G.38 GNS SCIENCE ANNUAL REPORT 2014 IN TODAY’S WORLD WE NEED… GNS Science Annual Report 2014 1 G.38 TO MEET THE DIVERSE AND CHANGING SOCIETAL, ENVIRONMENTAL AND ECONOMIC CHALLENGES PLACED UPON US. Presented to the House of Representatives pursuant to section 17 of the Crown Research Institutes Act 1992 2 GNS Science Annual Report 2014 GNS Science Annual Report 2014 1 THROUGH THE GREAT WORK OF OUR SCIENTISTS, WE MEET THESE CHALLENGES EVERY DAY TO PROTECT OUR ENVIRONMENT AND MAKE NEW ZEALAND A SAFER, MORE PROSPEROUS PLACE TO LIVE. CONTENTS 02 DIGGING DEEP 32 Natural Hazards 04 DEALING WITH PRESSURE 38 Engineering Geology 06 KEEPING IT CLEAN 42 Geology and Past Climates 08 Chairman and Chief Executive’s Review 47 Organisational Structure 12 Statement of Core Purpose 48 Board of Directors 13 Staff Awards, Honours and Distinctions 50 Management Team 14 Vision Ma-tauranga 53 Performance Indicators 15 Stakeholder Survey Findings 56 Corporate Governance 16 Being a Good Employer 58 Report of the Directors 18 Energy and Minerals 59 Financial Statements 24 Groundwater 80 Directory 28 Isotopes and Ion-Beam Technology 2 GNS Science Annual Report 2014 GNS Science Annual Report 2014 3 FINANCIAL HIGHLIGHTS REVENUE BY SECTOR OUTCOME AREAS AFTER TAX PROFIT Geology and 8.7% Past Climates $4.0m Energy and 28.6% Minerals Hazards 47.2% $1.8m $1.5m $1.1m Groundwater 6.0% $1.0m Engineering 2.6% Environment 6.9% Geology and Materials 2010 2011 2012 2013 2014 REVENUE SOURCES TOTAL ASSETS Technology 9.3% GeoNet 11.8% transfer – overseas $53.6m $51.0m $49.7m $47.8m $45.0m Technology 20.1% transfer – New Zealand Marsden 2.5% Direct Crown 35.6% Funding Contestable 20.7% funding 2010 2011 2012 2013 2014 EXPENSE ANALYSIS REVENUE Research 14.0% contracts $76.7m $73.7m GeoNet 5.7% $72.1m $72.0m direct costs $65.1m Employee 48.5% Other 31.8% related costs operating costs 2010 2011 2012 2013 2014 MEETING THE ECONOMIC CHALLENGES PLACED UPON US ECONOMIC RESILIENCE Our diverse contributions to building a stronger economy range from providing expert knowledge in the quest for geologically based resources to supporting the sustainable management of our existing resources. Just as nature can give, it can also take away – in seconds. So another major focus for us is helping to protect our wealth from the impacts of natural hazards. With New Zealand’s current reliance We also maintain a strong capability in the Exports of premium honey generate on fossil fuels comes a reliance on the science of geothermal energy. Geothermal more than $120 million a year, and this is international markets we source them accounts for 16% of our electricity another industry that benefits from our from. Producing our own petroleum production and GNS Science’s work in expertise in understanding the chemistry resources not only delivers financial understanding this resource and helping to of isotopes. The quality premise behind our benefits and jobs, it also decreases our identify and develop new geothermal fields primary products is vital to the continuing reliance on those markets and increases is vitally important for this industry. success of these exports, and our work our security of supply. GNS Science plays a crucial role in food authentication We believe geothermal will be a major supports the petroleum industry by and maintaining consumer confidence. contributor in achieving the Government’s helping to identify potential new goal of renewables making up 90% of The risk modelling we do, as well as subsurface accumulations and advising New Zealand’s energy generation by 2025. quantifying the physical and financial on the environmentally responsible impacts of geological hazards, informs management of existing ones. Perhaps lesser known, but equally important business decisions by a range important, is our innovative work in Since the 1980s we have contributed to of public and private sector organisations. materials science. This is where we the discovery of new oil and gas fields in Understanding the probabilities of natural implant atoms into the surface of materials Taranaki and have drawn industry and disasters – and assessing the likely losses to achieve a range of properties such as government attention to other areas from them – allows for improved building super-toughness, ultra-smoothness, and of high potential. This industry is New designs and earthquake codes and fairer resistance to corrosion. This part of our Zealand’s fourth largest export earner, setting of insurance premiums. business has its roots in the pioneering contributing around $1.7 billion in export work of Lord Ernest Rutherford. It supports revenues in 2013 plus $800 million in taxes a growing number of industries including and royalties. As a small island economy energy, transport, medicine, security, remote from the world’s major energy electronics, agriculture, and high-value markets, New Zealand needs scientific manufacturing. Importantly, it is helping to leadership to benefit from its natural ensure that New Zealand companies can energy endowments. secure access to a global market in nano- structured materials and nano-electronics potentially measured in billions of dollars. 4 GNS Science Annual Report 2014 GNS Science Annual Report 2014 5 MEETING THE SOCIETAL CHALLENGES PLACED ON US SOCIETAL RESILIENCE We contribute to societal wellbeing by helping to protect communities from the impacts of natural disasters, and by sharing our knowledge and experience for the benefit of New Zealanders and the international community. While we can’t prevent natural disasters Through our engineering geology work We also support New Zealand’s role as from happening, we can help ensure that and liquefaction studies, supported by our a responsible global citizen and help communities are well-prepared. Our work mapping expertise, we have a much better develop diplomatic relations by sharing helps mitigate against the effects of a understanding of how the ground beneath our skills and knowledge in numerous wide range of natural disasters, including our feet will respond in earthquakes and countries, particularly in the Asia-Pacific earthquakes, tsunami, volcanic eruptions, landslides. This not only helps to identify region. Our hazards staff work closely with and landslides. how existing buildings and infrastructure communities in Indonesia, Vietnam and the will perform during a geohazard event, South Pacific to reduce exposure to risk. Thanks to the vision of the Earthquake but is also a vital tool in shaping decisions Commission and the expertise of GNS We also have a strong commitment to about building design and land use as we Science, New Zealand has a world-leading education and developing New Zealand’s plan for our future. geohazards monitoring network in GeoNet. understanding of science. Our programmes The information provided by the 600- In the same way, monitoring of our to engage school students with science, odd instruments in its national network volcanoes helps us better understand and our strong support of postgraduate not only improves our understanding of the likely impacts of an eruption, as well students, all help in the development of the geological hazards, it also meets society’s as ensuring we have early warning when role of science in New Zealand’s future. ever-growing need for better and faster volcanic unrest occurs. And not forgetting information. This has been borne out by the the water peril, we operate a network of huge numbers of hits the GeoNet website tide gauges around the New Zealand coast receives every time a moderately large and on offshore islands to track incoming quake or minor eruptive activity occurs tsunami. (632 million last year, including 49 million in one day). GNS Science Annual Report 2014 7 6 GNS Science Annual Report 2014 MEETING THE ENVIRONMENTAL CHALLENGES PLACED UPON US ENVIRONMENTAL RESILIENCE Our contribution to protecting the environment is multi-dimensional. It ranges from the bottom of the ocean to the air in our cities. And it spans climate studies of the deep past to helping test models of future global climate. Our overall aim is to improve the environmental knowledge base and help in mitigating against environmental issues that affect New Zealand. A key aspect of our climate studies is Our materials and groundwater teams New Zealand’s entire offshore sovereign collecting and analysing ice cores from contribute to a better understanding of how area is 5.7 million square kilometres. Antarctica and New Zealand’s shrinking land use affects waterways. Our scientists This is equivalent to 14 times the size of glaciers. From this we can understand are examining the make-up of the California, or 1% of the Earth’s surface. how the Earth behaved in past periods of sediments in New Zealand waterways to Large parts of this realm are unmapped warming and cooling. This enables more understand where they come from and how and unexplored. As well as precious accurate forecasts of the impacts of rising they impact the waterways. Parallel to this, ecosystems, this area of seafloor almost temperatures and sea levels. our groundwater specialists investigate the certainly contains trillions of dollars complex interactions between groundwater of minerals and biological resources. To augment this, our palaeontologists study and surface water, which helps us The systematic work of GNS Science tiny fossils found in marine environments understand how nutrients travel from in understanding the geology and its going back more than 100 million years. farms to our streams, rivers and lakes. relationship with the biodiversity of A surprising amount of environmental this area will help in prudent marine information can be deduced from these Our monitoring of air quality around New management in the decades ahead as the critters. It includes the temperature and Zealand enables us to identify air pollution world looks increasingly to the oceans for chemistry of the oceans and the relative and its sources so councils can take steps its wealth, food and energy needs.