What NZ should do with its privatisation proceeds

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It seems inevitable that National Party is going to sell off some more power company assets - the prestigious hydro assets. Probably not the best timing since we are currently in a drought. Buyers will be thinking; oh dear, we better mark down the price for potential adverse climate change response. Maybe NZ is going to be a drier place? This on top of the possibility of Rio Tinto closing its Aluminium smelter.

The NZ government government is saying its going to pay down the state's debt. This makes a lot of sense for several reasons:
1. The debt levels of NZ are rather high
2. The terms of trade of NZ are rather favourable; and they can be expected to deteriorate as more food is grown offshore
3. Its actually a reasonably good time to sell off assets - particularly if the process can be used to encourage NZ savings. This is good because there are too few opportunities for NZ'ers to invest, and these are high-yielding assets.

NZ needs to take a look at Norway's approach to prosperity. It does not perform all the exploration work, and then give it away to the private sector. It places some value on its national assets; giving its people a 'windfall' and not the private, commercially-motivated operator who has the capacity to delimit its risk. The NZ has have to set the right 'terms and incentives', as otherwise no one will want to perform any work, and you don't want to be expropriating profits or changing terms down the track; that's just not fair to them.

The focus seems to be upon conventional oil & gas development in NZ - whether onshore or offshore. The much under-appreciated asset is methane hydrates - that sit on the seabed. Japan has been developing the engineering to extract these resources around Japan, and NZ could take a leap from its book in terms of developing an offshore gas hydrates market. There are several compelling reasons:
1. They are lucrative resources - large in size
2. Its easy extraction - a glorified form of dredging
3. The gas can be channelled into NZ's gas pipe infrastructure
4. NZ has a shortage of gas - which is contributing to the very high prices of it. More gas means the country can decommission its high cost Huntley coal-fired power station.
5. It can potentially displace a large import bill for petroleum into NZ

There is actually no better time to develop such energy resources because:
1. Interest rates are very low and set to stay low; so if you can make lucrative returns; this is a good time in use debt
2. The emerging markets are energy-poor in Asia so there is a great opportunity for those countries who get their political terms (i.e. sovereign rating) right; and keep them consistent.

There is a particular shortage of expertise and capital accumulation in small, consumption-driven countries like NZ. This can make the country vulnerable. This is not a deficiency in capitalism; its actually caused by socialism driving the value of emerging market labour down because of the distortive impacts of surplus Asian labour suddenly released onto global markets. This means governments are destined to need to finance  efforts at the margin to keep the economy secure. I don't like it; but its better to protect your labour than sabotage their preparedness to live; because ultimately dogmatic retention of ideas is a betrayal of those ideas because principles need to be held in context. Capitalism did not create the problem; and it will inevitably solve the problem quickest; but it requires the discretion and empathy of capitalists to 'cover' the threat posed by distortions to our values. This support will be required for at most 20 years; and if we upskill our labour, for much less time. This is why many of these European nations like Germany and Switzerland, Holland etc have been able to sustain their economic strength despite their high cost of living. They upskilled everyone rather than simply laying them off in the United States. In the US, you have this bitter intractable debate about who is responsible for the 'poor & destitute'. There is no discussion about what's causing it. One side says 'not my problem, work harder, get a job, get skilled' and the other side says 'can't live, can't get a job, need your money'. Its a false dichotomy because two parties - Conservatives and Democrats, and even some anti-intellectual libertarians, which is not going to be resolved unless these people learn some epistemology (a branch of philosophy). The problem is causeless assertions, i.e. Having unreasonable expectations, whether its the cause of other people's malaise, or a question of empathy (conceptual value judgement). Either way, it sux when these people drive the political debate.

Of course its the same issue in NZ - except there is less money; more reliance on foreign investment. This is why energy is critical, or why business and labour need to develop a greater respect and understanding for each other's position. Wealth holders deserve rights and recognition for their interests; and without the 'discretion' to retain it, to do as they please with it, there is not going to be a solution to this intractable problem. It starts with principles people - and it starts with your constitution - its starts with not having one...because they are a piece of dogma destined to undermine principled, contextual understanding of ideas.  Simple prescriptions don't work; they are too easily misappropriated by vested interests. That means no arbitrary 'representative democracy' because its not a rational process.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

NZ Constitutional Consultancy a charade

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Anyone who takes the time to participate in political discourse will realise that the process is designed to defeat change - whether the exponents or stewards of such 'purported change' realise it or not. There are a number of reasons why its a charade:
1. The representatives appointed to the panels which preside over the issues in these affairs are selected by the government. i.e. The government is destined to select an appropriate number, ratio and spread of people to make the process look 'broad based', but at the same time, it is destined to avoid giving any consideration to people who are destined to radicalise the agenda by offering ideas too controversial to entertain. In the case of the Constitution Reform issue, you can see that this panel is stacked with liberals, lawyers and Maoris. No one who will make a difference.
2. The terms of reference is the outline establishing what a 'so-called' independent commission or inquiry is supposed to cover in its inquiry. The problem is that such terms are destined to curtail or delimit the scope of the program or inquiry, to the extent of actually directing its outcomes. For instance, this is the terms of reference for an inquiry into Constitutional issues in NZ. It purports to offer direction, but the Terms of Reference are so explicit that they prevent any consideration of political reform. This panel is all about getting a few Maori to sanction the process and the outcome; irrespective of how 'staged' the result. In effect, these people are being paid to give a good show.
3. The person to head the inquiry is very important. In this case the head is a government minister; and that's about as safe as you can go. Sometimes a government will want to appear more detached from the process. When the Australian PM Kevin Rudd pursued an inquiry into human rights; he got a Church clergy to head it. This was another political process. The inquiry went nowhere. It was simply forgotten.
4.  The findings will be confidential or only advice to the government. There will be no requirement for the government to act on the advice; in fact it by shear incompetence in their selection process, that some radical agenda was offered, they could easily bury or publicly castigate the panelists, and never employ them again for such duties. In the case of this NZ Constitutional Inquiry, its clear who is controlling the process - a Catholic Deputy PM Bill English:

"The Deputy Prime Minister and the Minister of Māori Affairs will jointly lead a Consideration of Constitutional Issues. They will consult with a Cross-party Reference Group of Members of Parliament on major findings and reports before reports are made to Cabinet".

Even a hundred years ago there was less government control over the process. In this case, the government cites the fact that it will 'consult widely', however it is far from the most accessible process, and the process by which the report will be tabled is just as flawed. This is a process merely intended to give the greatest reformers 'hope' or 'faith' in a better life. They are dreaming. This is governance which is intended to keep people in their place. It is not about intellectually engaging with people. Its rhetoric which says people are important but fails to treat them as human beings. Consider that even the framework describes its over-arching philosophy, which is to subjugate:

One need only consider how this constitutional issue arose in the first place:

The Relationship and Confidence and Supply Agreement between the National Party and the Māori Party (16 November 2008) agreed to establish a group to consider constitutional issues, including Māori representation.

The National Party had no interest in constitutional reform. It is merely going through the issue because membership of the National Coalition would mean Labour would be forced to give greater consideration to Maoris, and not take them for granted. i.e. Labour had to learn respect because Maori hold a very powerful role - the balance of power - in our extortion based system of representative government. It is this very reason for the Western world to drop the facade and lambast this hopeless system of tyranny for the inefficient and deceptive piece of nonsense it is. This process is not a source of hope; its a deceptive effort to have representatives of Maori sanction the process and to keep the general Maori population waiting....losing faith, until they are so disenfranchised they just die. The government is trying to outlast Maori.
I hope that Pakehe don't view the process this way because white Europeans have more to gain from the process than Maori - precisely because they have less. By way of their good fortune, Pakehe have long believed they already had political rights. Its only when viewed alongside the token respect for Maori sovereignty that you realise how little regard politicians have for 'white fellows'. Pakehe have no voodoo. They are downtrodden after centuries of Western subjugation. Maoris are in contrast empowered by:
1. A sense of pride in their culture and sovereignty
2. A sense of victimisation
3. Liberal sympathies
4. Formal recognition of sovereign claims

Paheke have none of that because they were born subjugated by parents, an education system, a parliament. Look back long enough, they were subjugated by monarchs as well. People are accustomed to thinking so little of themselves, that they just obey and accept the law, irrespective of how irrational or immoral it is. It does not have to be internally consistent, i.e. You can have one standard for politicians, one for others. You can treat low-life one way, business leaders another. You can have statutory laws which breach common law. This is the politicians discretion to keep you in your place. Oh well, when will it end. It won't end with this process. Will it take a new type of leader? This process seems to be above any particular leader? Does it lie in the party machine? This process is intended to keep people subjugated to the entrenched party interests, and that means the people who have fought to get to the top, and who want to preserve the motivation that made the fight worth having, and the legacy, so there is no question of them deserving the spoils of high office.
You want to learn more about this constitutional process - see their website or download this booklet.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Auckland - live in fear - Rangitoto volcanic eruption

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Popular wisdom is that the two recent volcanic eruptions that struck Auckland, NZ's largest city are nothing to fear. I would care to differ for two reasons:
1. You cannot trust governments to tell you anything or to identify and act on any substantive evidence. Recent examples include the Christchurch earthquake, where a city engineer who warned about the risks of an earthquake was ignored.
2. The other example being the Tohoku tsunami where the people were lied to about the details of the risks posed by nuclear meltdown.

There are some 49 volcanic centres in close proximity to Greater Auckland City. If you want to get a sense of just how close those volcanoes are - you need only look at the maps in the following city report. Remember however subsequent eruptions will unlikely be associated with prior structures. They do however occur in clusters, and Greater Auckland City is a 'cluster'.

The fact that there were two earthquakes in Auckland is not important. They were closely related spatially and chronologically, so they could be considered as giving stress relief to different parts of the lithologic units. What is important is the shallow depth; the lack of alternate explanation, and the nature of Auckland's style of volcanism. By no means is Auckland's style of volcanism particularly severe, but consider that:
1. Volcanism is a threat under-estimated by people. Even a small eruption in the vicinity of a major city is going to be very serious. Far more serious than the Christchurch earthquake.
2. This style of volcanism occurs without warning - hourse compared to months for a volcanic arc eruption

Maori folk stories spoke of historic volcanic eruptions. The difference is that Maoris had no infrastructure to be destroyed, nor did they themselves have much exposure to these events, as they themselves have been in NZ for just a short time, so the land was relatively unpopulated. So what do we need to know about this form of volcanism:
1. Earthquakes can result from tensional release, i.e. Redistribution of lateral stresses
2. Inflation of volcanic plume or their deflation, i.e. Vertical stresses
3. Hydrostatic loading or unloading, i.e. The filling of a dam or its water loss in drought

Auckland is not on a major global fault. It is possible that residual stresses from movements on those faults is causing secondary earthquakes around local volcanies. There is the possibility that the drought has reduced vertical hydrostatic loading around Auckland, and this has caused earthquakes. My personal opinion is that this is not likely the case because there don't appear to be any large water storages around Auckland. I went looking but the information is not readily available.

This style of volcanism is well-documented for Auckland by GNS (Geological NZ Survey). These eruptions start with melting in the upper crust as a result of hot spot magma intrusion. Partial melting in the upper crust will result in the creation of a plume at depths. The heat from the plume will effectively drill its way through the crust until such a time as the plume is able to take advantage of its inherent force, i.e. when the magmatic pressure equals the load pressure. i.e. The plume will reach a level in the crust where it will be able to intrude a long structural weaknesses. GNS says that once a line of weakness is developed, these fluid magmas can rise at a rate of 5kms per hour. This seems hard to believe (even for me), but don't under-estimate the explosivity of these eruptions. The other problem is just how undocumented these eruptions are. You might expect some type of sonic blast when they occur, and the formation of a crater. As the blast pressure wave reaches the surface there will be a lateral blast as the force blows out material. This is because from about 300-500 metres depth the confining pressure will drop off immensely, so any near-surface planes of weakness will be exploited. This makes the earthquake more dangerous to you. This is particular so if you live in a house with a lot of glass windows. Expect them to be shattered.

What are the risks according to the government?

They list them as "ash falls, ballistic rock falls, cone-sector collapse, pyroclastic flows and surges, debris flows, lava flows and domes, lahars, volcanic gases, volcanic earthquakes, tsunami and seiches, hydrothermal blasts, and atmospheric effects. Many of these phenomena will only affect an area on the volcano or a few kilometres from the volcano. However, volcanic ash fall can be deposited hundreds to thousands of kilometres from its source, making it the product most likely to affect the largest area and greatest number of people. Volcanic ash can seriously affect aircraft that may fly unintentionally through the ash cloud, often many kilometres from the volcano".

The good news is that these earthquakes might not be signalling an eruption. i.e. The earthquakes might in fact be signalling a deflation of the volcanic hot spot. There is however no reason to expect this, and more reason to expect any waning of activity to be associated with stress release. Where was that release? Only unloading from surface reservoirs. This seems unlikely. Another big issue for Auckland is the location of these earthquakes. The last recorded earthquake in NZ was 600 years ago. This centre actually erupted twice - its on Rangitoto Island, offshore from Auckland City. That is scary because it establishes a geospatial link to past volcanism. If you look at the ages of volcanic activity on Figure 2 its apparent that these earthquakes are associated with the general area of the last eruption. We need to consider that Waitemata Harbour might be concealing a history of volcanism that we don't know about. Importantly, the proximity of the harbour poses the risk of a mini-tsunami for Auckland's North Shore and city coastline.

I went looking for heat flow data which might suggest that there is no 'immediate' heat event. But actually there is compelling evidence that the intensity of volcanic activity is increasing - read the quote below. This might relate to the fact that volcanism is offshore, in the process resulting in sub-surface mixing of seawater and magma, resulting in greater eruption explosivity.

"The area covered by each volcanic centre is generally localised (less than a kilometre across) and the total volume of erupted material is small. However, five of the volcanoes (Mt Mangere, One Tree Hill, Three Kings, Mt Eden and Mt Wellington) are of medium size. The largest, Rangitoto, is an exceptionally large volcano for the field, representing 59% of the total volume of erupted material. It is significant that the five medium-sized eruptions occurred between 20,000 to 10,000 years ago and that the largest eruption was only about 600 years ago". 

So the latest recorded volcanic eruption from NZ was the most explosive. I suggest because it was offshore, but it might also point to an escalation of heat. This is not to say that the eruption is imminent but that it is probably a risky decision to live in Auckland; most particularly the North Shore and Waitamata Harbour side. A cluster of volcanic earthquakes is clearly a sign of greater volcanic intensity given the relatively active nature of the Auckland field. I say people - be careful. Governments will minimalise the risk because they will want to preserve economic activity. They will not want to displace a million people. Personally, I'd be crying out for heat flow data which I can't find online, and I'd be really keen to watch future earthquake activity around Auckland City...particularly I'd be interested in the location of that activity, whether it was around Rangitoto Island, or whether its associated with faults in that area. The drought might actually be accentuating  the risk by 'unloading' confining pressure, but I'm inclined to think not given the high rainfall of Auckland, the small size of the city, and the fact that I can not locate the reservoirs. Surface storages and even the confining pressure of the crust are relatively weak counterforces in geology. I remind you to not under-estimate the force of the earth's mantle. The thickness of the crust is just 30km; the interior is 6400 kms in radius. That thin crust gets a bit precarious when molten magma 1300 deg C has already reached 5km depth and is seeking structural weaknesses to make its way to the surface.

There might be a reason there is no 'oral record' left by Maori. It might be because they were all killed by these eruptions. No written records is another explanation, and possibly the low population of the region. In any respect, you have the good fortune of more forewarning....but I caution you...more information is required on heat flow...and if you don't have the discretion to leave Auckland, then you might want more seismic/earthquake evidence. Read the following report to better understand what you are dealing with. Don't trust your government!! Well, you might watch to see if your local MP is spending less time in your (Auckland) electorate. Actually, no, just don't trust their faith. Follow the evidence...like the people of Christchurch didn't. Remember volcanoes can be more dangerous in many respects than earthquakes. They are different. Read this report to better understand the nature of what you are dealing with. Australia just started looking a little better. Here is a little history on Rangitoto Island - but no heat flow data!!!!!! Here is another warning from 'volcano watchers':

"Future vent forming eruptions will very likely occur within the city limits or its outskirts, allowing few mitigation or preparation options. Scientists agreed that residents of Auckland may get only a day or two warning of a volcanic eruption and will only know hours before where it will explode on the surface".

Was yesterday's earthquake a warning? Yes and no. We are looking for a pattern of earthquake activity. We already have a geospatial point of correlation. The question is what is the cause? Inflation or deflation. Heat flow will tell us. Is government keeping this information from us? Interestingly, if you look at this map of NZ, it is evident that NZ has a 'dog leg' in its stress relief. This is an interesting issue which might foretell future tectonism. Tension 'gashes' or faults might be opening up which are facilitating the higher degree of volcanism we are seeing. Remember that the subduction to the east is already creating an area of high heat flow (resulting from deep-seated melting) and lithospheric bending (brittle fracture) along this purple line of weakness. Is there going to be a change in regional tectonism. These developments will take millions of years. But the opening up of tectonic 'gashes' might well be imminent.

Here is a very realistic description of the threat posed by a volcano eruption in Auckland. It gives you a clue as to what you can do in the case of an earthquake. The threat is broadly greater if you are detached from your kids because they are subject to others guardianship at school. Yes, bureaucrats who need to follow government rules. So what do you do:
1. Get to a concrete building (preferably having already identified a 'sponsor' or a few in case of non-availability). Avoid any room where there is windows as there is going to be a 'sonic' or basal blast of volcaniclastic material.
2. Avoid near-shore environments. If near Waitamata Harbour, a likely epicentre, ensure you rise to a 3-4th floor in the concrete apartment so that you will not be swamped in any mini-tsunami.
You will want these places to be within a few blocks of your home. Identify them at home and at work. Toilets are great because they are small rooms with small windows. If in glazed rooms, you will need to wrap yourself in towels, or hang towels over the window might help.
How will you know to do this? Personally; I have no idea. Good to do around the time of an earthquake, but you might not even feel it. Worst still you might not see anything (at night) until the incident has passed. You are most likely going to be killed by the basal surge shattering all the glass windows in your building. You might want to pre-order your glazing and store the glass in the basement. There might be a supply shortage in future. The other problem is food & water, but these are lesser problems because the dust is readily cleared and the infrastructure is hardly going to be damaged. Its a risk of people losing lots of blood from being punctuated by a lot of glass.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com