OMV hearing urged to consider economic benefits

By Gavin Evans

July 31 (BusinessDesk) - A panel considering the environmental impact of trace discharges from a drilling rig has been urged not to lose sight of the potential economic and climate benefits of a large gas find off the South Island.

A committee appointed by the Environmental Protection Authority has been told there will be no economic benefits attached to the consents OMV is seeking for accidental spills discharged from the deck drains of a rig it plans to use off the Otago coast early next year.

But the consent is essential if the drilling, the first off that part of the coast in 35 years, is to go ahead. OMV expects to apply to the EPA for the other consents it needs in the next couple of weeks in a separate process that won’t be open to the public.

Josh O’Rourke, policy manager for the Petroleum Exploration and Production Association of New Zealand, told the committee yesterday that it is a legislative “quirk” that they are only considering a consent for part of OMV’s planned activities.

While there may not be any economic benefit from the discharge consent, he said there will be employment from the exploration programme itself and potentially large economic benefits if gas is found and can then be developed.

“That broader picture of this operation as a whole should be kept in mind.”

But that was challenged by committee member and EPA board member Nicki Crauford. She said the committee is only considering a discharge consent and OMV had said there is no economic benefit from that activity.

“There are other things that we cannot take into account that you have mentioned, such as climate change impacts,” she told O’Rourke. “So, I guess we have to be clear as to what it is we are taking into account and what we are not.”

Twenty-five individuals and groups opposing OMV’s plans have asked to be heard by the committee which comprises Crauford, chair Mark Farnsworth and Greg Shaw.

OMV is planning to drill one well – Tawhaki-1 – about 146 kilometres south-east of Balclutha early next year. The well lies in about 1,300 metres of water so is not especially deep by international or New Zealand standards and has about a one-in-six chance of success, OMV estimates.

It is one of four wells the company plans this summer, including three wells off the Taranaki coast: Maui-8, an in-fill well in the ageing gas field OMV is trying to extend the life of; Toutouwai-1, in a permit it shares with Mitsui and Malaysia’s Sapura Energy; and Gladstone-1 in a permit it owns with Sapura.

OMV has previously said its New Zealand exploration efforts are likely to end if there is not a reasonable discovery this summer.

Farnsworth told the hearing the committee understands the genuine concerns submitters have about climate change, but said it was specifically barred from considering that as an issue.

All submitters raised it and only once did Farnsworth curtail a speaker on the topic.

Alan Mark, emeritus professor of botany at the University of Otago, described ocean acidification as the “evil twin” of climate change and said it was “quite anomalous” that the latter could not be considered by the decision-making committee.

He said action was urgently needed on climate change and said granting the consent would be at odds with the government’s ban on new offshore exploration and Dunedin City Council’s declaration of a climate emergency.

O’Rourke told the committee that “reasonable voices” acknowledge the role natural gas will play as a key transitional fuel as the world moves away from higher-emitting oil and coal.

The International Energy Agency forecasts a 45 percent increase in global gas demand by 2040 and New Zealand can help meet that demand, he said.

Submitters were also confused by the hearing’s reliance on the modelling of a theoretical cup of concentrated bleach – the most toxic material carried on the rig OMV plans to use – entering the rig’s deck drains and being discharged to sea. All the expert evidence is that any such accidental spills will be rapidly diluted and pose negligible risk.

Brenda Stebbings said she did not accept one cup of anything harmful going into the sea. She knew it was wrong, just as theft and bullying are wrong.

Farnsworth asked her to justify that view, given bleach is put down household drains daily without anyone raising concerns.

“My opinion is that we have to see the big picture,” she said.

The hearing continues today.

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