New Zealand Fracking report’s core alarming, A tougher fracking regime in prospect

A tougher fracking regime in prospect by Chapman Tripp, December 03, 2012,
The Parliamentary Commissioner for the Environment will be recommending a tougher regulatory regime for fracking when she delivers her final recommendations to Parliament next year. This is clear from her interim report, released on Tuesday, which concluded that:
•    the risks associated with fracking can be managed effectively by the implementation of operational best practice, enforced through government regulation, but
•    the current New Zealand framework is fragmented and may not be adequate to the task.
Although the report did not deliver formal recommendations, it outlined seven interim findings relating to the environmental risks of oil and gas production and to regulatory oversight.

Public concerns about the safety risks associated with fracking are not confined to New Zealand.  A number of studies have been conducted or are underway in other jurisdictions, among them a recent UK study by the Royal Society of London which found that fracking can be made safe provided “operational best practices are implemented and enforced through regulation”.  This finding was influential with the Commissioner and is quoted by her.

A few hours before the release of the Commissioner’s interim report, the Government announced new health and safety (HSE) regulations to cover the oil and gas sector.  These will bring New Zealand into line with UK and Australian practice and will apply from June next year. … In addition, the Independent Taskforce on Workplace Health and Safety, appointed as part of the Government’s response to the Pike River coal mining tragedy, is preparing a reform package for presentation to Ministers in April next year. And the Environment Minister has instructed the Ministry for the Environment to produce clear guidelines on the respective functions of central and local government in relation to the control of fracking.

Problems with the current framework are:
•    oversight is complex and fragmented
•    regulation may be too light-handed so that operators are perhaps being trusted too much to do ‘the right thing’, and
•    a ‘social licence’ for fracking has yet to be earned as there has not always been sufficient communication and engagement with local communities to build up the requisite trust.

Specific regulatory gaps which the Commissioner discusses in some detail are:
•    once a company has been granted a permit, it seems to be free to decide where to drill within the permitted area without any input from either central or local government
•    although the operator must take “all practicable steps” to notify the High Hazards Unit in MBIE 20 days before drilling begins, the actual drilling plans do not require the approval of the Unit
•    it is not clear who is responsible for well integrity – the High Hazards Unit or regional councils
•    in the absence of New Zealand standards for well design and construction, companies are tending to follow the specifications applying in their home jurisdiction
•    New Zealand’s HSE regulation is completely separate from its environmental regulation
•    there is no central guidance to councils on fracking (the Commissioner suggests that the Environmental Protection Authority may be the appropriate body to provide this, given the expertise it will need to develop to perform its regulatory responsibilities in relation to off-shore drilling), and
•    even where operators are required to provide (often highly technical) data to councils, MBIE, New Zealand Petroleum & Minerals and to the High Hazards Unit, there is “no guarantee that the information is always being understood and used to enforce best practice – or even good practice”.

New Zealand Fracking report’s core alarming by Bruce Bisset, December 1, 2012, Hawke’s Bay Today
Indeed, rather than Jan Wright’s report showing opposition to hydraulic fracturing is, in John Key’s words, “fundamentally wrong”, there is considerable doubt as to whether current industry practices can in any way be considered “right”. While everyone from Federated Farmers to the NZ Herald have been quick to breathe an “all’s well” sigh of relief that the commissioner hasn’t called for a ban on the practice, there’s a very important codicil to that: yet. See, it’s an interim report. It does little more than state background and bring the facts into question. It does not answer the questions to any substantive degree. How well the environmental risks associated with fracking are actually managed will be scrutinised in the next part of the report, which will also contain the commissioner’s recommendations. It’s not due until the middle of next year. And while Ms Wright has so far found little to justify a moratorium, she also admits that position could well change once the detail is properly digested. Regardless, there are enough contentions raised in this initial offering to alarm rather than allay concerns. Anyone dreaming otherwise has read the text with one eye closed.

More than 50 fracking operations for oil and gas have occurred in New Zealand since the first known frack in 1989, all but two of those in Taranaki. But until recently Taranaki District Council neither required consents for these nor carried out any monitoring or environmental effects assessments of them. That was done (if it was) by the companies concerned; they were, in practice, allowed to design their own programmes in their own way and carry them out purely to their own satisfaction. In short, the industry has set its own rules. As a result, many problems from conventional drilling – such as spillages into streams, seepage from waste pits or well-heads, even radioactive waste issues – did not cross into the public domain. So it’s a moot point whether the industry has had any problems with fracking. They simply haven’t been reported.

Or, as the commissioner more delicately puts it, “companies are perhaps being trusted rather too much to all do ‘the right thing”‘, while noting “only the most recent consents require that groundwater around the well is monitored for contaminants”. She calls the current regulatory regime “complex and fragmented” with no “fit for purpose” oversight and a lack of transparency. The report repeatedly stresses there are significant risks with fracking, calling the potential for aquifers to be contaminated “very real”, while the potential for more-than-minor earthquakes to be triggered if an already-stressed fault were affected by a frack is described as a “major concern”. … She also proposes a number of pertinent questions needing answers before fracking takes place here. Overall, “the risk of fracking leading to significant environmental damage is critically dependent on each stage of the process being done with great care”, the commissioner says, but then most tellingly concludes that “at this stage I cannot be confident that operational best practices are actually being implemented and enforced in this country”.

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