An environmental timebomb is ticking in the Nevis Valley.
A London-based mining company, Xtract Energy Plc, has been
granted a mineral exploration permit covering 10,450ha of the
Nevis Valley in Central Otago, including the Nevis,
Bannockburn and Lorn survey districts.
Crown Minerals group manager Richard Garlick granted the
five-year permit to Xtract Energy Plc, which also has a base
in Australia, on May 25, 2007.
The permit gives Xtract exclusive rights to explore and test
for oil shale, and permission to perform a follow-up
programme involving the drilling of at least 15 holes.
Because the permit was for exploration only, no resource
consent was required from the Otago Regional Council or the
Central Otago District Council.
However, Central Otago Mayor Malcolm Macpherson said a
resource consent application would be "enormously
controversial" should the company wish to start mining oil
shale.
Oil shaleFine-grained sedimentary rock, containing the tarry
compound kerogen, which can be processed to extract
hydrocarbons (used as fuels).
Xtract Energy is investigating a new Australian-developed
technology to extract the oil from shale in enclosed vessels.
Nevis has been investigated previously, but was economically
marginal.
Oil shale is found near the surface, but drilling is required
as a quality control to ensure the shale on the surface is of
the same quality as shale found deeper.
Xtract Australian asset management director Dr John Shirley
told the Mountain Scene "hundreds of millions of tonnes" of
oil shale was believed to be in the Nevis, which could lead
to a "multibillion-dollar development" in the area.
Gaining resource consent for a development of that scale
would likely divide the district. Dr Macpherson said two
processes could be used to extract oil shale, should testing
be favourable.
The drilling of holes would not require "too much" surface
disturbance.
"That wouldn't be terribly difficult to consent," Dr
Macpherson said.
"However, if they wanted to strip mine . . . if anyone ever
proposed that, it would beenormously controversial."
Professor Dave Craw, of the University of Otago's geology
department, said the Nevis was part of the coal-bearing
strata found all through Central Otago.
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