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BEFORE THE ENVIRONMENTAL PROTECTION AUTHORITY
OMV GSB LIMITED APPLICATION FOR MARINE DISCHARGE
CONSENT TO DISCHARGE OFFSHORE PROCESSING DRAINAGE
(HARMFUL SUBSTANCES FROM DECK DRAINS) 5
EEZ 100018
IN THE MATTER of the Exclusive Economic Zone and
Continental Shelf (Environmental Effects) Act 2012 10
AND
IN THE MATTER of a Decision-making Committee
appointed to consider a marine discharge consent 15
application made by OMV GSB Limited for the
discharge of trace amounts of harmful substances
from deck drains in the Great South Basin
Held at: Distinction Hotel, Dunedin 20
Decision-making Committee
Mr M Farnsworth (Chair)
Mr G Shaw 25
Dr N Crauford
30
2
I N D E X
DAY THREE (1 August 2019)
5
Opening Statement from the Chair 3
Presentation by Liz Palmer 5
Questions from Committee 13
10
Presentation by Fiona Clements 16
Questions from Committee 20
Closing representation by Mr Winchester 21
Questions from Committee 30 15
Closing remarks from the Chair 31
3
OPENING STATEMENT FROM THE CHAIR
CHAIR: Kia ora tatou, people, the DMC whanau, tena
koutou katoa to the family of the DMC process, a 5
warm and welcome to the third day of the hearing,
of a hearing convened by the EPA to hear an
application by OMV GSB Limited for the discharge of
trace amounts of harmful substance from an offshore
processing drainage from the deck drains of one or 10
more of its MODUs.
We have some new people here this morning, so some
quick introductions. I am Mark Farnsworth, I am the
Chair of the DMC, an independent Hearing Commissioner
based in Northland. To my left, I have Dr Nicki Crauford 15
and to my right I have Greg Shaw. And over here I have a
series of EPA staff who are here to assist. In
particular, can I single out Gen Hewett, if you've got
any questions about anything talk to her. And I'm going
to ask the Hearing Manager Paula Duffy to do a quick 20
commercial break on health and safety.
MS DUFFY: Good morning, everybody. Please ensure that
you sign the attendance register upon your arrival.
If you didn't do that, just at the break could you
please pop and sign that. 25
Please ensure that you turn your cellphones off and
any electronic devices at least to silent mode so we
don't get any interruptions this morning.
The camera that you see here was for Skype the last
couple of days, we don't have any Skype calls today but 30
there is absolutely to be no recording, visual or audio,
of this hearing without the prior approval of the
Committee.
4
The hearing is being recorded for transcription
purposes, so assume that the mikes are live at all times
and there will be a transcript available for you on the
website.
For health and safety, if an alarm is activated 5
please exit this room and follow the green emergency exit
signs. You came up through the lift, if you head back in
that same direction but before you hit the lifts you need
to turn right and follow those exit signs or come down at
the bottom of the hotel foyer and the emergency assembly 10
point is that blue building right there on Liverpool
Street.
In the event of an earthquake, please do not leave
the building, drop, cover and hold and wait here until we
get further instructions from the venue. 15
Thank you very much.
CHAIR: Just to reiterate a number of things. We are
here to listen and it's very important that people
understand that we have not made up our minds in
any shape or form. We are here to hear, consider 20
and decide.
One of the aims of the DMC is to ensure that
everyone gets a fair go within the confines of the
hearing process. And to that degree, if there's
repetition or matters that go on, I will bring them to a 25
conclusion.
Anyway, as simple as that. Any questions that you
have, please talk to Gen. Only the DMC can ask questions
of submitters, no-one else. If you have something that
you would like us to consider that needs to be put, 30
please talk to Gen Hewett.
Okay. I think we've got a relatively short morning
this morning, so we will make a start. I think is it Liz
5
Palmer who's here, thank you. And contrary to the press
report we will give you a fair hearing, Ms Palmer
PRESENTATION BY LIZ PALMER 5
CHAIR: Good morning and welcome.
MS PALMER: Thank you, shall I start now? 10
CHAIR: Yes, you can.
MS PALMER: Thank you. I appreciate the time that I've
been given to present this today. My name is Liz
Palmer. I am a project financial adviser for a
corporate consultant. I state this not to assert 15
myself as an expert but to say I understand the
corporate structure, dialogue and motivation. I
submit as a concerned citizen of New Zealand with
the intention of assisting the DMC in this process.
I am presenting this in bullet points that I put to 20
you recently.
Significant use of assumptions and out-dated
information resulting in uncertainty and incompleteness.
I see little certainty in the dialogue used in this
application, nor in supporting reports. I see the use of 25
assumption, and outdated data (marine ecology data from
1958, deep water corals information from 1981, pollution
studies 1987 and weather conditions from 4 years ago,
this is a nonsense considering the current state of
affairs). Never in our human history have we seen 30
changes to the condition of the planet happening so
quickly. I question the relevance of expert reports,
when they are based on such outdated data.
6
The 'certainty' that impacts from the activity are
negligible must be questioned. OMV state that there are
significant risks of bringing the toxic waste to onshore
(and no doubt significant costs) however there are
apparently only negligible risks when diluting the 5
substances, spilling a bit, then discharging them into
the ocean. I fear this is a case of 'what the eye
doesn't see...'
While wading through this information, it is
appallingly clear that there are many unknowns. How can 10
impacts be assessed as negligible when there are so many
unknowns?
Unknowns include frequency of an event; current
state of the ocean is unknown; effects of fast-changing
conditions are unknown; cumulative effects are unknown; 15
vessels (for the duration of the consent) are unknown;
location of the wells (for the duration of consent) are
unknown; economic benefits are unsubstantiated and
economic costs are unknown; substances are unknown and I
don't believe should be looked at in isolation; 20
therefore - risks are unknown.
Assumptions are evident in the prolific use of
phrases such as negligible consequence; rare likelihood;
while theologically possible; substances would be
undetectable (by humans); temporary in nature; are 25
expected to be; intermittent nature of discharge and the
high mobility of fish reduces any potential threat. This
last point has not been assessed. It has been presumed
and calculated by assumption. Is this good enough? I
suggest not. There is no mention of the fact, which is 30
common knowledge, that fish aggregate near rigs, which in
turn attracts bird life. There is no mention that rig
lighting attracts bird life. There is no mention from
the oil industry experts of the fact that certain fish
7
are susceptible to harmful toxins from very small
quantities, again common knowledge.
I understand these are qualified assumptions,
however they are qualified assumptions from within the
oil industry and I questioned whether the DMC has a 5
balanced input of information required to make a
justifiable decision.
I understand that uncertainty is defined by law,
however I am not alone in querying the use of this
dialogue. The 2018 Stantec Report recommends the DMC 10
clarify what OMV's commitment really is. For example,
'wherever possible' has been translated by the author to
mean 'cost/availability'. Environmental risk has been
lowered to 'as low as reasonably practical', again a cost
measurement, commonly known as weighing a risk against 15
the trouble, time and money needed to control it.
You have a report that states there are no
uncertainties. I am sure it is not intentional, however
I consider the report cursory.
If mankind is to effect the necessary change of 20
behaviour required, to keep the planet in a livable
condition, no government agency can be seen to supporting
such activities. This agency should go to great length
to do just the opposite. The EPA Statement of Intent
says the client should be at the forefront of all 25
decisions it makes, as a government agency I trust the
client is the people of New Zealand.
Inconsistencies in the application around economic
benefits, raising question of process. OMV states there
are no economic benefits of this activity. OMV has 30
provided brief and general reference to investment in
New Zealand since 2002, around $3 billion. In this brief
discussion on economic benefit, OMV has made no attempt
8
to forecast any benefits the proposed GSB EAD programme
may contribute going forward.
Economic benefit, in the current environment, needs
careful consideration. A recent report commissioned by
Westpac examined future threats to our economy, suggests 5
a $30 benefit to GDP through to 2050 by adopting a smooth
transition by New Zealand business to meet climate
obligations. It went on to suggest growth is not
protected to be evenly distributed. Renewable energy
sources such as wind, hydro and solar will be among those 10
industries to prosper, alongside fishing and non-ferrous
metals, while fossil fuel industries will contract; and
added - a sector's capacity to decarbonise is positively
correlated with projected growth. I would suggest that
OMV's failure to properly address economic benefit is a 15
lack of understanding in the above matters. I have been
given to understand that OMV is still seeking investment
for this operation. Perhaps the above knowledge, coupled
with OMV's loss of social license, is hindering this
process. 20
It appears to be acceptable for the applicant to
extract facts around the whole proposal when trying to
justify the economic benefits of the activity, while also
being acceptable to limit facts to an isolated activity
while assessing the environmental impacts. 25
This raises the question of joint processing and
decision-making on related applications. The application
clearly states that EPA will be hearing more than one
application and I fail to see in all fairness why the EPA
does not exercise its right to ask that the related 30
applications be heard at the same time. Although the
numerous applications may not yet be technically lodged
by the applicant, they are most certainly before the EPA.
9
Can a decision, that safeguards the life supporting
capacity of the environment, be made, in all fairness,
when all the applications are not heard together?
Inadequate determination of existing
interests/stakeholders and reporting of engagement. The 5
application is, I believe, vague in the reporting of
feedback from any consultation undertaken. There is
explanation of the method of determining "existing
interests", but actual reporting on consultation that may
have occurred is insufficient or non-existent. It 10
appears everyone listed may have been sent the draft
application, but this should not be considered
consultation because it puts the onus of a response on to
the affected party, whereas the burden of communication,
I believe, lies with OMV. There are no written approvals 15
with this application.
For example, OMV states, "There are a number of
customary rights along the shoreline adjacent to the AOI.
The nearest 24 kilometres away. In theory, these rights
could give rise to an existing interest. If so, they are 20
highly unlikely to be affected." This is intentionally
vague, obviously a matter of opinion. The matter is
dismissed at this point and discussed no further.
For an organisation that prides itself in historic
and extensive engagement with stakeholders since 2011, it 25
offers little evidence of this. In fact, OMV reports
that "face-to-face meetings have not been possible with
all groups prior to the submission of this application".
No explanation given, certainly not due to time
constraints. 30
While stating that its discussions are confidential,
evidence of actual discussions taking place and being
properly reported should, I believe, be a minimum
requirement. There is no reporting of feedback from
10
consultation with the listed regulators, TAs or shipping
interests. I believe this is both desirable and
necessary for the DMC to determine that consultation has
been adequately undertaken.
OMV states "it has worked hard to build and maintain 5
trusted working relationships with many groups and
individuals in the area it operates in New Zealand". I
do not agree. This is an example of the puffery used
throughout this application.
A summary of what can be teased out of the material 10
provided, is that stakeholders, particularly iwi, found
it hard to properly assess any affects this venture may
have on them due to the process of separating relevant
consents, and any information these may contain.
Stakeholders ask that they be consulted further wen these 15
applications are made. This is a concern, as further
applications, if any, are non-notifiable. The EPA in its
Statement of Intent talks of increasing the frequency and
quality of engagement with specialised groups such as
environmental non-government organisations. One way this 20
can occur, I believe, is in the expectations of the
consultation process of its applicants.
One might argue that we are all stakeholders when it
comes to this industry. The facilitating of the
extraction of fossil fuels, which this consent forms part 25
of, affects every living thing on the planet.
I consider the consultation undertaken by OMV to be
cursory and unclear by way of feedback. The lack of
reporting of engagement would suggest the inadequacy of
the process. 30
Cumulative impacts assessed in a way systemic to the
industry. Cumulative means "including all amounts that
have been added before". Within this meaning, I would
expect to see the cumulative impact of adding more toxins
11
to the ocean to be assessed for the purpose of this
consent. Instead, we are provided with a wordy report of
cumulative impact based on all amounts added by other
operators in the area. As OMV may potentially be the
last operator in the area, with the issue of new permits 5
no longer lawful, this is nonsensical. Nowhere have I
seen a proper assessment of the current state of the
ocean from which to examine the impact of adding more
toxins.
It appears to be an assumption that we are starting 10
with a clean slate. I need no expert to tell us this is
not the case. It is common knowledge that plastic, a
product of fossil fuels, is a major pollutant in the
ocean. The ocean has five major gyres (permanent
currents) that can carry pollutants all around the 15
planet. This being so, I would imagine that the study of
cumulated impacts, of polluting one particular area,
would be difficult to assess. OMV have stated that any
adverse effects would be negligible due to the mobility
of fish, but clearly mobility is also relevant to the 20
spread and cumulation of waste from an oil rig, including
those under consideration today.
I believe cumulative impacts cannot be properly
assessed if all activities of the EAD are not considered
together. This thin edge of the wedge approach to the 25
consenting process, in my opinion, is no longer relevant
nor fair. It is well-known that tonnes of drilling
fluids and metal cuttings are disposed of daily by
offshore rigs.
Use of precedent in relation to the rope of EPA. 30
Certain narrative used in this application insinuates
acceptability, suggests business as usual, and approval
as a fait accompli. For example, "substances already
12
approved for use elsewhere by the EPA". A gentle
reminder perhaps from the applicant of a precedent?
Having viewed the earlier application of OMV for
activities in Taranaki, I question if this regurgitation
of information is considered adequate for the DMC to make 5
a just and fair decision, at this time.
The approval of a previous consent, in an area where
the world's rarest dolphin calls home, must not set a
precedent, in fact I believe quite the opposite is true.
I would ask that this application be assessed through 10
fresh eyes with consideration to the fast changing state
of the world, and the downward spiraling social licence
of this sunset industry.
Even in America, last month, the House of
Representatives passed amendments that block the 15
expansion of offshore oil drilling in the Atlantic,
Pacific and Eastern Gulf of Mexico, along with a block of
funding seismic blasting in the Atlantic Ocean. I
understand the consent under consideration is for a
permit that could end as late as 2030. This is the exact 20
time period when a just transition to renewable energy is
required. Sustainable management of our natural
resources must also include 'cessation' if crises is to
be averted.
Request to decline the application and provision of 25
reasons for this decision. The dialogue has changed.
This systematic use of language, to say very little, no
longer has social licence, nor the integrity needed to
make decisions that sustainably manage the remaining
resources on this planet. I ask that you exercise a duty 30
of care in making this decision.
Economic benefits are not established either for
this current activity or the entire EAD programme. The
information provided is cursory at best. The EEZ Act
13
places a focus on economic development. The ability of
this industry to ensure such development is questionable
in the long-term.
I do not believe the interests of New Zealanders,
either environmentally or socially, are properly 5
addressed in the consultation process undertaken by the
applicant.
The cumulative effects of this activity are complex
and hard to assess. I consider the amount of puffery in
the assessment reinforces this observation. The 10
applicant's conclusion that cumulative effects are
negligible also highlights this difficulty. However,
this does not make the conclusion acceptable.
I am uncertain of the independence of the material
the DMC must decide upon. Most of the assessments and 15
evidence produced for this application are from within
the oil industry. If the strength of the EPA is to
remain independent, then this must be seen to occur.
The EPA must put their client to the forefront of
every decision they make. As a government agency, I 20
would expect the people of New Zealand to be that client.
With this in mind, I ask the DMC to use all their power
to ensure this activity does not proceed. We are all
caretakers of the environment. I ask that you favour
caution and environmental protection when making your 25
decision to decline this application. You have a real
opportunity to make a positive and material difference to
the challenges facing our country. I urge you to look at
the tools available to you to do the right thing.
CHAIR: Thank you, Ms Palmer. Dr Crauford, have you got 30
some questions?
DR CRAUFORD: Ms Palmer, I don't have questions for you
because if I was to ask questions, I think it would
be repeating a lot of what has happened prior in
14
the last couple of days. I don't think you've been
here for other parts of the hearing, have you?
MS PALMER: No, I've read some feedback.
DR CRAUFORD: Some of the issues that you raise have
been discussed in other parts of the hearing, so if 5
you have the time you might like to have a look
through the transcript and you might get some
answers to some of the issues that you have raised.
MS PALMER: Yes, the transcripts were only available for
day 1 which didn't address that. 10
DR CRAUFORD: Okay, it will be available shortly for
other days as well. For example, the issue of
birds, we spoke about that yesterday.
MS PALMER: Okay.
DR CRAUFORD: So, I will leave you to have a look 15
through that.
MS PALMER: Thank you.
DR CRAUFORD: Thank you for your submission.
CHAIR: Mr Shaw?
MR SHAW: Yes, Ms Palmer, you started off by stating 20
that the data used was outdated. Now, I'd be very
interested to know whether you had available at
your disposal more relevant data which you refer to
when preparing your submission?
MS PALMER: What in particular are you asking about? 25
MR SHAW: All of the data that you've mentioned here,
marine ecology, pollution studies, weather
conditions etc.
MS PALMER: Oh, that data was from the appendix of the
application submitted by OMV. 30
MR SHAW: Yes. I'm asking, you were saying it was out
of date, do you have or did you look at your own
data in order to make that comment?
15
MS PALMER: Well, I made the comment based on the year
it was produced.
MR SHAW: So you don't have any alternate data?
MS PALMER: Well no, I'm not an expert witness, so no I
don't. I am just commenting that the data that has 5
been used seems to be very much out of date,
bearing in mind the conditions, fast changing
conditions.
MR SHAW: But you can't offer any alternative to prove
your hypothesis? 10
MS PALMER: I'm commenting on the age of the
documentation. I live in a university city,
there's people studying marine science every single
day here. We run courses for that. I know of
people that are out there in vessels studying the 15
marine environment. That I would believe is common
knowledge. So, we didn't stop looking at deep
water corals in 1958, we didn't stop looking at
pollution studies in 1987, we haven't stopped
looking at the weather from 4 years ago. So, 20
obviously I would imagine there's more information
out there. Why would we stop looking at it? But
it's not upon me to be producing that information.
MR SHAW: No further questions.
CHAIR: Ms Palmer, thank you very much for taking the 25
time to present to us this morning, thank you.
MS PALMER: Thank you, Mr Farnsworth.
CHAIR: We now move to the second item on our agenda
which is sustainable Dunedin city and it's Ms Fiona
Clements. Welcome. 30
16
PRESENTATION BY FIONA CLEMENTS
MS CLEMENTS: Tena koutou, tena koutou, tena koutou
katoa. (Addresses in Te Reo Maori). 5
CHAIR: Kia ora.
MS CLEMENTS: Kia ora, my name is Fiona Clements and I
am the Chair of Sustainable Dunedin City.
Sustainable Dunedin City is an incorporated society
which began in 2007 and its purpose is to 10
facilitate a positive, secure and sustainable
future for Dunedin City in the face of challenges
posed by climate change and unsustainable resource
use.
The Society conducts research and disseminates 15
information on climate change and sustainability,
promoting awareness of these issues to the wider
community. The Society aims to influence
individuals, businesses and governments to adapt
their behaviours and policies to reflect the 20
importance of these issues.
The Society fosters linkages between organisations
with objectives similar to or complementary to the
Society.
It hosts around 400 members of the Dunedin community 25
and as the Chair, I speak on their behalf.
I would like to thank the DMC for the opportunity to
speak to our submission and the OMV for witnessing the
great opposition from Dunedin City and further afield to
their consent application. 30
I ask the DMC today to not only listen with their
heads but also with their hearts, and that we acknowledge
the failing system that we work within.
17
Today we would like to reiterate and reinforce all
those who have spoken before us in opposition of this
consent application. We believe these people have the
best interests of the environment of the Great Southern
Basin in mind. 5
Today we speak to the uncertainty held within this
consent application. Firstly, the consent application
does not verify what harmful substances will be
discharged. Without this information, how can we be sure
our environment is being protected? 10
We also have no idea of the frequency of the harmful
substances being discharged. The only certainty we hold
is that they are harmful.
There is no specific definition of what trace
amounts are for these harmful substances as trace amounts 15
can vary based on the type of substance, this is
insufficient detail to approve its consent.
The uncertainty around the insufficient and
inadequate information provided in regards to harmful
substances gives cause for alarm as to how these can be 20
mitigated or mitigation steps be implemented when they
are unknown.
The results of discharge can lead to accumulation in
the marine environment. There is insufficient
information on the cumulative effects of these harmful 25
substances in the proposed discharge on its own. There
is insufficient information and research data on the
potential cumulative effects with other discharge
substances from the drilling activities. There is an
issue on the calculations for estimating the dilution of 30
harmful substances and plume modelling of discharge as
this has been based on Taranaki conditions.
There are major concerns relating to insufficient or
inadequate information on the existing environment, as
18
information from Taranaki has been used to inform this
consent instead of the actual environment this consent is
being asked for. There is no mention of what
environmental conditions are deemed the same in the
Taranaki to the Great South Basin to make such a 5
comparison acceptable.
We are uncertain about the levels of ecotoxicity of
the hazardous substances mentioned in Stantec's
uncertainty report and we believe that no ecotoxic
substances released in the marine environment are 10
acceptable. We believe no hazardous substances should be
replaced into the marine environment or any environment
and that no environmental effects are considered to be
acceptable. Only regenerative or cradle to cradle
objectives are sufficient as acceptable. 15
This application does not take any regenerative
approaches to its mitigation. Therefore, it is
unacceptable to approve its consent.
There is uncertainty and inadequate information
regarding the type of mobile offshore drilling unit that 20
is to be used in this consent, giving no certainty that
discharges will be mitigated in a regenerative manner.
Secondly, stating that extreme events are unlikely
to occur during the time period that drilling is expected
to take is not an adequate mitigation tactic in the 25
current ecological conditions that we find ourselves in.
Extreme events have been occurring in Aotearoa as our
planet strives to balance itself from the extractive
industries that continue to profit from her well-being.
We are also uncertain whether CH4 emissions from 30
offshore platforms have been taken into account as
evidence from nature.com suggests that CH4 is a dominant
component of emissions from offshore oil platforms
released as a result of gas fluring and venting,
19
equipment leaks and evaporation losses with concomitant
emissions of CO2 mainly due to gas flaring. Among a
variety of CH4 sources, current estimates suggest that
CH4 emission from oil and gas processes account for
approximately 20% of worldwide antigenic emissions. We 5
cannot continue to add to this number by consenting this
application.
We believe that the precautionary principle needs to
be used in this instance because extensive scientific
knowledge on the matter is lacking. There is a social 10
responsibility to protect the environment from harm.
We also speak to point 39 of the EPA Consideration
Report, namely that from Catherine Ducker that states, I
do not consider that a condition requiring an engagement
agreement with Whakatipu Runanga and Ngai Tahu iwi and 15
tapu is necessary. The Ngai Tahu claim area includes the
Great South Basin and, as kaitiaki of this area, we are
uncertain that the marine environment and whakapapa of
Tangaroa has been taken into account. We believe that
those sitting before us cannot even begin to understand 20
the concept of whakapapa in relation to Tangaroa. And
that those ancestors, mammals and other sea life,
including our endemic seabirds who we regard as taonga
and that live in the marine environment in question, are
not taken into account. We are certain that there should 25
be an impact assessment and a meaningful cultural
assessment of the effects of harmful substances on these
species. A cultural assessment such as the whakapapa
from Mason Durie would be appropriate. We are certain
that these harmful substances will have an effect on 30
these species.
I am certain that the marine environment in question
holds no value to those concerned as it does to local
20
Runanga and that all they see is a way to make profit
from continuing to extract fossil fuels.
I am certainly uncertain about the uncertainty held
within this consent application process. (Speaks in Te
Reo Maori) for us and our children after us, today we 5
challenge the DMC to stand on the right side of history
and decline this application for consent and we ask the
EPA to hold public notified hearings for the latter
non-notified applications due for the furthering of this
process. (Speaks in Te Reo Maori). (Waiata). Thank 10
you.
CHAIR: Kia ora. Mr Shaw, do you have any questions?
MR SHAW: No, no questions.
CHAIR: Dr Crauford, any questions?
DR CRAUFORD: Yes. You mention an agreement with Ngai 15
Tahu or local Runanga. Are you representing Ngai
Tahu?
MS CLEMENTS: I am Ngai Tahu, yes, but I do not
represent the Runanga, no.
DR CRAUFORD: Okay, thank you. 20
CHAIR: Thank you, Ms Clements, for that.
MS CLEMENTS: Thank you.
CHAIR: That brings us to the conclusion of the
submitters' presentation. We now move to OMV has
the right of reply. Now, Mr Winchester, would you 25
like us to adjourn for a while?
MR WINCHESTER: No, thank you, Sir, I think I'm happy to
go now.
30
21
PRESENTATION BY MR WINCHESTER
My right of reply won't be lengthy and I am
happy to deliver that orally and back that up with 5
anything in writing should you require it.
CHAIR: I haven't discussed the need for how we want to
handle the right of reply, so just pause for a
minute. (Committee members confer).
Mr Winchester, it would come as no surprise that we 10
welcome an oral presentation but we certainly would like
it backed up by a written copy of the right of reply,
please.
MR WINCHESTER: That's fine, Sir. I am reading from
some notes which hopefully I will be able to 15
transform into a summary of the right of reply
relatively quickly.
CHAIR: Thank you.
MR WINCHESTER: Probably before I speak to the right of
reply, the DMC yesterday asked about a record of 20
OMV's spills of harmful substances associated with
its historical exploration drilling activities. I
have filed this morning with Ms Hewett a memorandum
which outlines a response to that. Does the DMC
have that before it? 25
CHAIR: Yes, we do.
MR WINCHESTER: I am happy to answer any questions about
it. The short point is that there has been one
such spill in 174 days of exploration drilling
conducted by OMV in its history in New Zealand. 30
And the circumstances of the spill were that it
wasn't captured by the deck drainage system, is the
essence of what happened. So, some contaminated
rainwater, 2 litres of that, was discharged
22
directly to sea and a small proportion of that
rainwater contained water based drilling muds, of
which a component was a classification 9.1
substance. So, that happened in 2014, Sir.
CHAIR: Thank you. Any questions? 5
DR CRAUFORD: No.
CHAIR: Mr Shaw?
MR SHAW: Just to clarify, modifications have been made
to prevent that from happening again; is that
correct? 10
MR WINCHESTER: Well, I understand that OMV's approach
is continuous improvement. Obviously, this was an
unplanned activity and it has sought to learn from
that, take necessary precautions. It incorporates
these experiences into its business processes and 15
it takes them into account in things like rig
selection processes. So, it definitely has
resulted in improvements and responses by the
government.
MR SHAW: This data doesn't tell me, I assume, when that 20
operation was undertaken that you had an
understanding of what the expected rainfall would
be in that area?
MR WINCHESTER: Look, Sir, I'm sorry -
MR SHAW: My question is, assuming everyone had done 25
their homework properly and prepared for this, then
why did this first incident occur? And are we
likely to have a similar one in the Great South
Basin where potentially the amount of rainfall is
far more in excess of what was recorded in this 30
event? I'm just wondering whether data of the
rainfall has been obtained as well in allowing them
to improve their methodology? If you can follow
what I'm trying to say.
23
MR WINCHESTER: Yes, I understand that. I can't answer
that question, Sir, in that I'm simply delivering
the information that was provided to me. I would
observe that was under a different regulatory
regime. This is now specifically dealt with, these 5
activities are dealt with now under the EEZ Act and
associated regulations, and there is a different
level of regulatory oversight in these types of
activities.
CHAIR: Do you want to come back to that? 10
MR SHAW: Yes, we may have some more questions around
that.
MR WINCHESTER: All right, Sir. I'll endeavour to
assist you as far as I can within my understanding
of events but, as I said, I am relaying the 15
information provided to me.
MR SHAW: It's not just we need a bigger bucket. You
need to start at the beginning of the process as to
what's caused it.
MR WINCHESTER: Indeed, Sir, and I suppose my response 20
to that is, you have before you evidence which
indicates that that issue has been specifically
considered by OMV and a highly conservative
approach taken in relation to this proposal and
these sorts of risks have been specifically taken 25
into account.
MR SHAW: Thank you.
CHAIR: Okay, Mr Winchester, you can carry on.
MR WINCHESTER: Thank you, Sir. I suppose, as a
starting point I should say that OMV maintains the 30
position that it set out in its opening submissions
and the evidence which it has presented to the DMC.
In terms of the other information which is before
the DMC, there's nothing which has been submitted during
24
the course of the hearing which causes it to change its
view or doubt the evidence that it has provided.
OMV understands that the marine consent and public
hearing process is daunting to lay people and submitters
and it also accepts that a lot of the information which 5
is in the public domain about this application is
technical and lengthy. That is a consequence of the
EEZ Act and the process. It does require significant
scientific and technical information.
OMV understands and it fully accepts the 10
frustrations of submitters who are confined by the scope
of the application and the constraints that that places
on evidence and information which is relevant to the DMC
decision. From OMV's perspective, that legal position is
unsatisfactory but, as I said in opening, those are the 15
cards that we are all dealing with and we don't really
have any choice in that matter.
Given those factors, OMV acknowledges the input of
submitters to the process, the obvious effort and deep
feelings that they express and acknowledges the efforts 20
they have gone to in order to express their views and
concerns and the manner in which they have conducted
themselves.
In my submission though, despite the procedural
complexity and the scientific and technical information 25
which has been produced, in reality the application and
its assessment in terms of risks and effects is
relatively straightforward, and a number of submitters
have effectively conceded this point in acknowledging
that the activity for which consent is sought is 30
irrelevant in terms of effects. And the real effects
they are concerned about are somewhat different.
In my submission, the fundamental issue before the
DMC is submitted to be one of risk, rather than effects,
25
because there is no certainty that there will be any
spills or harmful substances and hence discharge to the
deck drainage system and then to the marine environment.
And the evidence identifies that the risk of the spill is
very low and the information I've submitted in response 5
to the DMC's request obviously demonstrates that.
There will only be effects if there is a spill and
then based on all the assumptions used by OMV, which in
my submission are not only appropriate and appropriately
certain, but they are highly conservative. The 10
assessment is that the effects of the discharge of a
harmful substance as defined will be negligible.
With respect, those assessments of risk and effects
stand to reason and cannot be seriously challenged and
have not been in this instance by expert evidence. 15
There has been a very strong theme from submitters
about uncertainty. In my submission, if the application
and the evidence is carefully considered, there is ample
certainty about what you are considering because the list
of harmful substances is defined in regulations, it's a 20
specific list of harmful substances, and that is the
trigger for consent and the consent potentially applies
to any or all of those substances.
So, what's been assessed for the purposes of
identifying potential risks and effects is the most 25
ecotoxic substances on that list that might ever be used
on a MODU.
And the results of that assessment have been clearly
and thoroughly assessed by Mr Forrest and explained to
the DMC and it is submitted to be the best information. 30
So, in my submission, there is no material
uncertainty. This is what is known as a black box
application; it's very common and the method of
26
assessment and the assumptions used are entirely
reasonable in the circumstances.
I want to now turn to respond to or clarify a number
of specific matters that have arisen during the course of
the hearing. 5
The first is the suggestion by numerous submitters
that OMV has not been transparent in pursuing this
application and is somehow unfairly taking advantage of a
legal loophole to avoid fronting up to issues submitters
want to make about climate change and fossil fuel use. 10
That is not accepted.
In my submission, the EPA in this DMC is not the
correct forum for this issue and these concerns to be
raised. If people have concerns about the process, and
again those concerns are heard and understood, this is 15
fairly and squarely an issue for Parliament. The law is
what it is and everyone is bound by that. And if people
think that that is wrong, then it's up to them to
persuade Parliament to change the law.
In that respect, Parliament recently changed the 20
Crown Minerals Act to remove the ability to seek or issue
further offshore exploration permits for oil and gas.
And in doing so, Parliament also consciously and
deliberately preserved existing oil and gas exploration
permits and can only be assumed to know that in doing so, 25
it preserved and locked in the legal obligations set out
in permits between the Crown and permit holders.
There is ample evidence in the public domain that
indicates that Parliament knew exactly what it was doing
when it amended the Crown Minerals Act. There are 30
numerous public statements by the Prime Minister, the
Minister of Energy and the Minister of Regional Economic
Development that clearly outline that the government knew
what it was doing.
27
The Prime Minister said, "We are protecting existing
exploration and mining rights. No current jobs will be
affected by this and we are honouring all agreements with
current permit holders". She also said, "We are striking
the right balance for New Zealand. We are protecting 5
New Zealand industry and protecting future generations
from climate change".
And the climate change Minister, Mr Shaw, said, "We
would like to be able to move faster on this transition
but we always did say we would honour existing permits". 10
I understand that people have an objection to the
current state of affairs. OMV is not responsible for
that, nor is the EPA, nor is this DMC. It's a job for
Parliament.
So, in terms of the law and what OMV's exploration 15
permits involve, that expressly involves a legal
obligation on OMV to carry out the exploration activities
specified in that permit, and that is an obligation on
Crown.
This present application is a necessary part of 20
complying with that obligation.
What OMV is doing is therefore not only lawful, it
is entirely consistent with Parliament's intentions.
And similarly, the marine consent process in the
scope of this application is prescribed by law. There 25
has been substantial discussion between OMV and the EPA
about how marine consent applications are to be
considered and determined and OMV is following what the
EPA has concluded as required, which is a notified
application for discharge of harmful substances 30
considered on its own and on its merits.
What I am essentially saying, is the unbundled
approached to marine consents for offshore exploration is
not an idea advanced by OMV. This is exactly the same
28
process as what happened with regard to the Taranaki EAD
programme.
The second point I want to suggest is suggestions
around the present application having been wrongly
assessed as being complete under Section 40 of the Act by 5
the EPA. That decision has been made by the EPA. They
are the relevant decision-maker for that and the DMC,
with respect, does not have the ability to change that,
except to the extent that you might conclude that the
application should be declined on its permits. 10
In any event, OMV's experience is that a Section 40
completeness assessment is not a rubberstamping exercise,
as some submitters have suggested. It is rigorous and
the EPA is not only the expert body which has carried out
numerous such assessments on a range of different 15
proposals but history has shown that it sets a pretty
high bar in terms of adequacy of information. And that,
of course, is demonstrated by the amount and detail of
information submitted by OMV in this instance.
There was a suggestion yesterday by Ms Larsson of 20
Greenpeace regarding OMV's position on consultation and
nothing really turns on it but, in my submission, it was
a misrepresentation of the clear evidence that you heard
from Mr Park about consultation and engagement.
On my understanding of what Ms Larsson said, she 25
suggested that OMV had chosen not to consult with
environmental groups because it considers there is a
constraint on consulting with groups other than existing
interests and that, as a consequence, its consultation
for this proposal was compromised. 30
I heard Mr Park's evidence. I've checked his
written evidence and that's simply not what he said.
Mr Park was very clear that OMV has consulted with a
range of groups, whether they are existing interests or
29
not, and has at its discretion gone well beyond those
defined as existing interests for this application,
including Greenpeace in Austria through OMV's Head
Office. OMV has never suggested, nor did Mr Park's
evidence say, that the definition of existing interests 5
is a constraint on its ability or willingness to consult.
Finally, not quite finally, second to last point in
terms of economic benefits. I repeat and confirm that
the economic benefits are not claimed by OMV for this
application. 10
So, as such, I did have an exchange with you, Sir,
in opening about whether it was a balancing exercise or a
weighting exercise in terms of section 10 and section 59.
In my submission, it doesn't arise in this instance as
there is no balance between economic benefits and 15
environmental factors that needs to be undertaken.
I would say, in terms of what the nature of the
exercise before the panel, before the DMC is, there's no
case law as to whether the EEZ Act decision-making on
applications is a weighting or balancing exercise, 20
certainly compared with the considerable body of RMA case
law. In my submission, it is really a matter of applying
section 59 of the Act to the extent it is relevant to and
engaged by the present proposal.
Finally, it's really a factual matter. There was a 25
question asked of Mr Hollinger about the dimensions in
deck height of the prospector rig. I can advise the DMC
that the main deck is 20 metres above water when it is in
drilling mode. That the air gap between the lower part
of the rig to the water level is 12 metres for drilling. 30
And in the case of a bad storm and large waves, the what
is known as survival mode configuration has the main deck
at 22 metres above water level.
30
That's all I have to say. I am happy to answer
questions but I would register my thanks to the DMC for
the careful consideration of matters and certainly to the
EPA staff for the professional way in which they've
handled this hearing. 5
CHAIR: Thank you, Mr Winchester. Dr Crauford, do you
have any questions?
DR CRAUFORD: No, I don't have any questions.
CHAIR: Mr Shaw, do you have any questions?
MR SHAW: Just a technical one about these wave heights. 10
The deck levels 22 metres in survival mode and I
read that the height of the largest wave recorded I
think was 23.4 metres in that area. So, therefore,
the deck would be awash with water when that wave
struck, is that my understanding? Could somebody 15
answer that?
MR WINCHESTER: I am not an expert and the maths, as far
as I can tell, sounds right but I suggest that if
you want some clarity on that I can have
Mr Hollinger consider that question and furnish a 20
written response.
MR SHAW: Yes, I would appreciate that.
MR WINCHESTER: Thank you, Sir, I'll do that.
CHAIR: Okay. Any other questions?
MR SHAW: And that's allowing for the wind driven 25
effects of the waves as well?
MR WINCHESTER: Right, thank you, Sir, I'll make sure he
understands the question and provides a response as
soon as he can.
MR SHAW: That's it. 30
CHAIR: Nothing else from anyone? Ms Hewett, anything
from you that we need to consider?
MS HEWETT: Perhaps a date for any written closings
might like to be confirmed.
31
CHAIR: Of the closing statement?
MS HEWETT: Yes.
CHAIR: Mr Winchester, when would you provide that?
MR WINCHESTER: I suspect I will have some time today to
work it up. Shall we say Monday next week? 5
CHAIR: Yes, that would suit us admirably. And
conditions, an up-to-date set of conditions, have
we decided on that?
MR WINCHESTER: I think the position remains as set out
in opening and in Mr Gartier's evidence but I can, 10
as with the written right of reply, I will furnish
OMV's preferred set of conditions as part of that.
CLOSING REMARKS BY THE CHAIR 15
CHAIR: Right. So, before we adjourn for the day,
adjourn this hearing, clearly we are not closing it
at this present point in time, Mr Winchester and 20
Mr Harwood, can I just make a couple of
observations.
One, I'm going to thank you both for your
forbearance and the way you conducted yourselves.
You could have made my life very difficult but you 25
chose to sit and listen and on behalf of the DMC,
we thank you for that, both of you for that. It
helped the smooth running of the hearing.
To the EPA staff, thank you for the assistance over
the course of the last three days. 30
And for the one person that remains in the audience,
we appreciated all the submitters, and of course the
press down the back who have attended.
32
And the stenographer, of course, a very important
person, thank you for your diligence.
So, that just leaves me with the task of trying to
get my tongue around a mihi for the day which I will do,
and please forgive the way I do my Te Reo, even though 5
I've spent many years living on the Peninsula, I still
can't get it right. (Mihi in Te Reo Maori). Greetings
to everyone, we have come to the end of the process.
Therefore, greetings to Ngai Tahu who are the iwi of the
area. DMC whanau, to all the people who made this 10
hearing, Tena koutou katoa. Safe travels home everyone.
Tena koutou, tena koutou, tena koutou katoa, thank you
very much.
We are adjourned.
15
Hearing adjourned at 9.59 a.m.