Hughes Gareth: Crown Minerals Amendment Act 2013 Amendment Bill — First Reading Second Reading In CommitteeText is incorporated into the Bound VolumeHughes Gareth: Crown Minerals Amendment Act 2013 Amendment Bill — First Reading Second Reading In Committee[Sitting date: 16 May 2013. Volume:690;Page:10235. Text is incorporated into the Bound Volume.]GARETH HUGHES (Green): Kia ora Mr Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise to take a call in the second reading of this bill the Crown Minerals Amendment Act 2013 Amendment Bill. Obviously we had the first reading wrapped up only about 20 minutes ago so under urgency and under the auspices of the Budget this Government has decided to ram through the Crown Minerals Amendment Act 2013 Amendment Bill.In this call in the second reading I want to talk about the lessons. Obviously we are not learning the lessons of why it is important to have a deliberative consideredapproach to passing legislation because we are going and fixing up the messes Mr Bridges saw in the original Crown Minerals Amendment Act. But I want to talk about the lessons we should learn from our petroleum and gas history in New Zealand.Let us learn the lessons of McKee 13 and the well blowout we saw in Taranaki. Let us learn the lessons of the Kapuni soil and groundwater contamination we see affecting Taranaki right now because they decided back then in good old Kiwi fashion that when you have got produced water containing toxic chemicals and hydrocarbons you do not need to store it in a metal drum or store it in a secure facility. They dug a hole—a blow-down pit they call it or a frack pit—and they just stored the produced water and the toxic chemicals in the pit. Surprise surprise now we have groundwater contamination that cannot be remediated and literally hundreds of cubic metres of soil are being trucked to Wellington to be remediated.Let us learn the lessons from the lack of inspectors which has had tragic consequences in our country’s history. After the Pike River tragedy the Government announced it would be increasing the number of well and oil and gas facility inspectors. Up until then when it comes to oil and gas we had one inspector covering the entire country—one inspector covering all the onshore and all the offshore oil and gas facilities in this country. The Government of course raised it to three. I understand that this is still woefully inadequate. When you look across the world you see Australia has one inspector for every three installations Britain has one for every two and Norway has an inspector for every single facility.So if we are going to learn the lessons of some of the bad and shoddy practices we have seen in this country and actually come together to have stronger regulations stronger protections for our cities our towns our environment our people and our workers let us have that conversation. Let us learn the lessons from when practices have been done badly.And that is the tragedy because under urgency this Parliament could be introducing legislation to make oil and gas activities in New Zealand safer. We could be passing legislation to be introducing relief wells so that one was on hand if an accident happened. As we have seen in Australia as we have seen in America this is the only way a deep-sea well blowout or a well blowout has been contained. We could be talking about introducing liability because although the Government put the liability bill on the operators it requires them to carry only $30 million worth of insurance. When you look across the world oil spills have cost tens of billions of dollars yet the National Government says operators need to have only $30 million of insurance. We could be talking about increasing the penalties. Despite lobbying from the Green Party we have seen the exclusive economic zone legislation penalties being increased to $10 million which is still woefully inadequate when you talk about a potential $40 billion bill in the Gulf of Mexico. The Resource Management Act still has a maximum corporate penalty of only $600000.Why are we not talking about insurance? Why are we not talking about penalties? Why are we not talking about making sure that capping technology is on hand to New Zealand and that we have adequate oil pollution funds building up for when accidents happen? Why are we not talking about signing up to international conventions like the bunker convention and the new series of conventions we could be signing up to in order to protect the taxpayer from liability?That is the ultimate tragedy: we are not talking about those things. We are talking about making it easy for cowboy speculators to come down to New Zealand and drill and risk our environment. This is why I am opposed to deep-sea drilling. I am not opposed to on-shore or shallow drilling. The Green Party is not opposed to that. It is not in our policy. We would obviously like to see a transition to real jobs for Kiwis and atransition strategy because we are concerned about the environment but we are not opposed to those things. We want to see good regulations for those workers who are mostly in Taranaki at the moment.But when it comes to deep-sea drilling when you are drilling past 200 metres and maintenance and dealing with an accident can happen only when you have advanced robotics or submarines we are talking about a different kettle of fish from what we have done in Taranaki over the last 100 years. When you are drilling past 200 metres which is what Anadarko is going to be doing off the New Zealand coast this year—of course the very same company that recently paid out $4 billion for its involvement in the Gulf of Mexico spill. Let us have a conversation about risk and whether we are prepared to deal with a spill.The Government and the industry cannot guarantee we will not see a catastrophic well blowout in New Zealand’s waters. What we are talking about when you are drilling down as deep as 1500 metres—which is what they want to do off my coast in Wellington in the Pegasus Basin—is close to freezing conditions where the pressure would crush a person in an instant where it is completely black. Yet this is where the oil is gushing out at close to boiling point where the oil has to be heated across literally kilometres of hardened strengthened cables—because of course otherwise the cables would snap under the fantastic pressures of that depth—and where you are having to heat the oil so the methane crystals do not crystallise and break the cables. We are talking about operating at the frontiers of technology at the frontiers of geology and at the frontiers of geography in some of the most hostile marine environments in this country.So let us talk about what we are doing to prepare ourselves to get ready if an accident happens because when you look across the world accidents have happened. As the presidential commission in the United States pointed out it is akin to the nuclear industry when you are doing deep-sea drilling in the sense of course that not every well is going to have an accident but when an accident happens the consequences are catastrophic. What would a spill in New Zealand mean when 65 percent of our population lives within I understand 5 kilometres of the coast and when our entire economy depends on the environment—our fishing our tourism and our aquaculture?When we look across the Gulf of Mexico the exclusion zone from their oil spill was almost as large as the entire North Island. Imagine that happening and oil washing up at Pīhā or the Bay of Plenty. Of course they already know the effects. It is not academic to people in the Bay of Plenty. They have seen it they have touched it and they have smelt it and that was only 300 tonnes of oil. What we have seen in the Gulf of Mexico was 600000 tonnes of oil. What we saw in America was that they had more than 46000 people working on the spill response. New Zealand has 400. They had 46000; we have 400 trained responders.When you look across at America they had more than 1000 vessels working on that spill. I am sure the Minister can tell us how many boats Maritime New Zealand has. It has got three skimmers the size of dinghies and it refuses industry and union calls for a multi-purpose rapid response vessel. Look at the difficulty we had dealing with 350 tonnes of oil from theRena and the requirement of flying in literally two aeroplanes full of extra equipment. The Gulf of Mexico spill saw 600000 tonnes of oil yet this Minister’s oil preparedness plans are prepared to deal with a spill of only 5000 tonnes. That is the figure the Government has nominated to be prepared for. It is not on because it cannot guarantee the risks when operating in hazardous environments where every extra hundred metres you are going magnifies the consequences and the difficulty of dealing with a spill.But let us talk about the economics because this is what the Government likes to focus on of course. Let us talk about the economics because what we know is that under National we have got the fourth-lowest royalty plus tax rate in the world. Under National it will be easier to bring in foreign workers. We know the oil sector has got the lowest job-producing potential per percent of GDP of any sector of this country’s economy. What we know—and the Government’s own reports say this—is that it expects 90 percent of the profit to flow offshore. So for all that environmental risk threatening our economy and our environment we are going to see hardly any jobs hardly any taxes and hardly any royalties and most of the profit is going to flow offshore.It is not a smart economic strategy so let us talk abut how we can develop a smarter strategy. I am glad to see the Minister of Finance in the Chamber. I see him doing the numbers. Of course the National bench is obviously a bit worried for his position after that dire Budget because what the finance Minister said was that we are going to see our current account deficit blow out to 6.5 percent of GDP second only to Turkey in terms of the lowest grade in the OECD and we are predicted to be the worst. We see debt almost hitting—blowing out to a net level of more than $200 billion. That is $43000 for every single New Zealander. We are seeing more debt more assets being sold and more deals for the mates. The only thing we are not seeing is more jobs.So this is what we should be having a conversation about: how do we grow a prosperous economy? The answer is not looking to the past. The answer is not looking at the bottom of the ocean and hoping that someone from a foreign country will drill and not damage our environment. Let us look at the clean-energy potential we have got. I mean this is what PricewaterhouseCoopers says is a $22 billion opportunity. This is what Pure Advantage says is a $6 trillion global industry that we can get a slice out of. This is an industry where we could be building tens of thousands of jobs—building exports and sustainable jobs. What we know is that clean-energy jobs have got four times the job creation potential of dirty old fossil fuels. We are going on the wrong path and this bill is a huge step backward a huge missed opportunity. Let us look to the future not to the risky old dirty past. Kia ora.