Councils should be be able to ban fracking in their backyards, Parliament's environmental watchdog says, after a landmark report found New Zealand was unprepared for any expansion of the controversial form of mining.

Parliamentary Commissioner for the Environment Jan Wright said in her long-awaited report that while current fracking in Taranaki was low-risk, onshore oil and gas drilling was poorly regulated and rules needed to be tightened if the industry grew beyond this region.

Green groups wanted New Zealand to follow the example of 17 other countries -- and the Australian state of Victoria -- in putting a moratorium on hydraulic fracturing, which involved blasting water and chemicals through a deep well to loosen rock and extract trapped gas.

Dr Wright dismissed this suggestion, saying New Zealand had a chance to "get ahead of the game" because unlike other countries, fracking had not yet taken off here.


Government said it would consider her six recommendations, which included the development of a national set of standards, an industry fund to pay for clean-ups, and better designing and monitoring of wells.

The Labour Party wanted the recommendations to be implemented as soon as possible.

The oil and gas industry said it would work with Government to improve the developing sector, but it was uncertain about a "one-size-fits-all" national policy statement.

Dr Wright had few concerns about fracking in Taranaki, which had taken place in low-risk, deep "tightsands" for 20 years without incident.

But in The East Coast, where TAG Oil has drilled exploratory oil wells, the shale was looser and required more unconventional extraction methods and a larger number of drilling sites.

The conditions were similar to parts of the US and Australia where massive expansion of drilling had left the landscape pockmarked with wells.

She said oil and gas drilling should be made a "discretionary activity", which would give local authorities power to block applications to drill.

Hasting Mayor Lawrence Yule said there were mixed feelings in the community about the possibility that their land could be a new frontier for shale gas mining. He said the report made it clear that rules needed to be put in place as soon as possible, because overseas experience had showed that once a fracking boom started, "it goes very, very quickly".


The East Coast region was drier and more dependent on aquifers, which could be affected by fracking leaks or water use. It was also a seismically active region, which would increase the chance of wells being damaged.

The commissioner said the report should not be perceived as a "big tick" for industry expansion. She said the key issue was not local environmental effects, but climate change, and she would rather see a focus on green growth in New Zealand.