For countries dependent on oil imports, self-reliance in energy production has long been a holy grail. It is aggravating but nevertheless true that some of the world’s biggest oil exporters are also countries that are not distinguished by their enlightened political regimes, but tend to be notable for their rankings on international comparisons of the most corrupt places to do business. Think Libya, Iraq, Venezuela and Nigeria. Having to kowtow to such regimes is anathema to Western politicians, but running out of oil is even more unthinkable.
In the US in particular, enormous resources have been poured into alternative energy sources, especially as oil prices have steadily risen and made those alternatives more viable. Although biofuels continue to be developed, it is hydraulic fracturing, or fracking, that has changed the domestic energy landscape in the US. In the past three years, natural gas prices have halved and consumption has boomed (a poor choice of word, perhaps). Imports of oil and natural gas have dropped, and so have prices.
But like all energy-extraction technologies, fracking is not without its costs and critics. It is in order to get an accurate assessment of the environmental risks, and the adequacy of controls, that our Parliamentary Commissioner for the Environment, Jan Wright, recently announced an investigation into fracking.
Fracking involves forcing a mix of water, sand and chemicals into the ground at extremely high pressure, causing the rock to fracture and release oil and gas that could not be released by conventional drilling methods. As the Listener reported in January, it is one of the technologies in the ascendancy and it is expected that 70% of the world’s future oil and gas production will come from sources other than those accessed by conventional drilling.
With the Government being forced to make cuts in public spending to reduce borrowing, the idea of increasing exports to raise revenue is naturally attractive as a way to get the state’s finances back into the black. Oil is already New Zealand’s fourth-largest merchandise export and earned us around $2.2 billion last year. A new report commissioned by the Government has suggested we could earn an extra $12.7 billion over the next decade if we increase exploration.
“If we do this right, the economic potential for New Zealand is great in jobs created and economic returns from mining existing resources and new discoveries,” former Environment Minister Nick Smith told the Listener last week.
However, exactly what unintended consequences fracking has are yet to be fully known. The US Environmental Protection Agency is investigating the impact on drinking water, because communities living in fracked areas are complaining of contaminated groundwater. Other countries have a moratorium on fracking until more is known about its consequences.
Another sensitive subject for New Zealanders is the relationship between fracking and earthquakes. This magazine has previously reported an American geophysicist as firmly stating that fracking causes earthquakes. That aspect certainly requires a close look by Wright’s investigative team and may influence where fracking should, or should not, be allowed.
Her investigation will look at the adequacy of the regulatory environment around fracking. Taranaki residents were certainly surprised to discover that fracking was occurring in their area, and had not required resource consent. It does now.
Wright’s independent review, based on science and evidence, is appropriate and timely and the Government should ensure her office is resourced to do the job thoroughly. Neither protesting actresses nor oil companies should be providing the information on which debate about energy production and usage is based. The Listener quoted one energy company representative as saying, “We’re here to do our business, so you don’t want to believe us.” We will take that advice, thank you. But equally, the public finds environmental groups deploying celebrities for media coverage even less credible.
A final word, though, because once again debate on energy is centred on extraction and production rather than the need to reduce consumption. As the world’s population continues to grow, and concerns about climate change escalate, the need to reduce energy consumption becomes more urgent. The responsibility for that rests with each of us.