Possibility Govt's new law may allow oil projects with no resource consent 'absurd'

Environmentalists have slated the Government for considering allowing deep-water oil and gas exploration drilling in New Zealand's exclusive economic zone without the need for consents.

The Government's recent estimation that almost 30 exploration wells may be drilled around the coast during the next five years may turn the proposed deep-water exploration in the Great South Basin and Canterbury Basin next year into a rallying point of environmental concern.

The Green Party is calling for the prohibition of deep-water drilling in New Zealand, saying the environmental risks are too high.

Forest & Bird said the new Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act was supposed to be about regulating deep-water activity.


Green Party MP Gareth Hughes said in order to protect the environment, the Government should make deep-sea drilling a prohibited activity, not a permitted activity.

"It is outrageous that the Government is even entertaining the idea of allowing dangerous deep-sea oil drilling in New Zealand waters without requiring a resource consent," Mr Hughes said.

Public opinion worldwide was polarised in April 2010 by America's worst environmental disaster at the Deepwater Horizon rig in 1500m of water in the Gulf of Mexico, which killed 11 oil men and spewed almost five million barrels of oil into the ocean.

The total clean-up and compensation costs were US$38 billion ($46 billion).

The Great South and Canterbury basins are both deep-water targets of oil companies. The first and most likely holes will be at prospects off Oamaru in a year, in about 1000m of water, by Houston-based Anadarko, potentially costing up to $200 million.

Shell, which has spent about $50 million in ship-borne seismic surveys around the Great South Basin over five years, will make a drilling decision within two years.

Further southern oil and gas exploration plans may be revealed in mid-December, when the Ministry of Economic Development announces the successful tenders for exploration of 23 onshore and offshore blocks around the country.

The Government is developing regulations under the new EEZ legislation on which offshore activities should be prohibited, discretionary, which require consent, or are permitted within stated rules.


Mr Hughes and Forest & Bird were responding to reports Minister for the Environment Amy Adams would not rule out allowing deep-sea drilling as a permitted activity in the act.

"It would be absurd to allow oil companies to conduct risky deep-water drilling without a resource consent while New Zealanders are required to get a resource consent to build a tall fence in their backyard," Mr Hughes said.

He said of the 11,834 public sub-missions that the Government received on the EEZ regulations, 98.5 per cent called on the Government to make deep-water drilling a prohibited activity.

"What's the point of having an environmental legislative regime for our EEZ if the Government is going to allow companies to conduct risky activities there without the scrutiny of the resource consent process," Mr Hughes said.

Forest & Bird conservation advocate Claire Browning said the EEZ legislation was supposed to be about regulating deep-water activity, and taking a cautious approach.

"It would be incautious, and downright dangerous, if the Government were now simply to permit it."


Forest & Bird's earlier submission on the draft regulations had been part of the 99 per cent of the 11,834 submissions which called for deep-water drilling beyond 500m to be prohibited for the time being, the remainder to be discretionary and requiring consent.

Digging deep
$200m cost of drilling off Oamaru

$50m cost of Great South Basin surveys

23 offshore and onshore blocks to be allocated this year

No need to publicly notify, says industry

Publicly notified consents should not be required for offshore oil and gas exploration activities within New Zealand's exclusive economic zone, says the Petroleum Exploration and Production Association.


The association's chief executive, David Robinson, said the topography of New Zealand's seabed was entirely different to that in the Gulf of Mexico, where the 2010 disaster occurred in 1500m of water. "The terrain and activity of the south is vastly different to the Gulf, which was [oil under] high pressure and high temperature."

He noted the Great South Basin and Canterbury Basin, which may be hosting an exploration drill ship in about a year, were "more than likely gas prospects" rather than oil.

While he said there would always be "residual risk" to any drilling programme, it was "very unlikely New Zealand would ever have any problems drilling around its coastlines".

He likened the risk mitigation to that of Air New Zealand, where commercial aircraft had crashed but Air New Zealand maintained theirs to the highest standard possible.

He dismissed suggestions the introduction of publicly notifiable consents was a way of giving the public reassurance on safety and environmental concerns. There already existed, under the Resource Management Act and new economic zone (EEZ) legislation, a "plethora" of regulations to adhere to.

"It's not as if the [oil and gas exploration] industry is not unregulated," Mr Robinson said. In Taranaki drilling had been safely operating for decades without the need for consents, and the EEZ should be similarly covered.


The Government will soon decide which offshore activities are to be prohibited, discretionary, requiring of a consent or permitted by the recently passed Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act.