An editorial in the journal, Nature, highlights the issue of compensation for loss of ecosystem services when accidents occur such as the April 22nd explosion of the Deepwater Horizon oil rig in the Gulf of Mexico. The article cites ecological economist Robert Costanza at the University of Vermont in Burlington that the outpouring of oil into the gulf from the burst well-head has already cost an estimated a $34-billion to $670-billion for the loss of ecosystem services. The article reports the suggestion by Costanza that oil and mining companies pay an up-front ‘assurance’ bond’ to cover the cost of damages in the event of accident or disaster. In the case of BP, Costanza has suggested that the company would have had to pay a bond in the order of $50 billion to get permission to drill in the Gulf.
In New Zealand, there is no overall, integrated system of marine management beyond the 12-mile seaward limit of Resource Management Act. New Zealand has identified 8 sedimentary basins with known or potential hydrocarbons as well as several deepwater basins within its Exclusive Economic Zone. It has recently opening large areas for oil and gas exploration. These include 25,000 sq Kms of the Raukumara basin north of the Raukumara Peninsula on the East Coast, and over 100,00 sq kms of the Reinga Basin, to the northwest of Cape Reinga. In addition, the Centre for Advanced Engineering at the University of Canterbury in Christchurch has published an options report for the development of methane hydrates off New Zealand’s east coast.
In the light of the BP Deepwater Horizon disaster, given that there are no standard practices for environmental risk management practices within New Zealand’s wider marine area, it is important that appropriate policies, guidelines and performance standards be introduced as soon as possible and before drilling or exploitation. As one of the precautionary elements for such activity, I suggest that the Ministry of Economic Development should include staff and statutory tools to impose significant performance bonds for exploration, drilling and any other forms of exploitation of non-living marine resources.
Reference:
Editor, 2010. A full accounting. Nature,
465,
985–986,
24 June 2010. http://www.nature.com/nature/journal/v465/n7301/full/465985b.html (accessed 23 June, 2010)
R.J. Hopper et. Al. (2010) An Options Analysis for the Commercial and Economic Development of Offshore Methane Hydrates as a Future Energy Option for New Zealand. Centre for Advanced Engineering, University of Canterbury, Commissioned by the Crown Minerals Group, Ministry of Economic Development. Downloadable from http://www.caenz.com/info/publications/books_reports/in_print/hydrates/CAENZ_Hydrates_Options_Analysis_Reportv11.pdf (accessed 24 June 2010)
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