BEFORE THE ENVIRONMENTAL PROTECTION AUTHORITY IN …
Transcript of BEFORE THE ENVIRONMENTAL PROTECTION AUTHORITY IN …
OPENING REPRESENTATIONS FOR
ORIGIN ENERGY RESOURCES KUPE NZ LTD ON BEHALF OF THE KUPE JOINT VENTURE PARTIES
16 FEBRUARY 2017
B S Carruthers / D Owen Phone +64 9 367 8000 Fax +64 9 367 8163 PO Box 8 DX CX10085 Auckland
3240815
BEFORE THE ENVIRONMENTAL PROTECTION AUTHORITY
IN THE MATTER of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012
AND
IN THE MATTER of applications for marine consent and marine discharge consents by Trans-Tasman Resources Limited to undertake iron ore extraction and processing operations offshore in the South Taranaki Bight
1
3240815
MAY IT PLEASE THE DECISION MAKING COMMITTEE :
1. SUMMARY OF POSITION
1.1 The Kupe Joint Venture ("Kupe JV ") is an unincorporated joint venture between four partners:
(a) Origin Energy;
(b) Genesis Power Ltd;
(c) New Zealand Oil & Gas Ltd; and
(d) Mitsui E&P New Zealand Ltd.
1.2 Origin Energy Resources Kupe NZ Limited ("Origin ") is the operator
of the Kupe JV and makes this representation on behalf of the Joint
Venture Parties. They are referred collectively in this representation
as the "Kupe JVPs ".
1.3 Origin and the Kupe JVPs have existing interests in the proposed
consenting area under s 4 of the Exclusive Economic Zone and
Continental Shelf (Environmental Effects) Act 2012 ("EEZ Act "), being
Petroleum Mining Licence 38146 ("PML 38146") and the rights and
interests it gives them as a lawfully established existing activity,
together with the existing infrastructure established and operated
under PML 38146.
1.4 The Decision Making Committee ("DMC") must "take into account"
any effects on existing interests.1 It can only disregard those effects if
written approval has been obtained from the person holding those
existing interests.2 Trans-Tasman Resources ("TTR") has not
obtained the written approval of Origin or the Kupe JVPs. Had TTR
been able to satisfy their concerns with its application, written approval
might have been obtained. But that is not the case and the DMC must
discharge its statutory duty to take into account any effects on their
existing interests. In ascertaining what effects there are, the DMC
must also apply the relevant information principles in s 61 of the EEZ
Act. 1 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012
("EEZ Act) , s 59(2)(a). 2 EEZ Act, s 59(5)(c).
3240815
2
1.5 Around half of TTR's 66 km2 marine consent application overlaps PML
38146.3 The marine consent area extends close (1.14 km) to the
existing Kupe Wellhead Platform, the capital cost of which (and its
associated infrastructure) was in excess of $1.3 billion.4 The marine
consent area also overlays an existing (capped) Kupe Wellhead and a
number of identified hydrocarbon prospects and leads.5 The Kupe
JVPs may need to develop further infrastructure in the future within
the TTR marine consent area, in order to exploit the resources they
have rights to.
1.6 Despite stakeholder engagement and negotiations regarding potential
co-operation between TTR and Origin, Origin continues to hold
concerns regarding the known and potential adverse effects of the
proposed activity on its operations and existing interests in the South
Taranaki Bight ("STB"). Origin's concerns have remained
substantively the same throughout its engagement with TTR and
Origin has notified TTR of these on many occasions.6 Origin would
have preferred to reach an agreement with TTR on these matters
before a new application was lodged.
1.7 TTR elected to submit the current application to the EPA without
making any further substantial progress with Origin. Origin is
concerned that there was almost no information, assessment, or
evaluation of the effects of TTR's proposal on the Kupe JVPs'
interests in the application,7 and fundamentally disagrees with TTR's
view that the conditions attached to TTR's Minerals Mining Permit8
("MMP") sufficiently protect Origin's operations.
3 Refer to Appendix 1 of these submissions. 4 Evidence of Owen Hobbs at [4.14]. 5 Kupe Wellhead no. 4. Refer to Appendix A of these submissions and Evidence of Iain Currill at [5.21] - [5.23]. 6 For example, Origin's concerns, informed by a review of the proposed activity by Origin's own internal experts and by AMOG Engineering Solutions, were set out in a letter to TTR in May 2016. These concerns were also reflected in Origin's July 2016 response to a draft agreement and narrow amendments to the application proposed by TTR. 7 Refer page 177 of the Impact Assessment. 8 Minerals Mining Permit 55581, 2 May 2014.
3240815
3
1.8 While these conditions provide a platform for consultation, they
contain significant gaps, fail to address key known and potential
effects, and are not sufficiently detailed or robust enough to ensure
that risks to Origin's infrastructure posed by TTR's proposed operation
are avoided, remedied or mitigated to an acceptable level. Origin has
not yet been able to gain sufficient certainty or comfort from its
engagement with TTR to ameliorate those concerns. Finally, the
MMP conditions were granted under a significantly different legislative
framework; that of the Crown Minerals Act 1991 ("CMA"), and the
tests required to be met under the CMA and EEZ Act are deliberately
distinct.
1.9 TTR's position, in Origin's view, has commenced from the wrong
starting point. There is no reverse onus on Origin to prove that
conditions above and beyond that provided by the MMP are
necessary. Rather, under the EEZ Act, where express provision is
made for the consideration of adverse effects on existing interests,
and where the information principles under s 61 place a clear onus on
the applicant to satisfy the DMC,9 it is for TTR to address and satisfy
the DMC that the adverse effects of the proposal on Origin's existing
interests will be appropriately avoided, remedied, or mitigated. By
adopting the wrong starting point, TTR is running the risk of another
decline.
1.10 Origin contends that TTR has provided inadequate information or
assessment as to its potential impacts on Origin's interests, and has
not adequately consulted with it. In the absence of that information,
and due to both the likelihood and significant consequences which
may result from damage to Origin's existing interests, the DMC should
decline the consent sought. Alternatively, if the DMC is minded to
grant consent, it must at a minimum impose the conditions requested
by Origin and outlined in the AMOG Report10 to adequately avoid,
remedy or mitigate effects on their existing interests.
9 Or, in the absence of satisfaction, to favour caution and environmental protection. 10 Appended to the Evidence of Christopher Carra as Appendix B.
3240815
4
2. BACKGROUND FACTS
Kupe JVPs' interests
2.1 PML 38146 covers an area of 257 km2 in the STB. It gives the Kupe
JVPs exclusive rights to mine for petroleum within that area. The field
has taken over 30 years to develop,11 with the first discovery of gas in
1986. The final investment decisions were made in 2006, with the first
gas produced in 2009 (following capital investment of over $1.3
billion).12 The current facilities have a design life of 25 years.13 The
current Kupe Wellhead Platform and infrastructure are likely to exist
for almost all of TTR's 20-year consent period, if not longer (as the
facilities can be maintained or upgraded to extend beyond their design
life). PML 38146 expires in June 2031,14 but can be renewed.
2.2 A statutory exclusion zone operates to keep all other vessels and
activities 500 m away from the Kupe Wellhead Platform.15 That is a
minimum safety requirement and does not indicate that any activity
further away will have no effect on the Kupe infrastructure or interests.
TTR's iron sand proposal
2.3 TTR's proposed marine consent is for a 66 km2 area. Approximately
half of that area overlaps PML 38146, including the currently capped
Wellhead no. 4.16 As indicated above, the marine consent area
extends to within 1.14 km of the Kupe Wellhead Platform. The
proposed anchoring buffer zone17 extends beyond the project area
and the nominal 2km anchor spread (1km line) of the Integrated
Mining Vessel ("IMV") means anchors will be set, and hauling tugs will
operate, immediately adjacent to the exclusion zone.18
2.4 In May 2014, TTR obtained a minerals mining permit under the Crown
Minerals Act 1991.19 Origin engaged with New Zealand Petroleum and
Minerals ("NZPAM") in respect of that permit. While some of the
permit's conditions relate to Origin, and as discussed further below, 11 Refer Evidence of Owen Hobbs, figure on page 5. 12 Evidence of Owen Hobbs at [4.14]. 13 Evidence of Owen Hobbs at [4.4]. 14 Evidence of Owen Hobbs at [4.10]. 15 Continental Shelf (Kupe Wellhead Platform Safety Zone) Regulations 2006. 16 Refer to Appendix A of these submissions. 17 Proposed Conditions of Consent. Condition 62. 18 Appendix A of the Evidence of Robert Overy, at [9]. 19 Minerals Mining Permit 55581. 2 May 2014.
3240815
5
those conditions are insufficient to protect its existing interest. In light
of the significant information gaps present, and the lack of certainty
provided by the currently proposed consent conditions, Origin is
seeking that the application be declined. If, in the alternative, the
DMC is minded to grant consent, Origin submits that it must impose
additional conditions on that consent to ensure that those information
gaps are filled, and the known and potential effects on Origin's
operations are adequately accounted for (through avoidance where
possible, or mitigation).
3. KEY CONCERNS
3.1 With regard to the Kupe JV infrastructure and interests, the Kupe
JVPs are particularly concerned about:
(a) collision by TTR's vessels or crawler with the platform,
umbilical or other infrastructure, which is a potential effect of
low probability, but with a high (and potentially catastrophic)
impact;20
(b) loss of integrity of the existing infrastructure due to changes
in the oceanographic environment resulting from the mining
activities;
(c) loss of visibility at the platform, umbilical and other existing
infrastructure making it difficult to monitor or repair the
infrastructure; and
(d) inability to develop and utilise the petroleum resource in the
remainder of its permit area due to conflict with TTR
activities.
20 EEZ Act, s 6(1)(f).
3240815
6
4. LEGAL FRAMEWORK
4.1 This representation focuses on the legal questions most relevant to
the Kupe JVPs' interests.
Existing interests
4.2 Section 59 requires the DMC to:
(a) "take into account";
(b) "any effects on ... existing interests of allowing the activity",
where existing effects are defined as:
... the interest a person has in —
(a) any lawfully established existing activity , whether or not authorised by or under any Act or regulations, including rights of access , navigation, and fishing:
and;
(c) in considering the effects of an activity on existing interests,
to "have regard to":21
(a) the area that the activity would have in common with the existing interest; and
(b) the degree to which both the activity and the existing interest must be carried out to the exclusion of other activities; and
(c) whether the existing interest can be exercised only in the area to which the application relates; and
(d) any other relevant matter.
4.3 Clearly, Origin have a lawfully established existing activity in the Kupe
Gas Field. They have existing rights of access to the petroleum
resources under PML 38146, including rights of access to petroleum
under TTR's proposed marine consent area. Section 162 of the EEZ
Act provides that activities involving existing structures or submarine
pipelines that are associated with mining for petroleum authorised by
a petroleum mining permit granted under s 25 of the CMA may
21 EEZ Act, s 60.
3240815
7
continue without a marine consent for the term of the permit.22
Origin's existing interests in the area have been previously recognised
by the EPA, including in a ruling issued under s 162(2) of the EEZ Act
in November 2014.23
4.4 Accordingly, under section 59(2) any effects on those interests must
be "take[n] into account". In considering what those effects might be,
the factors listed in paragraph 4.2(c) above under s 60 of the EEZ Act
provides some specific matters to consider, as well as a wide catch-all
discretion to take any relevant matter into account.
4.5 In our submission, the duty - coupled with the information principles24
and other requirements25 - requires the DMC to:26
(a) make every reasonable effort to understand what the effects
could be;
(b) where the applicant has provided scant information, or simply
made assertions, to make inquiries and test the position
and/or seek further information ("make full use of its powers"
- addressed further below); and
(c) if insufficient information has been provided, to consider
whether caution therefore requires the application be
declined, or, alternatively, stringent conditions imposed
(including proper adaptive management).
4.6 As the DMC will be aware, this was largely the process followed
during the first application for consent by TTR which resulted in the
DMC declining the application. Origin has not seen (to date) sufficient
differences in the material provided by TTR (as it relates to Origin's
interests) that suggest that a different approach should now be taken.
22 As it was on the day before the EEZ Act came into force: EEZ Act, s 162(4). 23 Decision Memorandum for Ruling Request EEZ0113ORG, dated 24 November 2014. 24 Refer s 61 of the EEZ Act, to which we return below. 25 EEZ Act, s 59(2)(j), (l) and (m). 26 Refer to Bleakley v Environmental Risk Management Authority [2001] 3 NZLR 213
(HC) for discussion of the meaning of "take into account" at [72].
3240815
8
Information principles
4.7 The DMC is required to ("must") make full use of its powers to request
information from the applicant, obtain advice, and commission a
review or a report; base decisions on the best available information;
and take into account any uncertainty or inadequacy in the information
available.27
4.8 One qualifier to this is that the "best information" is defined to mean:28
the best information that, in the particular circumstances, is available without unreasonable cost, effort, or time.
4.9 However, we doubt that it would have been unreasonable for TTR to
have produced - or the DMC to have required - better information,
modelling, and evaluation addressing potential effects on the Kupe
JVPs' interests. This is particularly so given Origin has maintained a
number of concerns in its engagement with TTR since early 2014,
during both the first application and its preparation and subsequent
lodgement of this consent application.
4.10 Section 61 establishes a "cascade approach":
(a) in circumstances where the EPA has not been able to make
full use of its powers to obtain "the best available
information"29 (or has the applicant itself has failed or refused
to produce that information); and
(b) where, therefore, there is uncertainty and/or inadequacy in
the information available;30
(c) the DMC must "favour caution and environmental
protection".31
27 EEZ Act, s 61(1)(a)-(c). 28 EEZ Act, s 61(5). 29 Section 61(1)(a) and (b). 30 Section 61(1)(c). 31 Section 61(2).
3240815
9
4.11 That same approach must in the circumstances include applying
caution to protect existing interests. (Before refusing the application, it
is accepted that an adaptive management approach must be
considered.32) The clear inference from sections 59, 60, and 61 is that
the onus (in respect of adverse effects on existing interests) remains
on the applicant to satisfy the EPA that the relevant statutory tests are
met. It is not sufficient for an applicant to be able to point to regulatory
restrictions generated through an entirely separate statutory regime,
and then for the onus for regulation above those restrictions to fall
upon the party with the existing interest.
Adaptive management
4.12 In Minute 17,33 the DMC invited legal counsel to address in their
opening submissions at the hearing a range of matters relating to
adaptive management. We do so below.
Section 87F(4)
4.13 Section 87F was introduced via the Marine Legislation Bill 2012, which
substantially amended the Maritime Transport Act and the EEZ Act to
provide the EPA with the ability to regulate discharges within the EEZ
and Continental Shelf of New Zealand. There is limited commentary
in the legislative background surrounding s 87F(4), but Parliament's
intent to exclude adaptive management considerations from any
conditions that could be imposed on a discharge consent is clear from
the words used and their surrounding context.
Applicability of the Augier principle
4.14 Origin accepts that, consistent with the approach taken in a number of
RMA cases,34 conditions can be offered and attached to the discharge
consent by the DMC that sit outside of its legislative powers, where
the Augier principle is used.
32 Section 61(3). 33 M17 - Minute of the Decision-Making Committee in respect of section 87F(4) of the Act, 3 February 2017. 34 See, for example, the High Court's decision in Frasers Papamoa Limited v Tauranga City Council (2009) 15 ELRNZ 279, [2010] NZLR 202.
3240815
10
Ability to separate activities in respect of applying conditions
4.15 Origin accepts that there are some difficulties separating out the
activities that relate to the "mining" consent, and the "discharge" that
follows via re-sedimentation. However, Origin submits that it would
not be a lawful approach to circumvent the express exclusion of
adaptive management conditions (regarding that re-sedimentation) on
the discharge consent, by instead attaching the same conditions to
the mining consent. That approach would run the risk of failing the
established test for conditions under the RMA, applying the Newbery
thresholds, in that the proposed conditions could not reasonably relate
to the activity for which consent is being sought for.
Scope of the definition of adaptive management
4.16 We wish to emphasise the need for any adaptive management
approach to require, where there are significant adverse effects or
unanticipated adverse effects, the activity to be reduced in scale or
discontinued. The latter is explicitly recognised as a potential
outcome of an adaptive management approach in s 64(2)(b).35
4.17 It has also been recognised as a requirement, in appropriate
circumstances, in RMA cases - for example in the conditions attaching
to the New Zealand King Salmon marine farm consents.36 In that
case, the Board also outlined four requirements that must be satisfied
for adaptive management to be an acceptable approach to managing
environmental effects of activities:37
[a] There will be good baseline information
about the receiving environment;
[b] The conditions provide for effective
monitoring of adverse effects using
appropriate indicators;
35 EEZ Act, s 64(2)(b). 36 Board of Inquiry's decision in New Zealand King Salmon Requests for Plan Changes
and Applications for Resource Consent Blenheim, 22 February 2013. 37 Board of Inquiry's decision in New Zealand King Salmon Requests for Plan Changes
and Applications for Resource Consent Blenheim, 22 February 2013, at [181].
3240815
11
[c] Thresholds are set to trigger remedial
action before the effects become overly
damaging; and
[d] Effects that might arise can be remedied
before they become irreversible.
4.18 The key questions are whether:
(a) an adaptive management approach can remedy the
deficiencies in information or lack of assessment of effects on
existing interests? and;
(b) if so, whether the conditions proposed actually achieve an
appropriate adaptive management approach, or if they leave
the consent holder with too much room to move, and avoid
the EPA requiring TTR to reduce, relocate or stop its
activities if necessary?
4.19 The DMC needs to take great care in the construction of conditions, to
ensure that they will achieve the outcomes it anticipates. Origin
accepts that the test requires a "proportionate approach to risk which
involves identifying both the probability of an adverse effect and the
cost of its consequences", and that therefore "conditions do not have
to be completely certain" as certainty – and validity – will always be a
question of degree.38
Relevance of RMA planning instruments
4.20 A question this morning related to the relevance of the Regional Policy
Statement in the event effects are to be experienced in the territorial sea.
While not binding on this DMC, it may be of assistance to note that in
relation to the first application, the DMC observed:
(a) There is no requirement to give effect to, or have any regard to,
the subordinate documents prepared under the RMA.39
38 Aubade NZ Ltd v Marlborough District Council [2015] NZEnvC 154 at [35]. 39 Trans-Tasman Resources Ltd Marine Consent Decision, June 2014, at [754].
3240815
12
(b) However:
(i) Many of the effects will occur in the coastal marine
area, rather than the EEZ, and should be considered;40
(ii) The New Zealand Coastal Policy Statement
("NZCPS"), Regional Policy Statement ("RPS") and
Regional Coastal Plan give guidance as to the
important values within the coastal marine area, and it
is appropriate for them to be considered.41
Precautionary approach
4.21 The Honourable Dr Nick Smith, in the Committee of the Whole House
reading of the Exclusive Economic Zone and Continental Shelf
(Environmental Effects) Bill 2012, stated that the reason the wording
"favour caution" was used in the Bill, rather than the phrase
"precautionary approach", was to avoid the legal uncertainty that the
use of the precautionary approach has created under the RMA.42
4.22 In our submission, there is little difference between the need to "favour
caution" and the well-understood principles that apply to the
precautionary approach.43 Where there is uncertainty as to effects,
such as in respect of those on Origin's interests, significant care (or
"caution") needs to be taken to ensure that existing interests are
protected. If there is doubt, that should be resolved in favour of the
existing interests by declining consent.44
Liability
4.23 An impact between the IMV and the Kupe Wellhead Platform or
pipeline could cause structural damage to Origin infrastructure and
40 Trans-Tasman Resources Ltd Marine Consent Decision, June 2014, at [754] and [759]. 41 Trans-Tasman Resources Ltd Marine Consent Decision, June 2014, at [754] and [760]. 42 (21 August 2012) 683 NZPD 460. 43 This was apparently accepted by the DMC which considered the Chatham Rock
Phosphate application, where at [838] it appeared to find little difference or practical import between the terms "precaution" and "caution"; and that those constructs should be used interchangeably.
44 Echoing the approach to notification taken by the High Court in Progressive Enterprises Ltd & Anor v North Shore City Council & Anor [2006] NZRMA 72 (HC) at [73].
3240815
13
result in an uncontrolled hydrocarbon discharge.45 The environmental
consequences of such a discharge are potentially catastrophic. The
EEZ regime does not contain an appropriate mechanism for TTR to be
held responsible or prosecuted in the event that its activities result in
an uncontrolled hydrocarbon discharge from Origin infrastructure.
Liability lies with the owner of the infrastructure from which the
discharge originates.46 Accordingly, Origin seek that any conditions of
consent indemnify the JVPs, should TTR's activities cause damage to
Origin infrastructure.
5. SPECIFIC EFFECTS ON ORIGIN'S INTERESTS
5.1 We briefly outline key effects on Origin below. They can be broadly
separated into two categories:
(a) effects on existing infrastructure / operations; and
(b) effects on future operations.
5.2 Origin's witnesses address these effects in detail in their statements of
evidence. That evidence consists of statements from internal
employees within Origin, who have significant experience in the oil
and gas industry, and statements from external third party experts
engaged by Origin to review TTR's latest application. To the extent
that Origin's employees give evidence during the course of this
hearing on expert matters, that experience and expertise should not
be undermined simply because those witnesses are employed by
Origin. In all instances, the views of Origin's internal experts (both
during the first application, and this latest application) have been
corroborated by the independent experts engaged by Origin to review
the material.
5.3 Origin has also filed a statement of evidence from Mr Martin Aylward,
who was party to the discussions that took place in the lead-up to this
latest application, and provides evidence regarding some of Origin's
concerns.
45 Refer Evidence of Owen Hobbs at [6.3] and Evidence of Iain Currill at [4.14]-[4.39]. 46 Acknowledging that the Act provides for defences to operators where discharges are arise on a 'no fault' basis.
3240815
14
5.4 Additionally, by way of scene setting, it is important to understand that
the consequence of any interference with the Kupe operations is
significant. If something were to happen to the existing infrastructure
causing operations to cease, it could result in losses of $1 million per
day of stopped production or losses in the billions if the infrastructure
is damaged beyond repair. Moreover, significant damage to Origin
infrastructure could result in an uncontrolled hydrocarbon discharge,
the consequences of which are potentially catastrophic.47
Existing infrastructure / operations
5.5 TTR's activities will:
(a) Pose and increase the risk of a collision / significant impact
on the Kupe Wellhead Platform, pipeline or umbilical, or other
infrastructure (such as Wellhead no. 4):
(i) Clearly, the greater number of vessels operating in
proximity to the Kupe infrastructure, the greater the
risk of a collision event, impact or anchor dragging
across infrastructure. If an impact caused major
damage to platform infrastructure, liquids could flow
uncontrolled at a rate of 5,500 barrels per day into
the STB, until the wells could be plugged or
capped.48
(ii) Origin has significant concerns with the class
notation for the IMV and its mooring configuration,
given a lack of inbuilt redundancy and the design
criteria used.49
(iii) Proximity is also an issue. Obviously, the closer the
vessels are to Kupe assets, the greater the risk. A
specific condition requiring TTR's activities to be
undertaken at least 1.5km from the Kupe platform
should be imposed (to reflect, in Origin's view, a 47 Evidence of Owen Hobbs at [4.14] and [6.3]. See also Evidence of Iain Currill at [4.13]-[4.34]. 48 Evidence of Iain Currill at [4.13]-[4.34], particularly [4.23]. 49 These concerns are based upon AMOG's third party expert review of the IMVs classification and mooring design, attached to the evidence of Christopher Carra as Appendix B. Specifically, see [2.1]-[2.2].
3240815
15
minimum safe distance between the two operations
based on the specifications contained in the
application) ).50 In respect of the currently capped
well located within the TTR marine consent area, or
future infrastructure, an exclusion zone of 500 m
should also apply.
(iv) The residual risks should also be addressed through
a condition requiring an indemnity and appropriate
insurance to the maximum reasonably obtainable on
the market. (If TTR is correct and the risk is minimal,
then securing insurance should not be an issue.)
(b) Result in changes to undersea currents and wave velocity,
with potential impacts on the in-place stability of the pipeline
and umbilical. In particular:
(i) The ocean is an unpredictable environment. When
the Kupe infrastructure was being installed a number
of issues arose, even though specific modelling was
undertaken.51
(ii) TTR has failed to provide any detailed assessment
of the oceanographic environment as it relates to the
Kupe interests; how the TTR mining activities may
alter that environment; and what the impact could be
on those interests.52 Any material change in seabed
currents and wave loadings could increase the
stress on the pipeline and umbilical in particular,
while pits and mounds created during mining
operations may migrate, potentially causing pipeline
spanning or burial.53
50 This is reflected in Origin's submission on the application, 12 December 2016. 51 Evidence of Iain Currill, [3.4] – [3.36]. The extent of the work undertaken to understand the environment and effects is illustrated by the attachments to Mr Currill's evidence. 52 Evidence of Iain Currill, at [4.51]. Noting that TTR have committed to completing
baseline monitoring and ongoing environmental management and monitoring plans. See also Appendix A to the Evidence of Robert Overy at [5]: the OCEL report on jack-up rig operations does not address the practical problems mining operations will pose to jack-ups.
53 Evidence of Christopher Carra at [4.7] and Appendix B at [3.2].
3240815
16
(iii) Baseline and operational monitoring may enable
changes to be detected; but there must be a
requirement in conditions to modify or cease
operations if necessary to avoid damage to the Kupe
infrastructure.
(c) Impact on inspection, maintenance, and repair because of
reduced visibility:
(i) The Kupe JVPs currently undertake ROV surveys to
monitor their infrastructure on a regular basis, and to
investigate any emergency situations that arise. To
be efficient and effective, that requires horizontal
underwater visibility of no less than 5 m.54
(ii) TTR has not undertaken baseline modelling or
monitoring at the Kupe site, or undertaken a
modelling exercise to specifically determine how
frequently the Kupe JVPs visibility will be adversely
affected, or if adversely affected, how long those
effects will last once mining has stopped.55
(iii) Specific conditions, including requirements for TTR
to modify its activities, need to be imposed to ensure
the Kupe JVPs can monitor, maintain and repair
their infrastructure.
Future operations
5.6 TTR's activities, if approved, will impact on the Kupe JVPs' ability to
develop and utilise the petroleum resource in the remainder of its
permit area due to conflict with TTR activities. Impacts will include:
(a) Interference with timing and potential locations: a petroleum
well (or other infrastructure), seismic acquisition surveys, and
iron sand mining activities cannot exist or be carried out at
the same location at the same point in time. Mining vessels
and anchors present physical barriers to hydrocarbon
54 Evidence of Iain Currill at [4.50]. 55 Evidence of Iain Currill at [4.51].
3240815
17
surveys while operational noise and changes to bathymetry
and seabed density reduce the quality of gathered data and
increase costs.56 As bringing drilling rigs and associated
support vessels and infrastructure to New Zealand is a
significant undertaking, it is almost always co-ordinated with
other companies to share costs and risks. Any delays caused
by mining operations might therefore cause the Kupe JVPs to
miss their window of opportunity, making it uneconomic to
develop their field, and leaving stranded assets.57
(b) Operational risks and additional investigation and installation
costs: the mined and disturbed seabed that would be created
by TTR's proposed operations poses very significant
geostability challenges and risks for the installation and
operation of jack-up rigs, and the placement and attachment
of subsea infrastructure.58 At a minimum, there will be
significant additional costs (and potential risks) associated
with that. While quantifying those costs is exceedingly
difficult (as there will be little "before" data as to the precise
physical nature of the specific areas of seabed), it has been
estimated TTR's mining operations will add an additional $10
– 17 million NZD per well alone.59 Again, the costs and risks
could be such that the Kupe JVPs would not proceed, when
they otherwise might have done so.60
(c) Process and procedure: The Kupe JVPs will likely need
marine consent for any new development within its mining
permit area. If marine consent is granted to TTR, it will
become an existing interest; any effect of the Kupe JVPs'
future activities on TTR's activities would need to be
considered and TTR could oppose the grant of marine
consent to the Kupe JVPs, potentially limiting the Kupe JVPs
access to resources it is entitled to.
56 Evidence of Iain Currill at [5.28] – [5.28]. 57 Evidence of Iain Currill at [6.5] – [6.9]. See also Appendix B to the Evidence of Christopher Carra at [4.3]. 58 Appendix A to the Evidence of Robert Overy, at [5] and [11]. See also Appendix B to the Evidence of Christopher Cara at [4.1]. 59 Evidence of Iain Currill at [6.7]. 60 Evidence of Iain Currill at [6.9].
3240815
18
6. SPECIFIC CONDITIONS
6.1 Conditions are essential to the exercise of a consent in a manner that
will ensure that effects are appropriately avoided, remedied, or
mitigated - and contained within known and accepted levels. In the
context of "proposals of national significance" under the RMA's EPA-
Board of Inquiry process, across 15 proposals, the number of
conditions often exceeds 250. They are usually proposed in a
comprehensive form at the time of lodgement, updated in evidence,
submitted at the start of the hearing (having taken into account
submitter evidence), and again after conferencing.
6.2 The conditions proposed at the time of lodgement were not "shaped"
by consultation with Origin, and did not address the concerns clearly
expressed by Origin in relation to the first application.61 The evidence
of Mr Carra set out the concepts that would need to be incorporated
into the proposed conditions which, in addition to the 1.5km exclusion
zone sought through Origin's submission, would be required to
address the concerns of the Kupe JVPs. Following the submission of
that evidence, TTR have made contact regarding the potential for
amended conditions to address Origin's concerns with the application.
As noted by Mr Holm in opening, a first draft of conditions was
received yesterday and is currently being reviewed. An update as to
progress will be provided when Origin's evidence is presented on 16
March. As this process has only recently commenced, and has
certainly not yet reached resolution (and nor is there a guarantee it
will), the formal position for now remains as set out in the submission
and evidence.
61 Refer to the Evidence of Ian Currill at [2.7] and Martin Aylward at [3.14] where both witnesses note they consider TTR's pre-lodgement engagement with Origin was simply designed to show the DMC some form of consultation had been undertaken, rather than to reach agreement on outstanding issues.
3240815
19
7. CONCLUDING REMARKS
7.1 If the DMC is minded to grant marine consent to TTR, despite the lack
of information and uncertainty as to effects on the Kupe JVPs, it must
be granted on appropriate conditions including those conditions
proposed by the Kupe JVPs.
DATED 16 February 2017
B S Carruthers / D Owen
Counsel for Origin Energy Resources Kupe NZ Limited , on behalf of the Kupe Joint Venture Parties