What’s Wrong with Drilling East Cape?

Last month the influential publication Bloomberg Business Week made the dire assessment that the Brazilian owned Petrobras is ‘more exposed than any oil company on the planet to the risk of an accident similar to the Deepwater Horizon spill in the Gulf of Mexico, the largest in U.S. history’.

This is the same company that the National government has just awarded a five year exploration licence to drill over 12,000 square kilometre area off the East Cape.

Claims that Petrobras have cleaned up what Forbes magazine called a ‘poor safety record’ overlook the concerns raised by petroleum sector academics in a Reuters report published in May. These Brazillian experts suggest Petrobras operations pose an even greater risk than extraction in the Gulf of Mexico given the technology has not yet been developed to manage deep sea extraction safely: “Depth is associated with the failure rate of the BOP (blow-out preventer), which showed itself to be inadequate at preventing a leak in the case of BP,” said Segen Estefen, a naval engineering professor with the COPPE, an institute linked to the Federal University of Rio de Janeiro. “The entire industry thought the BOP was adequate, but it wasn’t enough,” he said. “We need more effective equipment than the current BOP,”

The Petrobras P-36 Rig sank after exploding in 2001

Gordon Campbell (www.scoop.co.nz) points out that most of the Raukumara Basin is more than twice the depth of the Deepwater Horizon bore and it would be much further from the kind of emergency response equipment that the Gulf of Mexico has easy access to.

While the Big Oil public relations machine set to work after a couple of hundred Coasties expressed concern about the Petrobras plans, we can expect to see a massive green washing exercise as opposition grows and politicians and the industry try to reassure us that local fears are unfounded.

At present there are no internationally agreed rules, standards or common practices for mobile drilling rigs. Given the glaring gap in regulations that the Gulf disaster has exposed, many, including the Obama administration, are urging a halt to any new deepwater drilling operations. “We should hold off on exploring in some of the deeper basins” Tina Hunter, an assistant law professor at Bond University in Queensland who studies offshore oil regulation, is quoted as saying in a Business Week article in June.

According to The Economist, questions have been asked about the $224 billion spending Petrobras has committed to for current projects, such as developing offshore-oil assets. A planned share issue of $25 billion was recently put on hold because of a delay in a government valuation of its offshore reserves.

Claims by local commentators and national politicians that the exploration will create a boom in jobs are a joke. Multinational petroleum companies import workers who need years of experience and global qualifications to work on the rigs. And it is very unlikely that they will use Gisborne’s port as Tauranga is much better placed to host the operation if the company choose to use a land base.

As the easy to extract oil and gas has already been found and taken, those who protested were communicating a simple message: as a region we need to urgently decide how much risk we are prepared to expose our environment, and by association our economy, to in return for some quick cash. The reality is our region bares all the risk, and if something ‘worth’ extracting is found, the Gisborne district will not receive any remuneration commensurate with the level of risk being imposed on us by Wellington.

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One thought on “What’s Wrong with Drilling East Cape?

  1. Apart from the environmental caos that such a venture may bring. I see no economic benifits reaching our district. We must resist the urge to be dragged in to such a thing.

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