New Zealand's fragmented oversight of the oil and gas industry could result in potential 'fracking' problems slipping through the gaps, says the Parliamentary Commissioner for the Environment.
A week after releasing her interim report on hydraulic fracturing, Dr Jan Wright today answered questions from the public in a live chat on nzherald.co.nz.
Dr Wright said one of the main issues she planned to spend more time investigating was how the oil and gas industry and its use of fracking techniques was monitored in New Zealand.
"There are many agencies involved - that's why one of my interim findings is that government oversight is complex and fragmented,"she said. "I am concerned that problems could fall through the gaps, this is why I'm taking more time to investigate."
'Fracking' is a process which involves injecting fluid containing sand and chemicals at high pressure to fracture rock to extract previously inaccessible oil and gas from the earth's crust.
In her 199-page report, Dr Wright concluded that while fracking should not be banned in New Zealand, there needed to be better oversight and regulation of the industry.
New Zealand has several different central government agencies and two levels of local councils involved in monitoring oil and gas production.
"For any one fracking operation each of these different regulatory agencies is involved in different parts of the process, and each has its own areas of particular responsibility," Wright said in the report.
"In many instances it has been difficult to determine where regulatory responsibilities begin and end, and how effectively they are being implemented."
During the live chat, Wright said a recent study from the United States showed methane levels in the air around a major gas field were higher than would be expected.
However, this was not due to seepage but to leaks from poor infrastructure, she said.
"I'd expect more research to carried out on this topic. There's also a report coming out from Australia which I will be looking into."
Another concern would be if fracking were to go ahead in Canterbury, Wright said today.
"There is no official moratorium in the UK. However the one company that was exploring shale gas voluntarily ceased its operations after causing earthquakes.
"With respect to Canterbury, I do have concerns. That is one reason for my finding about 'watch where you drill'."
So far, almost all the fracking operations in New Zealand have taken place in
Taranaki.
Wright said she had not reached "a firm conclusion" that there had been no problems caused yet by fracking in that region.
"While I haven't found any big red flags, I will be having a closer look at the monitoring that has been done.
"That said, I don't think it's possible to take the Taranaki experience and extrapolate it to other parts of the country, other kinds of fracking, and greater scale."
The commissioner's final report is due in mid-2013.
Findings of the interim fracking report
Government oversight and regulation
* Oversight is complex and fragmented.
* Regulation may be too light-handed.
* Companies have not earned public trust.
Environmental risks management
* Well sites must be chosen carefully, away from earthquake faultlines.
* Wells must be designed and constructed to prevent leaks.
* Spills and leaks must be prevented on the surface.
* Waste must be stored and disposed of with care.