The Parliamentary Commissioner for the Environment (PCE) has tabled an interim report on fracking in Parliament. "Fracking" (a contraction of "hydraulic fracturing") is a process used by the mining industry to extract oil and gas from the earth's crust.

The Commissioner, Dr Jan Wright, undertook the investigation in response to growing concern about fracking's environmental impact. Critics from New Zealand and elsewhere associate the practice with aquifer contamination and earthquakes, among other detriments.

In the interim report, Dr Wright concludes that the risks associated with fracking can be managed effectively, provided that best practice is adhered to and enforced through regulation. However Dr Wright notes some of the challenges of satisfying that proviso:

  • Regulation is complex and fragmented, with responsibilities shared across central, regional and local government.
  • Further, fracking is yet to earn a "social licence" from the public; communities remain generally sceptical about the practice.
  • Increasing exploration activity in previously "un-fracked" regions (such as the North Island's east coast) makes resolution of these challenges especially important.
  • These regulatory issues will be considered in a second phase of investigation, with a final report (including formal recommendations) expected in mid-2013.

The interim report also noted more broadly that light-handed regulation can be problematic in a high-risk industry such as oil and gas. This statement coincided with an announcement by Acting Minister of Labour Christopher Finlayson that new regulations will be made under the Health and Safety in Employment Act 1992 for the oil and gas sector, in light of deficiencies in this area which were highlighted in the Pike River Royal Commission's final report.

The Government has welcomed the interim report and directed the Ministry of Business, Innovation and Employment to prepare a response in advance of Dr Wright's final report. Meanwhile, fracking's critics have cited the identified regulatory uncertainty as strengthening their case for a moratorium, despite Dr Wright stating that this could not be justified. The interim report can be found on the PCE's website, here.