deep-sea oil drilling

Guest Post: Is the “Aberdeen of the South” an idea past its time?

Is the “Aberdeen of the South” an idea past its time?

Guest post by Professor Colin Campbell-Hunt

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There are very many of us in Dunedin who will want to welcome Shell and the promise of economic activity that exploration brings. If I were to look ahead only 10 years I might be one. But I have learned a thing or two about oil and gas in the last few years that would urge caution. This is an industry that only has a decade or so of growth left, so if we want our city to invest in infrastructure for industries that will secure our prosperity for the future, oil and gas exploration should be well down the list. Here’s why.

First, even the short-term benefits may be much less than we might think. A 2012 study by the economic consultancy BERL concludes that the prime contractor for engineering and construction would be a large offshore-based multinational. Some sub-contracting work may come to local New Zealand firms, but BERL concludes that few New Zealand companies outside of Taranaki have the expertise required to win contracts for the work.

Second, the same BERL study concludes that the number of sustained jobs created for the local economy would settle at around 200 following a spurt of up to 1,000 jobs during a three-year development phase. It is unlikely that the oil or gas produced would come ashore; more likely it would be shipped directly from a sea-based platform.

So far, the project looks to make reasonable sense, both for Shell, and for Dunedin. But look out beyond 2020 and the horizon looks a lot darker for the oil industry.

The third – and far more serious concern – arises from the effect on the planet’s climate of burning fossil fuels and releasing carbon dioxide CO2 and other greenhouse gases into the atmosphere. Climate modellers at the Potsdam Institute in Germany estimate that if we put another 500 billion tonnes of CO2 into the atmosphere beyond 2013 levels, we would face a one-in-four chance of the planet warming by more than 2C. And if we were to increase that to 1,000 billion tonnes, the chances rise to 50:50.

So how much CO2 is there for us to burn? A 2013 study by the Grantham Institute at the London School of Economics reports that the world’s current proven reserves already contain between 3 and 6 times more CO2 than we could safely throw into the skies. Corporate oil alone has more than enough reserves to blow out the 500 billion tonne budget.

Why does the 2C limit matter? Beyond 2C, science warns that we open ourselves to the possibility of runaway climate change wreaking serious havoc to the world’s population, economy, food supply and political stability. These are not the wild imaginings of prophets of doom who would urge us to climb up a hill somewhere and wait for the world to end. These are level-headed assessment of risks that the human (and non-human) populations of earth are facing right now.

So where is this going to leave the oil industry? At the present rate of emissions, we will hit the 500 billion tonne warning sign in just ten years. If we wanted to keep our chances of avoiding more radical change to just 1-in-4, that would have to be the end of CO2 emissions – not another tonne, ever. Of course that is not going to happen. We are riding on a super tanker that is going to take years to bring to a halt, and this is something that is increasingly accepted – with dismay – by the people who follow these trends. The fact that the oil industry is willing to invest in exploration for new sources of hydrocarbon when we already have far more than we should ever burn tells us that they don’t believe the political will to change our ways will stiffen up any time soon. Which in turn tells us that we, the voters, want to keep our good life for as long as we can too.

But spool forward 10 years, or twenty. The pressures of climate change are only going to get stronger; the realisation of the risks we are running can only get firmer; the prospect of controls being placed on the burning of CO2 can only get greater. A far-offshore gas field is expected to have a life of 35 years. If we are beginning to understand the dangers of climate change now in 2014, we can be very sure they will have radically changed the rules for the oil industry by 2060.

So should Dunedin hitch its economic wagon to this dying industry? Should we be building the public infrastructures to support an industry that has such a poor long-term future? Should we be anxious to attract a business that might deliver 1,000 jobs for three years, then only a quarter of that for however many years it takes before expensive deep sea gas wells get shut down – if indeed they are ever put into production?

There has to be a better way. Developing assets – both physical and human – for the city’s infrastructure to be ready for a low-carbon economy and low-carbon lifestyles will give us a far greater chance of delivering benefit over their productive life than any investments we may be tempted to devote to a dying oil industry.

Colin Campbell-Hunt is a Professor in the University of Otago Business School and has written widely on New Zealand’s competitiveness.

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Deep Sea Drilling – A Local Perspective

This summer Anadarko Petroleum Corporation intends to begin exploratory deep-sea oil drilling in the Canterbury Basin, off the coast of Otago. Shell are also currently considering deep-sea drilling in the Great South Basin, and using Dunedin as a base. This film gives the perspective of several local academics and prominent members of the community. It addresses the economic, environmental and social issues involved with deep sea drilling off the coast of Otago.

Deep Sea Drilling off Otago – Worth the risk?

We say – oil or gas – the risk is not worth it. Why?

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White-capped albatross after Rena oil spill, Tauranga Photo from http://www.birdlife.org

The risk is ours

  • The oil companies cannot eliminate the risk of a disaster. A disaster like the Gulf of Mexico Deep Water Horizon catastrophe would ruin New Zealand’s south eastern coastline.
  • The cost falls to us – the industry does not have to pay any bond to cover liability.
  • The Rena cost New Zealand taxpayers $36.8 million, and that was tiny compared to a major oil rig blowout. The Horizon disaster in the Gulf of Mexico has cost Americans $80 billion so far.

Jobs and prosperity do not stack up

  • Per dollar earned, the oil industry creates fewer jobs than most other industries, and most of those jobs will come from outside the region.
  • Floating Production, storage and offloading vessels (FPSOs) and Floating Liquid Natural Gas vessels (FLNGs) would take the fuels directly to export. No onshore facilities would be built – so no cheap oil or gas for us. Onshore facilities would be limited to some maintenance and repair work and some support services like hotels, casinos and a helicopter (although we have already heard they would use Nelson for a helicopter service).

We have too much to lose

  • Our ocean is unspoilt and unique. More albatross species breed in our exclusive economic zone than anywhere else in the world.  38 of the world’s 80 whale and dolphin species live in our southern ocean.
  • Whales are returning to our coast after many years’ absence. Planned offshore drilling sites coincide with their migration routes.
  • Tourists, including cruise ship passengers, come to Dunedin for the wildlife harbour cruises, the albatross and yellow-eyed penguin tours.  These businesses have everything to lose if there is an oil or gas spill.
  • Fishing is New Zealand’s fifth largest export earner. An oil spill or gas blowout in our ocean could destroy our commercial, recreational and customary fishing. The Gulf of Mexico’s fishing industry could take 50 years to recover from the Horizon disaster – if it ever recovers.

We have no say

  • We have had no say in whether or not Anadarko and Shell drill in our oceans. Beyond 12 km these companies don’t have to produce ESHIAs (environmental, social and health impact assessments).
  • Neither local tourism operators, fisheries and wildlife experts, nor businesses – whose livelihoods depend on our ocean, our clean green image and our abundant natural fauna – have had input into the decision to drill.

Burning oil & gas releases CO2, causing climate change

  • Two degrees of global warming is now inevitable – the so-called ‘safe’ limit that world governments have agreed to. Beyond two degrees the climate will become increasingly unstable.
  • Shell, Anadarko and the other fossil fuel companies already have enough discovered reserves on their books to push global warming to five times beyond two degrees.
  • 80% of those reserves have to stay unburned for global warming to keep to two degrees. Anyone can see that exploration for more oil and gas in such a risky environment is – at the very least – a poor  investment choice.

We do not need to take that risk. We have what it takes right here to develop a low carbon economy

  • With over 70% electricity generated from renewable sources New Zealand is in an enviable position. We can thrive on clean energy and remain true to the values of being an unspoilt place.
  • Dunedin has the expertise to build a low carbon economy that we can bequeath to the next generations. With foresight and leadership from the business community and elected representatives, we can show the way.
  • We are already locked in to a future of rising seas, increased storm surges and changing weather patterns. We can avoid making the future harder by beginning now to improve public transport, electrify our transport fleets, protect low lying areas, consolidate and encourage local food producers, and develop new renewable industries. There are opportunities for everyone.

oil versus gas

  • Anadarko and Shell say they are more likely to find gas than oil off our shores. They are trying to brand gas as the “clean” fossil fuel.
  • Gas still causes global warming. Burning gas releases about 75% the greenhouse gas emissions of crude oil, causing the same damage to the climate in 4 years that oil does in 3.
  • A gas blowout can be a major disaster. In 2012 in the North Sea, an Elgin platform gas leak spewed 200,000 cubic meters of gas per day. It cost $3 billion and took six months to drill relief wells to stop the leak. If this happened here, the oil companies admit it would take months for a relief well to reach NZ.
  • Gas condensate can still wash up on beaches and is toxic to wildlife and humans.
  • Accidental methane emissions from gas wells can be huge and are not factored in to Anadarko and Shell’s definition of a “clean” fossil fuel. Unburned gas from these emissions is mostly methane, which is 21 times more potent at warming the atmosphere than carbon dioxide – nothing “clean” about that.

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White capped albatross off Taiaroa Head, near Anadarko’s planned drill site. Photo by Derek Onley

Beach Cleaners Protest Shell

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Oil Free Otago staged a ‘beach cleaner’ protest outside Community House on Thursday, where Shell Oil were meeting with environmental groups about their plans for drilling off our coasts in the Great South Basin.

This meeting was part of Shell’s campaign to legitimise their claim that “Environmental concerns are very close to our heart.” To this, we say “Fui”, something Dave’s nana used to say to mean “bullshit”. Shell have a terrible safety and environmental track record. For example, Shell spilled nearly 14,000 tonnes of crude oil into the creeks of the Niger Delta in 2011, they have also recently had to cancel their plans to drill for oil in the Arctic this year.

Our first objective for the day was to engage with members of the public to make them aware of the deep-sea oil risk that is being posed to our coasts. We had an overwhelmingly positive response, with many members of the public joining us in protest for various periods of time.

It was our goal to ensure that Shell is aware that they, and any other oil companies, are unwelcome to drill off the coasts of Otago. We achieved this by, very ‘vocally’, escorting’ the Shell representatives to their car (which we noted was parked in the Countdown carpark, rather than in legal pay-and -display parking 😉  ). They were certainly in a hurry to leave.

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Derek Onley, who attended the meeting on behalf of  the  Ornithological Society, said,

“There was little new information.Shell have back-pedaled on their ’empty-ocean’ stance, and are now accepting that yes, the ocean is full of creatures. In fact, they now agree that their drill site is in the middle of a whale migration zone. They mentioned that if there was an oil blow out, it would take relief response at least 14 days to arrive here from Singapore.”

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Shell said that they have still not decided whether or not they will go ahead and drill.

Oil Free Otago will continue to oppose Shell and Anadarko at every step of the way.

http://www.odt.co.nz/news/dunedin/267143/oil-free-otago-protests-outside-meeting

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Lush Support on World Oceans Day

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The serious business of shopping was interrupted on Saturday by scantily clad oily people at Lush that caught the attention of bemused shoppers – and their other halves.Lush

Oil Free Otago members held the event, in conjunction with Lush, to coincide with World Oceans Day. On World Oceans Day and we wanted to alert Dunedin people that our ocean is at risk. Anadarko, partners in BP’s Deepwater Horizon disaster in the Gulf of Mexico, are coming to drill for oil off our coast this summer. Shell are also looking to start deep sea drilling in the Great South Basin soon.While these companies get tax exemptions, government subsidies and almost all the profit, we get all the risk of an oil spill.

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What about the jobs and prosperity Anadarko and Shell might bring to Dunedin? Check out last year’s Ministry of Economic Development report (Regional Impacts of a New Oil or Gas Field).This report says it is highly unlikely that companies would invest in onshore infrastructure. They will export the oil and gas directly. We won’t see it unless it washes up on our beaches.

If that happens, we pay for the cleanup. The Rena cost taxpayers $46.9 million, and that was tiny compared to a major oil rig blowout. The Deepwater Horizon disaster has cost Americans $80 billion and rising.

Cleaning up Saturday’s oily people was easy, but the serious business of cleaning up our beaches will cost a lot more than a bar of Lush soap.


A huge thank you to Lush (Dunedin) for their support  

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Untabled facts tell a different story, of danger and disaster

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Untabled facts tell a different story, of danger and disaster

Shell’s exploration manager Roland Spuij was “simply trying to lay the facts on the table” before protesters closed down their community engagement workshop in Dunedin on 8 April. By then the presentation was almost finished – so what facts did Shell lay on the table?

The decision to drill down to 4km in 1.5km deep water in the Great South Basin (GSB), about 150km off Dunedin, will be made later this year. Seismic surveys suggest a 70% chance of finding nothing, a 30% chance of gas and a 1% chance of oil.

It’s gas they’re after, said Shell, not oil.

How credible is this claim? The technology to liquefy gas at sea is still unproven. Our back yard would be Shell’s testing ground for their not yet built FLNG (floating liquefied natural gas vessel); four soccer fields long, six times heavier than the biggest aircraft carrier, and holding 174 olympic swimming pools worth of liquefied gas chilled to -162 degrees C. A gas find would have to be massive to be economically viable. 

Are Shell playing down their expectation of oil to allay fears of the oil-on-beaches image, so real since Rena?

That’s not to say a gas blowout wouldn’t be destructive. Gas could boil to the surface and kill rafting birds such as albatrosses – in Shell’s words, a “moderate” impact.

Such accidents happen even where help is at hand, let alone in a region as remote as the GSB. In the North Sea, a leak at the Elgin platform spewed 200,000 cubic meters of gas per day. It cost $3 billion and took six months to drill relief wells to stop the leak.

But Shell assured the meeting that they “will design the well to the highest industry safety standards”.

How high are these safety standards? They emphasised their injury record in a graph whose unexplained y-axis, ranging from zero to five, hinted at low numbers but turned out to be “number of injuries per million working hours”. To give some meaning to this scale the UK, whose injury record is four times better than ours, had about 130 major or fatal injuries per 100,000 workers last year.

Until 2011 there was only one inspector to oversee our entire oil and gas industry. Now there are three; still poor compared to other countries.

What of Shell’s environmental safety standards?

“Environmental concerns are very close to our heart” Shell repeated (no less than five times) while showing photographs of whale, albatross and shearwater, and the entrance to a local marae.

However, Shell’s ESHIA (Environmental, Social and Health Impact Assessment) had not been completed, so there was little of substance to present. NIWA’s Tangaroa had just returned from another seabed survey, and although the data hadn’t yet been analysed, it did not stop Shell’s environmental officer from pre-empting the findings; “As you can see, not much there”, he repeated as Tangaroa’s cameras cruised the seabed. A diagram showing marine migration routes passing either side of the proposed drill site backed up the story of an empty ocean. – “No fishing, no tourism, no infrastructure.”

But details of migration, breeding and feeding patterns are virtually unknown for most of our southern ocean creatures. We know little about what our Tairoa Head albatrosses get up to when away from home. We do know that the southern ocean is home to the greatest number and variety of albatrosses and other seabirds in the world.

Close to the heart, or close to the chest? What other facts did Shell leave off the table?

Oil and gas spills happen all the time. The 2010 Horizon disaster in the Gulf of Mexico is only extraordinary in terms of scale. Between 2001 and 2010 in the Gulf alone, there were 855 fires or explosions, 1,349 injuries and 69 deaths.

The Montara blowout of 2009 off the coast of Perth, at a depth of 80 meters, took two and a half months to plug and destroyed around 64,000 hectares of coral reefs off Timor. This equates to one Rena disaster every day for 74 days.

Back to Shell. Let’s lay some more facts on the table.

Twenty million people have been displaced following 60 years of environmental damage by Shell’s drilling in the Niger Delta. Following the hanging of nine Nigerian peaceful protestors Shell were sued in 2009 for human rights abuses including summary execution, crimes against humanity, torture, inhumane treatment, arbitrary arrest, wrongful death, and assault and battery.

In February this year Shell pulled out of the Arctic after a drillship grounding, engine failures, a fire on one of its rigs and other technical difficulties.

Shell have been censured 25 times in the past six years for breaking safety rules, but have a history of under-reporting such incidents, let alone laying them on the table in community engagement workshops.

But actually, I agree with Shell; why bother to mention such things?

Companies like Shell already have enough proven oil, gas and coal reserves on their books to raise the atmospheric temperature to five times beyond the so-called “safe” two degree limit. Once burned, it’s goodbye future for our grandchildren.

Oil spills, dubious safety records, crimes against humanity, pale in comparison to the future impacts of Climate Change, the elephant in the room, so studiously omitted from the table at Shell’s community engagement workshop.

By Rosemary Penwarden

Hands Across The Sand

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On Saturday, the 18th of May communities all over the world came together to draw a line in the sand to say no to fossil fuels and yes to clean energy. At 12noon people came together to hold hands for fifteen minutes and draw this symbolic line in the sand. In New Zealand alone, nine groups around the country, comprising over one thousand people, took to the beaches to say no to deep-sea oil drilling in Aotearoa.

On this freezing cold, wet day about sixty people in Dunedin stood together at St Clair beach. These community members voiced their concerns about Anadarko Petroleum Corporation and Shell drilling in our coastal waters.

Over five hundred people lined the beach in the small community of Kaikoura. Their community has clearly united over this issue after their recent  dealings with the government and Anadarko. Oil Free Otago’s aim is to build a similar united front against drilling in Otago.

The people on our beaches on the 18th were a diverse group from all walks of life. The movement against deep-sea oil drilling in New Zealand is growing.

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http://www.odt.co.nz/news/dunedin/257700/hands-message-oil-companies

http://handsacrossthesand.org/

http://www.stuff.co.nz/marlborough-express/news/8692829/Hundreds-protest-deep-sea-drilling

http://www.stuff.co.nz/nelson-mail/news/8693861/Linking-hands-against-oil-exploration

http://www.stuff.co.nz/dominion-post/news/politics/8690901/Making-a-stand-on-the-sand

http://www.radionz.co.nz/news/national/135468/beach-protests-held-against-deep-sea-drilling