Phillip Mills: The good oil? There's no such thing

Protesters argue oil spills from offshore drilling could destroy oceans, coastlines and habitats. Photo / Greenpeace

The Government should look to geothermal and bioenergy industries instead of mining and drilling.

This week, dozens of people from the international oil industry are in the capital for a conference. They aren't there alone. There are politicians shaking hands and offering supportive comments.

The industry folks and the politicians share the same hymn sheet. It's about jobs, and the economy, they chorus. Oil will help us out with such things, they rhapsodise.

Meanwhile, outside, there is a crowd of people who disagree. It's about the environment, they say. Burning oil causes climate change. A spill will destroy our oceans, our coastline and the animals that live there.

And that's how this annual gathering is presented. It's the economy or the environment. It's one or the other. This argument is often used to create support for dubious industries - "if we don't allow them to drill/dig/pollute we will become a third world economy". Fortunately, this is complete and utter nonsense.

In the first place, there is no economic case for New Zealand allowing foreign companies to drill for oil in our waters. There will be some fine rhetoric from those inside and outside of the conference. But rhetoric isn't economics. Sound economics and robust business decisions are based not on finely crafted soundbites, but on cold dollar values.

When we look at the cold dollar values, we realise that the oil sector just isn't the place to go to if we want to give New Zealand a multi-billion dollar economic boost. And it isn't the place to go to if we want to provide long-term jobs for thousands of Kiwis.

If we want prosperity, jobs and an economic boost provided by the energy sector, the oil industry simply is not where we should be placing our bets.

Almost 30,000 jobs could be created in areas such as the geothermal and bioenergy industries. The geothermal industry alone could have export opportunities worth more than $4 billion to the economy every year. And a growing bioenergy sector could see us becoming increasingly less reliant on foreign oil imports, saving the country over $7 billion each year by 2035.

The oil industry cannot come close to matching these numbers. That's why, if it's down solely to economics, the Government is backing the wrong industry.

And the extent to which it is backing the wrong industry becomes more apparent when we look at what is happening around the planet. The world is turning away from oil and coal. Just last week, China announced a dramatic shift away from coal. Three provinces, Beijing, Hebei and Shandong, pledged to reduce coal consumption by 73 million tonnes by 2017. These three provinces alone burned more coal in 2011 than all of the European Union. This is not good news for Australia's coal export industry.

This month, President Obama, and the leaders of Norway, Denmark, Finland, Iceland and Sweden were united in their stance to cut the use of fossil fuels, and back clean energy instead.

Fredrik Reinfeldt, the Prime Minster of Sweden, said his country "has reduced greenhouse gas emissions by 20 per cent since 1990, while GDP at the same time has increased by 60 per cent. So there is no contradiction between economic growth and the protection of environment".

Obama praised Sweden, and talked about building a clean energy partnership that would tackle climate change and create jobs. Sweden's clean energy drive was "remarkable" and made the country an "extraordinary leader" which is "developing new technologies", the President said. Obama has spoken repeatedly about clean energy this year, saying this technology will "power new jobs and new industries" and that "we must claim its promise".

The world is moving away from fossil fuels. The businesses, industries, economies and jobs of the future will be powered by clean technology. And this great country, our country, has a wealth of the knowledge, experience and skills to lead the way.

A 2012 Pure Advantage study carried out by the London School of Economics and Auckland University identified 21 areas where the country has core strengths that can be leveraged to create world-class low carbon industries. Investing in those areas could create hundreds of thousands of high quality jobs and rescue our world-renowned, but increasingly threatened, clean, green brand.

We shouldn't be opening our seas up to deep sea drilling, or carving our land up for coal as the world moves the other way. There's a booming clean economy just about to take off, and we could be more than just a part of it. We could lead it.

At the moment, we're being taken the wrong way. That's bad news not only for our environment and our quality of life, but also for our economy.

Phillip Mills is chief executive of the Les Mills group and a trustee of Pure Advantage, a group of business leaders lobbying for green economic strategy. The views here are his own.