Oil & gas in Hawke’s Bay

Wed, Oct 09 2013

Commendably, Lawrence Yule and the Hastings Council are hosting a Hawke’s Bay oil and gas forum on Friday.

It seems to me there are several layers to the oil and gas ‘onion’ insofar as whether exploration and development should proceed in our region.

1. Do the people of Hawke’s Bay want to ‘aid and abet’ any exploitation of fossil fuels, given the impact of using such fuels on the global environment?

2. If so (and/or if we have no local choice in the matter), under what conditions — environmental and economic — might development proceed?

3. And more specifically, does fracking have any role to play if development does proceed in Hawke’s Bay?

In answer to #1, the decision is out of our local/regional hands.

Our nation is nuclear free, but we are yet as a society to declare ourselves anti-fossil fuel. And, addicted as we are, we are highly unlikely to do so for the next few generations. We can wring our hands, but exploration will proceed, followed by development if the economic potential is deemed significant by executives in far away board rooms.

The present reality is that today Hawke’s Bay imports through Napier Port — and then consumes — 250 million tonnes of fuel per year. All the money we pay for that fuel disappears from Hawke’s Bay, draining wealth from our region’s economy as well as our individual wallets.

Arguably, regional oil and gas development represents an opportunity to substitute our own oil and gas for those imports (saving the transport energy consumption as well). Or at least setting up a financial scheme wherein our exports pay directly for our imports, leaving our own cash in our pockets — as consumers and businesses — to be spent on more local goods and services.

[Actually, the big picture issue here is achieving energy self-reliance for Hawke's Bay, with numerous environmental, social and economic benefits. That solution could be built upon solar and biomass, but that's for another discussion.]

So the real question is #2 (and derivatively, #3) — under what conditions might development proceed? And very importantly, under what conditions that we here in Hawke’s Bay have the authority to require for our own peace of mind?

Firstly come our concerns with individual and environmental health and safety. These should be paramount. At the outset, the risks associated with development must be fully identified, quantified and assessed … starting with, but not limited to, potential risks to our water safety and supply. It is entirely plausible that the risks far outweigh the benefits, but already we hear nothing but the ‘Jobs, jobs, jobs’ mantra.

If — big if — the net benefits are substantial, far outweighing the risks, that calculus can still only be satisfactory if mitigation of the environmental dangers is plainly and effectively achievable. And there, the burden of proof is on the developers, not the citizenry of Hawke’s Bay.

Then we need clarification about precisely what authority over such matters our local/regional councils hold and how it might be exercised. And we need to ask: Are our local bodies even remotely capable of seriously monitoring oil and gas development and guaranteeing our protection from its adverse consequences? I doubt it.

And that presents a dilemma. The fundamental ground rules will probably be dictated by central government, which will at least claim to be fronting up with the necessary expertise and precautionary attitude, with perhaps the regional council left to monitor and administer their implementation. Not exactly a confidence inspiring scenario with respect to either party at present.

But conditions should not only be environmental and safety related. We need economic conditions that can benefit our region as well.

For example, any and all infrastructure required for oil and gas production must be 100% paid by the developers (just as other types of development costs presently are). All costs associated with monitoring and ensuring environmental and public health (and dealing with any breeches) must be 100% paid by the developers.

But that’s not all, Hawke’s Bay — not only the Crown — should get a share of the profit. In any conceivable development scenario, there will be risk. And if we the people of Hawke’s Bay are expected to shoulder that risk, then we must be rewarded commensurately.

Which brings us to question #3, the specific danger of fracking as a tool for oil and gas development.

At the moment, our well-respected Parliamentary Commissioner for the Environment is saying that fracking is acceptable in the right geologic circumstances and if properly managed within a rigorous regulatory environment.

One might conclude from her position that no fracking whatsoever should be allowed where it might endanger water supplies (leaving aside for now other environmental/health dangers). The determination of whether that principle should apply here in Hawke’s Bay, and who should determine exactly where it would apply, should be a ‘deal-breaker’ issue for the people of Hawke’s Bay and our local body representatives.

As we seek answers to all of these questions, there is absolutely no need to hurry. The resource is going nowhere, and it will only increase in value over time. Time is on our side.

The assessment process must be robust, precautionary in intent, and fully transparent in order to earn public acceptance. The manipulative practices followed by our Regional Council to drive its water scheming give us clear lessons regarding how NOT to proceed with weighing the potential benefits and risks of oil and gas development.

Let’s hope those lessons have been learnt before we turn to oil and gas.

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