Fracking in New Zealand – the debate continues

by Administrator / 18 August, 2012
An Australian activist who has helped galvanise farmer opposition to the exploitation of gas reserves is coming here to help fight the gas industry’s use of fracking.
Fracking in New Zealand


Just as the Government is trying to speed up the expansion of the oil and gas industry, Australian activist Drew Hutton is on his way here to advise groups on how to resist the sector’s advance. Across the Tasman, Hutton has been a central figure in galvanising farmer opposition to the coal-seam gas industry, and has forged an unlikely bond between rural communities and urban greens to oppose the exploitation of the huge gas reserves. Hutton, a rangy 65-year-old environmental campaigner and former Green Party candidate, helped found the Lock the Gate alliance in 2010 after spending several weeks among the farming communities of Queensland’s western Darling Downs, where coal-seam gas production was increasing dramatically. Coal-seam gas is mostly methane, and is held to the surface of the coal by water pressure. It is released by drilling into the seam and drawing up the water, which allows the gas to flow. In some cases the seam is hydraulically fractured – fracked – by injecting a high-pressure mixture of water, sand and chemicals to let the gas flow more easily.

The industry has been likened to a new Australian gold rush. Queensland has over 3000 production wells already, and the industry is looking to exploit New South Wales’ equally huge reserves. It’s estimated that 40,000 more wells could be developed over coming years. Most of the gas is destined to be processed into liquefied natural gas at one of three massive plants being developed at the Queensland port town of Gladstone, and sent to offshore markets. There’s talk of the industry generating 18,000 jobs in Queensland alone and expanding the state’s economy by $3 billion a year. But although the industry has brought jobs and wealth, Hutton says during those weeks in the bush with farmers in early 2010 he heard of mounting tensions between landowners and the companies drilling for gas on and around their properties. Many farmers expressed “bitterness and depression, and were feeling disempowered … They had no way of organising, or any real strategy to deal with what they were facing. “I said to farmers, ‘You might not like me [as a prominent environmentalist]’, and farmers haven’t tended to like environmentalists. But I said to them that they were not going to win this west of the Great Dividing Range as a farmers’ issue, and I didn’t think it could be won as a green issue, either. They needed to be brought together.”

LOCKING THE GATES


Chief among their concerns were that methane from coal-seam gas operations was seeping into groundwater, and that the proliferation of well heads, pipelines and access roads was eating into productive farmland. Hutton says they felt they were losing control of their properties. “We began a Gandhian campaign of non-violent non-co-operation,” he says of the October 2010 launch of the Lock the Gate campaign. Almost two years on, 150 community organisations have joined the alliance, and Hutton says at least 10,000 landowners in New South Wales and 2000 in Queensland have “locked their gates” – that is, refused to negotiate access agreements with the gas companies, and put up a Lock the Gate sign as a mark of resistance. That’s despite Queensland and NSW state laws obliging landowners to negotiate. Hutton says under Queensland law, drilling companies are required to tell the farmer they want to enter the property and explore; the two parties then have 20 days to negotiate access and compensation. If no deal is done, it can be taken to compulsory mediation, and if agreement still can’t be reached, it can be elevated to the Land Court. Once it is before the court, the driller is allowed to enter the property and if the landowner obstructs he risks a $50,000 fine.

In NSW, if no agreement can be reached between the gas company and the landowner, it can be taken to arbitration, with the right to appeal to the Land and Environment Court. A landowner who then obstructs can be prosecuted. “There is very little defence that the landowner can use,” says Hutton. “[The law] certainly favour the rights of the mining companies.” The landowner doesn’t have the legal right to refuse access simply because he doesn’t want drilling on his land, although industry leaders in Australia insist they want good relations with farmers and have no desire to resort to the courts to force them into access agreements. Hutton says Lock the Gate’s strategy is to get wide consensus within a community to refuse to sign up to access deals. If a landowner does sign, other members of the community “should feel right on their side” to impose a non-violent blockade against the gas company.

Blockades have so far occurred in three places: in Gloucester in New South Wales’ Hunter Valley, Kerry in southern Queensland and Tara in Queensland’s Darling Downs (the Tara campaign went on for 90 days). “We’ve had farmers who have never broken the law in their lives, and who are some of the most conservative people in the country, stand on blockades and even get arrested … Our strategy is basically to harass [the gas companies], slow them down, make their lives as miserable as we possibly can, so that governments are forced to say there is a moratorium on until we are absolutely sure what the impacts are. And we’re going to narrow their [commercial] margins along the way.” Farmer resistance is starting to hurt the drilling companies, he claims. “The number of farmers signing [access agreements] has slowed to an absolute trickle.” Shell recently decided to withhold further investment in its large Arrow joint venture project, which would mine gas from Darling Downs and turn it into liquefied natural gas at Gladstone. Hutton claims one reason – apart from spiralling costs and thinning margins – is that landowners are resisting. He says only 150 of the 1500 landowners with whom access agreements are needed have signed up.

THE ALLEGATIONS


The industry faces allegations that the process of dewatering the coal seam – which involves pumping up massive volumes of water – causes groundwater levels in the surrounding area to fall. That fear was backed up recently by a report from the Queensland Water Commission, which concluded more than 500 water bores in one southern Queensland drilling areas would be affected by gas extraction. Some landowners also claim methane has found its way into their water wells: Australian television footage has shown farmers setting their bore water alight. And Hutton says the Condamine River, in one of the most intensively drilled areas, has methane bubbling to the surface. “We can light the Condamine River on fire.” The gas industry has countered that this is natural seepage, and is not caused by drilling operations. There have also been claims from some families living near coal-seam gas operations that exposure to methane is causing rashes, bleeding noses, headaches and vomiting. Hutton is dismissive of industry and government assurances that environmental regulation and monitoring of the industry is strong, and that coal-seam gas extraction poses minimal risks to groundwater. He accuses both the sector and the Government of a “suck it and see” approach that “throws the precautionary principle out the window … They simply don’t know what the impacts are going to be on people’s health or the water or land.”

Fracking in New Zealand - The campaign at Tara in Queensland’s Darling Downs


This is the message he will be bringing to New Zealand later this month when he talks about the Lock the Gate movement to audiences in Wellington, Dannevirke, Hastings, Gisborne, Hamilton, New Plymouth and Gore, as well as the “Alternative Minerals Conference” in Rotorua. His visit follows intense public debate in this country over proposals to use fracking to extract oil and gas from deep shale rock on the East Coast, and localised opposition in Taranaki to plans by oil and gas companies to expand the use of the technology there. Fracking recently received high-level endorsement from the Royal Society in the UK, which concluded it was a safe method to exploit Britain’s large shale-gas reserves, provided “operational best practices are implemented and enforced”. It said there was only a low risk that fracking could contaminate groundwater because there is generally a large distance between frack zones and water tables. The risk that fracking could trigger earthquakes was also low. Nevertheless, many remain suspicious, with the Dunedin City Council recently becoming the fifth local authority in New Zealand to call for a moratorium on fracking until the Parliamentary Commissioner for the Environment, Jan Wright, has completed an investigation into the practice. She is expected to report later this year.

INTEREST MOUNTS IN NEW ZEALAND


Interest in coal-seam gas production is also mounting in this country, with Solid Energy recently announcing it is focusing on its extensive Taranaki resource after successfully trialling fracking technology to extract coal-seam gas at Huntly. L&M Energy also holds coal-seam gas exploration permits in Southland and South Canterbury. The Government is keen to see New Zealand develop its “abundant” energy potential, and has talked of this country becoming an oil and gas exporter by 2030 and reaping almost $13 billion in royalties from oil and gas production. But Hutton will be advising New Zealanders to be wary. First, “I’m going to tell them they should not believe a word the industry tells them necessarily. They should examine everything with as much scepticism as possible that comes from both the Government and industry. They need to swap stories with other countries, and find out what has been the experience of Australia and the US especially … “Second, do not operate as an individual when dealing with these companies. Operate as a community, and get as much consensus as possible. Third, call on the Government to introduce a moratorium until all the research is done on the impacts. “Fourth, unless all of that is done, lock your gates.”

Fracking rules


The gas industry can overcome public anxiety by adopting the “golden rules”, says the International Energy Agency.

Conflict between Australia’s booming coal-seam gas industry and Drew Hutton’s Lock the Gate movement is just one illustration of the massive opportunities and challenges arising from the surge in “unconventional” gas sources. Coal-seam gas and shale gas are both examples of unconventional sources, in that the methane is held tightly in the rock or coal-seam. Conventional gas, by contrast, has accumulated over millions of years in porous rock, and flows readily. In the past, unconventional gas was too difficult and expensive to extract. But the development of modern fracking and horizontal-drilling techniques have made it profitable to exploit, and the international energy market is being transformed as a result. Shale-gas drilling is booming in the US: little more than a decade ago the country was preparing to import natural gas, but by 2009 it had become the world’s biggest gas producer. In Queensland, coal-seam gas production increased six-fold between 2004 and 2010. As well as providing about 90% of the state’s gas requirements, it has sparked the development of a massive LPG export industry. The International Energy Agency (IEA) notes that other regions are also lining up to develop their unconventional gas resources, including China, Europe and Latin America. Given the mounting interest in both shale resources and coal-seam gas here, the agency might also have added New Zealand to the list of aspirant nations. “Global natural-gas resources are vast, widely dispersed geographically and can help improve energy security,” the IEA wrote in a 2011 report. But more recently the Paris-based agency cautioned that although the world was poised to enter a “golden age of gas”, there are concerns about the potential for “unacceptable environmental and social damage”.

In another report titled “Golden Rules for the Golden Age of Gas”, published in May this year, it warns that if the implications for local communities, land and water resources are not adequately addressed, “these concerns threaten to hold back, and perhaps halt, the unconventional gas revolution”. Unease about the possible environmental effects of fracking has already led to the imposition of moratoria in New South Wales, France, South Africa and Bulgaria, as well as in the US states of New York, Maryland and New Jersey. The IEA report acknowledges that unconventional gas production is an “intensive industrial process, generally imposing a larger environmental footprint than conventional gas development.” The scale of development can have “major implications for local communities, land use and water resources”. It says the technology exists to meet those challenges, but calls for adherence to a set of “golden rules” to deal with environmental and social impacts. Tighter regulations along the lines it proposes would increase the cost of a typical shale-gas well by 7%, but it would also give the industry a “social licence to operate” and pave the way for a potential trebling of unconventional gas production worldwide by 2035. It envisages big increases in production not only from the US and Australia, but also from China, India, Canada, Indonesia and Poland.

Among the “golden rules” are:

  • keep fracking well away from water tables;

  • make the disclosure of fracking fluids mandatory;

  • ensure robust well design to prevent leaks;

  • strictly monitor environmental indicators, such as groundwater quality;

  • fully disclose methane leakages, water use and the content of waste water; and

  • engage with local communities.


The IEA warns that if the industry doesn’t do more to earn greater public acceptance, the tide will turn against unconventional gas, and production will be massively constrained. Not only will energy prices be higher and the market less secure, but the planet will be worse off , too, it argues. Gas produces less carbon dioxide than coal when burnt; if the unconventional gas market is constrained, that means more coal will be used, resulting in higher greenhouse gas emissions, it reasons. Whether it is correct on this last point is up for debate, however: a recent study from Cornell University concluded that between 3.6% and 7.9% of the methane from shale-gas production leaks out into the atmosphere. Because methane is a much more potent greenhouse gas than CO2, it concludes this could make the impact of shale gas on climate change as bad, or worse, than coal.

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