Extractive Industries & The East Coast

Rotorua Green Drinks1 May 2012

Overview

Introduction

CMA, RMA & EEZ

Offshore: Permits / Petrobras / Opposition / Update

Onshore Permits / TAG&Apache / Opposition / Update

What can we do?

Introduction

CMA, RMA & EEZ

Crown Minerals Act: Crown assumed ownership of all petroleum & minerals in 1939, Sir

Apirana Ngata strongly opposed this move Petroleum Act replaced in 1991 by CMA 2006 four national hui to identify sensitive areas for Maori Currently being reviewed to relax regulations

Resource Management Act: Delegates most environmental regulatory authority to regional

councils (out to 12 nautical mile boundary) Councils delegate most responsibilities to staff Significant public interest not grounds for notification

Exclusive Economic Zone: No legislation, Bill currently with Select Committee, submissions

closed.

Offshore Drilling

Brazillian company Petrobras was in 2010 given a 12,330km2 five-year oil and gas exploration permit by NZ Government.

The permit area starts 4 km off the East Coast out to 110 km.

Three stages to the permit: Stage 1 – Gathering 2D

seismic data

Stage 2 – Gathering 3D seismic data

Stage 3 – If proven viable Petrobras will drill an exploratory well.

Petrobras P36, March 2001

“Petrobras has established new global benchmarks for the generation of exceptional shareholder wealth through an aggressive and innovative programme of cost cutting on its P36 production facility…”

oil leak from another well at Roncador field, 500m from Nov 2011 spill (Apr 2012); two offshore oil spills: one small and one undisclosed amount (Mar 2012); Petrobras rig fire, oil and drilling fluid spill off Rio (Mar 2012); 30 barrels spilt from a Petrobras rig off Rio on (Feb 2012); 160 barrels of oil leaked from Petrobras platform offshore from Sao Paulo (Jan 2012)

death of another Petrobras employee and injury of two others in a Boxing Day accident on the PUB-03 oil rig in offshore waters in Rio Grande do Norte state (Dec 2011)

Police say material dumped in the river from Petrobras refinery violated the limits set by environmental law.

a spill from a project co-owned by Petrobras and Chevron spewed 3,000 barrels of oil into the sea and took a week to get under control. Local government authorities have taken a civil lawsuit against the polluters claiming US$11billion in damages.

Petrobras worker killed and his colleague badly disfigured from a refinery explosion in Argentina that was similar to another fatal accident two years earlier.

major incident in the Gulf of Mexico involved a deep sea riser coming loose with a 130 tonne buoy narrowly missing another rig as the company prepared to start the first new extraction since the Deepwater Horizon disaster. Had the break happened a few days later when oil had started pumping, analysts claim it could have resulted in a disaster similar to the BP oil leak in 2010.

Petrobras Wall of Shame2011-2012

Opposition

Opposition

Opposition

Opposition

Onshore Drilling

History of Onshore Exploration

East Coast basin is 120,000 sq km between East Cape and Kaikoura, and about half the area, comprising the Raukūmara Peninsula, Hawke’s Bay, Wairarapa, and Marlborough, is onshore.

More oil and gas seeps than elsewhere in New Zealand. The phenomenon was known to Māori and attracted the attention of European prospectors from the 1880s onwards.

Two wells sunk at Waitangi Hill in 1874 and 1875, but, while there were indications of high-pressure gas and oil, the company folded under financial difficulties the following year.

South Pacific Petroleum also sank its first wells at Waitangi Hill, with one producing enough oil to cart downhill and sell at Gisborne.

A new site on the Waingaromia valley floor was tried in 1884 and oil was encountered, producing between 20 and 50 barrels per day.

In late 1887, escaping gas was ignited by the boilers and the wooden rig burned down. The rig was rebuilt, but investors had lost confidence and the company closed in 1890. However, Waingaromia remains the most productive oil well drilled in the East Coast basin to date.

Permit 38348

Expires: 7/11/2011

Area: 1606 SQKM

Location: East Coast Basin

Operation Name: Waitangi Hill

Minerals: Oil, Condensate, LPG, Petroleum, Gas

Te Puia

Tokomaru Bay

Whangara

Tolaga Bay

Te Karaka

Whatatutu

Permit 50940

Expires: 2/4/2014

Area: 274.7 SQKM

Location: East Coast Basin

Operation Name: Onshore Gisborne area

Minerals: Oil, Condensate, LPG, Petroleum, Gas

Whangara

Te Karaka

Manutuke

Muriwai

Company Profiles

How does mining happen?

1. Government issues a permit2. Land owners negotiate access3. Council issues Resource

Consents

What are the benefits?

Probable: 1. a few local jobs2. some increase in local economic

activity3. government royalties

Possible:4. significant number of local jobs5. high increase in local economic

activity

What are the risks?

Risk Likelihood Impact

polluted surface water/waterways

High Medium

polluted land High Medium

polluted underground aquifers

Low High

polluted air High Medium

significant earthquakes Low Low?

social impacts Guaranteed Medium

cultural impacts Guaranteed High

economic impacts Guaranteed Medium

greenhouse gas emissions Guaranteed High

Where to from here?

- ongoing efforts for greater participation and transparency in consents, monitoring and reporting processes

- building support for moratorium on fracking (at least till the PCE's report is released), with eventual bans in some areas

- increased accountability in company operations- avoiding/minimizing damage to the environment and

natural resources- protecting local residents affected by fracking and

oil/gas operations

Where to from here?