Thoughts on the Oil & Gas Industry – Saturday Write In HB Today

Oil & Gas Exploration on the East Coast is very topical at the moment. And so it should be. The $130,000 East Coast Oil and Gas Development study states “East Coast Communities will want to make choices about the extent and pace of development and how a range of issues will be managed”. And so we do. But they need to be informed choices.

Given its terms of reference the study is, as expected, full of good intentions and waxes lyrical on how beneficial the oil and gas industry will be to our economy. However, there is an admission that it will adversely impact on Dairying income (potentially down 8.2%), and Horticulture income (potentially down 6.1%). It does not even mention what might happen to the income of Hawkes Bay’s largest agriculture sector, sheep & beef. I have to ask myself why produce figures on the adverse effects this industry will have on dairying and horticulture, and not sheep & beef?

It is also evident that the definition of helping local economies is very loose. Already the we see that the contractors working on Tags Oil’s Dannevirke site are based out of Napier, when there are very capable contractors in Dannevirke. I hope the Mayor of Tararua takes the opportunity to get hold of Tag Oil and ask them why this is.

The PCE’s report ‘Evaluating the environmental impacts of fracking in New Zealand’ does not give the big tick to fracking, no matter what the Prime Minister may say.

I acknowledge that it sates “That conclusion is that the environmental risks associated with fracking can be managed effectively provided, to quote the United Kingdom Royal Society, “operational best practices are implemented and enforced through regulation”.

Taken in isolation this possibly backs up the government’s position on fracking but what is often forgotten is that the PCE qualified this statement by saying “But at this stage I cannot be confident that operational best practices are actually being implemented and enforced in this country.”

Have there been any changes to regulations or increased enforcement since the release of the PCE’s report? No.  Is the industry ploughing on regardless? Yes.

The PCE also stated “regulation may not be fit-for-purpose – companies are perhaps being trusted rather too much to all do ‘the right thing”. Horizons Regional Council recognises that baseline water sampling needs to be taken before any drilling operations commence.  But who is doing the testing? Tag Oil. Talk about letting the fox run the chicken house.

The PCE also states that the (regulatory) system is complex and fragmented, making oversight extremely important. Unravelling the labyrinthine roles of different central government agencies, and the relevant responsibilities of regional and local government, has been a major exercise in itself. Such complexity works against open transparent government, and important issues can fall between the cracks, no pun intended.

If the PCE is having difficulty working out how the regulations work, and lacks confidence in what has happened in the past, what hope has HBRC got in managing the oil and gas industry satisfactorily? This is why we have been asking for a moratorium on expansion of this industry on the East Coast until the issue of regulation is sorted out to everyone’s satisfaction.

There is of course also the question of the lack of social licence for the industry and it associated players. For example Iain Maxwell at the HBRC (who is in charge of the Resource Consents team) is an advisor to the NZ Petroleum Summit 2013, and was involved as part of a panel discussion ‘Beyond Taranaki – An expert discussion around best-practice community and stakeholder relations’ at the 2012 summit. Do we really want our council staff getting this close to the oil industry?

On Wednesday Simon Bridges, Minister of energy and resource is meeting with local councils, council staff, and HB Chamber of Commerce to promote the oil & gas industry in Hawkes Bay. If the Minister is serious about getting community support for the industry why has he invited the Chamber of Commerce and not the public in general? Personally I don’t think this is right and is why I am organizing the Rally of Hope II on Wednesday commencing at Clive Square at 9:30Am so that we can present our concerns to the Minister. The public is invited to attend.

Paul Bailey is part of Don’t Frack the Bay, a a lobby group who have concerns about the oil and gas industry coming into the Hawkes Bay. This column is based on speeches given this week at Sherenden & Bay View.

PS:

Iain Maxwell is on the agenda at 2:35 http://www.petroleumsummit.co.nz/page/agenda-2012

Iain Maxwell noted as an advisor on URL http://www.petroleumsummit.co.nz/advisor/iain-maxwell

Submitted 29 Mar 13 (Not published)

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