A paper I presented at the Oil & Gas Symposium, Hastings District Council, 11 October 2013.
The Gisborne Chamber of Commerce asked candidates five questions, these are my responses…
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I have enjoyed first term on Council, part of that was on the Chamber Executive and I’d like to see those links strengthened a little more as I think Brian Wilson and myself acted as a useful conduit between the Council and Chamber on a number of issues.
I think I’ve been able to make intelligent, sensible and considered contributions to Council and I’ve helped raise the quality of discussion, debate and decision-making.
I’ve had a focus on increasing public involvement in planning and decisions and been a strong advocate for the city and the district as a whole.
I have listened to residents and ratepayers (even after being elected!), worked well with others (who don’t always share the same values and views) and helped make good decisions in the best interest of the region as a whole.
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1. What do you see as the GDC’s role in contributing to economic development and growth in this region?
Council has a key role in a number of areas contributing to economic development:
Some of functions within these areas, particulatly information gathering and sharing, advocacy and relationship brokerage could be devolved to an Economic Development Agency run separate to Council. But the Mayor and Council have a critical leadership role in advocating on behalf of the region – especially on things like roading, new costs being imposed by central government legislation, etc. And political leadership can help broker mutually beneficial relationships with industry, iwi, land owners, research institutions, entrepreneurs, etc.
Council can also have procurement and banking policies that benefit the local community in different ways.
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2. What is your view of the core role of council? Do you consider there are any current council activities that do not fit this role?
Under new legislation the purpose of local government is now to provide quality infrastructure, regulation & essential services. Opposition parties have pledged to revert the purpose back to promoting sustainable development and local cultural, environmental, social and economic wellbeing.
I’m not completely wedded to Council providing social housing. I have argued it could be sold to a Charitable Trust, housing cooperative or something like ECT but wouldn’t want to see them go to private ownership. I’m also open to Council not owning any or all of its commercial assets (WOF station, holiday park, farms) if there are compelling financial reasons to divest from these enterprises. We need an urgent review of Council asset ownership to identify options and the benefits of retaining or releasing these enterprises.
Tauwhareparae Farms are being well run but I’m not convinced we need to retain them. They were acquired to supplement port income and will always provide low value compared to capital committed, as the trees appreciate so will the capital value. There is no legal risk in selling them and my preference would be as Margaret Thorpe suggests to land-bank them via OTS as they are subject to Treaty claims. This will ensure we get a premium price, they are retained in local ownership and we demonstrate goodwill to the traditional owners.
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3. Businesses have to live within their means, or face the consequences. What is your view with regard to GDC achieving the same discipline around keeping rates increases in check?
Significant savings have been made by previous and current CEO to trim as much as possible. More ‘savings’ could be found but that depends on what we want to give up and what quality of life we can tolerate.
I campaigned on rates rises at or below inflation and we have achieved that. The ‘razor gang’ didn’t make any significant savings. I also campaigned on getting more predictable rates system with smaller variations year on year and we are making good progress on this through the participatory rates review process.
Council league tables suggest we are now one of the most financially sustainable and we rank 26 out of 73 councils for cost of rates.
Councillors are financially conservative and understand the limits of affordability for residents, but the WMT suggests this is not the case. That massive blowout and the need to address some basic first suggest some of the fancy projects need to be reviewed while we attend to the basics first.
If the community has things they think we should stop doing or not start they have the opportunity every year and we listen to that feedback.
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4. What is your position with respect to the re-opening of the Gisborne to Napier rail line?
The railway line a billion dollar public asset that is lying idle while Gisborne and Wairoa businesses scream out for it to make our products more competitive. Some people say logs will never go South on it but there are massive forests between Napier and Gisborne that will provide the anchor business for the line so that containerised seasonal produce and timber coming out and fertiliser going to Gisborne can be transported by rail instead of trucks. Coastal shipping is unlikely to ever be viable if the rail is operating.
More trucks on the road means more cost in maintenance, more congestion and more danger for other motorists – it also means more cost for local businesses and more competition from other places that have lower freight costs.
With the support of 10,000 signatures and $20,000 given by local businesses and residents, we commissioned a study that demonstrated the lack of rigor in the government’s position and the potential for a realistic business case if roads and rail were considered on a level playing field by central government.
A different government next year will reinstate the line if the local business consortium is unable to raise the funds required. Some candidates say they don’t don’t support ratepayers funding the line operation – that has never been a realistic option – but Council could be a stronger advocate for the line.
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5. If you were elected to the council, what activities or actions would you take to ensure Gisborne becomes an even better place to work, live and play?
I will keep doing what I have been:
– all of the above, plus…
– working with the IT sector to establish local computer hubs for young people and families with few opportunities to access IT, career pathways via the Techxpo and partnership with major NZ telcos
– advocating for more central government support for our district (transport, rail, imposed costs, renewable energy, forestry carbon credits, aquaculture, etc.) and working with iwi and other stakeholders on these issues
– leading a gang transformation project focused on employment and working with employers and support services
– review commercial assets
– keep rates at or below inflation
– continue support for better commuter cycling and walking infrastructure
– more emphasis on local housing issues – affordable, healthy housing for everyone, not provided by Council but Council facilitating government, community and private sectors working together
– continue emphasising the importance of opportunities for public input on issues like forestry harvest rules, petroleum exploration applications, legislative submissions, etc.
– continue work on Māori land issues – Council working with landowners to look at how to make the land more productive and/or revert to indigenous forest
– continue supporting illegal dumping prevention and removal, and more ambitious waste minimisation targets.
– continue bringing diverse parts of the community together to address complex issues
– continue voluntary involvement in a wide range of community groups and local issues.
When it comes to mining, Australia has many lessons for us. A 2009 report from the Queensland Government and Centre for Social Responsibility in Mining (CSRM) at University of Queensland showed that housing affordability often declines for people in mining towns who aren’t working in the industry.
Stats from the Real Estate Institute of Queensland (REIQ) show a close correlation between Queensland resources and property booms — median house prices in one suburb soared 65 percent in a year. Great if you’re a property investor, but if you just want an affordable home for your family you might be out of luck.
CSRM studies have documented the “two-speed economy” that follows mining “boom towns”, where people who aren’t working in the industry get a sharp shock when they realise that normal life is suddenly a lot more expensive.
A US Department of Agriculture study published last year found that in three states experiencing petroleum booms, a large increase in production caused only modest increases in local jobs and median household income and employment rose 1.5 percent on pre-boom levels.
There is a range of other peer-reviewed empirical studies on the subject (a few listed below), and I’m happy to look at evidence to the contrary.
So while some incomes will rise during an oil boom, the cost of living for everyone is likely to increase as well — meaning those on a fixed income are in fact worse off. We know that most of the high-paying jobs that go with the territory go to specialists who are brought in.
While this may not on its own be reason enough to say “no” to oil and gas exploration here, it’s important to understand the real opportunities and risks before rolling out the red carpet.
And communities aren’t the only ones thinking hard about the pros and cons. Two months ago Rabobank Group said it would no longer provide finance to anyone involved in extracting unconventional fossil fuels such as oil shales through fracking (see their Oil & Gas policy).
One of the world’s largest lenders, Rabobank is worried about the impact oil and gas production is having on people, productive agricultural land, wildlife and the climate — as well as the release of greenhouse gases and their warming of the planet.
As we are seeing in Taranaki now, there is increasing conflict in the communities affected by the expansion of oil and gas there and a perceived risk to the rural sector from residents near new developments.
A letter to Tiniroto resident John Brodie from the FMG Service Centre says:
“Our Underwriters have confirmed we exclude cover of Fracking and anything related to this activity. Fracking is outside of FMG’s preferred risk profile and is not something we would be willing to cover as we do not insure any risks relating to the mining industry.”
I agree that Gisborne refusing to welcome fossil fuels production here won’t make a serious dent in global greenhouse gas emissions. But global agreements don’t happen out of thin air — they tend to come from grassroots movements that influence local government, national legislation and eventually international diplomacy.
The people of Gisborne taking a stand would help the industry and government to think twice and take notice. But that’s a decision for our community to make, and soon. Last year 2000 locals asked for public notification of any mining resource consent yet Gisborne District Council has chosen not to do so. I think now more than ever we need a forum for the community, our government, iwi and industry to sit down and talk about what the pros and cons really mean for Tairawhiti.
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Weber, J. G. (2012). The effects of a natural gas boom on employment and income in Colorado, Texas, and Wyoming. Energy Economics, 34(5), 1580-1588. doi: http://dx.doi.org/10.1016/j.eneco.2011.11.013
Jacquet, J. 2009. Energy Boomtowns & Natural Gas: Implications for Marcellus Shale Local Governments & Rural Communities, NERCD Rural Development Paper No. 43, January 2009, 63 pp., University Park, Pennsylvania: The Northeast Regional Centre for Rural Development, The Pennsylvania State University. http://www.sciencedirect.com/science/article/pii/S0301421512006702
Always a voice for sensible decision-making, Brian Wilson’s Opinion Piece on local petroleum exploration was no exception. Brian succinctly outlined some of the fundamental challenges we have as a community if the oil industry gets established in Gisborne and questioned any benefits the industry might bring.
The greatest challenge of course is a moral one: why would we welcome an industry that is, probably more than any other, responsible for causing catastrophic changes in our climate? What are we going to tell our grandchildren when they ask why didn’t we make the transition to renewable energy faster?
And yes, anyone suggesting we need to change and still using fossil fuels is compromised, but that’s a bit like saying Gandhi and Mandela should not have spoken English during their struggle against colonisation.
The transition to renewables will take time – it took petroleum a few decades in the early 20th Century to supersede coal as the primary fuel – but the longer we allow cheap access to fossil fuels, the longer the transition takes.
Humans have already discovered five times more oil and gas than we can consume without pushing planetary warming above the critical two degrees increase. We don’t need to find any more.
I was at a meeting with a representative from Z Energy recently where they talked about the concept of ‘permitted oil’ as opposed to ‘peak oil’. Last month Z Energy partnered with Norske Skog and others to invest over $13 million in a biomass development project in the Bay of Plenty using woodchips and sawdust to create biofuels. That kind of money is not just green-washing, they are serious about using our existing resources to reduce New Zealand’s $6 billlion/year addiction to fossil fuels and our community should be talking to them.
Scion, the forestry research institute has estimated that eight biomass plants around the country could replace ten percent of our crude oil requirements using just the current waste from the wood industry.
A recent Auckland University and Vivid Economics report commissioned a group New Zealand’s most influential business leaders, suggested that green growth may not out perform the dirty alternatives if the goal is short-term profit but a different way of measuring growth and wealth may be required.
“The benefits of green growth policies do not always show up rapidly as higher growth, and higher short-run growth should not be a necessary criterion for a good green growth policy. This is because conventional measures of growth do not measure the state of the economy’s stocks of wealth, and many valuable environmental outcomes are not traded in markets, so improvements do not appear as growth. A green account addresses these deficiencies.”
Renewable energy industries do however have a much higher job creation result for the same investment in fossil fuels, and Tairawhiti is well placed to take advantage of any shifts in the allocation of resources around the national economy during the transition period.
Gisborne District Council has committed to reviewing our policies and plans as they apply to petroleum exploration and production. As a result of public concern, our Council reportedly has the most robust process for assessing resource consent applications from this industry.
As a community we are still waiting to have a well-informed, rationale discussion on the issues and while central government has indicated a willingness to resource this, they are still rolling out more exploration permits and changing laws to reduce opportunities for public input in the decision-making process.
The local body elections will not provide the best opportunity to have this discussion but candidates should all be able to clarify their understanding of the issues.
A decision by Gisborne District Council to give the green light to Canadian company TAG Oil for an exploratory well to be drilled west of Gisborne city has been condemned by an RMA Commissioner.
Manu Caddie, who is also a Gisborne District Councillor, says he is supporting an application for a judicial review of the decision based on the public interest test, cumulative effects and the way potential cultural impacts have been handled in the assessment phase.
“Two thousand local residents signed a petition last year requesting any application to drill in the district be publicly notified. All they want is a chance to look into the application and make submissions if they have concerns.”
The Council’s Regional Policy Statement and Combined Regional and District Plan are largely silent on drilling activities and the Council has agreed to review the plan once the Parliamentary Commissioner for the Environment issues her report on fracking later this year.
“The PCE in her interim report on fracking raised a number of real concerns about drilling on the East Coast and the lack of regulation in the petroleum industry as a whole” said Mr Caddie. “Until those concerns are addressed the public should have the right to examine applications and comment on them.”
“An industry representative said just last week that they have nothing to hide, so why are they afraid to give our community the opportunity to be part of the decision-making process.”
Mr Caddie said he understood the company had threatened to leave the district if the application was publicly notified and comments from vested interests meant staff felt pressure to let the application go through non-notified. “I’m sure everyone will deny that is the case, but this is what staff have told me.”
Mr Caddie said it was a sad day for the district and democracy. “The petition of 2,000 citizens must be the largest set of submissions Council has received on a single issue and it is bitterly disappointing that a simple request to have the opportunity to make comments at a public hearing – for or against the proposal – has been seen as less important than the desire of the company to rush into drilling.
Mr Caddie said he believed Council had good grounds to notify the application – while the risk of significant immediate pollution may be limited to a well explosion like the one that happened in the United States last month or limited contamination of land and streams, the cumulative effects of the activity should be taken into account at each stage and the RMA allows for public notification when the risk may be small but the potential effects significant if something goes wrong.
“There is scant information in the application on the process for rehabilitating the site while industry publications suggest at least half of all wells corrode within 30 years allowing fugitive emissions of gas and oil, long after they have ceased production. The area is around known fault lines and aquifers, who knows what impact drilling into those could have.”
The documentation provided with the Council decision suggests one or two individuals within local iwi had signed off on behalf of the tribe with no evidence of hui-a-iwi to provide a mandate or majority of iwi members’ endorsement.
“Iwi and hapū have a right under Te Tiriti o Waitangi, New Zealand law and international agreements to make free, prior and informed decisions on activities that impact on their traditional lands, waterways and air space. From the information supplied I can’t see evidence of that happening in this situation and a number of iwi members have expressed extreme frustration with the process used by the company to consult with iwi.“
Mr Caddie said central government should provide much more support and resources to iwi and hapū that are faced with extractive industries moving into their area.
“Around the world we have seen indigenous peoples welcome industries that make grand promises then leave after ruining the environment local peoples have depended on for generations. It is a familiar story we are seeing played out in our own backyard.”
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Gisborne District Council: Decision Documents
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CONTACT: Manu Caddie – Tel. 0274202957 / Email: firstname.lastname@example.org
Gisborne District Councillor Manu Caddie has welcomed the interim report on fracking by the Commissioner for the Environment.
Mr Caddie said he was pleased Commissioner Dr Jan Wright had repeated a number of concerns raised by local residents. “Many ordinary people have raised these same issues and been dismissed and belittled, not only by the industry and politicians but also by local critics who think they know better.”
The report says a list of questions ‘need to be asked and answered’ in relation to the specifics of the East Coast situation. “The report’s revelation of previously secret legal advice to Taranaki Regional Council suggests councils would be in violation of the Resource Management Act if plans continued to omit rules related to discharge of fracking reiterates the need for an urgent review of the Combined Regional and District Plan for Gisborne” said Mr Caddie.
“This should be enough for the Minister to reconsider his proposal to accelerate petroleum development on the East Coast” said Mr Caddie. “Let’s take it slowly and see what happens with the permit areas that have already been granted to the Canadian companies. The PCE makes it clear that oil rushes are not good for the host communities.”
Mr Caddie said he is satisfied with Dr Wright’s assessment that the environmental impacts of hydraulic fracturing may be managed at an acceptable level of risk and appreciates that the PCE is reserving the right to call for a moratorium once she has completed her investigation into regulations.
“Not knowing who is responsible for well integrity seems like a pretty fundamental problem already identified by the PCE and the kind of ambiguity we saw contribute to the Deepwater Horizon and Pike River disasters.”
Mr Caddie said the PCE and government seemed to be at odds on industry claims that everything is fine and New Zealand is a world leader in fracking regulation.
“Given the lack of confidence the PCE has in the current rules and plans, I look forward to her final report that will make recommendations to ensure we don’t see a continuation of the cowboy approach taken by at least one regional council and an over-enthusiastic central government.”
At the end of the day, local communities will decide what is appropriate for them and local regulators will rely on these kind of ‘expert’ reports to inform local decisions. For this reason Mr Caddie is disappointed many of the issues explored in the report seem to end half way through the investigation – the section on well construction and completion is a good example of this. “I have spoken to the PCE staff who say further evidence and analysis of the issues will be included in the final report as this was all they could do to date.”
Mr Caddie said the ‘contribution to climate change’ section clearly needs more work. “The PCE says climate change is the biggest issue facing the world then implies we don’t need to be concerned if New Zealand exports all fossil fuels because they won’t impact on our greenhouse gas emissions.”
The report quotes a range of studies, experts and news reports but neglects to provide a systematic assessment on the validity of competing claims. For example the PCE quotes a recent Cornell University report suggesting fracking produces more greenhouse gas than coal and cites criticism of that study but provides no suggestion on what the most likely emissions scenario is.
It has been an exciting week for the oil and gas industry. Todd Energy published a 180 page ‘no worries’ fracking tract and the Government announced plans to open up a large area across the flats and into the hills between Te Karaka, Tiniroto and Frasertown for petroleum exploration.
Todd acknowledges in its submission to the Parliamentary Commissioner for the Environment’s inquiry that “many of the environmental risks raised as concerns relating to hydraulic fracturing apply to all exploration and production drilling.” That’s been my concern for some time and I agree to a point with industry suggestions that most of these risks can be managed with ‘best practice’ and strong regulation.
The claim that opposition to fracking in New Zealand is being based not on evidence, but on misinformation and emotion really is ironic. Are the professors at Duke University, Cornell University, Penn State or the University of Alberta misinforming us with their peer-reviewed, published empirically evidenced papers? Which regulators that have concluded fracking was the cause of water contamination, earthquakes and/or air pollution were being too emotional in their reports?
We hear claims that there has ‘never been a major incident in Taranaki’, yet a recent oil spill that reached the Kapiti Coast took 265 days to ‘clean up’ and in one year alone three workers were killed on Taranaki wells. Taranaki Regional Council reports reveal chemical contamination of ground water near the Kapuni well so bad that it should not even be used for irrigation, let alone stock or human consumption.
No one is suggesting that every injected well results in drinking water pollution or dangerous earthquakes, but the evidence from independent scientists all over the world confirming contamination makes it clear that fracking is causing serious issues. The Todd submission acknowledges that there are real problems to deal with. Common concerns relate to water pollution through fugitive emissions from well casings, air pollution from flaring and spray disposal, soil pollution from spills, leaks and dispersal, significant earthquakes caused by the pressurised reinjection of fracking waste, radioactive material to be disposed of as part of the fracking process and the list goes on.
Todd Energy says a moratorium on fracking until we sort out the regulations would scare off overseas oil companies. These are the companies that spend well over $100million every year lobbying US politicians and threatening all sorts of calamity if profits are not prioritised over other considerations.
There will be stronger measures on climate change from the US after Hurricane Sandy and Obama’s reelection, but New Zealand politicians are still not prepared to commit the country to a realistic transition plan away from fossil fuels. Todd Energy argues that natural gas is a better option than coal, but conveniently overlooks recent research including a study from Cornell University that found the greenhouse gas footprint of natural gas could be at least 20 percent higher than that of coal (Howarth, R. W., R. Santoro, and A. Ingraffea, 2011).
Putting aside any moral obligation to future generations who will be the victims of a lack of climate justice in our time, we should be clear about the local risks and benefits of the industry. Three studies due before Christmas will help with that assessment and Gisborne District Council will consider them all carefully.
In the meantime interested members of the public might like to check out the maps of the proposed exploration permit areas, find out some more about what is planned and give feedback to local councilors, iwi leaders and/or the Minister of Energy and Resources by the end of January.
I was pleased to hear about the various pieces of work to be included in the study initiated by the Ministry of Business, Innovation and Employment on the likely impacts of petroleum exploration and production on the East Coast.
Ramping up fossil fuel production in New Zealand is the number one priority in the Energy Strategy of the current Government. We should not be surprised therefore that the Terms of Reference for the East Coast study will deliver results focused on the potential economic benefits for the country and the region. It is a shame they are not going to have the analysis peer-reviewed or use global scientific experts to assess the environmental risks.
Ministry officials have told me the assessments of the likelihood and impact of potential environmental risks associated each scenario (high, medium, low production levels) would be included but only at a very high level. Localised environmental risks such as hydrocarbon and toxic chemical leaks into the air, water and soil are of concern to many landowners and residents. There are also the global impacts of continuing to make cheap fossil fuels available while we know they are contributing to catastrophic climate change – no study is able to justify what has become an indefensible situation we are all responsible for.
While the oil industry argues the foreign exchange earnings from their products help pay for our schools and hospitals, they also need to acknowledge the intergenerational injustice the industry is causing. The Government has no transition plan to renewable energy and no strategy to reign in greenhouse gas emissions to 1990 levels by 2020. Carbon emissions of each production scenario are not included in the MBIE study.
All of the analysis on the national and local economic impacts of petroleum production has been outsourced to NZIER, the organisation that recently suggested climate change should be considered New Zealand’s “least important environmental issue”. Parliamentary Commissioner for the Environment described the analysis in a 2009 report by NZIER as “muddled and superficial”, “too superficial to lead to well-reasoned priorities” and “fundamentally flawed”.
BERL last month published an economic study for Southland that demonstrated the benefits of alternative industries for the region would outweigh the jobs and income from fossil fuel extraction. That is the kind of study we should have to sit alongside the MBIE project.
MBIE staff assure me that labour estimates in the report should be able to quantify the types of jobs the industry would require under each scenario and the likelihood of local people being employed in those roles.
The economic analysis should also include assessments of the likely impacts on existing businesses from land use changes, pollution, regional brand impacts, though MBIE say this is only going to be at a very high level. Federated Farmers and Hort NZ seem relaxed about the potential impact of thousands of oil and gas wells, tens of thousands more truck movements each year and the storage and disposal of toxic waste. Farmers and growers I have spoken to sit across the continuum, some are strongly opposed to the oil industry establishing itself here, others are quite open to the idea.
The capacity and expertise required by consenting authorities on exploration and production issues are outside the scope of the MBIE study but of real concern to many locals. Councils and central government should be able to work toward agreement on what resourcing is appropriate for government to provide given the royalties flow back to central government but local authorities have to do all the regulation and manage community expectations and concerns.
The MBIE study should be interesting reading alongside the PCE report on fracking due in the same month and the research Professor Caroline Saunders has been working on for Gisborne District Council that looks at the positive and negative impacts on provincial communities when an oil boom hits town.
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Oil lobbyist David Robinson in a recent column said we should let the public make up their own minds: “we can argue back and forth, back and forth using hand-picked examples of why each point of view is right. But that’s not helping anyone.” Of course he included with this statement with a few hand-picked examples.
I guess I do have personal ideology as Mr Robinson claims but I don’t agree it should be ‘put aside’ – it’s an ideology that favours all of the relevant information being made available to the public so we can make free, prior and informed decisions. Any opposition I have has developed since looking beyond the industry PR spin ($185m worth of lobbying in the US alone last year) and trying to take seriously the science related to human use of petroleum and its impact on the planet.
Beyond the climate implications, it seems useful to refer to people with direct experience of the industry, like Caleb Behn who acknowledges the income that can be derived from oil. Weighing these benefits with the negative social, cultural, economic and environmental impacts in his homelands, Caleb is strongly opposed and warns others to look carefully at the situation in British Columbia and Alberta.
The farmer speaking in Gisborne this week is in no way ‘philosophically opposed to the oil and gas industry’ – if Mr Robinson had read her story in The Washington Post he would have seen that Ms. Vargson and her husband used to maintain a herd of dairy cattle but got out of that business because of methane getting into their well water, a fact confirmed by the state regulators. The couple now work at other jobs and worry their son won’t be able to farm there either. Ms. Vargson permitted drilling of a gas well in the pasture behind her home, but the experience has raised serious doubts. Drilling “can be done safely,” she said. “I believe that the technology is there.” But she added: “I believe that for the most part the industry takes a lot of shortcuts.”
The Royal Academy of Engineering (RAE) and UK Royal Society’s fracking report probably hasn’t been widely promoted because it omits some key facts: the RAE’s ex-President is Lord Browne, Chairman of Cuadrilla, the UK’s leading fracker. Lord Browne was head of the RAE until last year and owns 30% of Cuadrilla.
The RAE is also part funded by the oil and gas industry. In the last three years the RAE has taken £601,000 from oil companies with links to fracking. The same organisation has awarded cash prizes to BP engineers for their work in hydraulic fracturing.
The influence of the oil and gas industry on the RAE has not decreased with Lord Browne’s departure. His successor – Sir John Parker – is closely connected to the fracking industry. Before taking over at the RAE, Parker headed Anglo American with their fracking interests in in South Africa. Parker is a gas man through and through – some of his previous positions include non-executive director at British Gas, Chairman of National Grid Transco (gas distribution) and non-executive of BG Group (which has coal bed methane interests in Scotland).
Mr Robinson says renewables are too expensive, I agree. If it wasn’t for the one trillion dollars of annual public subsidies awarded to the fossil fuel industries and permissive legislation that allows continued access to relatively cheap fossil fuels, renewable technology would be affordable to most of us.
It was great to hear Rod Drury this week talking about how his software company may soon overtake Fonterra as New Zealand’s largest business. IT entrepreneurs are keen to move to Gisborne for the lifestyle and environment it currently offers. Some locals have been in contact with a biochemicals company in California that has huge potential and is interested in establishing a demonstration plant on the East Coast. These seem like far more sensible opportunities for our community to encourage than the dirty business of oil.
This article originally appeared as an Opinion Piece in The Dominion Post on 10 May 2012.
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Oil industry representative David Robinson’s Opinion Piece on Tuesday said it’s time for the truth about oil drilling. It promised facts but provided only rhetoric. Mr Robinson says there have been no ‘major incidents’ in oil production in New Zealand, which is simply not true. The following incidents, all undeniably major, are examples of facts the oil industry tries to keep to itself.
In 2007 the Umuroa facility, operated by Norway’s Prosafe and Australian company AWE, spilt 23 tons of crude oil off the Taranaki coast. The spill affected nearly 15 kilometres of coastline, took 232 days to clean up and resulted in a successful court prosecution.
In 2010 Austrian oil giant OMV accepted responsibility for a large spill from the Maari field that saw oil washing up on Kapiti Coast. The Rena disaster revealed just how ill equipped authorities are to contain anything beyond a minor inshore spill under perfect weather conditions.
The offshore wells in Taranaki are at depths of no more than 150 metres, the Raukumara Basin off East Cape where Petrobras has been given a permit to drill is up to 3,100m deep and the BP exploratory well that blew out in the Gulf of Mexico for three months in 2010 was at a depth of only 1,500m. Anadarko (one of the DeepWater Horizon companies) has plans to drill off the coast of Taranaki and Otago in up to 3,000m of water.
In 2009 the Montara spill off the west coast of Australia resulted in the equivalent of one Rena sized disaster every day for 74 days in a row. Why would New Zealand be immune from such risks?
Over the past 15 years 282 fatalities among Petrobras staff and contract workers have been documented in accidents at oil rigs and refineries. Petrobras has suffered 27 rig blowouts since 1980 and was the first company allowed to drill at depth in the Gulf of Mexico after the BP disaster. Just before oil was due to start flowing a production riser broke away, if it had happened a few days later there could have been a repeat of the Deepwater Horizon disaster less than a year later.
Claims that a recent GNS report on earthquakes and fracking in Taranaki suggest there is no credible link, overlook the fact pointed out by seismology expert Michael Hasting that the GNS seismic detectors are not calibrated for nor close enough to fracking operations to determine any relationship. GNS should also acknowledge they are contracted to the industry when they comment on overseas reports citing evidence of a direct link.
If the industry is committed as Mr Robinson says to proper public consultation then they should agree to all resource consent applications for mining activities being subject to full notification.
The industry asks the public to trust them on their record in Taranaki. But with only 40 wells drilled, no independent scientific studies, sparse regulation and minimal monitoring, we need to consider the overseas evidence.
Professor Avner Vengosh from Duke University has led some of the most comprehensive studies on water quality related to fracking and found a direct link between water contamination and hydro-fracking. Professor Karlis Muehlenbachs at the University of Alberta cites the industry’s own publications that show up to 60% of well casings will fail within 20 years of construction. The list of peer-reviewed independent studies showing problems with the practice is growing but there are still huge gaps in knowledge about health and environmental impacts in particular.
This week it has been revealed that Germany is following France, Bulgaria and a number of other jurisdictions in Canada, USA and Australia with an indefinite ban on hydraulic fracturing.
New Zealand has too much to lose if large-scale petroleum extraction goes ahead. Our economy depends on quality food production, processing and exporting – why put it all on the line for a few years of income from petroleum exports? When consumers learn that Taranaki farmers are being paid by the oil industry to use their farms to absorb highly toxic fracking waste, our milk and meat will quickly lose its wholesome appeal. But our own health aside – how will our export markets react to the news that New Zealand milk products may derive from Taranaki cows grazed on land that has fracking waste spread over it?Mr Robinson said it’s time we had a reasonable conversation about the future of the oil and gas industry in New Zealand. Let’s just make sure the conversation is based on the full facts.
Gisborne District Councillor Manu Caddie says he is very pleased that the Parliamentary Commissioner for the Environment has decided to launch a full and independent inquiry into the risks of hydraulic fracturing in New Zealand.
“I first wrote to Dr Jan Wright in November last year asking her office to undertake an inquiry, so was pleased to hear that the scoping investigation started by her staff quickly revealed the need for a full inquiry under the Environment Act. The office of the PCE had said they did not expect to make a decision until mid-year, so obviously they found enough evidence to launch the inquiry immediately.”
While an application to frack is expected in the next few weeks from Canadian company Apache Corporation, Gisborne District Council staff have said they do not have expertise in petroleum exploration and earlier this month said they support an independent inquiry.
“It is obvious – to everyone except maybe the industry and Minister of Energy & Resources – that the fracking process has some serious problems associated with it. Hopefully the peer-reviewed PCE report due by the end of the year will provide some clarity on if and how it can be done safely here.”
Mr Caddie says he has asked the PCE if an advisory group for the investigation can be established comprising various stakeholders including industry representatives, central government officials, local government representatives who may provide feedback on the proposed scope, terms of reference and draft report.
This is a list of questions relating to the Apache/TAG exploration plans for the East Coast that I will try to post answers for – feel free to ask any other questions in the Comments Box below to add to the list.
The responses are my understanding at the time of writing and do not necessarily reflect GDC or anyone else’s opinion or position.
The staff report on the proposed visit is available here.
A discussion on Radio NZ Morning Report (23/1/12) about the trip is available here.
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1. Who is the GDC staff member going on the trip to Canada?
Trevor Freeman, Manager of Environmental Services and District Soil Conservator is the staff member that his manager is recommending for the trip. Trevor’s participation is yet to be confirmed, it is a recommendation to the full Council meeting on 26 January and councillors may decide he should not go or that GDC should fund it without Apache assistance.
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2. How are they and GDC going to manage the moral/ethical pressure (subconscious as well as conscious) of being beholden to the oil company that is hosting-paying for them to make such a trip?
The itinerary will be on the public record once confirmed – and is in fact still open if people have suggested contacts that the group could visit near Calgary, Fort St John and Victoria, BC. Trevor will provide a full report to Council on his return and is expected to establish contacts with regulators and other stakeholders in Canada that should be broader than just those arranged by Apache Corp. By definition subconscious pressure will be difficult to manage, but staff understand that Apache Corp. representatives will be at only a few of the meetings scheduled – probably only the meetings with their Canadian staff.
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3. Why to Canada and these parts of Canada in particular?
British Columbia seems to be the area that Apache is most active in fracking – including in 2010 the largest frack job ever completed at that time. It seems sensible to make contact with people there who have seen the impacts firsthand and establish some ongoing connections between us and them as a way to share learning, experience, policies, concerns, etc.
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4. Why is this money being accepted by GDC for just one individual to travel all that way to look at a few examples and talk to just a few people in the world when there’s masses and masses of information and research available to many and from all points of view?
GDC can and will still access as much of the reliable information available online and from various academic and independent sources as it comes to hand. This is an opportunity to see the impacts firsthand, to build networks and build the capacity of GDC staff to understand the process which our district has no previous experience with. I am working on a primer on fracking that collates the most compelling peer-reviewed evidence against the practice to share with my colleagues and the public – assistance with this project would be appreciated!
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5. What could be achieved by the money being used for a panel of widely respected district people (Council, Iwi, other community interests) to independently review all available information and report to the district on all the issues as they apply to the East Coast (and if necessary, interview people by skype, define what trips to observe directly should be made by whom about what)?
This could also be something GDC require Apache to fund as part of any new consents application. Apache has reportedly invested $100million in the project, so they should support a robust investigation process by NZ regulators and the public, and their representatives have made public comments to that effect.
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6. What is GDC’s logic and rationale for a geotechnical / soil conservation staff member going?
Most of the resource consent applications will relate to disturbance of the soil and discharge to land – there is also likely be water take and possibly discharge to air consent applications and the individual going to Canada is responsible for all these areas as Manager of Environmental Services.
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7. Who initated this oil-company funded trip?
I understand it was recently proposed by the company to staff from the three councils involved (Gisborne District Council, Hawkes Bay Regional Council and Horizons Council).
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8. What and whose purposes and intent is the trip designed to serve?
My understanding, based on the report going to Council this week, is that the trip is designed to help build the knowledge of GDC staff in relation to Apache Corp. operations in Canada and the regulatory framework employed by Canadian authorities. I guess the company hopes the visit will reassure Council staff who work on behalf of their residents and ratepayers that Apache Corp. is a socially and environmentally responsible company that is regarded with respect in the areas of Canada it operates. My support for the trip will be because it enables our staff to also have direct contact with environmentalists, First Nations representatives, politicians and regulators who may have concerns and even direct opposition to Apache Corp. activities.
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9. What alternative uses of $ oil company offering for: research / review / staff training / were debated/considered – if any?
The trip is seen as a valuable learning opportunity for staff. It is expected that the costs will be between $3-5k and these will be incurred by GDC and then reimbursed by the company. Further staff training, research and reviews will definitely be required and may be funded as part of any consent application and/or funded by Gisborne ratepayers, central government and possibly academic institutions – like Auckland University that next month is hosting a visiting researcher from Duke University that has published papers documenting the dangers of fracking.
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I’ve asked Apache/TAG Oil and GDC staff to comment on the following questions and will post responses if/when they provide them:
What environmental and public health risk assessments are being undertaken before drilling is finally scheduled, and by whom?
What insurance cover will be in effect, covering landowners and GDC, to cover loss of potable water supply due to petroleum contamination, land erosion etc.?
Is a survey of water supply catchment significance, in relation to proposed drilling sites being undertaken?
What would be the proposed method for handling drilling water flowback and drilling waste disposal, bearing in mid the hazardous chemical nature of oil shale or oil source rock detritus?
What engineering measures would be envisaged to prevent long-term corrosion and seismic shock damage to well casing which could result in petro-chemical contamination of aquifers?
What fracking chemicals are expected to be used for oil shale work: BTEX volatiles, barium, diesel oil?
What fracking pressures would you expect to be used if working into oil shale?
At Whakatutu, where do you anticipate that the high volumes of drilling water needed will be obtained from?
Will the well borers used by Tag/Apache test completed cement casing, if ‘yes’, what is the method of testing?
To what depth would bore cementation be taken, from the surface and how many steel liners would be used to below waster aquifer depth?
Would you anticipate using ponding areas for storing flowback water etc. at the drilling site?
If commercial quantities of gas or oil are found, what would be the means for transporting the gas/oil from the drilling site and to where?
Aquifer water in the vicinity of drilling sites should be pre-tested for petroleum contaminants prior to commencement of drilling and reasonably frequently after drilling.This testing should, ideally, be undertaken by an organisation unrelated commercially to the petroleum industry?
In view of the fact that drilling operations are subject to material failures, human error, faulty cement injection and seismic shock damage, what assurance can the petroleum industry give that aquifer contamination will not occur as a result of such factors?
Does Tag Oil/Apache acknowledge that deep drilling and fracking can result in earthquake shocks, as acknowledged by the USA Geological Survey after the series of shocks experienced last year in Northern Dakota, also at a Cuadrilla Ltd. Drilling site near Blackpool, in England, as acknowledged by the U.K. Geological Survey?
In view of the fact that deep drilling and fracking can cause earthquake shocks, is a survey of faultlines being undertaken across the proposed drilling area, in relation to possible earthquake shock generation? ( Ref: Deep drilling and high-pressure injection caused a series of earthquake shock in the Denver, Colorado area, between 1961 and 1966, when toxic chemicals were being disposed of underground, the disposal method then being abandoned due to the earthquakes).
The delegation plan to visit Calgary, Victoria and Fort St John in British Columbia – so let us know urgently if there are any other contacts that may be good to meet with in these areas.
We can also send any questions on to Apache Corp. representative Alex Ferguson who has said the company will answer as best they can.