It’s easy to tell when an official report is well balanced, because lobby groups from across the spectrum claim it supports their position. So it is with the report by the Parliamentary Commissioner for the Environment on the process of extracting oil and gas by fracking. Green groups such as Forest & Bird and the Environmental Defence Society are happy because commissioner Jan Wright has endorsed the need for stronger regulation of fracking, which involves injecting water, sand and chemicals deep into the ground to fracture fuel-bearing rock, releasing the gas or oil.
The mining industry is cheering because Wright hasn’t called for a fracking moratorium, such as exists in France, Bulgaria, Vermont, New York State, New Jersey and Victoria. Only the Greens are grumpy with the report, arguing the concerns Wright raises about the adequacy of current regulations are grounds for an immediate moratorium.
The interim report – the final part of which will look more deeply at how regulations and monitoring are working – does an important public service by casting light on a topic most people hadn’t heard of until 18 months ago and taking the invective out of an increasingly bitter debate. Wright concludes the environmental risks associated with fracking can be effectively managed, provided operational best practices are implemented and enforced through regulation.
The most important word in the report is “provided”. Because the question is not whether fracking can contaminate water, cause earthquakes or leave toxic waste. It can. The US Environmental Protection Agency has linked fracking with contaminated groundwater in small towns in Pennsylvania and Wyoming. Fracking causes very small earthquakes, but has also caused at least three larger ones – a 2.3 magnitude shake in Lancashire, a 2.8 in Oklahoma and a 3.8 in British Columbia. And in the only New Zealand fracking site, Taranaki, there is a toxic legacy – drilling and fracking waste from the Kapuni field has been left in unlined pits, with contaminated soil now having to be removed.
The question is how to control such risks, as well as other significant risks such as well failure. Wright raises serious doubts about whether the present regulatory and monitoring regime is capable of achieving that. The system is “complex and fragmented” and “may not be fit for purpose”. Alarmingly, she says “companies are perhaps being trusted rather too much to do ‘the right thing’ ”.
Until 18 months ago, the Taranaki Regional Council didn’t even require companies to have resource consent to frack, and even now consent applications are not publicly notified. Wright’s flag of caution stands in marked contrast to the industry’s assurances that fracking carries minimal risks and that New Zealand’s environmental rules are good enough. At times, those reassurances have bordered on conceit – for instance, when Todd Energy’s Paul Moore was challenged by Radio New Zealand over his company’s environmental performance in Taranaki, he replied, “The public should have confidence in our operations.”
Fracking has a habit of taking countries by surprise. Within a decade, it has turned the US energy industry on its head, unlocking vast and previously uneconomic “tight” oil and gas reserves. Consequently, the US is set to become a net exporter of oil by 2030, freed – thankfully – of its reliance on Middle Eastern oil. Australia’s coal-seam gas boom has, almost overnight, spawned a multi-billion-dollar industry, and in the process turned large areas of farmland into an industrial landscape of well heads and roads, and bitterly divided rural communities.
Our Government is keen to tell the world about New Zealand’s untapped oil and gas resources, and wants to entice exploration companies with modern drilling technology. Quite apart from the question of whether a strategy that would lock us into greater economic reliance on fossil fuels is wise, Wright’s interim report makes clear we need to be ready for a potentially rapid scale-up of fracking, including in regions such as the East Coast that pose very different geographical and seismic risks from Taranaki.
The Government recently announced stronger health and safety rules for the oil and gas sector, which may have a beneficial spill-over into environmental management. But there is no room for complacency: oil and gas are high-risk industries, and we have learnt from Pike River that slack regulation and excessive trust can have terrible consequences. Yes, fracking – like coal mining – can be done well, but New Zealanders must first be assured that it will be done well.