Exploration investment thwarted

By Lindsay Clark

New geothermal energy developments are offering a promising new future, but new investors are being discouraged for want of exploration licensing.

Indications of new geothermal fields not previously known have shown up in aerial geophysical surveys of the Taupo volcanic region.

These magnetic and gravity surveys are designed to “look through” the heavy layer of ash that covers the underlying geology to find prospective gold deposits which form in geothermally altered rock.

The Wellington-based mineral exploration company Glass Earth, which carried out the survey, believes it may have found some new geothermal fields but has decided to concentrate on its gold prospects.

Strangely, for a country that pioneered geothermal exploration, and unlike other countries such as Australia, geothermal exploration licences don’t exist in New Zealand. If a company wants to explore or develop a field here, it must go through a prolonged series consents under the Resource Management Act administered by local regional councils, and obtain land access from landowners. Because there is no prior right given to an initial prospector under this system, a company finding a geothermal field could be gazumped by someone else who gets in their resource applications first or ties up access to the land.

This means companies both domestic and offshore, are discouraged from investing in one of the country’s most reliable renewable energy resources – a sector largely left in the hands of established players like Contact Energy and relatively new entrant Mighty River Power.

It would make sense to include geothermal energy with other forms of energy like natural gas, oil, coal and other minerals within the government Crown Minerals permitting system with ‘prior rights’ to a discoverer. After all, petroleum and minerals explorers under the Crown Minerals system are still covered by the RMA and still have to obtain access agreements with landowners. Nor would it preclude Maori landowners from participating.

Opening the geothermal system up for exploration would also attract more of the skills, technologies and capital from the oil industry into renewable energy business.