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.
OPINION: Both are in deep seas which would make exploiting them tricky. Deep-sea drilling is not only technically difficult, it is expensive and is only feasible when prices for the product are high. It is for those reasons that the hunt for a find large enough to justify the financial risk has been on and off for 40 years.
In the Great South Basin, the first time was in the 1970s and 80s. Hunt Petroleum went so far as to drill eight wells for testing, but later pulled out. Other consortiums acquired exploration licences in 1990s, but did not drill as the oil price waned. 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.
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.
One of the objectors' grounds is the risk of pollution. The risk in general is extremely small but in this case it is practically non-existent. The consortium is almost certain that if the field is commercially workable, the product will be not be oil but gas. In addition, the Government, with the support of the Maori, Act, United Future and Green parties, last year passed a law extending New Zealand's environmental protection laws to cover all the waters of our exclusive economic zone. That was done deliberately to ensure any offshore drilling would be carried out to the highest possible safety standards.
Hard-core opponents, of course, object to any petroleum exploration because of its contribution to global warming. While it is true that cleaner forms of energy must be found, the blunt fact is that New Zealand, like the rest of the world, at present runs on oil products. They are necessary to maintain our first-world standard of living. While we are unwilling to give that up, as most people are, to object to drilling here implies only that it must be done somewhere else.
- The Press