Fitch Ratings Warning: Mining + Oil isn’t a solution economically or environmentally – It’ time to pivot from Dairy, Tourism and China to electrification!
Fitch Ratings analysts warned NZ this month that the next 10 years of economic growth was dangerously stunted.
This matters because it is ratings analysts like Fitch who warn the market if we are good for all the money we borrowed.
They base that on future projections of our economic cycle and their analysis is terrible.
Fitch have made clear to us that Dairy, Tourism and exports to China have waned and can not grow beyond the manner in which we have already grown them…
He told BusinessDesk that Fitch sees the drivers of growth in the decade before Covid as having “run their course”.
In other words dairy, tourism and China export growth – while continuing to be large and core components of New Zealand’s economy – can’t possibly continue on the same dramatic growth curve they did before.
…John Key’s, ‘All our cows in one Beijing paddock’ has not only been geopolitically dangerous, it’s also run its economic course.
So what now?
This Government seem to think mining, gas and oil exploration alongside weakening regulations for donors will unlock NZs next economic cycle but it can’t and won’t…
The idea that we’ll mine our way to prosperity is one of those. It may well be an industry worth promoting, but betting the house (or more specifically our clean green reputation) on it being transformational is just silly.
We mined the big accessible gold deposits in 19th and 20th centuries. The odds of finding valuable rare metals like lithium are very low. It would be great if we did but if that’s this Government’s strategy, they might as well buy Lotto tickets.
Striking oil is also a long shot and the time frames involved to find it and get it out of the ground take us well past 2030 – the date by which the International Energy Agency has forecast the world will face a “staggering” glut.
If Kiwis ever wanted to be a rich oil-producing nation (and a large percentage don’t) we’ve missed that boat.
…if we are to play to our advantages, we need to play to the one that will provide the most impact to all of us.
Cheap, 100% renewable electricity!
This needs to be our focus…
When we look at what gave New Zealand a competitive advantage in the 20th, cheap electric power is near the top of the list.
The dairy industry was built on the ability to turn liquid milk into powder more efficiently than our competitors.
The next wave of global economic growth will involve electricity and lots of it.
Artificial intelligence is incredibly power-hungry. One Chat-GPT search uses 10 times the power of a Google search.
Throw electrical vehicles on top of that and it becomes obvious – only countries with access to a cheap, stable power supply will have a competitive advantage in the years ahead.
There has been plenty of talk about the potential for New Zealand to be a world leader in data centres. To do that we’ll need more and ideally cheaper power.
Collectively, data centres will consume about 200 megawatts (MW) of electricity at peak usage – roughly the amount required to power some 200,000 homes. The average demand in Auckland is about 1700MW. That has been forecast to rise to 500MW of consumption over the next five years based on current plans.
…solar pan els on every public building.
Local wind turbine generation.
Windfarms.
Electric public transport.
More Hydro.
Tidal generation investment.
This needs to be our way forward. Not more Dairy and more cheap basic exports to China and Tourism.
Cheap sustainable electricity is our competitive edge, we need to urgently focus on that now!
Windmills grind wheat into flour.
Wind turbines generate electricity.
Why cant we have a sensible discussion about modern nuclear power? Do we need to wait for the last of the old hippies to die or something?
You can have that discussion, getting someone to pay extra for your modern nuclear power is the problem as when you include all the costs involved nuclear is substantially more expensive than renewables with the additional burden of nuclear waste for thousands of years.
This government will propose some form of electrical energy producing brake systems……on Toyota Corolla’s
I would take a Corolla any day of the week over this government, at least the Corolla will be reliable, unlike this government which is a walking disaster, going on the Cook straight issues they will probably have swimming it as the only option if they stay in power much longer.
They’re right about the dairy boom having run its course. China won’t bail us out this time because they can’t even bail themselves out! So, we need to be open for new business opportunities. It shouldn’t be the government’s job to ‘pick winners’; just help clear the obstacles in the way of new ventures as they arise.
There is 2 billion dollars’ worth of gold under the Karangahake hills that will pay for a lot of cancer drugs and MRI machines. There’s a global scale antimony reserve under Reefton that might pan out too.
100% renewable electricity is a laudable goal that the government can and should involve itself in, but 100% of what exactly? 100% of the current generating capacity is certainly achievable with a bit more hydro, solar and geothermal but mass electrification of the light vehicle fleet is a technical impossibility – a pipe dream. We don’t have the grid capacity for a start, and the waiting list for big grid transformers was about 30 years last time I looked. We’d need to literally more than double our electricity generating capacity and the only way to do that would be nuclear.
We’d be really lucky if we found oil, but a new gas field is far more likely. There are 100,000 homes and countless industries that rely on gas heating and the existing supply is dwindling rapidly.
2% of 2 billion is fuck all so you wont be buying fuck all of the stuff on your list .Then they will take off and us taxpayers will be left to clean up the toxic mess ,the end result a loss to us of 1 billion
The cluster theory of economic development is to double down with massive govt investment on the stuff that you have a few companies already doing well. What could happen if a billion was put into the nuclear fusion sector?
https://www.openstar.tech/
https://www.rt.com/business/508677-china-turns-on-artifical-sun/
The world economy is contracting and will be 19% smaller by 2050 .If we go clean energy for transport we will still have a shot because we wont be wasting 25% of gdp importing fosil fuels .And the cost of going green energy will fall the more we install .One only has to look at the dramatic drop in the cost of solar panels over the last 10 years .If every home had a good solar system we would never have another power cut because every house would have its own storage system battery and also the battery in the electric car .The need to invest more in the national grid would fade away with only maintance needed .