Petrobras, oil exploration and the Rena disaster

Many thanks to Frank McSkasy for this first-rate article.

Petrobras withdraws – sanity prevails

Frankly Speaking,

5 December, 2012

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Sanity has prevailed – albeit perhaps temporarily – as Brazilian oil company, Petrobras, has announced it’s withdrawal from further prospecting in the Raukumara Basin, off the East Coast of New Zealand.


Petrobras was first granted a prospecting permit on 1 June 2010. The signing was met with approval by Dear Leader,
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John Key, Gerry Brownlee, and Marcelo Carlos Lins Vertis, on 1 June 2010

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Gerry Brownlee (then Minister  of Energy) granted Petrobras a five-year exploration permit covering  12, 330 sq kilometres (red lined area in map below),
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Acknowledgement: unattachednz: Petrobras Protest
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Sixteen months later, on 5 October 2011,  the MV Rena smashed into the Astrolabe Reef, also off the East Coast of New Zealand,
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Oil began leaking from the stranded ship, eventually dumping an estimated 350  tonnes of heavy fuel oil into the sea,
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Much of this oil eventually washed onto East Coast beaches, killing an estimated 20,000 local birdlife,
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Volunteers cleaning up the mess were faced with heart-breaking  sights like this,
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Meanwhile, John Key was otherwise engaged in more important government duties,
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Full story
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Whilst it is unclear why Petrobras has backed away from continuing to exercise it’s license to prospect the Raukumara Basin for gas and oil, there are many New Zealanders who will be giving a sigh of relief.
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It  was fairly obvious to most people with a modicum of common sense that New Zealand was ill-prepared for a major oil spill disaster, as happened in the Gulf of Mexico two years ago.


Our own Rena oil-spill created an enormous ecological disaster,
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Meanwhile, our witless National ministers can’t even get their stories straight. Energy Minister, Phil Heatley issued this explanational why Petrobras was leaving,

“I’ve met with them and they’ve said pretty clearly that it’s sort of technical reasons and prospectivity, meaning that they didn’t find enough to keep them sort of on the string so they want to regroup in Brazil. But we believe that there’s opportunities out there in the Raukumara Basin; others might pick up those particular permits and we might still see opportunities.”

See: Petrobras pulls out of NZ oil exploration

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If Petrobras “didn’t find enough to keep them sort of on the string ” – why would any other oil company be interested?! At $1 million a day, no oil company would be interested in taking the prospecting permit for the Raukumara Basin if  there was nothing there.
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Indeed, if Petrobras is  in dire financial straits, we are fortunate that they have pulled out now. One can only imagine a cash-strapped oil company, engaged in risky deep-sea drilling, and cutting safety corners .

The Pike River Mine disaster springs to mind what happens when companies ignore basic safety in the pursuit of profits.
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Indeed, the Royal Commission into the Pike River Mine disaster found  that the company put profits ahead of safety,

The Royal Commission of Inquiry’s report on the Pike River Mine disaster has slammed mine management and the Department of Labour for a lax attitude toward health and safety.

It highlights a culture of “production and profits before safety” which was enforced by managers, and paints a damning picture of ignored safety warnings and sidelined investigations into previous accidents.

See:  Report slams lax safety practices at Pike River mine

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Now consider a deep sea drilling rig  operating under similar circumstances – taking into regard New Zealand’s lax laws under our current de-regulated safety regime (courtesy National,  1992)  – and the potential for a repeat of the  Deepwater Horizon disaster on 20 April  2010 becomes wholly apparent,

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The initial explosion killed 11 men working on the platform; injured 17 others; and released about 4.9 million barrels of oil into the ocean from a 10,680 metre deep well.

The water depth was approximately 1,260 metres.

The crisis lasted for  eightyseven  days.
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By comparison, the Rena stranding was on the sea surface and relatively easy to access,
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It took over five weeks for  salvage crews to  finish pumping 1,454 tons of oil from the Rena. After fourteen months, the wreck of the now-submerged vessel remains, in pieces, on the reef along with an unknown number of sunken containers.


Now compare the depth of  where Deepwater Horizon was operating in the Gulf of Mexico (1,260 metres), with that of the Raukumara Basin,
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It took the Americans 87 days; with all their technological prowess; their Coastguard and navy;  and billions of dollars, to cap an oil spill that was in waters 1.26 kilometres (1,260 metres) deep.

Parts of the Raukumara Basin are over 6 kilometers (six thousand metres) deep.
Despite constant questions to Key and his Ministers, there is no indication that New Zealand is in any way prepared to deal with an oil blow-out that is six kilometres under water. National has consistantly fobbed off questions of concern regarding this country’s ability to address a critical oil spill.


As recently as 24 October, this exchange took place between Dear Leader and Russell Norman, of the Green Party.,

Questions for oral answer

5. Oil and Gas Exploration—Deep-sea Oil-drilling and Environmental Risk

5. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Does he stand by his statement, “We’re not environmental bandits. If we don’t believe drilling can take place in a way that is environmentally sustainable and wouldn’t put at undue risk the environment, we wouldn’t go with it.”; if so, why?

Rt Hon JOHN KEY (Prime Minister) : I stand by my full statement, which included that we want to balance our economic opportunities with our environmental responsibilities; because it is true.

Dr Russel Norman: How is deep-sea drilling not putting the environment at undue risk, when just this month Dayne Maxwell of Maritime New Zealand said about the Government’s oil response equipment: “Most of the response equipment that we have is designed for near-shore sheltered conditions, and really there isn’t available internationally any equipment specifically designed to operate in the rough kind of conditions offshore that we have in New Zealand.”?

Rt Hon JOHN KEY: Well, that is one person’s view. I think it is also worth remembering that if somebody gets a permit to go and undertake these activities in the exclusive economic zone, not only would this Government be filling a gap that was previously left open but also there would no doubt be conditions on that. Finally, as I said yesterday, there have been 50,000 wells drilled in the Gulf of Mexico. Is the member arguing that all of those wells were a high risk and should have been closed up?

Dr Russel Norman: How is deep-sea drilling not putting the environment at undue risk, when the head of the Petroleum Exploration and Production Association said in April 2011: “You know, there is no absolute guarantee that disasters won’t happen, and if you had a major catastrophe, it would be just as bad as you have in North America.”—aka Deepwater Horizon?

Rt Hon JOHN KEY: Firstly, I mean, the member asked me yesterday about the head of Anadarko. One of the things he did say to me in the meeting was that there were a lot of learnings that had come out of that situation, and that they can be applied so that those things do not happen again. Secondly, if the member is reflecting on a comment by an individual that basically says there are no guarantees in life, well, actually, that is true, but, on the same basis, the member will never get on a plane again, never get in a car again, never get on a train again, never do a lot of things he does, because the risk is that something very bad can happen.

Dr Russel Norman: How is deep-sea drilling not putting the environment at undue risk when a leak at 2.5 kilometres under water cannot be fixed by divers, and companies are forced to rely on robots and relief rigs, and this is diametrically different from operating in shallow water, like the case in Taranaki, where the deepest production well is only 125 metres deep?

Rt Hon JOHN KEY: All of those issues in mitigation of any risk would have to be considered as part of an application to drill in the exclusive economic zone.

Dr Russel Norman: How is deep-sea drilling not putting the environment at undue risk, given that the Gulf of Mexico disaster was stopped only when a second rig drilled a relief well, and this Government will not require a relief rig to be on site during deep-sea drilling operations in New Zealand?

Rt Hon JOHN KEY: The member is jumping to conclusions. He does not know what conditions will be set. But, in the end, I mean, this is really the fundamental problem, is it not, with the Green Party. What Green members are arguing is that everything contains some risk, so they do not want to do anything, except that they want to give lots and lots of money away, which is why they come up with the only solution that that person could come up with—print it!

Dr Russel Norman: I raise a point of order, Mr Speaker. That was not a question about the Prime Minister’s former job as a currency speculator. It was about deep-sea oil production. [Interruption]

Mr SPEAKER: Order! Order! I think we will consider it a draw at that point.

Dr Russel Norman: Given that the Prime Minister is putting enormous weight on this new piece of flimsy legislation, the exclusive economic zone Act, how does he think that this particular piece of legislation will plug an oil leak at 2.5 kilometres under water? Does he plan to shove the legislation in the hole? Does he think that might work?

Rt Hon JOHN KEY: I think it is unlikely a couple of bits of paper will work. But let us cut to the chase here. We are a Government that is actually filling a gap that has been missing from our environmental protection. That member has been in the House for how long? And how many members’ bills has he put in about this issue? Oh, that is right—none. What he is focused on is printing money. That is his focus of attention.

Dr Russel Norman: I raise a point of order, Mr Speaker. My question was not about the Prime Minister’s currency speculation—

Mr SPEAKER: Order! On this occasion I invite the member to reflect on the question he asked. It kind of invited the sort of response he got.

Dr Russel Norman: Why has this Government taken a major anti-environmental turn since the 2011 election; is it because of the rising influence of Steven Joyce and others—environmental bandits within the National Party—who now dominate Cabinet and the Prime Minister?

Rt Hon JOHN KEY: Shock, horror! It is Steven Joyce’s fault. No. It is because this is a Government that wants, in an environmentally sensible and considered way, also to grow the economic opportunities for New Zealanders. That member wants to go down to the West Coast and say it is really bad that people are losing their jobs, potentially, at Spring Creek, while at exactly the same time he is stopping them getting a job down the road. I call that hypocrisy.

Source
I have re-printed nearly all the text of that exchange to show the reader that,

• National has no answer to critical safety issues surrounding deep-sea drilling,
  

• National is willing to engage in risky commercial behaviour for short term gain,
  

• John Key has a cavalier, foolish attitude when it comes to serious issues like this.
  

Should foreign oil companies engage in deep sea oil drilling, and should a disaster similar to Deepwater Horizon occur, this is what we can expect as a consequence;
1. The economic fallout of any off-shore disaster involving a massive, uncontrollable oil-spill, will impact on our “clean and green” image and will cause incalculable harm to our tourist industry.
2. The harm to our fishing industry in an affected zone will result in lost exports and jobs.
3. As with the owners of the Rena, and BP’s reluctance to pay full costs for the Gulf of Mexico spill, we can expect the owners of a failed deep-sea drilling rig to evade paying for the full clean-up costs and compensation to local businesses that suffer as a consequence.
4. National will hold a Commission of Inquiry into any deep-sea oil spill.
5. Such a Commission will find the oil company  at fault – but not National, who allowed deep-sea drilling to take place without adequate safety precautions in place, in the first place.
6. A token gesture of a ministerial “resignation” will take place. Then followed by John Key wiping his hands and insisting  that,

“The Royal Commission found the Department of [insert name]  itself did not have the focus, capacity or strategies to ensure [insert company]  was meeting its legal responsibilities under health and safety laws, blah, blah, blah…”

See:  Labour Minister Kate Wilkinson resigns in Pike River report fallout
National governments – they permit things to happen.


But never take responsibility.


I doubt John Key and Gerry Brownlee will be helping to clean up the next oil-fouled beach, somewhere on our coastline. That responsibility will go to others, who had no making in the decision to allow deep-sea drilling in our waters.
Never underestimate National politicians (and their supporters) to do dumb things.
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Sources
unattachednz: Petrobras Protest (31 March 2011)
OFW Magazine: Salvage crew returns to NZ ship (Rena, 13 October 2011)
NZ Herald: Rena: Oil clean-up chemical worries Greenpeace (25 Nov 2011)
Business Insider: BP Only Wants To Pay $15 Billion To US Authorities Over The Gulf Oil Spill (9 June 2012)
Business Insider: 19 Months Later, Here’s What We’ve Learned From The Deepwater Horizon Oil Spill (3 Dec 2012)
NZ Herald: Brazilian oil giant Petrobras dumps NZ exploration permits (4 Dec 2012)
Radio NZ: Petrobras pulls out of NZ oil exploration  (4 Dec 2012)

Previous related blogposts

On the smell of an oily rag (11 Oct 2011)

Additional reading

It’s Déjà vu All Over Again
Gary Taylor: Sloppy oil mining rules too risky
World’s Largest Oil Rig Sinks
Rena timeline

Other blogs
TangataWhenua: Petrobras pulls out of Raukumara Basin
The Jackal:  Petrobras sent packing