As predicted in NZ Energy & Environment Business Week in our first edition this year, water is emerging as one of the key economic and environmental issues of 2010. While not the main theme of his agenda-setting speech to Parliament last week, John Key used the speech to make important noises about water, and used NZ’s water abundance as an example of the areas of potential NZ can exploit to try and catch up with Aust. Key told Parliament an early priority will be to take action “this year to remove particular regulatory roadblocks to water storage and irrigation in Canterbury,” before warming to the theme at the opening of a new drier unit at Fonterra’s Edendale plant in Southland last Friday.

The PM says “The point I think Bollard was missing is NZ has something Australia doesn’t have, and that’s water.” He says the Govt will be raising public understanding of the value of NZ’s water, and the potential to use more than is currently extracted for irrigation. 90% of the flows in the South Island currently wash out to sea without being used at all. Key says “once you’ve sold minerals to China it’s gone, but with water, it’s with us for a lifetime,” although minerals are another string to the Govt’s economic transformation bow. Meanwhile, Environment Minister Nick Smith is talking up the significance of water intensity in farming production, highlighting creating a litre of milk requires 800 litres of water, while one kilogram of steak requires 1000 litres of water to produce.

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Federated Farmers has become highly visible in applauding the Govt’s actions on water, going so far as to claim the Govt has listened to it and is pursuing policies to extract more water for agricultural irrigation as a direct result of its lobbying. The Govt will be pleased, after months of criticism on environmental policies generally and climate change policy in particular, it has found something it can agree about with Fed Farmers. Whether it helps the ensuing wider debate on appropriate water takes, and the creation of new storage facilities or water-sharing arrangements, remains to be seen.

Already, hydro-electricity generators and environmental activists are lining up as unlikely allies in the cause of protecting water resources from over-exploitation by the farming industry. Genesis, which is due to gain the Tekapo A and B power stations and associated storage is still getting to grips with its new South Island water assets, while Meridian is nervous already about lost operating flexibility created by placing those stations with Genesis, let alone new demands on water used by its other Waitaki hydro stations.

Meanwhile, TrustPower is investigating an irrigation development strategy, joint-venturing recently with Barhill Chertsey Irrigation Ltd and Electricity Ashburton to supply Rakaia River water via the Highbank generation facility.

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