It appears that the Texas oil giant about to start drilling off the Raglan Coast has sidestepped the tough rules and penalties that our Government recently introduced to control ultra-deep sea oil drilling. In a clever move Anadarko has set up a NZ based shell company Anadarko Taranaki with a share capital of only $100,000 with that company in turn owned by a Cayman Islands entity. The drilling is being done by a drillship registered in Liberia which operates a ‘flag of convenience ship registry’ with weak regulations. The drilling is expected to begin later this week, about 15th November.
Earlier in the year, Prime Minister John Key said that the Government would not be allowing any cowboy operators to drill around the New Zealand coasts.
Questions on why the Government has allowed the drilling to be done by this complex structure have gone unanswered, although local MP Shane Arden now says that, “I am willing to put them to the Minister.” See below for questions put to Shane Arden by Raglan local, John Lawson.
So far the only MP who has said he is prepared to take up the issue in the House is Hone Harawira who has said he will take it up if local MPs won’t. Other MPs have said they are looking into the issues.
The NZ Government and Anadarko have said that the chance of a spill is very low. John Lawson has been doing his own research and found that in 2010 there were only 84 ultra-deep water oil drilling rigs , so at that time it was a 1 in 84 chance of a Macondo type disaster. Using the current number of 819 rigs the spill ratio would be around 1 in 136 with the. In terms of the total number of 819 rigs, we’ll have 27 of them around our New Zealand coasts, so our chances of a disaster seem to rise to about 1 in 5. John says that with no public scrutiny of the plans the chances may be even greater. He points out that there have also been lesser disasters, such as another Gulf of Mexico rig on fire in July and one off Nigeria in 2012 which highlight the dangers and risks.
There has been no information provided on the type of oil spill containment dome carried on the drillship. This equipment is needed to contain an oil spill on the seabed when one occurs.
Meanwhile opposition is building in Raglan with another street protest on Sunday. Visitors to Raglan were greeted by an anti oil drilling and seabed mining protest on Sunday morning at the Bow St-Bankart St roundabout.
Raglan local John Lawson had put the question listed below to Mr Arden:
Oil Spill Preparedness November 2013
- Lodged an environmental impact assessment with the EPA. If the only requirement is to ‘lodge’, the content can be meaningless. Is there any safeguard against this? The EIA at http://www.epa.govt.nz/Publications/Deepwater_Taranaki_IA.pdf is missing many of the appendices. Will these be supplied and published before drilling starts?
- Safety Case accepted by the High Hazards Unit. What experience does the unit have in deep sea drilling?
- Lodged a well design plan with the High Hazards Unit.
- Discharge Management Plan approved by Maritime NZ (including Environmental Management Plan, Oil Spill Contingency Plan, Well Control Contingency Plan). What is the plan, has it been approved and, if so, what expertise in deep water drilling was sought?
- In highly unlikely event of spill, the operator is the first respondent and Maritime NZ’s Marine Pollution Response Service takes Government lead. What will ensure that the operator takes this role, given that Anadarko Taranaki is a $100,000 Cayman Is limited liability company and the ship is Liberian registered? If Anadarko is sure that this is a highly unlikely event, why have they gone to the trouble of setting up a limited liability company and why have they been allowed to run the project that way? Why are they being allowed to run a New Zealand company as if it were in the Cayman Is, presumably with little tax being paid here?
- Primary responsibility for oil spill response, as well as paying for any clean-up, rests with the operator of the well in question, who are heavily equipped for all scenarios. The EIA has 4 paragraphs (3.2.6.3) about the blow-out preventer, but no detail. It was buckling of the drill pipe that probably stopped the preventer working in the Gulf of Mexico. What changes have been made here? What would ensure a $100,000 company pays?
- Operators are required to plan what they would do if an oil spill of any size and scale occurs. Who checks the plans? Who would pay for it if Anadarko Taranaki exhausted its $100,000 limited liability shareholding?
- Maritime NZ (MNZ), the lead national oil spill response agency, places significant requirements on operators. MNZ has recently produced a guidance note setting out the requirement for operators engaging in exploratory drilling to submit a Well Control Contingency Plan, which MNZ must approve before drilling can commence. You can read more about MNZ’s requirements here: www.maritimenz.govt.nz/Environmental/Environmental-requirements/Requirements-for-installations/ Why doesn’t this link direct to http://www.maritimenz.govt.nz/Publications-and-forms/Environmental-protection/Well-Control-Contingency-Plan-Guidance.pdf? It has under 4 pages of substantive content written by a Maritime NZ Planner, without any guidance on time, payment, who approves the plan, or their expertise.
- Under the new law, the Government has ensured that substantial penalties of up to $10 million will apply to companies that do not comply with the regime. How would that penalty be applied to a limited liability company with no assets?