The Government has given oil companies the green light for more drilling and hydraulic-fracturing, or fracking, throughout the North Island's East Coast and in Taranaki in a move some fear will split communities.
Fracking involves pumping fluids under pressure into rocks deep underground to get at trapped pockets of oil or gas. Photo: 123RF
During fracking, fluid containing sand and chemicals is injected at high pressure to fracture rock to get at oil and gas from the earth's crust.
Its supporters say the exploration could be an economic game changer for New Zealand if it is successful but its critics worry about groundwater contamination from the chemicals, disposal of fracking waste and the release of greenhouse gases.
As well, a number of rural residents close to the drilling and fracking sites are anxious about what will become of their communities.
Jonathan Perry runs a 220 hectare farm at Ngaere, in Taranaki. A drilling site on the neighbouring farm sits right on his boundary.
"You get the people that allow the oil site on to their farms. They put it in their back paddock, furthest away from their house, so they don't get the noise," Mr Perry said.
"Often it's right beside their neighbour's house or cowshed or where they work, and that's where the problems arise - the person who's getting the money for the renting of the oil site, not a problem for them ... but their neighbour gets very little and gets all the noise and the flaring. That's what splits the district."
To mitigate against flaring, which occurs when returning fluids are evaporated by a gas flare, the oil company has given Mr Perry's family black out curtains to help block the light.
Donald James is a farmer near the Ngapaeruru exploration site near Dannevirke in the Tararua District. He said his rural neighbourhood was worried about what the drilling and any future fracking would do to the investment they have made in their properties.
"People are very concerned about their property values," Mr James said.
A number of farms near his were on the market but were not attracting any offers - and Mr James said oil companies were starting to admit there was a drop in rural property values "when they come to town".
"That's a huge concern for people living in places like this. They work their whole lives to build up a capital base but if you can't sell your farm, how are you going to retire?"
But Tararua District Mayor Roly Ellis said he had seen the economic benefits brought to the town when the exploratory well near Dannevirke was drilled in 2013 and believed fracking could be just what the region needed.
Canadian petroleum company Tag Oil has drilled two exploratory wells on the East Coast and plans to drill up to 10 more over several years.
Chief operating officer Drew Cadenhead said technological improvements such as fracking allowed the industry to tap previously inaccessible fossil fuels.
Mr Cadenhead said there had been good gas and oil shows in the source rock at Ngapaeruru, in southern Hawke's Bay, and Waitangi - as had been expected.
"We know that the kitchen's working. What we haven't done yet is moved into the phase of trying to get it out of there and see how fast we can get it out of there and if we can get it out at rates that will turn out to be economically commercial for us," he said.
- Listen to more on the fracking issue on Insight at 8.12am on the Sunday Morning programme
