Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Environment watchdog OK's fracking, wants better rules

Environment watchdog OK's fracking, wants better rules

By Pattrick Smellie

Nov. 27 (BusinessDesk) - The controversial oil and gas discovery technique known as fracking is safe when conducted to best practice standards, says the Parliamentary Commissioner for the Environment, Jan Wright, in an interim report

However, she will spend the next six months assessing whether New Zealand's "fragmented" regulatory system is up to scratch and lays out seven recommendations in the meantime relating to the main factors that should govern hydraulic fracturing, or "fracking", operations.

"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'.

"But at this stage I cannot be confident that operational best practices are actually being implemented and enforced in this country," Wright says in a long-awaited report which will disappoint the Green Party and delight the government, which has pinned much hope on an upsurge in oil and gas discoveries to boost New Zealand's economic growth rates.

Wright is an independent officer of Parliament who chose to investigate fracking after a sudden surge in public concern about the practice in the last two years. In other reports, she has been deeply critical of plans to use brown coal lignite for fuel and fertiliser, as proposed by Solid Energy, and of the government's watering down of the emissions trading scheme. A report last year concluded the poison 1080 was appropriate for managing the impact of pest animals on native bush and birds.

While fracking has been undertaken in New Zealand for more than two decades already, Wright acknowledged that to many people the practice "just feels wrong". The absence of a "social licence to operate" was one of the major obstacles to the technology being widely used outside the oil and gas province, Taranaki.

"The company executive who reportedly stated that the North Island east coast could become the Texas of the South clearly did not realise that a vision of green pastoral landscapes dotted with wellheads was unlikely to gladden the hearts of many New Zealanders," she observes of comments by Canadian producer TAG Oil, which is producing oil in Taranaki and has extensive east coast exploration permits where it has signalled it may want to frack.

Fracking involves injecting fluid containing sand and chemicals at high pressure to fracture rock to release oil and gas trapped in so-called "tight" geological formations. Its widespread use in the United States has been instrumental in the US overtaking Saudi Arabia as the world's largest hydrocarbon producer, but has provoked environmental protests.

The practice is banned in France and Bulgaria and faces a moratorium in the Australian state of Victoria, although a similar ban in New South Wales has recently been lifted and extensive fracking plans in Queensland are provoking a backlash from farmers and environmental activists.

The report concludes that while there are real dangers of groundwater contamination from fracking, these come mainly from poor handling of wastewater at the surface, while it describes the potential for deeply trapped oil and gas to leak into groundwater as "remote."

Poorly constructed well casings could cause environmental damage, but this is a risk common to all oil and gas extraction, the report says.

Likewise, it dismisses the potential for fracking to cause damaging earthquakes, even while acknowledging the potential for fracking near an active fault could trigger small quakes.

"The process of fracking itself only causes very tiny earthquakes," the report says. "But if liquids (fracking fluid or wastewater) were to find their way into an already stressed fault, the fault might slip triggering a more significant (though probably small) earthquake."

She identified four critical factors for safe fracking as: the choice of well site, the quality of well construction, avoiding surface spills and leaks, and safe disposal of waste.

She will examine three further three key issues for her final report, due by mid-2013: regulatory complexity, the possibility that regulation is "too light-handed", and the need for the oil industry to earn a "social licence to operate."

"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," said Wright. " Such complexity works against open transparent government, and important issues can fall between the cracks."

She worried also that regulation may not be "fit-for-purpose."

"Companies are perhaps being trusted rather too much to all do 'the right thing'. This applies to protecting health and safety as well as the environment."

The biggest issue with fracking was its impact on climate change, as a new source of carbon emissions, said Wright.

However, the jury is out on whether it may help or hinder. While supporters say fracking moves the world away from the use of carbon-heavy coal, it might also discourage development of cleaner alternatives.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news