4 Jun 2014

Report urges drilling rule changes

9:47 pm on 4 June 2014

The oil industry is rejecting a suggestion that all regions in New Zealand have the same rules when it comes to applications for oil and gas sites.

Jan Wright.

Jan Wright. Photo: SUPPLIED

The Parliamentary Commissioner for the Environment on Wednesday issued her final report on fracking - a method used to extract oil and gas by injecting fluid containing sand and chemicals at high pressure to fracture rock.

Jan Wright made six recommendations in the independent report, mainly concerning the rules and regulations before the well is drilled. This includes calling on the Government to provide a national planning document, because she says currently, the rules are inadequate and vary widely without justification.

Dr Wright said this was not only inefficient, but undermined public trust in regulators because of the confusion and frustration experienced by those who are concerned about the industry.

She said the challenges are nationally significant, and it is unfair and inefficient to leave councils to each work out their own response to this situation. Councils should also consider revising their town plans so that they are able to refuse applications for oil and gas sites and that the public has more of a say.

A spokesperson for the Petroleum Exploration and Production Association said while standard recommendations are useful, a one-size-fits-all approach often doesn't work. Janet Carson said the industry has found that Taranaki's regulations work well as they are.

But Dr Wright says the industry in Taranaki has been a bit laissez-faire and shouldn't be replicated. "We hear often about how you have to get a resource consent for adding a couple of metres to your deck - I don't know the truth of that - but you don't have to have a resource consent for drilling an oil and gas well in Taranaki, which I find extraordinary."

The Government on Wednesday defended regulations around the oil and gas industry, saying guidelines released in March clarify regulatory roles and help councils manage the effects of onshore petroleum development. It said they provide clear direction so that fracking is carried out in a robust, controlled and well-regulated manner.

Prime Minister John Key said the Government would consider the report, but is confident that the rules already in place are a significant advancement on what was there before.

"But there'll be some learnings that can be taken from the report and I'm sure the Ministry for the Environment and Simon Bridges' Ministry of Energy and Resources will go away at least and think about those issues."

The Environmental Defence Society hopes the Government will take on board recommendations that would give the public more say on the locations of sites. Spokesperson Gary Taylor said regardless of what region members of the public live in, the approach taken by the consent authorities would be the same.

"It would also mean that in terms of preparing that approach through a national policy statement, people would be able to have a say as to how they think consenting should be managed, and what rights of public objection there should be and where the limits to that should be."

Control over well sites

Jan Wright suggested that councils review their plans so that wells require consent, and so it gave them more say over where sites are located.

At present, the same rule covers drilling a bore for extracting oil and gas and drilling a bore for extracting water.

Also, consents are not usually required for the wells, but even if they are, the council cannot refuse them if the wells meet the aims of each council's plan. This meant the ability of councils to consider the location of wells was limited.

Dr Wright said re-thinking council blueprints would allow for public consultation about where sites should and should not be located. If that was to occur the public consultation may not be as necessary each time a consent application is lodged.

Levy proposed

The commissioner also proposed a levy to be used for future clean-up and contamination.

Dr Wright said that currently, once a consent lapsed, it became the landowner's responsibility to clean up the site if an abandoned well was to leak. Dr Wright suggests a similar plan to one Canada uses, where operators pay a levy into a fund that is used for future clean-ups. Dr Wright said this could also cover monitoring of those wells.

The commissioner stressed in her report the importance of food and water safety near well sites. She said wells needed to be cased in to ensure nothing can leak into aquifers and recommended this be a condition of any consent.

Dr Wright also wanted the Food Safety Authority to decide what livestock can be put on land where fracking waste is discarded.

In Taranaki, liquid waste from oil and gas wells is pumped back down into the earth. Dr Wright said despite there being no evidence that it is contaminating milk, Fonterra won't take milk from any of the farms that have had waste pumped into the soil.