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The controversial oil and gas exploration method of "fracking" is to come under more scrutiny from the Parliamentary Commissioner for the Environment but her interim report falls short of appeasing environmentalists calling for a moratorium on the practice.
Oil and gas companies view fracking, or horizontal hydraulic fracturing, as a tried and tested process capable of releasing gas that would otherwise be trapped in dense rock, while environmentalists fear the release of toxic chemicals used in the process, and adjacent salt water deposits, could poison aquifers or cause earthquakes.
There has been no fracking for oil and gas in Otago or Southland, and none is planned, but the areas contain "unconventional" deposits of oil and gas possibly receptive to fracking, but which would require resource consents by the respective regional councils.
Commissioner Jan Wright's 78-page report, released this week, said the risk of fracking leading to significant environmental damage was "critically dependent" on great care at every stage of the process, including the proximity of wells to aquifers, major faults, well design and construction, and careful handling of chemicals.
"When fracking is done well, the chance and severity of environmental damage are small compared to some other economic activities," she said.
"On the other hand, when it is done badly, the risks are higher.
"Thus, managing operations well right through the process is very important," Ms Wright said.
The theme of "managing risks" runs throughout the report, with environmentalists likely to target the lack of knowledge, or controversy surrounding data on the subject, as reason enough to at least call a temporary halt.
The National-led Government has promoted oil and gas exploration and production, and mining, as the cornerstone of economic recovery and employment.
Energy and Resources Minister Phil Heatley and Environment Minister Amy Adams welcomed the report findings that fracking risks to the environment could be effectively managed, providing best operational practices were followed and enforced through regulation.
Ms Adams said she had instructed the Ministry for the Environment to produce clear guidelines on the respective roles of central and local government over the control of fracking.
University of Canterbury environmental chemistry senior lecturer Dr Sally Gaw said even if operational best practices were implemented, blow-outs, mechanical failure and human error all had the potential to contaminate soil, surface waters and groundwater.
Ms Wright said while there had been calls for a moratorium to be placed on fracking in New Zealand, "I do not think this is justified at present".
"But at this stage I cannot be confident that operational best practices are actually being implemented and enforced in this country," she said, adding she would next scrutinise how well environmental risks associated with fracking were actually being regulated and monitored.
University of Canterbury and Lincoln University Waterways Centre for Freshwater Management director Prof Jenny Webster-Brown, saw no reason to risk the effects of fracking, but fracking was likely an "inevitability" and she described Ms Wright's report as " timely and balanced".