A look at energy security in New Zealand's extended neighbourhood. Part 2

Full report

Welcome to part 2 of my article entitled A look at energy security in New Zealand's extended neighbourhood. Part1 allowed me to provide the reader with a overview of the source material from which I made select commentary. My commentary was aimed at energy security from a Japanese perceptive. I also touched upon other topics including fossil fuels and the rise of Liquefied natural gas (hereafter LNG).

In part 2 I will turn my attention to Deep Sea Mining (hereafter DSM) . I am going to take the liberty of shifting much of my focus away from Asia to the South Pacific. When I do turn my attention to Asia how DSM will effect the dynamics of the region will be my focus. My thanks go to Anna Powles for pointing me the right direction when I was researching DSM.


Note to the reader I had originally planned to cover Timor – Leste and alternative energy sources in this article. For space considerations I will cover those topics in the next 1 or 2 instalments of the A look at energy security in New Zealand's extended neighbourhood series. I ask the reader to forgive me for not breaking down the South Pacific into more accurate geographical regions. As DSM will take place in all the regions I have chosen to take a broader perspective.

If the reader isn't very familiar with DSM I would invite them to check out the following resources on minerals found on the sea bottom: Cobalt-rich Ferromanganese Crusts ; Sea-Floor Massive Sulphides and Manganese Nodules.


Generally speaking the South Pacific will be vulnerable to legal and illegal DSM practices. Australia and New Zealand's neglect of our collective backyard will become more stark. Space doesn't permit me to go into more details concerning the neglect. , My thoughts on the entrance of China and other non traditional state actors into the South Pacific can be found in a earlier article .

A look at how DSM operates is in order. Starting from the sea floor the extraction of minerals is as follows: disaggregating mineralised material ; transporting the material to the surface and dewatering the material. The effect of the filtered sea water return to the ocean will extend beyond the mining site. Transportation via ship to a processing plant or market place is the end point.

Environmental management plans/regulations will serve as any nations framework for dealing with DSM. 2 factors are now worth a mention. A good regulatory frame work will or does balance out commercial and environmental issues. A lack of enforcement of regulations has numerous effects from environmental pollution to undermining a nations sovereignty.

Tying into these considerations is revenues from mining taxes and royalties. Corruption , illegal mining and a poor tax regime can play roles in the ups and downs of nations gaining the economic benefits from any kind of mining.


The merits of mining in tourism areas has been debated in New Zealand. If Open pit mine would be a eye to foreign tourists in New Zealand the same will apply to Rarotonga in the Cook Islands. The energy security and economic independence offered by DSM may act like a lure. If the lure is to great , Rarotonga's reputation as pristine tourist destination may well be ruined. Since this is a no brainier I will now shift my focus northward.


Asia provides different dynamics to the South Pacific. In Asia the abundance of natural resources at the sea bottom looks set to harden China, the Philippines , Taiwan , Vietnam , Brunei and Malaysia's competing territoral claims in the South China Sea. Whereby in the South Pacific states will wrangle with matters such as environmental regulations , in Asia defining nation states borders is already the order of the day.

I believe any consideration towards the outcome of the South China Sea's dispute must factor in energy security. The sovereignty of the nations involved , the natural resources on offer and national pride are all on the line. DSM and other forms of mining look set be a test of national sovereignty in sometimes contrasting ways.


New Zealand will face the coming challenges directly and on a strategic level. In the direct sense preventing illegal DSM in territorial waters , forming sound environmental regulations and tax regimes are all obvious stand outs. I will come back to a local perspective in 1 tick.

The biggest unspoken risk is if New Zealand is caught completely off guard and unable to police our own territorial waters including Marine Reserves. If New Zealand's defence outlook wasn't so half baked the risk would have been largely migrated by sound defence policy.

I fear New Zealand in general is ill prepared to accept the reality of rising tensions in Asia. Ignoring the effects of DSM would be perfectly in line with people burying their heads in the sand. Kiwi's from the person on the street to Prime Minster John Key are living in fairy land , when it comes to a meaningful discussion around the emergence of China as a economic and military power.


I believe the abundance of natural resources made unlockable by DSM may influence the course of a future war in Asia. A case in point is the reserves of Sea-Floor Massive Sulphides (hereafter SMS) minerals in the Bismarck Sea. If the Reserves of SMS could turn Papua New Guinea into a mini Saudi Arabia China will have a reason to cast their eyes beyond the South China Sea.

If a wartime scenario in which the Bismarck Sea becomes a factor eventuates , events will overtake Australia and New Zealand. Military the Chinese would include controlling the Bismarck Sea as a objective along with blockading or invading the Indonesian mainland and Papua New Guinea. If the worst happens New Zealand's failure to come grips with energy security in the South Pacific will have had consequences beyond most people's wildest imaginations.


In part 1 I mentioned Geoeconomics being a factor in the global LNG Market. There is every reason to think China will use DSM as a means of exercising Geoeconomic levers. Chinese State Own Enterprises (hereafter SOE's) will legally or illegally establish DSM sites at the bequest of their government. I would urge the reader to factor in the MO of Chinese SOE's into their thinking around energy security.

In New Zealand SOE's are expected to run on a commercial basis. China uses SOE's for aims that in no way involve making a profit. 2 instances of how China uses SOE's is worth highlighting. The first is taking over a strategic asset in the Port of Darwin with the intent of weakening Australia's ties with the USA. In a less subtle move China has placed a Oil Rig in Vietnam's territorial waters . China's motives for the placement of the Oil Rig appears to be something along the lines of possession of real estate is nine tenths of the law.


Now for this next section I am going to assume New Zealand will be able to weather the DSM storm. What options are available to New Zealand and Australia to ensure our South Pacific neighbours can do the same? Clearly the ideas I present below will not form a complete answer. As per usual I do want to provide the reader with food for thought and matters for debate.

Is the Pacific Patrol Boat Program (here after PPB) and it's planned replacement a token gesture or a program that never overcame obstacles like so few days spend by vessels at sea? In a near empty tool box the PPB sits at the disposal of participating nations. More on these points below.

My argument is the PPB is one of the core capabilities which should be expanded to strengthen the participating nations maritime capabilities. Law enforcement and maritime surveillance are also examples of core capabilities. By building up the capabilities of smaller states to defend their sovereignty New Zealand can kill two birds with the same stone. Improved relations with our neighbours and a more stable backyard would be the benefits.

Turning the PPB into a ocean going program would be no small feat. Logistical support in the form of Replenishment and repair at sea would fall onto the RAN and RNZN. The number of patrol vessels in the PPB would be increased as to ensure one is always available to meet any unexpected contingencies. To summarise under my kind of plan the PPB would be modelled on the Royal Fleet Auxiliary (hereafter RFA). If the reader would like me to expand upon my thoughts on a South Pacific RFA , feel free to leave a comment below.

The reader may be wondering how on earth Australia and New Zealand could ever fund the capital and operational costs of a South Pacific RFA? Reorientating foreign aid budgets away from ad hoc infrastructure projects in the region and towards the PPB wouldn't require any new additional spending. Japan has the financial muscle to pay for the new PPB bases and supporting infrastructure. The historical irony of Australia and New Zealand urging Japan to invest in defence related infrastructure in areas they tried to conquer in WW2 is not lost on me (think the Battle of the Bismarck Sea).

Effectively my expanded PPB/RFA would give the participating nations excellent maritime patrol capabilities. The new maritime patrol capability would act as the centre piece of efforts to build a sense of self reliance among South Pacific nations. By playing a role in providing greater levels of security and stability the conditions for a South Pacific renaissance will be in place. Successfully dealing with DSM and illegal fishing operations/management of Fisheries would be all positive by-products of the new age.  

In offering my thoughts on DSM's role in energy security in the Asia- Pacific I have only really scratched the surface. I will leave the reader with my final thoughts. If the New Zealand government and foreign policy establishment leave our engagement with the Asia – Pacific as the status quo there will be a heavy price to pay.

In terms of DSM at best the price will see our Pacific Islands cousins pillaged by legal or illegal means. At worst combined with strategic blindness New Zealand will stumble into a war. The war starts as a high intensity conflict in the South China and sea and soon engulfs Indonesia , Australia and New Zealand.