The truth about drilling

May 9th, 2012 at 1:00 pm by David Farrar

A welcome reality check from the Petroleum Exploration and Production Association CEO at Stuff:

It seems as if opposition to the industry wants Kiwis to believe they can either have a country with a clean-green image or one that supports hydrocarbon exploration. But we don’t need to choose. We can have both.

We can have both, and in fact do have both.

To say oil and gas exploration is 100 per cent risk-free would be untrue. Like many other industries we cannot responsibly provide foolproof guarantees.

What we can do is work hard to ensure we have best-practice models, that we eliminate risks at every turn and implement the best technologies to ensure wells have little environmental impact and are as safe as possible from the risk of incident. We are more concerned about constructing a steel reinforced fence at the top of the cliff rather than providing an ambulance at the bottom.

New Zealanders travel on planes every day. The pilots and mechanics triple check the engines; ground staff prepare each plane for flight over and over again. But there are no 100 per cent guarantees the flight will proceed without incident. We see some horrific stories about plane crashes. But because the odds of a plane crash are so small, we continue to board planes every day to get from A to B.

When lobby groups and politicians call for something not to occur unless it is guaranteed to be absolutely safe, then they are really calling for it to be banned because they don’t like it. There is no industry or activity that can ever be totally safe.

For decades the industry in New Zealand has run largely unnoticed. There have been no major incidents and the last death was in 1996. Few industries can claim such a record. Block offers have passed us all by without a hikoi in sight, and hydraulic fracturing has been carried out for 20 years without a single incident.

20 years, yet some are calling for it to be banned.

The oil and gas industry is no Johnny-come-lately. It has been a part of the economy for more than 100 years, is the country’s fourth largest exporter and provides 7000 well-paid jobs nationwide.

I wonder how many people would be without a job in a New Zealand with no mining and no drilling? A lot.

In Taranaki we have become part of the community. And the benefits of successful finds can be seen throughout the region.

Don’t just take my word for it, go and visit Taranaki. Go down to the local pub or club, find some of the industry workers and chat to them about the oil and gas industry; about the jobs they and many of their family have; about the swimming pool sponsored by Todd Energy; or this year’s children’s book festival sponsored by Origin.

It is very easy for people in Auckland and Wellington to demand an end to certain industries, because they are not large employers in cities. But go out to Taranaki or the West Coast, and you’ll see how important they are to regional economies.

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26 Responses to “The truth about drilling”

  1. Pete George (21,830 comments) says:

    And the truth about the opposition…

    On local Channel 9 last night “an Oil Free Otago Representative says there is still strong public resistance to any type of drilling, even if it’s for gas”.

    I queried the level of “strong public resistance” but the channel replied:
    we can’t alter what they say, or tell them to “quantify” their experience

    This “Oil Free Otago Representative” was not long ago in the ODT as “a member of the Frack Free Aotearoa New Zealand and Say No to Fracking and Drilling in the South Island networks”, calling the mayor to “take notice” of increasing local and national concern about the environment impact of fracking.”

    I researched this and couldn’t find much local or national concern – see What the frack.

    I think there’s a few people doing a lot of fracking opposing, and are making very dubious claims about their level of support.

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  2. David Garrett (5,152 comments) says:

    The analogy about travelling on aircraft is a good one…no matter how thorough the safety checks are, there will always be crashes. And we will all continue to fly because we know the chances of a plane we are on crashing are infinitesimal.

    It is worth mentioning that the last death in the oil exploration industry here was a guy who died when a piece of heavy equipment unexpectedly came apart, with part of that equipment hitting the guy on the head. Very unfortunate, but the same kind of industrial accident causing serious injury or death which sadly happens about once a week in New Zealand. The accident was in no way specific to the oil industry, although the piece of equipment was.

    The one before that was a guy who took his safety harness off to remove an item of clothing, and then when the rig began running again, forgot to put his harness back on before putting himself in a position where a fall is inevitable if you are not wearing a work-belt/safety harness. Again, although very sad, not an accident unique to the oil drilling industry.

    The last time there was a blowout in NZ was in 1965 when a gas “kick” was not properly controlled. As far as I know, the only substance “blown out” was water based drilling fluid which contains nothing very harmful.

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  3. David Garrett (5,152 comments) says:

    Come on Greenies!! There must be some of you just dying to comment on this thread and have your complete ignorance about how the NEW ZEALAND oil industry runs exposed….

    So no breathless gems from google about dumping oil based mud in the sea off Russia, or what might or might not have been used when little 1000 foot stripper wells in Texas were drilled 80 years ago, or blowouts in Venezuela or China….

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  4. alwyn (359 comments) says:

    The people who argue that an activity should not be allowed to occur unless it is 100% safe are mostly in the Green party and the most vocal ones are their MPs.
    Can we start insisting, and if necessary enfoce it in law, that they practice what they preach?
    Some examples might be
    Unless they can prove that there is no possibility that when driving they will be in an accident they are not allowed to drive a car.
    Unless they can prove it is impossible to have an accident while riding a bicycle they are forbidden to ride bikes.
    Unless they can prove that, if walking in the street, there is no possibility that they will bump into, and hurt, another pedestrian they are not allowed onto the street.
    Unless they can prove that there is no possibility of a short-circuit or exposure to a live wire by anyone in their house they are not allowed electricity.
    Unless they can prove that their blathering cannot, under any circumstances, cause an increase in the blood pressure of any person and therefore increase the likelihood of a stroke they are forbidden to speak.
    Peace, perfect peace.

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  5. David Garrett (5,152 comments) says:

    Very good Alwyn…unlike them not to have some uninformed idiot weighing in though…mind you it is 2pm on a school day, and we are not all self employed…

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  6. gazzmaniac (2,270 comments) says:

    They can’t respond to well reasoned fact based argument because their argument is emotive, not based on fact. In fact, every time someone using an emotive argument is questioned about their sources it usually shuts them up – this goes for greenies as well as christians who are preaching creation “science”.

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  7. Redbaiter (6,482 comments) says:

    Hey Dave, real rig workers don’t bawl in public when the commies pick on them.

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  8. Socrates (86 comments) says:

    While I agree with the sentiment and am supportive of more oil exploration, I don’t actually agree with the aircraft analogy.

    The reason being the consequences of a mishap; If an aircraft crashes it terrible for a large number of families. If a deep-sea oilrig fails and springs a leak – well look at the Gulf of Mexico where hundreds of thousands of people had their livelihoods ruined. So the consequences of the risk factor are a magnitude higher for a larger group of people than just those immediately involved in the event.

    However all evidence points to the oil industries acting responsibly in New Zealand. As long as that continues I see no problem with further drilling. We just need to be aware that if it goes wrong it can go catastrophically wrong and we should not kid ourselves about that.

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  9. Redbaiter (6,482 comments) says:

    Letter to the NZ Listener-

    As a petroleum engineer, I have done a number of frac jobs . One of the main reasons for carrying out a hydraulic fracturing job (fraccing) is to improve the oilfield economics by having to drill fewer wells to get the same hydrocarbon recovery.

    Drilling fewer wells results in the use of less land, with less casing, mud, cement, and landowner disturbance and fewer pipelines than would otherwise be the case. It also costs less. When a well is drilled, care is taken to avoid reducing the porosity of the rock by drilling with a non-damaging fluid, called drilling mud, which is designed in such a way that seepage into the rock is minimised. In the same way, frac fluid is designed to be non-damaging but also viscous enough to carry the sand into the fracture that is created by the high pressure fluid injected ahead of it.

    The main point that is missed by many detractors of fraccing is that within a few hours of the frac fluid being injected, as much of it as possible is flushed from the well to the surface to avoid clogging any of the pores in the rock, leaving the sand behind to create permeable channels. Within a few days of a well being successfully fracced, 99% of all frac fluid is produced to surface by the hydrocarbons flowing from the reservoir.

    The recovered fluid is separated and the water-based portion is land-farmed at approved worm-farm sites. Before any frac job, a mini frac is performed during which about 5% of the fluids and sand are injected into the formation and a number of parameters are monitored to ensure the fluid is being injected into the correct place at the expected rates and pressures.

    The frac fluid itself, for example in a shallow frac (at about 1600m), consists of 72,000 litres of fluid, of which 1500 litres are a mix of surfactant (soap), guar gum as a viscosifier (used in ice cream and bread), fresh water and an agent to link and stabilise the three components; the rest is fresh water.
    These are real figures. There is no secret about these chemicals. Such a frac would only extend 20m laterally from the well-bore in a 20m-thick reservoir and would be constrained vertically by the shale layers above and below it that seal in the hydrocarbons.

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  10. UpandComer (496 comments) says:

    What pisses me off is the total opposition even to the ‘idea’ of further mineral exploitation. These people need to get their heads examined. We make less then a fraction of a percentage of the worlds pollution, but we must completely stone wall ourselves in resource exploitation because….. because why exactly? Fine if you want to put strict regulations on risky deep sea drilling for instance, but complete opposition to every kind of productive resource enterprise? the blanket and total opposition is what reeeally pisses me off. The country needs money, and this would give us money. And we won’t lose tourists unless there is a catastrophe, so why not allow more capitalisation by degrees? It’s the total blind deaf dumb and faux outraged that gets to me.

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  11. insider (990 comments) says:

    @ socrates

    Looking at the Gulf of Mexico for guidance on NZ oil development risks is like looking at the Titanic when deciding whether to catch the Cook Strait Ferry.

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  12. Steve (North Shore) (4,330 comments) says:

    I wonder how many people would be without a job in a New Zealand with no mining and no drilling? A lot.

    Well Russel, Badford et all just want them all on benifits which the Govt will pay for. They have no fucking idea who the Taxpayer is

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  13. mister nui (885 comments) says:

    Good post Red. And it is very easy to tell you know what you’re talking about, as you can spell fraccing correctly. The number of supposed experts that spell it “fracking” immediately gives it away to me that they have no fracking idea of what they’re talking about.

    I can’t wait until NZ becomes a force in oil prodcution, then I might be able to spend some time in NZ, instead of tearing all about the world earning huge amounts of money to pay huge amounts of tax; to fund toad and his luddite friends socialist utopia.

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  14. Johnboy (13,439 comments) says:

    Never met a Taranaki Lady yet that considered a drilling from a Jaffa was anywhere near as satisfactory than a deep seismic survey by a local roughneck! :)

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  15. Johnboy (13,439 comments) says:

    For a small consideration mister nui I am happy to sell you virtual shares in my plan to drill for lanolin in Wainui.

    It’s far more slippery than petroleum, specially as you get older! :)

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  16. mister nui (885 comments) says:

    And a timely article in today’s Petroleum News;

    It’s not the fraccing’s fault

    Wednesday, 9 May 2012

    A GROWING body of professional opinion in the US is pointing to poorly installed cement casings as a cause of water contamination, not fraccing itself. By John McIlwraith

    Shale gas operations

    Anti-fraccing activists have claimed hydraulic fracturing – a process that uses water, sand and chemicals to break up shale and release gas – can pollute drinking water.

    A non-profit group in the US said cracks caused by fraccing could extend from the shale and allow gas and fraccing fluids to migrate.

    However, studies by gas extraction companies and independent experts suggested poor well construction was the key risk.

    In a recent report on shale production, the US Energy Department recommended companies run tests on every well to identify inadequate cementing and called for more inspections to ensure operators promptly repaired faults.

    After serious water contamination in a Pennsylvania field occurred before any fraccing took place, operator Chesapeake Energy conceded poor well construction could have played a role.

    It found evidence suggesting cement in one well developed small channels that allowed gas to escape.

    The company introduced new construction standards using three interlocking pipes instead of two in its wells –¬ an extra barrier to any gas movement.

    It also strengthened the cement casing in much of the well, especially above the curve where the vertical well turned to run horizontally.

    Other steps included a longer period allowing the cement linings to set and more stringent testing.

    Cementing is a crucial part of sinking wells.

    It is squeezed around the steel pipes sunk into the drilled holes to stop any movement of gas to the surrounding rock.

    Any faults in this cement shield could allow gas to seep into shallow aquifers.

    The energy industry has argued the fraccing technique has been employed for decades and in itself is not the cause of pollution.

    Australian companies drilling shale gas wells say they already have stringent installation and safety procedures.

    Origin, for example, has testing procedures in all phases on drilling and installation of wells.

    All the materials – and especially the cement – have to meet stringent international standards.

    During a well’s life, regular tests are carried out to ensure there are no leaks.

    Meanwhile, a small Australian company is developing a revolutionary method of extracting gas from shale, using high-pressure water jets.

    CFT Energy initially worked on the technique to extract dangerous methane gas from Chinese coal mines.

    Brisbane geologist Robert Pertich developed the technique and said high-pressure water jets were well-known in the oil and gas industry and could be easily applied to coal seam gas.

    CFT hopes to license the technology to gas explorers for a set fee, or for a percentage of the gas recovered.

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  17. Pete George (21,830 comments) says:

    The spelling varies, it can be fraccing, fracking, fracing or fracting – dictionary.com only lists fracking, which seems to becoming the most common variant. It’s derived from fracturing.

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  18. RRM (8,997 comments) says:

    The Truth About Drilling – brought to you by the chief of the Association of Drillers.

    I’d laugh if I wasn’t too busy weeping… It’s astonishing how flexible the acceptable standard is, depending on whether you agree with the message or not.

    (Disclosure: RRM is in favour of having the oil / gas industry in New Zealand. Well in favour…)

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  19. unitedtribes (24 comments) says:

    I guess the Greens would like to shut all the coal mines down and give everyone in the world a bike to ride.

    Well I hope they give out the bikes first because they will need 55 days of the entire worlds production of coal to make enough steal to manufacture the bikes.

    My analysis (could be wrong stats from google)

    Weight of bike about 20kg
    It takes 770gm of coking coal to make a kg of steal
    It takes 15.4 kg coal to make a bike
    World population 7 billion
    It takes 108 billion kgs coal to make a bike for everyone
    i.e. 108 million tonne
    The world uses 717 million tonne of coal a year to make steal.
    To make the Greenies bike you need 15% of this so 55 days world production.

    I know that there are a few holes in the argument but it dose show that even the greenies would need to mine it.

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  20. kiwipete (1 comment) says:

    So here’s the Green Party policy on fracking:

    The Green Party today welcomed the decision by the Parliamentary Commissioner for the Environment to undertake an investigation into fracking, and urged the Government to put in place a fracking moratorium until the results are released.

    “We welcome the Parliamentary Commissioner for the Environment’s independent investigation into the risks of fracking in New Zealand, but until she can assure the public that it is safe, Government should implement a nationwide fracking moratorium,” said Green Party Energy spokesperson Gareth Hughes.

    Given numerous overseas studies which have linked fracking to drinking water contamination, human health problems and earthquakes, New Zealanders are rightly worried about the safety of fracking in New Zealand.
    Fracking is the practice of pumping water, sand and chemicals at high pressure deep into the earth in order to extract oil and gas.

    “Given numerous overseas studies which have linked fracking to drinking water contamination, human health problems and earthquakes, New Zealanders are rightly worried about the safety of fracking in New Zealand,” said Mr Hughes.

    “Evidence from Taranaki backs up New Zealanders’ concern.

    “A Shell Todd Oil report from 2011 found that discharge of fracking fluids in Taranaki resulted in groundwater contamination that was unsuitable for drinking or stock use, or for irrigation.

    “New Zealanders are worried about new proposals for fracking in New Zealand, and as a result, pressure on Government for a nationwide moratorium has been growing.”

    Four New Zealand councils have recently voted to call on Government to implement a nationwide moratorium.

    “Growing concern over fracking in New Zealand mirrors growing international concern. Of the ten countries that have fracked, seven have adopted full country, state or region moratoriums in place and only New Zealand, China and Ireland have not,” said Mr Hughes.

    “New Zealand doesn’t need to resort to fracking when we have a wealth of smart green energy opportunities that will deliver real prosperity.

    “For example, instead of selling off the best of our last remaining SOEs we can keep them and refocus their largely domestic operations towards booming renewable energy export markets abroad.”

    To paraphrase – ‘Let’s find out if fracking will pollute the water table and set off earthquakes before we do it.’ Quite sensible really.

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  21. Paulus (2,299 comments) says:

    Greatest problem with the so called introduction of Fraccing is that Greenpeace throw mud (at anything) and our stupid and totally incompetant so called media lap it up.

    They are not interested in facts, only copy (sales).

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  22. RRM (8,997 comments) says:

    That’s an uncharacteristically hate-free, sensible, rational post from you, Redbaiter!

    Sure it’s not copy’n’paste?

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  23. Redbaiter (6,482 comments) says:

    Of course it is you hapless moron, it’s a letter that I observed in the Listener a few weeks ago that I thought made a very good case against the Communist Greens, so I kept it for reference.

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  24. RRM (8,997 comments) says:

    Thanks for clarifying that, ‘Baiter old chap.

    It was quite incongruous to imagine someone as unhinged as yourself as being a high-ranking professional in that industry, responsible for multi multi $millions of client property and countless workers’ lives.

    Which is why I had to ask ;-)

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  25. Redbaiter (6,482 comments) says:

    Well, that’s why you’re just a lowly office boy in your architectural office still enthusiastically kissing the boss’s arse at every opportunity, because you don’t have the logical ability to discern that my answer in no way excludes that possibility.

    IOW, you wouldn’t know logic if it was chewing your arse off.

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  26. Spam (586 comments) says:

    @KiwiPete:

    “A Shell Todd Oil report from 2011 found that discharge of fracking fluids in Taranaki resulted in groundwater contamination that was unsuitable for drinking or stock use, or for irrigation.

    No, it didn’t. The report is HERE.

    Page 42 states that:
    Most wellsites in the Kapuni field contain a blow-down pit. In some cases they were constructed from the original wellsite flare pit, although there are also purpose-built pits at some sites. As flare pits, they were intended to receive initial well flows (gas and condensate along with produced water and drilling muds), so that combustible material along with residues that could not be processed through the Production Station could be safely disposed of by flaring. The pits were subsequently used from time to time for the temporary containment of fluids produced as a result of various
    well maintenance or workover activities.

    So the contamination was caused by using the pits for flaring and for blowdown of wells, and surprise surprise, the Greens are being deliberately misleading. Again.

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