a balanced approach to building a sustainable energy and resources future. It details the priorities of the government, while acknowledging that the global challenges of energy supply and climate change will increasingly influence the availability and cost of energy. The report places an emphasis on exploiting oil reserves in New Zealand territory, as well as the continued development of renewable energy sources.

The geography and climate of New Zealand offer multiple sources of potential energy supplies, both renewable and non-renewable. These range from hydro, geothermal and wind power to traditional fossil fuels. While renewable energy makes up 79 per cent of all electricity generated in New Zealand, hydrocarbons have been identified as a potential source of future prosperity for the country. New Zealand plans to develop its hydrocarbon export potential to raise domestic living standards.

Recognising this, New Zealand’s Acting Minister of Energy and Resources, Ms Hekia Parata, announced a review of the way permits are issued for oil exploration. The review may result in increased activity in the Great South Basin, a potentially large source of hydrocarbon deposits, which is currently being surveyed by multiple companies. Already, Brazilian giant Petrobras is exploring in the waters off the North Island’s East Cape region.

While Australia and New Zealand have historically enjoyed a close bilateral trade relationship, Australia should seek to develop stronger links in the area of energy security. More specifically, Australia’s strength in liquefied natural gas production could be promoted as highly beneficial for New Zealand. This could open another market for Australian expertise.

Additionally, a stronger trade in energy expertise between Australia and New Zealand could allow for the transfer of renewable energy technology. This could assist Australia’s aim of reducing its dependency on fossil fuels. With continued debate surrounding Australia’s carbon emissions policy, enhancing the development of renewable energies could provide a viable method of substantially reducing those emissions. This could potentially have a very positive impact on the economies of both countries, as well as the environment.

Matt Jacob

Future Directions International Research Intern

Northern Australia and Energy Security Research Programmes