The Press on oil exploration

January 9th, 2014 at 11:00 am by David Farrar

editorial:

It is a long way from the exploration of a promising-looking gasfield and the development of a productive operation, and the outcome is far from certain. But the news that a well-resourced international consortium has committed $200 million to explore the Great South Basin, off the southeast coast of the South Island, is very welcome. Oil and gas production from wells in the Taranaki basin are already our fourth biggest export and generate hundreds of millions in revenue for the Government. The industry has made Taranaki one of the most prosperous regions in the country and created more than 3000 jobs. Finding another such productive area has long been sought. The areas with the greatest potential at present are in the Great South Basin and off East Cape. A successful result in either would be an enormous boost to our prosperity.

Yet one a Labour/Green Government would be against.

The search did not begin again in earnest until three years ago, when Dutch energy giant Shell along with the Austrian company OMV began to explore. Those two companies, along with the Japanese industrial conglomerate Mitsui, believe the seismic results are good enough to warrant the $200m commitment. Good enough means they believe there is 30 per cent chance of a commercial discovery.

30% is pretty high.

Green groups have predictably objected. Last year a meeting in Dunedin at which Shell was to talk about its plans with business owners was abandoned because of interruptions from anti-oil drilling protesters. Their objections are deeply misguided.

I would have thought Green groups would welcome NZ producing more of its own energy, rather than importing it from other countries.

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28 Responses to “The Press on oil exploration”

  1. Tautaioleua (324 comments) says:

    It’s bio fuel all over again. It was suppose to be another ‘GLORIOUS’ alternative energy source but it ended up threatening global food security; pushing prices further afield.

    Now “opposition to all forms of drilling” is the next big thing – only it’s threatening global job security; pushing welfare further afield.

    :-)

    History repeating itself so soon? the Greens cater for the middle-class liberals. They claim to represent the average Joe but they wouldn’t know him from a bar of soap.

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  2. Manolo (14,188 comments) says:

    Do imbeciles like Norman and Hughes go to work on horse and cart?

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  3. skyblue (215 comments) says:

    After November it will be by carridge.

    Shows in simple terms what economic idiots Lab/Gre are.

    Vote Cuntliffe get Norman.

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  4. Pete George (23,836 comments) says:

    Green councilors in Dunedin don’t want us to import nor drill:

    However, other councillors maintained their opposition to the industry, including Cr Aaron Hawkins, who said the council had a ”moral obligation” to protect the interests of future generations.

    ”I don’t think it’s fair to clamour over a few jobs now and leave our grandchildren to pick up the tab environmentally and economically.

    ”Frankly, I think that’s a very selfish way of looking at economic development.”

    Cr Jinty MacTavish agreed, saying the city would not spend money to try to attract the ”unethical” tobacco industry, and should avoid the oil and gas industry for the same reasons.

    ”It’s an unethical business and I wouldn’t like to see Dunedin setting out to attract it.”

    http://www.odt.co.nz/news/dunedin/287660/oil-gas-base-host-race

    So they are against it ideologically.

    Three other councillors, Crs Neville Peat, David Benson-Pope and Richard Thomson, “expressed either concern or outright opposition”.

    Four – Doug Hall, Hilary Calvert, Mike Lord and Lee Vandervis – “welcomed Shell’s plans”.

    John Bezett and Kate Wilson could not be contacted

    Mayor Dave Cull:

    Mr Cull also said the idea would be worthy of consideration if a case for it could be made, such as improving emergency response times.

    Royalties from oil and gas revenue could help cover the debt-servicing costs associated with such an investment, but only if the Government agreed to share them with councils, he said.

    The council would ”certainly consider” investment in infrastructure or other incentives to support the industry in Dunedin, but the oil companies’ needs would only become clear in time, he said.

    That’s a fudgier response than yesterday, I wonder if Jinty has had words with him. He keeps talking about local royalties but that’s very unlikely. He should know this, maybe he is using them to leave him an excuse to oppose.

    Deputy mayor and others:

    Some councillors were quick to celebrate, Cr Andrew Noone saying it was ”fantastic news”.

    ”It’s now a two-horse race, so we have got a 50% chance of securing a supply base,” he said.

    Deputy mayor Chris Staynes agreed, saying news of Shell’s test drill was ”great”, while Cr Andrew Whiley described Shell’s announcement as ”simply awesome”.

    All three men hoped the industry would eventually provide a much-needed boost for the city’s ailing economy, but Cr Staynes also suggested Dunedin could do more to secure hosting rights for any logistics base that might follow.

    That’s five against, seven for, two not determined and a conflicted mayor who is getting pressure from the business community as well as from his Green lobbiests.

    Dunedin doesn’t get to decide if drilling happens but they do have a chance to contest the support business.

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  5. Jack5 (5,289 comments) says:

    Pete George in an interesting link to his blog yesterday reported on Shell telling Dunedinites that it thought there was a 30 per cent chance of finding gas, not a 30 per cent chance of finding a commercial gas resource.

    Perhaps Pete could elaborate. There are two types of commercial resource, as the Hooerald suggests today: one sufficient to build a liquefaction plant for exports and the other sufficient only for a local onshore market.

    For a liquefaction plant, the Hooerald points out, the find would need to be bigger than Maui. For a smaller plant, the problem would be small if it would be straight forward to build an electricity generation plant. With the Greens and Soft Green politicians scared of this, that leaves virtually only a local domestic market, which would need the building of expensive reticulation lines to each house.

    It’s excellent news that Shell and it’s partners will explore the Great South Basin, and a big gas find would be great for the south and for the whole country. However, hyping the exploration as though NZ was on the bring of a bonanza is wrong IMHO. First, because people will make investment choices of many types on the basis of the bullshit, and second and worse, because the bulldust cloud will provide the cover for stupid, incompetent, and even lying local politicians to hoodwink their ratepayers.

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  6. peterwn (3,341 comments) says:

    Reminds of a Greenie in Auckland who has an organic plot somewhere in Northland which he goes to in a 4×4, does not mind it using petrol derived from foreign oil, would be opposed to ‘Holiday Highway’ (there should be more public transport for ‘other people’ to use so he has a quicker journey on the existing road) and submits to the councils that Sky dishes should be banned from houses along SH1 as seeing them annoys him.

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  7. Kleva Kiwi (292 comments) says:

    If Dunedin dosnt want it Invercargill will take it.
    They are theoretically in a better position anyway since they have New Zealands largest pre approved zoning of undeveloped industrial land not to mention relatively its flat land, something of which Dunedin has very little
    The local council is also heavily in favour of it (and not full of green taliban like DCC)

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  8. Harriet (5,201 comments) says:

    “……Cr Jinty MacTavish agreed, saying the city would not spend money to try to attract the ”unethical” tobacco industry, and should avoid the oil and gas industry for the same reasons……….”It’s an unethical business and I wouldn’t like to see Dunedin setting out to attract it.”…..’

    Hope you don’t mind losing your gun licence Pete…….they’re about to go too….and pubs….tab’s….pokies…..and how’s ya fat intake Pete?

    you made a good observation in a previous post Pete……..transient students and public servants are voting business out of Dunedin. – I agreed with that.

    So what do you prefer now Pete….Christian Conservatives or the Greens? – It’s all religion Pete. :cool:

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  9. Jack5 (5,289 comments) says:

    Re the political opposition to building a thermal electricity plant to build gas (my 11.21 post).

    Centrist politicians as well as the Greens and Labour also seem opposed to building thermal electricity plants. That makes it look almost like a super-Maui find in the Great South Basin or nothing.

    Would the chances of that be one in 20?

    Our problems aren’t just finding gas, but in using it, and these problems lie in our own stupidity.

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  10. mandk (1,034 comments) says:

    Tautaioleua: “the Greens cater for the middle-class liberals”

    Absolutely. Most greenies I come across are spoiled white kids who love fluffy bunnies but hate people.

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  11. slernz (33 comments) says:

    I am in favour of this proposal but i am confused by the Green/Labour and nimby outrage. As I understand it Shell and the consortium are drilling for gas, not oil. If commercial quantities of gas are found what will be the problem? I am not a geologist and but how can you get a gas spill?

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  12. mandk (1,034 comments) says:

    @ Pete George,
    The oil and gas industry will bypass Dunedin in the same way that the industry bypassed Dundee in Scotland (even though it had a better harbour than Aberdeen). 40 years on, Aberdeen’s economy is still humming, while Dundee’s is still a backwater.

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  13. RF (1,492 comments) says:

    Tautaioleua.. 11.06am. “They claim to represent the average Joe but wouldn’t know him from a bar of soap”

    As Greens do not use soap they could be excused for not knowing the average Joe. A smelly bunch of pot smokers !!!

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  14. Ross Miller (1,618 comments) says:

    Labour is again being led by the nose in kowtowing to the Greens on this. This all about Cunliffe trying to claw back Labour support lost to the Greens at the expense of jobs and prosperity for New Zealand. Labour doesn’t want any more Taranaki success stories. It would rather prefer the West Coast version where the preservation of snails is more important than jobs.

    Luddite thinking rules the roost on the left side of politics. People and prosperity come a very poor fifth.

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  15. Monty (899 comments) says:

    The greens put ideology before anything else. Never in NZ have they been subject to the scrutiny of government, rather they have been able to say anything and do anything without consequence. The Luddites are of course apart from their extreme left wing social agenda pretenders for ” caring for the environment”. Therefore any and all activities that could contribute to the myth of global warming must be opposed. The Luddites can only prevent mining through public support. What better way to do this than scare the be-Jesus out of their useful idiots who are easily manipulated. The green Taliban are experts at this. Their language is only emotive and based on fiction lies, manipulation and exaggeration of the reality. Such statement a as “high risk” , Polluted pristine beaches, wreck our clean green image, no economic benefit from mining, greedy multi-national corporates and so on are examples of language used.

    Their biggest fear is that there will be a major discovery. And such a discovery is found without incident. At that point in time the genie will be out of the bottle . And they know it. So far better to disrupt before anything happens. Is and when a discovery is made, NZers will want the economic benefits of a major oil discovery and nothing will stop the momentum at that point.

    What is funny is that the Labour Party desperate to stop the flow of votes to the greens are trying desperately to out greens the greens. So they too become opposed to exploration. They hope NZ won’t care about what they don’t have.

    Both parties are complete wankers who put their own agenda for power before that of NZ as a country.

    I look forward to the day a massive new oil /gas discovery is made.

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  16. Fentex (1,138 comments) says:

    I think exploration, and if discovered, extraction of oil is inevitable anywhere it can be commercial, there’s too much money involved for it never to happen.

    But what is commercial is a shifting target as easily accessible locations run dry and includes factors of how much caution is required. New Zealand has a responsibility to itself to ensure any prospecting and possible extraction is done with due care.

    The recent blow out in the Gulf Of Mexico is evidence of what can happen and how lax over-sight and self regulation can fail.

    People arguing that the Greens are being stupidly reactionary and childishly fearful have, I think, a responsibility to support adequate precautions so that arguments that responsible industry is a worthy investment do not fail on the absence of responsible behaviour.

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  17. Jim (358 comments) says:

    “I would have thought Green groups would welcome NZ producing more of its own energy, rather than importing it from other countries.”

    I wouldn’t expect any set of consistent views from the Greens:

    * They want us to use *less* energy (fuel, electricity)

    * They want cheap(er) electricity.

    * They want to keep cheap used car imports on the road for the masses. Everyone has the right to a car.

    * Stop slaughtering unicorns.

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  18. Grizz (613 comments) says:

    My understanding is that the physics of removing gas is different from oil. If there was a platform failure, the chances are that the gas will stay in the ground rather than spill out to see. Furthermore gas evaporates.

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  19. Dave_1924 (121 comments) says:

    What a great fillip a major discovery from this exploration would be. Jobs for the South/Regional NZ. Taranaki is a great example of what a new industry like this would mean for Otago/Southland depending on where a support and processing base would be established.

    The Greens need to actually think outside of their Aro Valley and Coromandel middle class, wine sipping, sad we are successful and earn money base – a discovery would be great for all sectors of society but particular for those would do hare core grunt work, as a platform would need deck hands, drill operators, plus engineers and mechanics…

    DCC needs to grow a pair and think a bit…

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  20. The only red for me is that of Manchester United (62 comments) says:

    As Kelva Kiwi correctly stated, Invercargill is in a better position to be used as a base. The local airport is only three minutes from the centre of town. Better for loading freight, and for helicopters landing. Dunedin’s airport is 37 kms away. Bluff is a better port. Again closer.

    As much as people like to deride Southlander’s being conservative, they can be pretty forward thinking and be well aware of how important this drilling goes ahead. The city council will do everything in their power to help create jobs and growth.

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  21. mandk (1,034 comments) says:

    @ Man Utd
    Agreed. Invercargill will be a much better base.
    Invercargill can have the offshore industry. Dunedin can have the vomiting students.

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  22. OneTrack (3,384 comments) says:

    Jim – “They want to keep cheap used car imports on the road for the masses. Everyone has the right to a car.”

    I doubt that is what they believe. Nobody should use a car (except Russel and Gareth of course) and everybody else should use public transport.

    Vote Labour, get watermelon.

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  23. kowtow (8,945 comments) says:

    Down here in Dunedin ,the left including the Mayor,try to grab headlines deploring the loss of jobs…..Hillside,ag research etc

    Along comes the best opportunity in generations and whose embracing it?

    Not Labour.(Note Benson Popes position in PG’s post above)

    I hope their abandoned cloth caps remember that at ballot time.

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  24. kiwi in america (2,314 comments) says:

    Labour is yeah nah on oil/gas exploration trotting out someone pro like Shane Jones when speaking in Taranaki leaving others to make anti drilling noises to, as so many have previously remarked, out green the Greens. Menawhile Cunliffe hedges in the middle trying to have his cake and eat it too hoping no one (especially the largely pro Labour/Green MSM) will notice.

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  25. Lance (2,719 comments) says:

    Tim Shadbolt has been a Labour supporter for years and yet is hugely in favour of oil/gas drilling.

    So when did Labour abandon the working class people of NZ?

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  26. Pete George (23,836 comments) says:

    More on MacTavish on oil and gas being unethical, she suggests similar to tobacco and munitions. Oil and gas unethical?

    And she wants council guidelines that rule out using staff time or resources on anything deemed to be unethical.

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  27. insider (845 comments) says:

    What’s the bets she finds no ethical issues claiming a mileage allowance off the council…

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  28. Peter (1,695 comments) says:

    Tim Shadbolt appears to understand working class values. It’s clear that Labour and the Greens wouldn’t know them if they tripped over some on the way to the Koru Club lounge.

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