The Parliamentary Commissioner for the Environment has found regulation in New Zealand is not adequate for managing the environmental risks of oil and gas drilling, especially if the industry expands beyond Taranaki.
In her 2012 report into fracking, Commissioner Jan Wright found that much of the concern about fracking was associated with the expansion of the industry. The technique of hydraulic fracturing – fracking – could be used to extract ‘unconventional’ oil and gas from many parts of the country outside Taranaki. In some parts of the United States and Australia, this has led to oil and gas wells multiplying so rapidly that regulators have found themselves “scrambling to catch up.”
Exploration wells are being drilled into the shale of the East Coast Basin – near Dannevirke, near Gisborne, and soon in Hawke’s Bay, said Wright. The shale in this part of the country has been compared with the Bakken and Eagle Ford rock formations in the United States where the number of wells has proliferated in just a few years.
Wright said that there are some deficiencies in the way the industry is managed in Taranaki, but beyond that, some fresh thinking is needed.
“The East Coast Basin is very different to Taranaki in a number of relevant ways, apart from the difference in rock formations,” she said.
“The region is drier and very reliant on a number of key aquifers. There are major known earthquake faults, so wells would be more vulnerable to damage from seismic activity, and therefore more likely to leak into groundwater. Increasingly, the region identifies itself as a producer of premium food, and there would be conflicts between this and a mushrooming oil and gas industry,” adds Wright.
Wright has made six recommendations in the report. They are:
- The Government should develop a national policy statement paying particular attention to ‘unconventional’ oil and gas;
- Revision of regional council plans should include better rules for dealing with oil and gas wells. Most council plans do not even distinguish between drilling for water and drilling for oil and gas;
- Wells need to be designed to minimize the risk of leaking into aquifers;
- Processes around who pays if something goes wrong need to be improved. Abandoned wells need to be monitored – the older a well is, the more likely it is to leak;
- Regulations on hazardous substances at well sites need to be better enforced;
- The disposal of waste from wells by spreading it on farmland needs review. There have been instances of farm animals grazing these areas before the breakdown of hydrocarbons is complete.
Although she has found that the local environmental impacts of oil and gas drilling can be managed, Wright said that she does not want the report to be seen as giving a big tick to the expansion of the industry in New Zealand.
“I would much rather see a focus on ‘green growth’ because my major concern is the impact of the burning of fossil fuels on the global climate,” she concluded.