City in race to host supply base

The race is on as Dunedin vies with Invercargill to secure hosting rights for an oil and gas base, after confirmation oil giant Shell plans to drill a test well in search of natural gas off the Otago coast.

Shell's plans to drill as part of a joint venture, probably in the summer of 2016-17, came as another oil giant, Anadarko, prepared to begin drilling its own test well, 60km off Otago Peninsula, next month.

News of Shell's plans was met with excitment and concern in Dunedin yesterday, some city councillors calling for the red carpet to be rolled out and others warning against welcoming the ''unethical'' industry.

Dunedin Mayor Dave Cull - who remained personally opposed to the increasingly difficult search for fossil fuels - said he was nevertheless ''cautiously optimistic'' the city could benefit from Shell's plans.

He was encouraged the company was prepared to invest up to $200 million in its search for natural gas, and not oil, off the city's coast.

However, with the test drill not scheduled until 2016, and any full-scale extraction - if it eventuated - a decade away, he cautioned against too much excitment, too soon.

''What comes out of it, in terms of job creation and business and economic development, will depend on the size of what they find.

''If they are going to be drilling, this is pretty good, and clearly Dunedin is very well placed to offer the services and facilities that they might need,'' he said.

Some councillors were quick to celebrate, Cr Andrew Noone saying it was ''fantastic news''.

''It's now a two-horse race, so we have got a 50% chance of securing a supply base,'' he said.

Deputy mayor Chris Staynes agreed, saying news of Shell's test drill was ''great'', while Cr Andrew Whiley described Shell's announcement as ''simply awesome''.

All three men hoped the industry would eventually provide a much-needed boost for the city's ailing economy, but Cr Staynes also suggested Dunedin could do more to secure hosting rights for any logistics base that might follow.

That should include considering an extension of Dunedin International Airport's runway, at a suggested cost of about $20 million, possibly shared between the council and central government, he said.

Cr Staynes planned to raise the idea in due course, and said it was an incentive the council could offer to encourage Shell and Anadarko to establish their bases in the city.

The move would allow larger jet aircraft to land, which the industry could use - among other things - to ferry emergency equipment to the area at short notice, he said.

Extending the runway had been considered before, and deemed uneconomic, but could stack up if the city secured hosting rights as a logistical base and the economic benefits that came with it, Cr Staynes said.

It might even help Forsyth Barr Stadium attract more big musical acts, adding to the economic benefits, he said.

The idea won support from Otago Chamber of Commerce chief executive John Christie, who said yesterday it would be a ''really good thing for the city''.

Mr Cull also said the idea would be worthy of consideration if a case for it could be made, such as improving emergency response times.

Royalties from oil and gas revenue could help cover the debt-servicing costs associated with such an investment, but only if the Government agreed to share them with councils, he said.

The council would ''certainly consider'' investment in infrastructure or other incentives to support the industry in Dunedin, but the oil companies' needs would only become clear in time, he said.

However, other councillors maintained their opposition to the industry, including Cr Aaron Hawkins, who said the council had a ''moral obligation'' to protect the interests of future generations.

''I don't think it's fair to clamour over a few jobs now and leave our grandchildren to pick up the tab environmentally and economically.

''Frankly, I think that's a very selfish way of looking at economic development.''

Cr Jinty MacTavish agreed, saying the city would not spend money to try to attract the ''unethical'' tobacco industry, and should avoid the oil and gas industry for the same reasons.

''It's an unethical business and I wouldn't like to see Dunedin setting out to attract it.''

Oil Free Otago also reiterated its opposition to ''short-sighted'' drilling in a statement released yesterday.

Despite that, Port Otago chief executive Geoff Plunket said Shell's announcement was ''very positive'', and the two companies were in regular contact.

Port Otago, like the rest of the city, was ''well placed'' to host a logistical base, Mr Plunket believed.

Mr Cull agreed, saying Port Otago's round-the-clock service would be attractive to the oil industry, while the city's mix of engineering businesses, infrastructure, hospital and aviation services also suited the companies' needs.

South Port chief executive Mark O'Connor agreed, telling Radio New Zealand it was ''highly likely'' it would make more sense to service initial drilling plans from Otago.

Of the other city councillors spoken to yesterday, Crs Neville Peat, David Benson-Pope and Richard Thomson expressed either concern or outright opposition to the drilling plans, while Crs Doug Hall, Hilary Calvert, Mike Lord and Lee Vandervis welcomed Shell's plans.

Crs John Bezett and Kate Wilson could not be contacted.


Drilling in the South
• Texas-based international oil and gas company.
• What: Deep-water test well 60km off the coast of Otago Peninsula, at the bottom of the Canterbury Basin.
• Value: $130 million
• When: February 2014

Shell (with OMV New Zealand and Mitsui E&P Australia)
• Joint-venture partnership between three companies
• What: Exploration well in Great South Basin liscensed area; exact location to be determined
• Value: $100 million- $200 million
• When: Summer 2016-17


Cycling infrastructure - Cr MacTavish responds

Cr Jinty MacTavish has followed up with figures on cycling infrastructure budgets as raised in the comment below.

Her response can be found here 

Climate change policy, cycle investments

Dear Ed.,

It would be difficult (and probably not particularly productive) for me to respond to the personal attacks in this thread, but I will endeavour to address to substantive matters raised by those commenting.

Mr. Oaten and Ms. Kerr both question the scientific consensus around anthropogenic climate change. The IPCC's recent Fifth Assessment Report, released last year, which draws on the work of thousands of the world's top climate scientists, is pretty unequivocal. Scientists are now as confident about anthropogenic climate change, as they are that smoking causes lung cancer. Further, the world's governments have accepted that it is occuring and that there is a need to keep the average global temperature rise to 2 degrees if we are to avoid catastrophic climate change.

Analysis done on the back of this science has shown that, if we are to keep warming within that limit, we can burn only about a third of the fossil fuels we have already found. This is why it is fairly suicidal to keep looking for more. In regards to how we might make the transition to cleaner energy, work is well underway on this all over the world, and are far too numerous to list in word-limited response. In most cases, switching to cleaner fuels also has a raft of other positive effects, from improved health to reduced energy bills.

While it's important to keep alert to changes in the science, and to consider the views of the very small minority of scientists who have a different interpretation of the data, I'm afraid I have little time for those who seek to delay the action urgently required to limit emissions in the light of the pretty unequivocal evidence. I find it pretty upsetting, too, that those who seek to delay action are usually not those who will have to face the worst effects of doing so - that will fall mainly to young people, and people in developing countries.

Ms. Kerr asserts that I wrongly claimed in a previous comment that $47M of expenditure was an unfortunate urban myth. It is not a false claim - it is indeed the case that the article reporting the Forum double-counted a number of projects and included NZTA's own projects. I did, however, commit to posting the actual figures and never got a final response from staff, so did not do so - I will raise it again with staff and endeavour to remember to post it on this thread. Constituents are also free to contact me at if they have further questions on this issue.

FW queries whether Council draws on university expertise in its formulation of policy around climate science. I can confirm that first report on climate change that the city commissioned, was written by an internationally renowned climate scientist based at the University of Otago, and that our climate change policy as a council is based on the IPCC's work, in line with Government's advice on the matter.

Regards and all the best,


Why lengthen the runway for helicopters?

Cr Chris Staynes is quoted as saying that the Dunedin airport will need to be lengthened to allow the servicing of any off-shore oil rigs and this would have the spin-off of allowing the necessary large aircraft that are needed to bring touring acts to the stadium.  I'm not sure what planet Cr Staynes is currently on as it is also quoted that any servicing of oil activities would be by helicopter.  He is therefore clutching at tiny straws to now try to justify the multi-million expansion of the runway to attract stadium acts.  If it is now deemed necessary to lengthen the runway to service the stadium, then why was this not considered at the time?  The answer of course was that those few that were involved in pushing for the stadium were not really interested in doing any genuine cost-benefit analysis.  Perhaps Malcolm Farry should be approached to see if the airport expansion formed part of the CST business, and meantime Cr Staynes should start to try not to speak unless his brain is engaged.

Your choice Jinty

You say that we need to move away, in the interests of global warming, from reliance on fossil fuels. I would ask in what preferences would you move? Would it be, transport, road rail shipping or air? Would you delete cosmetics, pharmaceautical medicines, plant fertilisers, pest control, plastics, lubricants, textiles , footwear,cycle tyres, road surfacing, building heating and air conditioning, computers, paper pens and ink? Just a few for you to ponder. All this for the off chance that the weather might take a turn for the worst, with no definitive science that it will or won't. I am afraid that the logic simply doesn't stand up and it is disturbing to think that as a councillor these are the thoughts being promulgated, supposedly in the interests of the citizens.


Boldor states

"20 million to lengthen the runway on the off chance we might get oil companies here"

however the article states  

"Extending the runway had been considered before, and deemed uneconomic, but could stack up if the city secured hosting rights as a logistical base and the economic benefits that came with it, Cr Staynes said"

so it wouldn't done on the off chance of getting them but as a result of them committing to Dunedin and if it was economically sensible according to the quoted statements. 

Also the propossed servicing of the debt was covered in the article "Royalties from oil and gas revenue could help cover the debt-servicing costs associated with such an investment, but only if the Government agreed to share them with councils, he said"

so at this stage it's just an idea being thrown out there however if they commit and if the govt shares the royalties or even pays for the runway, (after all they thought nothing of spending 30mil to secure comalco for an additional 1-2 years, so spending 20 mil to secure a long term investment in the city and country would make sense) the additional benefits to the city of a extended runway are quite numerous having been brought up and covered several times in the past and if its aquired funded from royalties then the other benefits are cream on top.

However this is a just an idea at the moment thrown out there as an example of the sort of thing that could be offered and the flow on benefits thay might occur from supporting the project. 

They are critised for not doing anything to help businesses and the city , but are critised when they announce some ideas. They can't win. If they didn't give us their ideas and tell us what they are thinking we would accuse them of not engaging with the community or something similar.

Representative democracy

FW: we have a representative democracy - this isn't a one party state, we don't elect all our councillors to speak with one voice, we use STV, we elect councillors who represent different parts of the community,  we expect them to have different opinions.

To say that it's not befitting for a councillor to represent the people who elected them betrays a fundamental misunderstanding of how representative democracy should work.

Eloquently put

ej kerr's comment eloquently and accurately describes what a lot of Dunedin citizens have thought and spoken on this matter.  The benefits to those who weren't born with a golden spoon in their mouth need and are entitled to any financial benefits that may come from these exploratory wells. To say that the oil industry is unethical is an egregious statement and not befitting an elected Councillor. It would be much more beneficial if comments regarding global warming etc was left to the professionals at the University and the Council call on their advice from time to time. A little knowledge is a dangerous thing.

Moral high ground self-kneecaps councillor

This from a councillor who in promoting the cycleway network for Dunedin wrongly presumed the projected cost of $47 million for the project was a case of double counting.

As blogger JimmyJones soon pointed out online, the price tag came from DCC at a forum held by the council and NZTA in May last year - City to lead country in cycle safety (ODT 24.5.13): Projects worth more than $47 million will form a cycle network unlike any other within urban New Zealand, those at a forum in Dunedin heard last night.

The issue is not ethics and hypocrisy, and omg: climate change... but surely, the credibility of the elected representative - charged by law to act prudently and conservatively with ratepayer funds. The councillor has difficulty with large numbers and prefers to chase council investment around what JimmyJones correctly refers to today, in response to the newspaper's editorial, as Global Warming mythology.

Cr MacTavish is promoting projects (for 'resilience'...) that before long are likely to seriously impact the council's ability to retire debt quickly. Formerly well-regarded for doing her homework before council meetings, she now invariably comes across as naive, immodest and risky.

She says: I think drilling for hydrocarbons is unethical because of climate change. At the Council, we're already having to factor climate change planning into decision-making, and it's pretty obvious that it's not the cheap option. 

This conjecture about climate change - the strong whiff of council spending to come, on top of the extreme level of unsustainable council debt 'cycling' on the shoulders of a very small ratepayer base - is more of same from what passes as our fairy godmother from pecuniary hell.

The insidious debate about climate change the councillor floats is not pertinent to Shell and Anadarko's work off our coast (welcome, Both!) - it smacks of political self-righteousness. In-credible.

More acts Mr Staynes?

Are these people completely insane? Another 20 million yes 20 million to lengthen the runway on the off chance we might get oil companies here and more acts for the stadium. How much money do they think the ratepayers have? Earth calling, come in Mr Staynes time to come back from Fantasy Island. Shell can look for gas but not at our expense.


Jinty, my problem with your reasoning is the assumptions you make that oil consumption is unilaterally causing global war ming.  That you never make any suggestions for alternatives to allow our lifestyle to at least stay the same worries me. All opposers seem to assume that there would be no change in this if oil ceased to be available. Second, global warming and rising sea levels are by no means an established fact. On the contrary, it seems that there is very little evidence supporting the IPCC in its propositions. So until that is confirmed as certain then I believe we should not be expending debt and energy in formulating policies on the assumption that AGW. Is a proven fact . Dave Cull seems to be committed to the AGW line but he and you are not the majority on this.

Travel costs are my own

I can reassure FW that my trip in 2012 was entirely self-funded, and that I've no intention of asking Council to fund the (singular) trip I intend to make this year.

Being accused of a lack of long-term thinking is pretty novel - usually I'm blamed for quite the opposite!


The comments associated with this discussion shows lack of long term thinking and a high degree of naivety by City Councillors that oppose the exploration of oil and gas of the Otago/Southland coast.
As an adjunct, I note in Ms MacTavish's statement that she is planning a number of trips overseas. I sincerely hope that these trips are NOT in any way paid for or subsidised by the Dunedin City Council given the dire situation the Council finances are in.

Help fill the Stadium - Yeah Right

Cr Staynes must have been watching more Tui adds. How this can help bring more musical acts to the stadium is clutching at straws.

On ethics and hypocrisy...

As some of the comments on this thread seem to be directed at me personally, I thought I'd offer some thoughts in response.

Firstly, to southd, a couple of clarifications - it's unlikely that the hydrocarbons found (if any) would result in greater fuel security for Dunedin or NZ. The most likely scenario is that they'd be shipped directly offshore and sold on the international market. Secondly, I don't think drilling is unethical because it's on our back door, or because I'm worried about oil spills (although I remain of the view we're ill-prepared for them as a nation). I think drilling for hydrocarbons is unethical because of climate change. At the Council, we're already having to factor climate change planning into decision-making, and it's pretty obvious that it's not the cheap option.

Secondly, to address the issue of hypocrisy raised by Dav1D, Sv3nn0 and southd. I personally don't own a private motor vehicle - I ride, walk and bus as much as I possibly can - and I take other measures to reduce my carbon emissions as far as practicable. Yes, I travelled overseas in 2012, after a lot of angst about whether it was right to do so -  because I felt what I would learn would enable me offer significantly more to our city as we endeavour to become an increasingly sustainable, resilient place. I plan to attend another overseas conference (coupled with two local government visits) this year, again because I think it will again enable me to offer much more in the work I'm doing here. You might have another view, and you know, it's entirely possible you're right. Perhaps in a few years from now I'll look back and think my judgement was wrong but it's not for want aboput thinking about my carbon footprint that I made these decisions. 

In broader terms, because of the society we live in and the systems our society has built over time, all of us rely on fossil fuels to some extent or another. Yes, Calvin, fossil fuels have enabled us to do pretty phenomenal things, but what the science is telling us now is that they're doing a whole lot of damage too. In my view, the challenge for our whole society is to change our reliance on fossil fuels. If we don't try, we're accepting that millions of people all over the world will have their livelihoods significantly compromised because of extreme weather events, rising sea levels, and economic/political disruption. Even close to home - property-owners in South Dunedin, whose homes are at significant risk from sea level rise. So yes, to me fossil fuel extraction is an unethical industry, and in the light of the science, ones that we need to be moving public investment away from, not courting with ratepayers' resources.



As it suits some when they need it

Do some of the ones that call it "Unethical" here think it's that of the Oil that comes from the Middle East also and are they Consumers of oil also as they drive to the Civic Council building or other place of Employment.

The golden age of petroleum

The argument that (Western) human society has gained from petroleum for 150 years and therefore we should allow to continue is ridiculous - and takes gratitude for past gifts too far. We have a very good understanding of what petrol and gas are doing to our world, and we understand that fossil fuel burning must stop (by 'we' I mean almost everyone outside of the oil industry and its financial beneficiaries). In the spirit of progress you seem so enthusiastic to ascribe to the antiquated (and, yes, unethical - take a look at the oil fields of Africa, the tax they pay and fracking) energy industries perhaps we should be a little more imaginative about the industries we support. We shouldn't jump on a rapidly dying industry for short term gain. It may be a little easier to do it than to put some thought and imagination into alternatives but it is the wrong decision. If Dunedin deserves anything, it is to be protected from exploitation, the notariety of complicity, and the risk of environmental damage.


Given that oil free otago puts bumper stickers on petrol-drinking cars I think they show a bit of hypocrisy in calling others "short-sighted".


What right do Crs Hawkins and MacTavish have to label the petroleum industry as 'unethical'? In the last 150 years the benefits to mankind from this industry are unquantifiable. Without it we would be still in the 19th century and burning coal, killing whales, for oil, and existing in a very primitive way. Ethics is a very emotional subject, seriously misused by a small group of anti progress folk. Dunedin, unfortunately has more than its fair share of these, and it shows. Let's for once sit back and breathe through our nose before leaping to a position on this one. Dunedin deserves it.


Jinty McTavish & Aaron Hawkins need to take a reality check.

Why would we import fuels when we can take the oppurtunity of an industry such as gas which has little or no environmental harm with the creation of jobs and wealth.

They both use hydrocarbons daily and it wasn't that long ago that councillor McTavish flew overseas for a conference, hmmm.

It's hypocritical to say use we'll use hydrocarbons but we cannot drill off the coast 150km from Dunedin beacuse it's on our back door.

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