Recommended NZ | Guide to Money | Gimme: Competitions - Giveaways

Govt’s new oil spill insurance cap 'still a drop in the ocean'

Contributor:
Fuseworks Media
Fuseworks Media

The Government is touting an increase in oil industry liability as a win for taxpayers, but Greenpeace says the new plan would still see the New Zealand public picking up most of the bill for in the event of a major spill.

The changes to the law covering the insurance of oil exploration were announced tonight, just as the giant drilling platform of Austrian oil major OMV is about to begin its work in New Zealand waters. OMV plans to drill at depths at least as great as those of the 2010 Deepwater Horizon disaster.

While the increase from $27 million to $1.2 billion is a significant improvement, Greenpeace Senior Campaigner, Steve Abel, says it’s still a "drop in the ocean" of what a major oil spill would cost.

"The Deepwater Horizon oil drilling accident cost well over $90 billion, but the maximum insurance cover that the New Zealand Government is requiring of oil exploration companies is just $1.2 billion," he says.

"The rest of the cost of a spill inundating our coasts would be paid by our seabirds, dolphins, fisheries and the New Zealand public, which is a massive ecological and financial underwriting of oil exploration that we shouldn’t even be doing in this climate emergency.

"In a climate emergency these companies shouldn’t be searching for new oil at all, but as the Government is letting them in, the companies should have to pay the full cost of anything going wrong.

"The oil industry has refused to provide a guarantee that they will underwrite the cost of a spill, and have refused to work here unless the Government provides this subsidy.

"The drilling is done by a locally incorporated subsidiary so if there is a big spill, the New Zealand subsidiary can simply declare bankruptcy and disappear over the deepwater horizon, leaving New Zealand to clean up their mess.

"If companies like OMV believe their drilling is so safe, why don’t they underwrite the full cost of a spill?"

All articles and comments on Voxy.co.nz have been submitted by our community of users. Please notify us if you believe an item on this site breaches our community guidelines.