Cold comfort from Ministry of Economic Development

The Gisborne Herald Editorial on Saturday 10 July suggested that information provided by the Ministry of Economic Development should alleviate fears of a big oil spill in our waters. On the contrary, the surprising thing is how little concrete reassurance the MED information actually provides. I guess it is positive that the government is now willing to engage in a discussion with our community about the process they used for granting exploration rights for oil and gas off East Cape and the associated risk to our region.

MED quoting from Petrobras’ own website to justify its safety record reminds me of how Transocean Ltd, the operator of the Deepwater Horizon rig in the Gulf of Mexico, was also honoured by regulators for its safety record. The very day of the explosion, executives were aboard celebrating its seven straight years free of serious accidents!

While Petrobras say they are focused on gas reserves in the Raukumara Basin, we know the license is not restricted to gas exploration. The presence of oil in the area was a big selling point during the tendering process based on GNS seismic mapping and satellite imaging.

Is the Editorial’s claim that “the company now ranks well amongst its peers” supposed to give us confidence? Claiming that Petrobras is the biggest deep water oil producer in the world does not mean much given that the practice is so new and few companies are prepared to take the associated risks. The Gulf of Mexico disaster has demonstrated the inherent risk of any deep water drilling.

MED claims the statement that “The entire industry thought the BOP [blowout preventer] was adequate, but it wasn’t enough,” is unsupportable. The statement was made by Professor Segen Estefen from the Federal University of Rio de Janeiro who actually tests this kind of equipment for Petrobras and other companies. He was not referring just to the BOP used by the Deepwater Horizon rig but to the technology in general. In a television interview just last week Estefen said the BOP failure was “a big surprise, because the state-of-the-art contingency plans didn’t work in very deep waters”.  He said most oil companies that he has contact with were shocked at BP’s repeated failures to cap its damaged well.

If MED are ‘monitoring the US response’ and think ‘Norway is one excellent forward model for New Zealand’ to emulate, why has our government not put a hold on exploration licences like those two countries have, until the investigation determines what went wrong?

I also wonder how much of the information provided through MED came from Hill and Knowlton, the PR company working for Petrobras. Just this year Hill and Knowlton was awarded a million dollar (per annum) contract with Petrobras specifically to help the company sanitise deep water drilling in the face of growing public and political opposition. This is the same PR company that represented the tobacco industry for years after the link between tobacco and cancer was proven and duped the American public into supporting the first invasion of Iraq by using false testimony at congressional hearings. Petrobras is the 34th largest corporation in the world – I wonder what East Coast communities could do with $1m per year for research and PR to oppose the drilling plans?

The one helpful piece of information supplied by MED was the industry training programme that will try to turn around the trend of importing qualified oil and gas workers from overseas. This piece of good news is however, small consolation given the enormity of the risk our region is being exposed to.

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