By: N/A
Published: 9/05/2012
Mining is a divisive issue in New Zealand. Deniston Plateau, offshore exploration, Save Happy Valley and Schedule 4 land are terms that invoke diverging opinions and heated discussions. In recent times discussion regarding these matters has manifested into significant protest action. Fracking, or hydraulic fracturing, is likely to be no different. Indeed, last month the Christchurch City Council unanimously voted to declare the city a “fracking-free” zone and called on other Council’s to follow their lead.

This declaration, upon request from the Spreydon-Heathcote Community Board, has followed a considerable amount of negative media attention regarding the practice and the announcement by the Parliamentary Commissioner for the Environment, Dr Jan Wright, of an inquiry into the controversial mining technique. The inquiry will canvas the environmental effects of the practice, in-particular two issues of direct relevance and concern to the Canterbury area; the risk of groundwater contamination and an apparent causation of seismic activity. It will seek to undertake a science-based approach and lay-down a factual foundation for the future conduct of oil and gas exploration in New Zealand without political rhetoric.

The risks posed have seen some countries place a moratorium on fracking being undertaken, unconvinced that the economic rewards of the practice outweigh the potential adverse environmental effects. There have been sustained calls for central Government to call a nationwide moratorium until the PCE report is released[1]. However, with the Minister for Energy and Resources displaying little desire to call a suspension of activities there remains the possibility that fracking could occur in the Canterbury area in the foreseeable future. Given this, now seems a pertinent time to provide a broad outline of the relationship between fracking and our own environmental regulatory regime.

However, before attention turns toward the regulatory scheme, it is necessary to provide a brief description of hydraulic fracturing and its current use in New Zealand. In short, fracking is a mining practice used to break up rock deep underground to enable oil or gas to flow freely. It involves the drilling of a deep well lined with steel casing into hydrocarbon-bearing rock. Most of the wells in New Zealand are 2500 metres deep, with some stretching to over 4000 metres. At these depths, high-pressure blasts of water, sand and chemicals are used to fracture hydrocarbon-bearing rock allowing trapped gases to escape up the well to be collected at the surface. A large quantity of high quality water is required for hydraulic fracturing as the hydraulic fracture fluids are around 97% water and proppant. The technique has been used in Taranaki for 20 years, with over 40 wells fracked. Late last year the Taranaki Regional Council (“TRC”) released a report that examined the use, and assessed the effect, of fracking within the region[2]. While the Report found no evidence of adverse environmental impacts it acknowledged that the practice poses a low risk to adversely affecting the environment and thus, ought to be subject to regulatory controls.

For fracking in Canterbury any prospecting company would require consents for the use of land to establish a well, water take and water use, and for the discharging of contaminants into or onto land and into air. Further, consents may also be required for pipe-work, new roads, infrastructure, and impacts on the local amenities. However, prior to any hydraulic fracturing activity can be undertaken a company must first obtain an exploration or mining permit under the Crown Minerals Act 1991 (“CMA”). Under the CMA, the Minister for Energy and Resources gives approval for hydrocarbon exploration and production work programmes. Approval can be withheld if it is not recognised as good exploration or mining practice[3]. The CMA does not deal with the environmental effects of fracking, or the various consents/approvals required under the Resource Management Act 1991 (“RMA”). Instead, in Canterbury, these responsibilities fall to the Regional and District Councils. Towards the end of 2011 a Report was presented to the Canterbury Regional Council outlining how the Council’s planning documents applied to fracking[4].


The Report outlines that while fracking is not specifically referred to in any of the Regional Council’s regional plans, the objectives, policies, and methods contained within the Regional Policy Statement (“RPS”) capture the various activities associated with fracking. Further outlined is that the Canterbury Natural Resource Regional Plan (“NRRP”), which gives effect to the RPS, contains a number of rules that are relevant to the regulation of the associated activities. For example, Rule WQL34[5] provides that resource consent is required for the drilling, construction, use, maintenance, and decommissioning of a hydrocarbon well. This would include the use of a well for fracking. Further to Rule WQL34, Chapter 4 also outlines that the discharging of water, contaminants, and other liquids containing contaminants onto land and into surface water would also require resource consent as discretionary activity. Similarly, the discharge of contaminants to air from an industrial or trade process and waste management processes would also likely be a discretionary activity under the Air Quality provisions of the NRRP[6].

With regard to water allocation, various rules contained in Chapter 5 (Water Quantity) of the NRRP outline that the taking of ground and surface water for the operation of a hydrocarbon well could be a restricted discretionary, discretionary, non-complying or prohibited activity. The final classification would depend on the location of the well, the allocation status of the water resource in that area, and the extent to which individual activity conditions are complied with. Flowing on, if appropriate, the use of water for the development and operation of a well would be classed as a discretionary activity.

Generally speaking, and at very much a glance from afar, the status of the activities would on the whole be either discretionary or non-complying. This would require a full consideration of any adverse effects on the environment that may arise and allows for conditions to be imposed by a consent authority to ensure that environmental protection is given due weight. It is likely that any resource consent application would be fully publicly notified, so there would be ample opportunity for public participation in any fracking development.

Although fracking is not referred to explicitly in Canterbury’s regulatory regime, the objectives, policies, methods and rules in the RPS and NRRP form a suitable basis against which the appropriateness of the various activities may be considered. While the TRC Report does not point to any evidence of adverse environmental impact the PCE Report will be very much welcomed by stakeholders, the industry, and the public in general. Until evidence can point to the disproving of a negative, any environmental protection must be met through a robust environmental framework coupled with science-based foundation of information; the findings of the PCE seek to provide the latter. Until those results are released, attention should turn to how best apply the findings of the PCE to the current regulatory regime so a comprehensive assessment of fracking can be undertaken, answering the question of whether it provides for the sustainable management of our resources.
 
 


[1] The results are likely to be tabled before the House of Representatives late this year. See http://www.pce.parliament.nz/media/media-releases/pce-to-investigate-fracking/
[2] Taranaki Regional Council “Hydrogeologic Risk Assessment of Hydraulic Fracturing for Gas Recovery in the Taranaki Region” (December 2011).
[3] This ‘Good Practice’ threshold is not defined in the CMA but rather through various Ministry of Economic Development documents which indicate that it relates to the efficient use of mineral resource.
[4] Barry Loe, Loe Pearce & Associates Ltd “NRRP provisions to manage effects on the environment from Hydraulic Fracturing (Fracking)” (18 November 2011).
[5] Canterbury Regional Council “Canterbury Natural Resource Regional Plan Chapter 4 - Water Quality” (2011) at 180.
[6] See Rules AQL57 and AQL69 Canterbury Regional Council “Canterbury Natural Resource Regional Plan Chapter 3 - Air Quality” (2011).




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