Like Patrick O’Sullivan I get angry with climate change deniers. I also get angry with Peak Oil deniers. It defies logic to think that there is an infinite supply of cheap oil & gas. It is obvious that as we use oil & gas it is not being replaced at a similar rate. It is simply a matter of time before we reach a tipping point where the cost of extracting oil & gas becomes greater than what we are prepared to pay. Given the way that the oil & gas industry is focusing on unconventional extraction methods such as hydraulic fracturing and tar sands oil I believe we are fast approaching this point.
It would be nice to think that rather than debating the pros and cons of one of the processes used by the oil & gas industry, the debate would be around transitioning away from our dependence on fossil fuels. However this is not the case. Our officials at a local and central government level seem to not only deny that there is climate change but also imagine that there is an unlimited, never-ending supply of oil & gas.
I say this because of the way that the oil & gas industry seems to be being welcomed to the Hawkes Bay with open arms. But I have a stack of questions around the sustainability of the oil & gas industry which remain unanswered. Let me give you just six that are very East Coast of the North Island specific. These were first posed by the Parliamentary Commissioner for the Environment so can hardly be construed as emotive:
Given that the area is particularly seismically active, what are the implications for well integrity and the injection of wastewater?
Has the folding and faulting of the rock layers meant that contamination of groundwater is more likely?
Will the drilling be vertical or horizontal, as a horizontal well has a much greater likelihood of intercepting vertical faults?
What does the depth of the shale layers mean for proximity to groundwater and aquifers?
Given that the east coast is much drier (and frequently suffers from summer drought), where will the water required for fracking be taken from?
How well would the main waste disposal methods used in Taranaki (landfarming and wastewater injection) translate to the east?
Now that Maurauder Energy has been issued a permit to explore an area which extends from Bayview to Gwavas Forest, these questions need an urgent answer. Permit 53806 covers the Ngaruroro & Tutaekuri River catchments. 20% of the water shed of the Heretaunga Plains aquifer comes from these catchments. Around 5% of oil & gas wells fail within 1 year of completion, and 60% within 30 years of completion. Given that there could well be up to 3,600 wells being drilled on the East Coast means there is likely to be 180 well failures with 12 months and 2,160 within 30 years. Why are putting our aquifer at risk?
Royalty costs incurred by TAG Oil are 5% on net oil & gas proceeds on the first 200,000 barrels of oil (or oil equivalents), and then drop to 2.5% (page 10 of TAGS 2013 financial results). So Hawke’s Bay takes 100% of the environmental and social risk; central government gets 2.5% on net proceeds and companies like TAG and Marauder take the profits off shore. Is this really good long term thinking?
But the most worrying thing is we only have three lines of regulation in our Regional Resource Management Plan that mention oil well drilling. How is council going to extrapolate a suitable regulatory and monitoring regime from that? The oil & gas industry is not waiting for us to fix our regulations, they are ploughing on regardless. Can we afford to risk waiting?
Being described as alarmist because I speak out on these issues is a burden I am prepared to carry. I suppose some may describe me as a conspiracy theorist but I like to think I’m just joining the dots. The oil & gas industry coming to the Hawkes Bay could well be a game changer, but I believe that there is a great chance that the change could be detrimental to us environmentally, socially, and economically. I agree with Patrick O’Sullivan. Let’s stick to the facts.