Petrobras Exploration Permit
FREQUENTLY ASKED QUESTIONS
1. What is Petrobras?
PETROBRAS is a multinational energy corporation. It is the third largest petroleum company on the planet. In 2010 it has income of US$138billion. Petrobras is the largest company in Latin America by market capitalisation and revenue. The company was founded in 1953. While the company ceased to be Brazil’s legal monopolist in the oil industry in 1997, it remains a significant oil producer, with output of more than 2 million barrels of oil equivalent per day, as well as a major distributor of oil products. The company also owns oil refineries and oil tankers. It is majority owned by the government of Brazil.
2. Who gave Petrobras a permit and when?
The Minister of Energy & Resources, Gerry Brownlee and announced the signing on 2 June 2010.
3. What does the permit allow Petrobras to do and for how long?
The permit allows Petrobras to undertake 2D seismic testing, 3D seismic testing and to drill one exploratory well within a 12,330 square kilometre area of ocean off East Cape – all within 60 months (5 years) of signing the permit. The permit includes exploration for both oil and gas.
4. What public input was there in the government decision to grant Petrobras the permit?
None.
5. What input into the permit decision was there from communities around the East Coast?
None. The government say they tried to contact the iwi authorities of Te Runanga o Ngāti Porou and Te Runanga o Te Whānau (a-Apanui) in 2008 but got no response. Marae, hapū and residents of the area most at risk of negative impacts were never notified nor consulted on the proposal to grant the exploration permit.
6. What was the basis of the government decision to grant the permit to Petrobras?
Documents obtained under the Official Information Act by Radio NZ reveal that the only consideration made in assessing which company would be given the permit was the amount of the bid they made. No due diligence to assess of the companies environmental, health and safety, economic or community relationships record was made before the decision to grant the permit.
7. What are the main concerns about the exploration work?
The seismic testing involves shooting a 240db sonic pulse towards the seabed. There is a wide range of research that indicates negative effects on marine life from avoidance and displacement through to mortality.
The exploration permit includes the right to drill an exploratory well, the environmental effects of which were not considered in the permit process. B.P’s well in the Gulf of Mexico was also an exploratory well. If a large reserve is identified then mining becomes inevitable.
8. Won’t there be lots of jobs for the East Coast if Petrobras find oil or gas?
The process’ involved in extraction will require highly specialised and experienced tradespeople, many of which will be relocated from outside the East Coast area. Meanwhile the vast majority of wealth that stems from oil will remain with Brazilian owned Petrobras.
9. Won’t NZers get cheaper fuel if Petrobras finds gas or oil?
No, there is no requirement for Petrobras to sell the oil back to NZ. Oil prices are determined in the International market and the trend is that prices are rising with the decline in easily accessible oil reserves.
10. Doesn’t petroleum add over NZ$2billion pr annum to the national GDP making it our 4th largest export? Doesn’t the country need oil and gas exports to balance the books and pay for government services?
Petroleum exports are worth over $2b/year but 95% of oil and 99% of gas revenues are owned by the companies extracting them – the government gets 5% and 1% in oil and gas royalties.
11. Isn’t Taranaki a good example of how safe oil and gas extraction is in New Zealand?
Taranaki offshore wells are drilled on average in 100-150m of water. The Raukumara Basin has an average depth of around 2,000m. The Deepsea Horizon rig that exploded in April 2010 killing 11 workers and ultimately releasing over 200 million litres of oil into the Gulf of Mexico was drilled in 1,500m of water. Prime Minister John Key said on national radio that he thought the Raukumara Basin was not as deep as the Gulf of Mexico – showing how little he knows about what his government is letting happen.
12. Doesn’t NZ have robust environmental and health & safety regulations to prevent a disaster?
The Resource Management Act controls environmental aspects of oil and gas mining out to 12 nautical miles offshore, the edge of the territorial sea. The Maritime Transport Act covers some aspects of safety and environmental provisions for oil and gas activity on the Exclusive Economic Zone (from 12 to 200 nautical miles offshore) and the continental shelf but this did not include key environmental controls which led to the adoption of some unenforceable voluntary codes. Petrobras have said they are staying outside the 12 mile limit. Voluntary guidelines which have no legislative force include:
• Environmental Best Practice Guidelines for the Offshore Petroleum Industry (see http://www.mfe.govt.nz/publications/oceans/offshore-petroleum-industry-guidelines-mar06/index.html)
• Department of Conservation guidelines to minimise disturbance on marine mammals of mineral seismic surveys. These guidelines are currently under review.
There are no environmental regulations under the Continental Shelf Act or the Crown Minerals Act. When compared to Australia, Brazil, Canada, US, and the UK, NZ is the only country without a formal consent, referral, permit or environmental assessment process for offshore seismic operations.
The Guidelines for Minimising Acoustic Disturbance to Marine Mammals from Seismic Survey Operations’ is currently being reviewed. The review has shown that other countries considered – (Australia, Brazil, Canada, US, and the UK) have mandatory requirements.
13. Won’t the new EEZ regulations that the government is passing before any deep sea drilling starts mean that the drilling will be done in a safe way?
The United States of America faced their worst environmental disaster ever in 2010. Since then a wide range of official reviews and changes to legislation have been made to minimise the risk of something like that ever happening again. In March 2011 Petrobras was given permission to start the first deep sea extraction in the Gulf of Mexico since the BP disaster. Just before it was about to start pumping oil out, a 130 tonne flotation buoy broke loose and the extraction pipe broke off. If this had happened a few days later, the Gulf of Mexico could have faced a similar situation to the BP disaster all over again. If this kind of foul up can happen in what must be one of the most regulated areas for deep sea drilling, what assurance can the NZ public have about any safety regulations the government here can pass?
The proposals to develop gap filling legislation were consulted on in 2007 and 2008. Information can be found on the Ministry for the Environment websitehttp://www.mfe.govt.nz/publications/oceans/nz-exclusive-economic-zone-discussion-paper-aug07/index.html
Governing Our Oceans: Environmental Reform for the Exclusive Economic Zone is a recently released policy paper from the Environmental Defence Society that canvasses lessons learnt from the BP Gulf oil spill and international best practice to develop practical recommendations for the way forward to strengthen environmental management of New Zealand’s EEZ. Click here to download a copy of Raewyn Peart’s presentation from the launch. Listen to the audio from National Radio’s Morning Report on 6 April 2011. Click here to listen.
14. Who is involved in opposing Petrobras at present?
Ahi Kaa, Te Whanau a Apanui, Ngati Porou, Greenpeace
15. What are the NZ political parties positions on the Petrobras permit?
National supports Petrobras’ legal rights over the rights of its own citizens to protest. Labour has said Petrobras should be liable for clean up of any accidents. The Greens have said that drilling shouldn’t occur as there is no technology to mitigate a leak in a deep sea well. NZ First has supported Te Whanau a Apanui due to a lack of consultation. Tariana Turia has said it is an issue for each hapu/iwi to decide.
16. What is peak oil and why is it relevant?
Peak Oil is the point at which oil has reached maximum production at this stage a steep decrease in production occurs (and a steep rise in price) and reserves in difficult locations become viable. Given its depth and vicinity to plate movement, the willingness to explore the East Coast Basin indicates the peak has probably passed.
17. Aren’t the protestors hypocritical when they drive vehicles run on oil, cook with natural gas and use all sorts of petroleum based products on a daily basis?
Western countries have developed over the last 100 years on the basis of a cheap and plentiful oil supply and citizens have been led to believe this would continue indefinitely. Most of us live oil dependant lives not by choice but because our towns, cities and lifestyles necessitate it. Realising this is unsustainable and developing alternatives is a process that we should all engage in now.
18. Isn’t it just a case of ‘not in my backyard’? Aren’t we better to ensure oil and gas extraction happens here rather than in less regulated jurisdictions?
People all over the world are opposing these practices ‘ in their backyards’, we are in solidarity with those movements.
19. Is it Petrobras that are the problem or the National-led government?
Both Governments and Corporations are complicit in perpetuating this unsustainable and environmentally damaging industry.
20. Wasn’t it a Labour government initiative to sell off the coast around NZ for oil and gas exploration?
The expansion of permit issuing after 2004 suggests that the Seabed and Foreshore Act was intended for this purpose.
21. Doesn’t the Resource Management Act mean they need to notify the exploration and extraction activities?
The RMA only applies out to the 12 nautical mile limit, beyond that is not under RMA. Petrobras have said they are staying outside the 12 mile limit.
22. Doesn’t the new Marine & Coastal Area Act cover these kinds of activities?
No, the MCA Act only applies out to the 12 mile limit. Petrobras have said they are staying outside the 12 mile limit.
23. Can local Councils do anything to stop the potential effects of the exploration/extraction activities?
Yes, they can put pressure on the National-led government and communicate local opposition to the permit.
24. Who are the New Zealanders working for Petrobras?
- Mark Blackham is a Public Relations Consultant (a.k.a. ‘Communications Counsellor’) who has been hired by Petrobras to make their activities in New Zealand as easy as possible.
- John Pfarlert is the Chief Executive of the Petroleum Production & Exporters Association of NZ, Petrobras is a member and he works for the interests of the membership lobbying central and local government and through the media.
- Mahanga Maru is a Māori business consultant employed by Petrobras to advise on their relationships with Māori communities and iwi organisations.
25. Legitimate protest is acceptable, but isn’t it unacceptable when it interferes with another person or company’s legal activity as in this case with Petrobras and the protestors disrupting testing?
Thoreau, who performed civil disobedience in a democracy, argued that legal channels can take too long, for he was born to live, not to lobby. His individualism gave him another answer: individuals are sovereign, especially in a democracy, and the government only holds its power by delegation from free individuals. Any individual may, then, elect to stand apart from the domain of law. Martin Luther King, Jr., who also performed civil disobedience in a democracy, asks us to look more closely at the legal channels of change. If they are open in theory, but closed or unfairly obstructed in practice, then the system is not democratic in the way needed to make civil disobedience unnecessary. Other activists have pointed out that if judicial review is one of the features of democracy which is supposed to make civil disobedience unnecessary, then it ironically subverts this goal; for to obtain standing to bring an unjust statute to court for review, often a plaintiff must be arrested for violating it. Finally, the Nuremberg principles require disobedience to national laws or orders which violate international law, an overriding duty even in (perhaps especially in) a democracy.
