Oil's not well

Dunedin Tokelau Community president Pailate Tuisano believes continued oil and gas exploration...
Dunedin Tokelau Community president Pailate Tuisano believes continued oil and gas exploration threatens his atoll homeland and its people's culture. Photo by Atephen Jaquiery.
Associate Prof Patricia Widener
Associate Prof Patricia Widener
A bird lies covered in oil on a beach near the town of Arteixo in northern Spain. Photo by Reuters.
A bird lies covered in oil on a beach near the town of Arteixo in northern Spain. Photo by Reuters.

Oil and gas exploration heating up off Otago's coast brings not only potential benefits but risks too. Bruce Munro looks at the likely effects of a well blow-out and asks whether the planet can afford even one more well.

  • Read parts one and two in this series

Tokelau is 4409km away. But for Dunedin taxi driver Pailate Tuisano it is ever present.

Standing on a wooden wharf in the Otago Harbour basin amid a long line of other hopeful salmon fishers, the 68-year-old father of seven is keen to talk about his homeland; three coral atoll specks in the South Pacific Ocean midway between New Zealand and Hawaii.

Mr Tuisano's parents left the New Zealand-governed territory of Tokelau when he was a baby. He grew up in Samoa, then came to Dunedin in the mid-1960s, and did not return to his village on Fakaofo atoll until he was 58.

It was an emotional home-coming.

''My father always told us stories about our people, our family, our land,'' Mr Tuisano says.

''I always pictured them in my mind.

''I knew when I stepped on to the wharf [on Fakaofo] that this is my place, this is my identity.''

During his nine-month stay in Tokelau he became part of everyday village life; going fishing before daybreak most mornings to catch the day's food, building houses, planting coconut trees, playing kilikiti (Polynesian cricket). If not for family ties in Dunedin, he would have happily remained there.

Back in Dunedin, fishing is one of several Tokelau links Mr Tuisano maintains. This season he has caught one salmon and hopes today will yield another. He is aware of deep-water oil and gas exploration off the Otago coast and is concerned a spill during drilling could pollute local fisheries.

But how real is that risk? And what is the likely impact?

Gareth Hughes, of the Green Party, says one in 35 deep-water drills results in a spill. That is a 2.8% chance of trouble.

Amy Adams, Minister for the Environment, argues a much lower risk; two and a-half blowouts per every 1000 wells, or 0.25% chance of unintentional pollution.

Where the truth lies is probably somewhere between the two. The Greens' oceans and energy spokesman is using Gulf of Mexico drill data dating from the present day back to 1964 when safety procedures and technology were more rudimentary but deep-water drills were not common.

Ms Adams is using 1980 to 2005 data covering offshore drills in the Gulf of Mexico, United States outer continental shelf, the UK continental shelf and Norwegian waters. But her spokesman did not know whether the data included shallow water drills which have a lower ''incident'' rate than drills at the depth being pursued off New Zealand's coast.

David Robinson, who is chief executive of the Petroleum Exploration and Production Association of New Zealand (Pepanz), says well-design standards have improved since the Deepwater Horizon ultra-deep-water oil rig exploded and sank in the Gulf of Mexico in 2010 causing the largest offshore oil spill in US history.

''If you put together all the factors that are necessary to have a spill, it is possible, but highly unlikely,'' Mr Robinson says.

''You wouldn't do anything if it was on worst-case scenario, would you? You wouldn't get on a plane or in a car.''

If the worst were to happen during Anadarko's deep-water test drill scheduled for this month 60km off the coast of Otago Peninsula, the US-based oil company knows how it is likely to play out. Its oil spill modelling report, prepared for Maritime New Zealand, says the impact would be much worse for Canterbury than Otago.

Losing control of a well that has penetrated a productive reservoir of gas in the Great South Canterbury Basin could result in 18,000 barrels per day of light condensate gushing into the Pacific Ocean, the report says. This could continue for 35 days before the well could be shut off.

The condensate, with the look and consistency of pale lager, would be carried north along the coast by wind and waves, with a 10% likelihood it would be washed ashore. If that did happen, low concentrations would reach shore within two days of the spill, probably first washing up near the Moeraki boulders.

Within about three days it would reach Banks Peninsula.

Despite the light condensate evaporating and dispersing more quickly than heavier oils, more than 14,000 tonnes are predicted to reach shore. The maximum concentrations would be 10.88cu m per kilometre of shore.

The report says there is a medium chance more than 200km of foreshore, from the mouth of the Ashburton River to the mouth of the Waimakariri River, would be contaminated.

From Banks Peninsula ocean currents would take most of the remaining contaminant eastwards, directly into the Chatham Rise, New Zealand's most productive and important commercial fishing ground. Anadarko's New Zealand manager Alan Seay says the company has talked with fishing industry representatives, which has raised no concerns.

Seafood NZ chief executive Tim Pankhurst is more concerned about spills if, and when, commercial production of gas begins, rather than during exploratory drilling.

''In particular we would seek a good behaviour-type bond,'' Mr Pankhurst says.

Maritime New Zealand would be responsible for co-ordinating a national response to any spill. It will do this in partnership with local regional councils and the oil industry, with extra help from community volunteers, its spokesman Steve Rendle says.

The agency has been criticised for its inadequate response to the 2011 grounding of the Rena container ship off the coast of Tauranga, in which 2500 barrels of heavy oil leaked into the sea.

But the Government has since boosted the agency's funding by $2 million over three years, and Mr Rendle says it now has ''a strong oil-spill response system''.

Mr Tuisano has reservations about Anadarko's impending arrival. No doubt other fishermen along this wharf hold different views, some strongly.

The potential for conflict is one of the often overlooked risks of oil and gas exploration, Prof Patricia Widener says.

The Florida Atlantic University sociologist studies how communities are affected by the arrival of the oil and gas industry. She is in New Zealand on a research sabbatical.

She says the decision to allow drilling is normally imposed on a community. Its residents are forced to quickly take a position on the issue, which can create tension within the community or between communities.

''They are often still trying to get information and assess what it means while the oil or gas project goes forward,'' Prof Widener says.

''I always advocate for people to have a greater ability to be involved and decide for themselves.''

Economic risks also need to be weighed up, Prof Rob Lawson says.

The University of Otago marketing department researcher is the former convener of the Otago Energy Research Group.

The probable financial returns on any publicly funded large-scale infrastructure associated with the oil industry should be carefully weighed up, Prof Lawson says.

He hopes petroleum companies would fund any required infrastructure, but says there is a risk of public funds being spent if, for example, a ''silly competition'' develops between Invercargill and Dunedin, each seeking to become the industry's preferred operations base in the South. Mr Tuisano checks his fishing rod. The ruffled harbour surface sparkles like diamonds beneath a blue sky on this rare summer day. Here the water is three metres below the commercial wharf platform, sloshing harmlessly against its concrete wall. It is a different story in Tokelau.

When Mr Tuisano was there a decade ago, one of the key tasks assigned by Fakaofo village elders was the building of sea walls to combat the encroachment of the rising sea.

''Each family was given a bag of cement,'' he recalls.

''We cut a 44-gallon drum in half, filled the halves with cement, coral and stones, and put them in front of the house.''

In 2004, the foreshore was about 20m from houses, 40m closer than it had been a generation earlier.

Sea-level rise and other environmental changes are having serious impacts in the low-lying atoll group which, at its highest elevation, is 5m above sea level. Saltwater intrusion is killing crops. The layer of fresh water trapped in the porous coral has all but disappeared, forcing the islands' 1353 inhabitants to rely on rainwater. Droughts are more common, as too are severe storms.

Climate change is without doubt the biggest risk posed by the ongoing search for, and use of, fossil fuels.

Climate change itself is beyond argument. At a global level there have been more than 300 consecutive months of temperatures being warmer than the 20th-century average for that month. The Intergovernmental Panel on Climate Change says the planet is now 0.85degC warmer than at the start of the Industrial Revolution.

And even that seemingly small increase is having some large consequences. For example, the Arctic summer ice cover has collapsed much more quickly than expected. It is now about half of what it was a few decades ago.

The carbon already emitted is expected to push global temperatures 1.4degC above 1880 levels.

What scientists say we do not want to reach is a tipping point that unleashes runaway climate change - changes that trigger an irreversible and catastrophic reordering of our global ecosystem.

Mike Berners-Lee and Duncan Clark, authors of The Burning Question, say such a scenario could result in a large reduction in worldwide crop yields, significant global water shortages and massive threats to the world's plant and animal species. It could also plausibly result in something much worse, they say.

The tipping point is unknown. In 2009, however, after 20 years of weighing the evidence, world leaders gathered in Copenhagen decided a 2degC increase above pre-industrial temperatures was a line not to be crossed. It was not a mark at which there would not be any climate change effects, but at which the impacts would probably be serious but manageable.

On current emission levels we are headed for a 4degC to 6degC temperature rise. Climate campaigner Bill McKibben, when he visited Dunedin last year, put it another way.

The known fossil fuel reserves, 2795 gigatonnes, if burned, would release five times the amount of CO2 we can afford to put into the atmosphere if we hope to limit warming to 2degC.

So why are we contemplating digging even one more well? Mr McKibben, of the US, said the real blame lay at the feet of the fossil-fuel industry whose wealth gave it the political influence to prevent change.

Pepanz's Mr Robinson rejects this.

''I would disagree very strongly,'' he says.

''Where we put some effort in is in terms of ensuring we have a regulatory environment that works and is conducive to investment in New Zealand ... but typically that is at a very practical level. We are not political at all.''

Mr Robinson does not dispute what most scientists say about climate change, but says the hunt for oil and gas in our offshore waters is ''about New Zealand developing a resource we can use rather than importing someone else's''.

Climate change is a significant issue, but it is not just an oil industry issue, he says.

''I see it as a societal issue for us all to collectively work out what we are going to do about it,'' Mr Robinson says.

Petroleum is a transitional fuel, he says.

''The question that we have got, which the whole world struggles with, is what do we transition to, and over what timeframe do we make that transition?

''In order to displace those hydrocarbons we need an alternative form of energy which can do the things that hydrocarbons do today and it has to be affordable ... Or you have to have a really significant change in lifestyle.''

Mr Robinson believes New Zealand needs a plan to develop and transition to alternative energy sources.

''In the absence of a transitional plan it all just becomes talk without action,'' he says.

Asked whether the country needed a national energy transition plan, Simon Bridges, who is Minister of Energy and Resources as well as Associate Minister of Climate Change Issues, obliquely replied: ''The New Zealand Energy Strategy sets out the Government's objectives for the energy sector''.

The strategy includes a target of 90% renewable electricity generation by 2025, and a 50% reduction in New Zealand's greenhouse gas emissions from 1990 levels by 2050. Given fossil fuels' contribution to climate change, Tokelau was eating itself alive. It was burning 200 litres of diesel a day in its generators, adding to the greenhouse gases so visibly threatening its inhabitants' livelihoods and even their ability to continue living there.

In 2012, with the help of a $7.5 million advance on its New Zealand aid funding, Tokelau installed three solar power plants. They provide all of its energy needs and meet 100% of its international climate change obligations.

But, of course, the rest of the world keeps mining and burning fossil fuels, and the impacts accrue unabated.

''There should be something done straight away,'' Mr Tuisano says.

''But it seems our only hope is God. Otherwise there is no hope.''


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