Energy and Resources Minister Gerry Brownlee, and his colleagues, have work to do, according to an offshore petroleum environmental assessment, showing big gaps and serious risks in our regulatory practice
Gerry Brownlee presided over a small flurry of offshore petroleum exploration permits in the last 12 months. But far from putting their collective foot on the accelerator, Ministers, on Brownlee’s behalf, should be applying the brake, until all of the policy, legislative, and operational gaps are addressed.
Comparative Review of Health, Safety and Environmental Legislation for Offshore Petroleum Operations, a report given to Brownlee in September, was issued by him for public feedback on the cusp of Christmas.
Just as David Beatson had predicted:
The review is going to show New Zealand has extremely limited control over off-shore mineral exploration and exploitation practices, particularly beyond 12 nautical miles offshore in New Zealand’s vast exclusive economic zone, where most of our offshore petroleum industry activity is now concentrating. … Closer to the shoreline, regulatory and protective functions are split between a mishmash of central government agencies and regional councils.
Brownlee had been talking down “concerns that our small country also runs the risk of sustaining Gulf-scale human and environmental damage because of evident gaps in government management of safety and environmental risks from offshore mineral exploration and exploitation in the New Zealand EEZ”.
“New Zealand has very high environmental standards and particularly, safety requirements,” he said on May 5, 2010, in the New Zealand Herald.
The Comparative Review, by specialist environmental lawyers and international environment consultants, suggests that he was misinformed.
It compares New Zealand’s offshore petroleum regulatory approach to that of four other jurisdictions — the United Kingdom, Australia, Ireland, and Norway — concluding that “there is little room for complacency about the current regime”.
In the same breath it also says, somewhat oddly, that “with one exception (the lack of an environmental permitting regime in the exclusive economic zone) no major gaps or serious omissions were identified”.
However, the environmental permitting aspects for the EEZ, identified as the “major gap” (or “serious omission”) are ranked fourth and fifth of seven recommendations, in order of priority. Other issues, therefore, are presumably no less “major” and “serious”.
The government needs to draft an environmental regulatory framework for petroleum permitting in the EEZ (for which legislation is being developed) and decide who will be responsible for environmental assessment and decision making.
There is no Resource Management Act equivalent for the EEZ and extended continental shelf, 12 nautical miles and more offshore. There is no requirement for resource consent (or any analogous approval). Crown Minerals has no mandate for environmental impact assessment, or ability to grant or regulate petroleum approvals on environmental grounds; and it does not do so.
That aside, the reviewers identify a number of health and safety issues that, in their view, should be dealt with more urgently, because “the most likely environmental risk … is most likely to arise from a health and safety incident”.
Not only is there no environmental impact assessment as part of the petroleum permit application process. Unlike Ireland, the United Kingdom, and Norway, there is no current legislative ability to consider health and safety information, either, prior to the issue of permits.
This “means that the permit is granted before any level of assessment is made of a permit holder’s health and safety credentials, experience or potential performance in the event of major accidents or environmental pollution incidents”.
When it comes round to enforcement, inspections are under-resourced. Our seven existing permanent offshore petroleum installations “would suggest the need for at least three inspectors”. Australia has a ratio of one inspector to three installations. The United Kingdom has one inspector for each two installations. Norway has one inspector per installation.
New Zealand has one inspector for all seven installations, which “represents a serious risk”. In addition, the same inspector is also responsible for onshore petroleum and geothermal extraction activities.
Oil spill response preparedness, known to be inadequate, is under review. This report notes the inadequacy of financial remedies, for a major spill offshore. Current levels of compulsory insurance in New Zealand, of approximately $30 million, would be “seriously inadequate” to address resulting threats to coastline or other marine resources.
Unlike all four of the comparative countries, New Zealand is not party to international conventions and protocols that would give us greater access to funds in the event of a spill from an oil tanker. “While this may not be of immediate importance to improving the legal position for offshore petroleum installations, it highlights the need for New Zealand to ensure it utilises opportunities to become part of international conventions which address such issues in the future.”
On the plus side, within the territorial sea (12 nautical miles), the Resource Management Act generally goes much further than is normal in requiring a resource consent, in addition to Crown Minerals’ consent, and in its provision for public participation and rights of appeal.
The reviewers, however, do not regard this as a plus: they call it “procedurally complex”; not an appropriate new model for petroleum consenting in general; and in addition, consolidation of offshore environmental jurisdiction is a further suggestion made by the review.
In their opinion, “one of the main emphases of public and regulatory policy in respect of New Zealand’s offshore area should focus on anticipating, low probability, high consequence events” — that is, designing and administering the health, safety, and environmental regulatory regime to avoid or mitigate the risk of oil spills. The RMA has a somewhat different general principle and focus: sustainable management of natural and physical resources.
The two concepts are not unconnected, but they are different. For anyone who glimpses the gleam of a quid pro quo, in the Ministerial eye, thankfully, he has more than enough else to keep him occupied — sticking his fingers in the other holes in the dyke, before major new petroleum development applications flood in.