Resources Minister Judith Collins has slammed the regional council for its proposed moratorium on oil and gas exploration in Hawke’s Bay.
In a letter dated May 24 addressed to the council’s chair Rex Graham and his councillors, Collins said her concern is that a prohibited classification is not “an appropriate or justifiable way” to manage petroleum compared to other classification options.
The letter is in reaction to a potential plan change to prohibit the mining or oil or gas anywhere in the region – including the Hawke Bay.
The advice prepared by HBRC staff on the ban is looking at three areas - the practicalities, legal ability and issues associated with prohibition in surface water bodies and aquifers, the recharge zones for aquifers; and, the coastal marine area out to 12 nautical miles.
At the same time as staff were looking at this suggested ban, Collins made her block offer announcement, in which she offered up more than 5,500km² of Hawke Bay for tender – including 9NM that comes under the jurisdiction of the regional council.
In her recent letter to the council the Minister said oil and gas exploration is a well-understood activity that she considered could be managed through the resource consent process.
“In particular, I draw attention to how prohibiting petroleum activity appears inconsistent with the New Zealand Coastal Policy Statement, which must be given effect to in the coastal environment,” she said.
“Policy 6 of the Coastal Policy Statement is to ‘recognise that the provision of infrastructure...and the extraction of minerals are activities important to the social, economic and cultural well-being of people and communities’.
“Petroleum operations significantly contribute to the economic well-being of communities and this should be accounted for in plans, particularly in the coastal environment as required by Policy 6.”
Graham said he was going to write back to the Minister explaining that the people of the region don’t want this.
“I thank her for her letter,” he said.
“But the public of Hawke’s Bay don’t want any fracking or drilling in their aquifer or in the water bodies which feed the aquifer.
“It is not a total ban, if you can find a place in Hawke’s Bay that you can drill that is not in our water bodies or is not affecting our aquifer you can go for it.”
However, Collins said the economic benefits of such block offers were clear.
“Jobs in the petroleum and minerals sector are generally highly skilled and well-paid with an average income of $105,000,” she said.
“I also note that the Crown has received 3.2 billion dollars in royalties and levies from petroleum production since 2008.
“This revenue is invested in public services and infrastructure some of which benefits the Hawke's Bay region and its communities.”
She explained to the regional councillors that as the resources minister she was responsible for administering the Crown Minerals estate which includes petroleum.
She said the purpose of the Crown Minerals Act is to promote mining of Crown owned minerals for the benefit of New Zealand and to achieve a fair financial return to the Crown for its minerals.
“Because of this, I am compelled to ensure that plans and policies in geologically prospective regions manage petroleum and mineral activities in a fair and reasonable manner,” she said.
“My officials at MBIE [Ministry of Business, Innovation and Employment] have taken an active interest in making sure planning documents don't undermine this position.
“With my support, MBIE has appealed plans and policy statements after making submissions.”
“As Minister of Energy and Resources, I would expect to engage in submissions and appeals on policies that prohibit petroleum activities.”
She said she was happy to send officials to work through the above in more detail if it was considered to be of assistance.
Whether or not the HBRC takes the Minister up on her offer is yet to be determined.
However, last month the regional council’s deputy chairman Rick Barker said if the authority was going to take on such an issue it would seem to him that the HBRC taking on the government by itself “is a pretty unequal arm wrestle”.
“And if it was a serious challenge to say that we want to push back the government’s ability to offer block offers to such an extent, we would need to have - in my view at least - the other regional councils onboard as well,” he said then.
Barker said as such, the offer to take a stand against the government should be made to its counterparts nationwide to see if they too want to take up the fight.
“It then becomes a showdown between the central government and the regional councils on behalf of their communities,” he said.
“If you are going to have an arm wrestle that is where I would prefer to be.”
Graham’s response to his deputy was that he was never one to get “intimidated by the big boys”.
“I have a personal experience where I did take them [the government] on by myself with a couple of others and won,” he said, referencing the time he and others took on the government to deregulate the apple industry.
“The government isn’t right just because they are the government and just because they are big. They can be beaten.”