Oil news

Earlier this week, TAG Oil announced it was capping and abandoning its exploratory drilling site outside Gisborne (Waitangi Valley-1). Why? Too dangerous.

Their official announcement read: “Waitangi Valley-1 encountered very high hydrocarbon zone pressures at shallow depths that cannot easily be compared to anywhere else in the world. [Ed: italics added.] We understood this program would be challenging and we encountered extremely difficult drilling conditions in the first 856m of drilling. After consulting with worldwide drilling experts and considering all data ourselves, we have made a difficult decision to plug and abandon Waitangi Valley-1 before reaching the intended total depth of 3600m, to maintain the safety and integrity of the operation.”

TAG is re-deploying the drilling rig to Taranaki … to the relief of some on the East Coast, I suspect.

Ironically, last week a group of Hawke’s Bay Regional Councillors, including me, plus mayors Peter Butler and Craig Little, visited Taranaki for a long day of exploring oil and gas development there. Unfortunately we spent only an hour in focused group exchange with Taranaki staff regarding how they oversee oil and gas operations there. I’ve attached here the Powerpoint presentation we received … heaps of basic information there. However, in view of the criticisms about Taranaki made by the Parliamentary Commissioner for the Environment in her recent report on oil and gas development (she termed Taranaki’s approach “extraordinarily permissive”), we could have devoted half a day to substantive discussion.

Instead, we took the guided tour. The production and drilling sites we visited were impressive in terms of industry technology and professionalism. Certainly we benefited from getting a firsthand sense of the what actually happens on the ground. But that’s no substitute for serious questioning of the regulatory regime.

And of course we met with no critics of Taranaki’s oil and gas programme or its regional/local government regulatory oversight.

Returning from Taranaki, we visited the Horizon Regional Council, where I met Councillor Rachel Keedwell, a PhD ecologist.

Rachel had made a visit of her own to Taranaki, and did a lot more probing that we HBRC folks did. I’ve attached here her report on her trip, and urge you to read it. Among her concerns:

• Very little control over where wells are located (a primary concern of the Parliamentary Commissioner)
• No prior — and very little ongoing — monitoring of water quality
• Responsibility for abandoned wells falls on landholder and community
• Lack of clarity over who is deemed an affected party (which affects public notification or lack thereof)
• Non-disclosure agreements forced upon landowners
• Adverse impacts on adjoining property values and lack of disclosure on LIM reports
• Waste waters being discharged to waterways
• Overstatement of local job opportunities
• Adverse health impacts

And here’s her overall warning:

“…what I saw has left me with grave concerns that Horizons is seriously unprepared for the expansion of this industry in terms of ensuring that our communities are adequately protected. The Parliamentary Commissioner for the Environment recently concluded that the regulatory framework for oil and gas production in New Zealand is not adequate and that regulators may be left ‘scrambling to catch up’ if the industry continues to expand. From what I saw of the industry and the impact on communities, I believe her conclusions are accurate. We need to get onto this as an urgent priority if we want to have a chance of living up to our vision statement of making this region a great place to live, work and play.”

Amen! The same applies to Hawke’s Bay and our Regional Council. Indeed, the recent brouhaha over seismic testing in Napier simply points up the our lack of preparedness, complicated by overlapping jurisdictions (both regional and territorial councils have responsibilities).

I have pressed for $200,000 to be earmarked for the Regional Council to ramp up its own investigation of how we would oversee and regulate oil and gas development if it occurs in Hawke’s Bay. The money — approved by Councillors Belford, Barker, Beaven, Dick and Graham — is presently in the budget. But not all councillors feel the same sense of urgency about getting on with the job!

So, do your homework. Check out the two attachments. And get prepared to weigh in on Hawke’s Bay’s energy future.

Tom Belford

P.S. HBRC has invited the Parliamentary Commissioner to visit Hawke’s Bay and brief us on her recommendations. We’re expecting that visit in early 2015.