When the Tui oil-field was opened last year, the operators (AWE New Zealand, 87.5% foreign-owned, ironically) were given permission to burn off 10 billion cubic feet of natural gas retrieved incidentally to the oil over the life of the oil-field. That’s actually a hell of a lot of gas, about 6% of what New Zealand uses in a year and worth about $60 million, but, as it was meant to be coming out slowly over the course of the field’s life, it wasn’t going to be worth piping it onshore.
But AWE NZ stuffed up. It turns out there’s a lot of gas amongst the oil at Tui. They’ve known that from the start of operations but just kept flaring it. In just over a year of operations, they’ve so far wasted 7.5 billion cubic feet of the stuff. If that had been sold, it would have been worth $45 million. Because it has been burned it has cost the New Zealand government about $10 million in carbon credits that we will have to buy or have lost the opportunity to sell under Kyoto.
From the start, when they realised how much gas was there, the company should have started capturing it and selling it so that if it is going to be burned at least we can do something useful with it, like use it instead of coal at Huntly or help lower families’ heating bills. But they didn’t bother and so we, the taxpayer, pay the price for no gain.
Now, having literally sent $55 million up in smoke, New Zealand Oil and Gas is finally looking at laying a gas pipeline to connect to the pipes from Maui, only about 20km away, and then onshore. They’re not doing that because they’re worried about needlessly wasting such a huge amount of a non-renewable resource that is also damaging our climate. No, they’re doing it because they’ll soon hit the limit of what they’re allowed to flare.
This is why we shouldn’t put our country’s limited natural resources in the hands of short-term orientated and mostly foreign-owned private companies. These resources should be managed and exploited in New Zealand’s best interests. That doesn’t happen when it’s left to some company out to make a quick buck.
Frankly, with oil and all our limited mineral resources, I don’t know why we’re in such a hurry to dig them up. The prices are only going up but once they’re dug up and sold, they’re gone. In the ground they’re like money in the bank. Why not keep them there a while longer?