Oil, gas, fracking and the Regional Council

In her just released report, Drilling for oil and gas in New Zealand, the Parliamentary Commissioner for the Environment makes crystal clear that regional councils have a vital role to play in protecting environmental and public health in the event of oil and gas exploration and development.

And she comments specifically on oil and gas development in Hawke’s Bay — with its likely use of fracking.

Our Regional Council has already acted, as reported below.

Here’s an overview. You can download the PCE report here.

First of all, while describing the areas where national policy leadership is needed, the Commissioner emphasizes that councils should act proactively in their areas of responsibility, and in this regard she identifies the East Coast of the North island as an “immediate priority”:

“Aligning the environmental regulation of onshore oil and gas by creating clear and consistent national policy is very important, but would of course take some time. This report has identified a number of specific omissions or inadequacies in council plans (particularly regional council plans), and there is no need for councils to wait before addressing these.”

As for the Hawke’s Bay situation, in addition to commending Mayor Yule for initiating the oil and gas symposium conducted last year, the Commissioner notes:

“Hawke’s Bay is, for instance, very different to Taranaki in a number of relevant ways, apart from the difference in the rock formations. The region is drier and very reliant on two key aquifers. There are major known earthquake faults running through Hawke’s Bay, so wells may be more vulnerable to damage from seismic activity, and therefore more likely to leak into groundwater. Increasingly, Hawke’s Bay identifies itself as a premium food and wine region, and there may be conflicts between this and a mushrooming oil and gas industry. Oil and gas wells are not drilled in industrial parks on the outskirts of cities, and landowners cannot legally prevent wells being drilled on their land.”

In general terms, here’s how the Commissioner views the role of regional councils (the report also notes the role territorial authorities must play):

“Regional councils are responsible for managing the impacts of the oil and gas industry on the biophysical environment. Thus, regional councils need to assess potential well locations to prevent them being located in places that might lead to the contamination of surface water or groundwater. Regional councils should also ensure that oil and gas wells are not drilled near major faults, or within (or close to) valuable ecosystems.”

And what is the present regulatory setting in Hawke’s Bay, as embedded in our current resource management plan? It’s not comforting.

Here’s what the Commissioner says:

“The drilling of exploratory oil and gas wells is underway in the East Coast Basin of the North Island, with the aim of being able to extract commercial quantities of ‘unconventional’ oil. Yet in Manawatu, in Gisborne, and in Hawke’s Bay, this has begun without the public or representatives of other sectors having the opportunity to express their concerns because consents are not being publicly notified. And because the drilling of an oil and gas well in these regions is a ‘controlled’ activity, councils cannot decline applications if they meet the conditions in the plan. This means that the ability of councils to consider the location of wells is limited.

In regional plans, the drilling of an oil and gas well should be classified as a ‘discretionary’ activity. This would enable councils to retain the right to decline applications, consider all relevant environmental effects, and impose conditions appropriate to the location. Unless this is done, there is no ability to comply with the International Energy Agency’s Golden Rule – “watch where you drill”. Without the ability to decline applications for drilling, councils may find themselves concerned about the cumulative effects of many wells, but powerless to do anything about it.

In developing their plans, regional councils should also consider whether they need to prohibit drilling for oil and gas in particular areas. One reason for such a prohibition might be the need to protect certain aquifers. The Ruataniwha and Heretaunga aquifers in Hawke’s Bay are not protected in this way, despite popular belief.” [Emphasis added.]

To deal with this situation, the Commissioner recommends that:

Regional councils review the objectives and rules in their plans that are relevant to the oil and gas industry and:

• classify drilling an oil and gas well, fracking, and waste disposal methods as ‘discretionary’ activities;
• identify areas where oil and gas drilling can take place and where it cannot;
• set out core requirements for environmental monitoring;
• require applications for consents for establishing well sites and for drilling wells to be ‘bundled’ together;
• make explicit the circumstances when consents will be publicly notified and when they will not be;
• hold joint hearings with district councils whenever possible; identify and plan for the cumulative effects of an industry that may expand very rapidly.

Finally, how has the HB Regional Council responded to this report?

On Thursday, during FY 2014/15 budget deliberations, I offered the following motion, which was supported by Councillors Dick, Barker, Beaven and Graham and therefore adopted by 5-4 vote:

“Council:

Allocates $200,000 (to be allocated from unspent Open Spaces budgets) to consult with the public and prepare a Plan Change addressing oil and gas development, including management of fracking, in accordance with the recommendations of the Parliamentary Commissioner for the Environment.”

In passing this motion, the five supporting councillors have indicated that we expect our Council to address the oil and gas development issue with urgency. You can view the pertinent discussion on the HBRC website (toward the end of 5 June session).

This is not a resolution that approves or disapproves oil and gas development in Hawke’s Bay. It simply puts our Regional Council on a path to engage the public in that debate in the coming financial year and to begin with a precautionary mindset which presumes that if any development is occur, it must be in the context of a robust regulatory regime.

Tom Belford