DECISION ON MARINE CONSENT APPLICATION OMV New …3. The drilling programme was not able to be completed before 28 June 2014. As such, OMV lodged an application for marine consent

www.epa.govt.nz

Application Ref:EEZ000007

DECISION ON MARINE CONSENT APPLICATION

OMV New Zealand Limited

Development drilling at the Maari Field in the Taranaki Bight

EXCLUSIVE ECONOMIC ZONE AND CONTINENTAL SHELF (ENVIRONMENTAL EFFECTS) ACT 2012

Maari Development Drilling – OMV New Zealand Limited

Marine Consent Decision

Application OMV New Zealand Limited has applied for a marine consent to complete the existing

programme of development drilling in the Maari field in the Petroleum Mining Permit (PMP

38160). The application seeks a marine consent for the following activities:

The construction, placement, alteration, extension, removal, or demolition of a structure on or

under the seabed (section 20(2)(a)):

The removal of the jack-up drilling rig legs from the seabed; and

The alteration of the equipment on the wellhead platform.

The construction, placement, alteration, extension, removal, or demolition of a submarine

pipeline on or under the seabed (section 20(2)(b)):

The installation of submarine pipelines (production tubing, casing and associated fittings)

under the seabed.

The removal of non-living natural material from the seabed or subsoil (section 20(2)(d)):

The drilling of the wells involving the removal of material from the subsoil.

The disturbance of the seabed or subsoil in a manner that is likely to have an adverse effect

on the seabed or subsoil (section 20(2)(e)):

The removal of the jack-up drilling rig legs from the seabed.

The deposit of any thing or organism in, on, or under the seabed (section 20(2)(f)):

The deposition of drill cuttings and other materials on and under the seabed; and

The deposition of settling sediment from the plume generated from the removal of the

jack-up drilling legs.

The destruction, damage, or disturbance of the seabed or subsoil in a manner that is likely to

have an adverse effect on marine species or their habitat (section 20(2)(g)):


The construction, mooring or anchoring long-term, placement, alteration, extension, removal,

or demolition of a structure or part of a structure in the waters of the EEZ (section 20(4)(a)):


The causing of vibrations (other than vibrations caused by the normal operation of a ship) in

a manner that is likely to have an adverse effect on marine life in the waters of the EEZ

(section 20(4)(b)):

The generation of vibrations from drilling the wells.

Decision

Pursuant to section 62(1)(a) of the Exclusive Economic Zone and Continental Shelf (Environmental Effects)

Act 2012, the application for marine consent by OMV New Zealand Limited to complete the existing

programme of development drilling activities at the Maari wellhead platform in the South Taranaki Bight is

GRANTED subject to conditions.

The reasons for granting the marine consent, along with the conditions applying to its exercise, are set out

below in this decision pursuant to section 69 of the Exclusive Economic Zone and Continental Shelf

(Environmental Effects) Act 2012.

1. OMV New Zealand Limited (OMV) has applied for marine consent under the Exclusive Economic

Zone and Continental Shelf (Environmental Effects) Act 2012 (EEZ Act) for various activities

associated with the drilling of up to seven development wells in order to enhance petroleum

production at the existing Maari oil field in the South Taranaki Bight. The Maari wellhead platform

(WHP) is located approximately 80 kilometres (km) offshore from Opunake at 39.985833°S and

173.293836°E.

2. OMV submitted an Impact Assessment for the drilling of the seven development wells to the

Environmental Protection Authority (EPA) in June 2013 – a “planned petroleum activity” under

section 166 of the EEZ Act. Section 166 is a transitional provision of the Act that allowed OMV to

commence its drilling programme without a marine consent and continue until 28 June 2014.

3. The drilling programme was not able to be completed before 28 June 2014. As such, OMV lodged an

application for marine consent to authorise the continuation of their drilling programme on 3 June

2014, enabling OMV to continue with its drilling programme whilst its application for marine consent

is considered by the EPA.

4. The application for marine consent covers the drilling of up to seven development wells and

associated activities. The wells will be drilled within existing conductor slots, using the jack-up drilling

rig ENSCO 107. The purpose of the drilling programme is to enhance petroleum production at the

Maari oil field.

5. In making our decision on this application for marine consent, we have acted as an independent

decision-maker under delegated authority from the EPA.

6. Our decision is to grant the application for marine consent. The reasons for this decision are

summarised below and fully set out in the main body of this report.

7. In making our decision, we have taken into account the decision-making criteria set out in sections

59 and 60 of the EEZ Act. We have also applied the information principles set out in section 61 of the

EEZ Act.

8. We have also determined the extent to which imposing conditions under section 63 of the EEZ Act

might avoid, remedy or mitigate the adverse effects on the environment and existing interests. The

conditions we have decided to impose are detailed in Appendix 1 to this decision.

9. We have considered a wide range of actual and potential effects on the environment of this

application. It is not an application for consent for the recovery and production of oil or gas.

Submitters expressed concerns at potential effects arising from production activities at the Maari field

but we have confined our consideration to effects that arise from the development drilling

programme.

10. The overall effect of the development drilling programme on the environment is minor and, in many

cases, the effects are temporary. Nonetheless, we are conscious of our responsibility to take account

of events of low probability but high potential impact. An oil spill is such an event. This was the focus

of many submissions. The EEZ Act does not require no risk before an activity can be consented and

we considered whether there is a robust regime in place to prevent such spills and to manage them

should they occur. The information we obtained from Maritime New Zealand and OMV satisfies us

that this is the case.

11. Submitters expressed concerns that related to the recovery, production and use of oil and other

fossil fuels to generate energy and the impact of that on climate change across the world. One

submitter commented in an oral presentation that climate change was “the elephant in the room”.

Whatever the merits of that observation, we cannot consider climate change when we assess the

effects of this application. The EEZ Act specifically excludes climate change from those matters we

may take into account.

12. The EEZ Act is part of an overall regulatory regime, spread across various legislation, which

manages activities in the exclusive economic zone and in or on the continental shelf.

13. The purpose of the EEZ Act is set out in sections 10(1) and 10(2):

“10(1) The purpose of this Act is to promote the sustainable management of the natural resources of

the exclusive economic zone and the continental shelf.

10(2) In this Act, sustainable management means managing the use, development, and protection

of natural resources in a way, or at a rate, that enables people to provide for their economic

well-being while—

(a) sustaining the potential of natural resources (excluding minerals) to meet the reasonably

foreseeable needs of future generations; and

(b) safeguarding the life-supporting capacity of the environment; and

(c) avoiding, remedying, or mitigating any adverse effects of activities on the environment.”

14. Our assessment of the effects of the proposal is that there is no reason to refuse the application for

the development drilling programme and that granting marine consent for this activity meets the

purpose of the Act.

Dated this 15th day of December, 2014.

_________________________ ___________________________

Alick Shaw Sharon McGarry

Chair Deputy Chair

_________________________ ___________________________

Kura Denness Te Taru White

EPA Board Member DMC Member

_________________________

Dr Donald Robertson

DMC Member

i

Table of Contents

Introduction/Background ........................................................................................................... 1 1.

1.1 The Decision-making Committee ........................................................................................ 1

1.2 The Applicant and the Application....................................................................................... 1

1.2.1 The Applicant ......................................................................................................... 1

1.2.2 The Application ...................................................................................................... 1

1.2.3 Activities Subject to Approval ................................................................................. 3

1.2.4 Other Activities Associated with the Application .................................................... 5

1.3 Procedural History ............................................................................................................... 8

1.3.1 Timeline .................................................................................................................. 8

1.3.2 Requests for Information ........................................................................................ 8

1.3.3 EPA Staff Report .................................................................................................... 9

1.4 Context of Application ....................................................................................................... 10

1.4.1 Transitional Provisions ......................................................................................... 10

1.5 Submissions ...................................................................................................................... 10

1.6 The Decision-making Process .......................................................................................... 11

Description of the Existing Environment and Existing Interests ......................................... 12 2.

2.1 Physical Environment ........................................................................................................ 12

2.1.1 Geological Setting ................................................................................................ 12

2.1.2 Oceanography ...................................................................................................... 12

2.2 Biological Environment ...................................................................................................... 14

2.2.1 Benthic Ecosystems ............................................................................................. 14

2.2.2 Plankton and Primary Productivity ....................................................................... 14

2.2.3 Fish Species ......................................................................................................... 14

2.2.4 Marine Mammals .................................................................................................. 15

2.2.5 Seabirds ............................................................................................................... 16

2.2.6 Marine Reptiles and Corals .................................................................................. 16

2.2.7 Sites of Conservation Significance ...................................................................... 16

2.3 Existing Interests ............................................................................................................... 17

2.3.1 Iwi Interests .......................................................................................................... 17

2.3.2 Fishing Interests ................................................................................................... 17

2.3.3 Commercial Shipping Interests ............................................................................ 17

Statutory Framework ................................................................................................................ 18 3.

3.1 Introduction ........................................................................................................................ 18

3.2 Purpose and Principles of the EEZ Act ............................................................................. 18

3.2.1 Purpose ................................................................................................................ 18

3.2.2 International Obligations ...................................................................................... 19

ii

3.2.3 Te Tiriti o Waitangi – Treaty of Waitangi .............................................................. 20

3.3 Section 20 – Restrictions on Activities in Exclusive Economic Zone and Continental Shelf20

3.4 Decision-making Criteria ................................................................................................... 20

3.5 Information Principles ........................................................................................................ 23

3.5.1 Full Use of Powers ............................................................................................... 23

3.5.2 Best Available Information ................................................................................... 24

Context for Consideration and Evaluation ............................................................................. 26 4.

Potential Effects on the Environment and Existing Interests ............................................... 27 5.

5.1 Introduction ........................................................................................................................ 27

5.2 Macro-benthic Communities ............................................................................................. 28

5.2.1 The Issues ............................................................................................................ 28

5.2.2 The Effects ........................................................................................................... 28

5.2.3 Findings ................................................................................................................ 30

5.2.4 Conditions ............................................................................................................ 31

5.3 Planktonic Communities .................................................................................................... 31

5.3.1 The Issues ............................................................................................................ 31

5.3.2 The Effects ........................................................................................................... 31

5.3.3 Findings ................................................................................................................ 33

5.3.4 Conditions ............................................................................................................ 33

5.4 Marine Mammals ............................................................................................................... 34

5.4.1 The Issues ............................................................................................................ 34

5.4.2 The Effects ........................................................................................................... 34

5.4.3 Findings ................................................................................................................ 37

5.4.4 Conditions ............................................................................................................ 38

5.5 Seabirds ............................................................................................................................ 38

5.5.1 The Issues ............................................................................................................ 38

5.5.2 The Effects ........................................................................................................... 39

5.5.3 Findings ................................................................................................................ 39

5.5.4 Conditions ............................................................................................................ 39

5.6 Fish .................................................................................................................................... 40

5.6.1 The Issues ............................................................................................................ 40

5.6.2 The Effects ........................................................................................................... 40

5.6.3 Findings ................................................................................................................ 40

5.6.4 Conditions ............................................................................................................ 41

5.7 Biosecurity ......................................................................................................................... 41

5.7.1 The Issues ............................................................................................................ 41

5.7.2 The Effects ........................................................................................................... 41

iii

5.7.3 Findings ................................................................................................................ 42

5.7.4 Conditions ............................................................................................................ 42

5.8 Existing Interests ............................................................................................................... 42

5.8.1 The Issues ............................................................................................................ 42

5.8.2 The Effects ........................................................................................................... 42

5.8.3 Findings ................................................................................................................ 45

5.8.4 Conditions ............................................................................................................ 46

5.9 Oil Spills ............................................................................................................................ 46

5.9.1 The Issues ............................................................................................................ 46

5.9.2 The Effects ........................................................................................................... 48

5.9.3 Findings ................................................................................................................ 51

5.9.4 Conditions ............................................................................................................ 52

Effects on Human Health .......................................................................................................... 53 6.

6.1 The Issues ......................................................................................................................... 53

6.2 The Effects ........................................................................................................................ 53

6.2.1 Drill Cuttings and Muds ........................................................................................ 53

6.2.2 Algae Blooms ....................................................................................................... 53

6.3 Findings ............................................................................................................................. 54

6.4 Conditions ......................................................................................................................... 54

The Protection of Biological Diversity and Integrity of Marine Species, Ecosystems and 7.

Processes ................................................................................................................................... 55

The Protection of Rare and Vulnerable Ecosystems and Habitats of Threatened Species56 8.

The Economic Benefit to New Zealand ................................................................................... 57 9.

The Efficient Use and Development of Natural Resources ................................................... 59 10.

The Nature and Effect of Other Marine Management Regimes ............................................ 60 11.

Best Practice .............................................................................................................................. 61 12.

Conditions .................................................................................................................................. 62 13.

Relevant Regulations and Other Applicable Law .................................................................. 65 14.

14.1 Relevant Regulations ........................................................................................................ 65

14.2 Other Applicable Law ........................................................................................................ 65

Other Relevant Matters ............................................................................................................. 66 15.

15.1 Value of Investment .......................................................................................................... 66

15.2 Hydraulic Fracturing/Water Injection ................................................................................. 66

15.3 Precautionary Approach .................................................................................................... 66

15.4 New Technology ............................................................................................................... 67

iv

Adaptive Management .............................................................................................................. 68 16.

APPENDIX 1: MARINE CONSENT CONDITIONS .............................................................................. 69

APPENDIX 2: ABBREVIATIONS AND ACRONYMS USED IN THIS DECISION ............................... 77

APPENDIX 3: PROCEDURAL HISTORY ............................................................................................. 78

APPENDIX 4: SUMMARY OF SUBMISSIONS .................................................................................... 79

1

Introduction/Background 1.

1.1 The Decision-making Committee

1. The Environmental Protection Authority (EPA) is the consent authority for certain activities that are

restricted within New Zealand’s exclusive economic zone (EEZ) and in or on the continental shelf.

One of the EPA’s functions, pursuant to section 13(1) of the Exclusive Economic Zone and

Continental Shelf (Environmental Effects) Act 2012 (EEZ Act), is to decide applications for marine

consent.

2. On 5 July 2014, the EPA Board appointed a Decision-making Committee (DMC) to exercise powers

and functions under the EEZ Act related to the application for marine consent lodged by OMV New

Zealand Limited (OMV). The EPA Board also delegated all of the functions and powers of the EPA

related to the processing, hearing and deciding of the application under the EEZ Act to the DMC.

This DMC comprises Mr Alick Shaw (Chair), Ms Sharon McGarry (Deputy Chair), Ms Kura Denness

(EPA Board Member), Dr Donald Robertson and Mr Te Taru White. This is our written decision

pursuant to the provisions of the EEZ Act.

3. In considering and deciding the application for marine consent by OMV, we have exercised

independent judgement within the statutory framework for determining applications for marine

consent under the EEZ Act.

1.2 The Applicant and the Application

1.2.1 The Applicant

4. OMV New Zealand Limited (OMV) is a privately owned company that has been operating in New

Zealand since 1999.1 OMV operates the Maari and Manaia oil fields in the South Taranaki Bight with

three joint venture parties – Todd Maari Limited, Horizon Oil International Limited and Cue Taranaki

Pty Limited.

1.2.2 The Application

5. OMV has applied for marine consent to complete its drilling programme and seeks a term of consent

of two years.

6. Mr Frank Barker2 explained that the drilling programme will involve up to seven wells being drilled

from within existing conductor slots to oil reservoirs approximately 1,000–2,500 metres (m) deep and

that all will be side-tracked to drill horizontally to hydrocarbon reservoirs up to 8 kilometres (km)

away. Six of these wells will be for extracting hydrocarbons, while one will be a water injection well.

1 Mr Peter Zeilinger, Managing Director of OMV New Zealand Limited. 2 Drilling Manager for OMV New Zealand Limited.

2

7. The wells will be drilled by the ENSCO 107 jack-up drilling rig positioned alongside the existing Maari

wellhead platform (WHP). During the drilling programme, the ENSCO 107 is cantilevered over the

WHP.

8. Dr Karl-Heinz Zelt3 explained that the oil extraction process requires the oil to be heated and

pumped. Electrical submersible pumps are installed in the wells approximately 1,000 m below sea

level. The injection of seawater is also used to assist in recovering oil – this activity is not subject to

this application for marine consent.

9. Two of the new development wells will be drilled through conductor slots that were installed in April

2014. The remaining five will be side-tracked from existing conductor slots or wells. Mr Barker

explained that side-tracking involves plugging the lower portion of the wells with cement. The metal

casing and cement sheath is then milled out on the side of the upper portion of the wells and

horizontal wells are drilled to target reservoirs.

10. Drilling muds are continuously pumped down the drill pipe during the drilling process and are

pumped back up with the drill cuttings to the ENSCO 107, which is positioned over the WHP. Drill

cuttings are then removed from the muds, cleaned in separators and recirculated until they are no

longer needed. The drill cuttings are then deposited onto the seabed (via a discharge pipe 10 m

below the sea surface) or shipped for land-based disposal.

11. The Impact Assessment stated that drill cuttings, drilling muds, milling swarf and cement slurry will

be deposited on and under the seabed under the marine consent sought. It noted that the discharge

of drilling muds and cuttings into the water column is authorised under the Discharge Management

Plan (DMP) approved by Maritime New Zealand (MNZ) under Marine Protection Rule 200 of the

Marine Transport Act 1994.

12. Drill cuttings are discharged and deposited on a daily basis. The Impact Assessment stated that

approximately 3,000 cubic metres (m3) of drill cuttings were expected from seven wells. In their

closing submissions OMV stated that the upper limit of material removed from the subsoil as cuttings

is 3,500 m3, as measured by the length and width of the seven wells. The Impact Assessment stated

discharge particle size ranges from 0.007 to 7 millimetres (mm), with 80% of cuttings expected to be

less than 1 mm.

13. The Impact Assessment stated that approximately 40% of the drill cuttings produced by the drilling

programme will be produced using synthetic-based muds (SBMs), with the balance using water-

based muds (WBMs). WBMs with an oil-in-water content of less than 100 parts per million (ppm) will

be discharged into the sea, while SBMs will be shipped for land-based disposal. However, drill

cuttings that have been produced using SBMs that have a residual oil content of less than 4.9%

(average per well) will also be discharged into the sea. Drill cuttings with residual oil content greater

than 4.9% are shipped for land-based disposal.

3 Petroleum Engineering Manager for OMV New Zealand Limited.

3

14. Mr Barker stated that, at the end of drilling each well, WBMs are discharged into the sea at an

approximate hourly rate of 25 m³ and are discharged over periods of 12 to 24 hours. At the end of

drilling SBMs are returned to the shore for land-based disposal.

15. Mr Barker said that the bulk of milling swarf (metal shavings and chips) from side-tracking will be

returned to the ENSCO 107 and shipped for land-based disposal. However, some milling swarf will

be entrained in the discharge and deposited on the seabed.

16. As each section of a well is completed, a casing or liner is cemented into place to prevent hole

collapse and maintain well integrity. When drilling the next section of the well the base of the

cemented casing is drilled. Consequently, small amounts of cement will be in drill cuttings that are

discharged into the sea. Cement slurry is discharged when cement mixers and containers are

washed at the end of each section.

17. Mr Barker said that, by using existing conductor slots, drilling will begin approximately 107 m below

the seabed and not on the seabed surface. Drilling into the subsoil will generate noise and vibrations

in the seabed and the water column. Noise will be generated by machinery on the ENSCO 107, by

vessels, helicopter movements and the retraction of the legs of the ENSCO 107 from the seabed at

the end of the drilling programme.

18. The Impact Assessment stated that the retraction of the legs of the ENSCO 107 from the seabed

involves the rig being lowered into the sea until it floats, at which time the legs of the rig are

retracted. The ENSCO 107 has three legs that each occupy approximately 181 square metres (m²)

of the seabed and penetrate approximately 4–5 m into the subsoil.

19. The Impact Assessment noted that alterations to the WHP are also required to incorporate the new

wells into the existing production facilities at Maari. These alterations include installation of new

flowlines from the wellhead tree, extensions to the existing manifold and new producer/injection

flowlines in the wells. This work will take place on the topside of the WHP above the sea surface.

20. The Impact Assessment stated that the activities subject to this application for marine consent will

not change the character, intensity or scale of existing petroleum activities at the Maari facilities.

Under the provisions of Petroleum Mining Permit 38160, these can continue until 2027 without a

marine consent.

21. In section 8 of volume 1 of the application documentation, OMV proffered 37 conditions for the

marine consent sought, which addressed general operations, risk management, oil spill prevention

and preparedness, navigational safety, drilling operations, marine mammals and seabirds, and

monitoring.

1.2.3 Activities Subject to Approval

22. Details of the activities requiring authorisation under section 20 of the EEZ Act are set out in Table 1

below.

4

Table 1: Marine Consent Requirements

Consent Category Activities

Section 20(1) and (2)) – Exclusive Economic Zone and Continental Shelf

(a) The construction, placement, alteration,

extension, removal, or demolition of a

structure on or under the seabed.

Removal of the jack-up drilling rig legs from the

seabed.

Alteration of the equipment on the WHP.

(b) The construction, placement, alteration,


submarine pipeline on or under the

seabed.

Installation of submarine pipelines (production

tubing, casing and associated fittings) under the

seabed.

(d) The removal of non-living natural material

from the seabed or subsoil.

Drilling of the wells involving the removal of

material from the subsoil.

(e) The disturbance of the seabed or subsoil

in a manner that is likely to have an

adverse effect on the seabed or subsoil.


seabed.

(f) The deposit of any thing or organism in,

on, or under the seabed.

Deposition of drill cuttings and other materials

on and under the seabed.

Deposition of settling sediment from the plume

generated from the removal of the jack-up

drilling legs.

(g) The destruction, damage, or disturbance

of the seabed or subsoil in a manner that

is likely to have an adverse effect on

marine species or their habitat


seabed.

Section 20(3) and (4) – Exclusive Economic Zone

(a) The construction, mooring or anchoring

long-term, placement, alteration,


structure or part of a structure


seabed.

(b) The causing of vibrations (other than

vibrations caused by the normal operation

of a ship) in a manner that is likely to

have an adverse effect on marine life

Generation of vibrations from drilling the wells.

5

23. The Impact Assessment stated that, under section 36 of the EEZ Act, the activities requiring marine

consent are discretionary activities because they are not specifically classified in regulations made

under the EEZ Act.

1.2.4 Other Activities Associated with the Application

24. There are a number of activities associated with the drilling programme that are not covered by way

of a marine consent under the EEZ Act, but the effects of which need to be considered as part of the

overall effects assessment under section 59(2) of the Act. These ancillary activities include:

(a) discharges from the ENSCO 107 and floating production, storage and offloading vessel

(FPSO) into the water column;

(b) vessel movements;

(c) lighting;

(d) helicopter movements; and

(e) contingency explosions within the conductor slots.

25. We note that some experts on behalf of OMV said the effects of discharges from the ENSCO 107

and FPSO into the water column do not require marine consent and should not form part of the

effects assessment. However, we consider the discharges from the ENSCO 107 and FPSO into the

water column are inextricably linked to the deposition of drill cuttings and muds onto the seabed. The

discharges into the water column authorised by the DMP form part of the existing environment and

are relevant to our assessment of cumulative effects.

26. On 16 June 2014, OMV withdrew the part of their application relating to the use of explosives or

charges within a wellbore because it would not be in the waters of the EEZ and therefore would not

fall within section 20(4)(c) of the EEZ Act. Some of the above matters are also regulated under other

marine management regimes, which are matters we must take into account in accordance with

section 59(2)(h) of the EEZ Act. The government agencies operating marine management regimes

that are relevant to this application for marine consent are presented in Table 2 below.

Table 2: Relevant Marine Management Regimes

Agency Legislation Responsibilities

The Ministry of

Business,

Innovation and

Employment

(New Zealand

Petroleum and

Minerals Branch)

The Crown

Minerals Act 1991

New Zealand Petroleum and Minerals is

responsible for managing the prospecting,

exploration and mining permit regime.

6


Department of

Conservation

Marine Mammals

Protection Act 1978

Wildlife Act 1953

The Department of Conservation is responsible for

protected species and marine mammals. It

prepares and administers the guidelines for

minimising disturbance to marine mammals from

seismic surveys, as well as seismic surveying

regulations in marine mammal sanctuaries. The

Department of Conservation assesses Marine

Mammal Impact Assessments, which must be

prepared by anyone proposing to undertake a

marine seismic survey.

The Department of Conservation also has

responsibility for non-mammal species, including

seabirds.

Maritime New

Zealand

Maritime Transport

Act 1994

International

Regulations for

Preventing

Collisions at Sea

1972

Maritime New Zealand is responsible for ensuring

operators have approved plans in place to manage

wastes from their activities, as well as Emergency

Response Plans if that work causes a leak or spill

into the sea. Maritime New Zealand assists the

Minister of Transport in setting marine protection

rules for managing discharges and oil spills and

maritime rules preventing the collision of vessels at

sea.

Plans developed to meet those rules include a

Discharge Management Plan (DMP), which

includes a Spill Contingency Plan, Well Control

Contingency Plan and an Environmental Monitoring

Programme. Maritime New Zealand approves all

DMPs.

For oil and gas work, the Emergency Response

Plan needs to include how the operator would stem

the flow of oil in the unlikely event of a well blowout.

Maritime New Zealand is also responsible for

maintaining New Zealand’s national oil spill

response capability and preparedness and for

coordinating any major, national-level oil spill

responses.

7


Ministry for Primary

Industries

Fisheries Act 1996

Biosecurity Act

1993

The Ministry for Primary Industries is responsible

for managing New Zealand’s fisheries within the

EEZ and its territorial waters, which includes

commercial, recreational and Māori customary

fisheries.

The Ministry for Primary Industries is also

responsible for biosecurity at New Zealand’s

boundaries and within the EEZ. It administers

biofouling and ballast water guidelines for vessels

entering New Zealand waters.

WorkSafe New

Zealand

Health and Safety

in Employment Act

1992

Health and Safety

in Employment

(Petroleum

Exploration and

Extraction)

Regulations 2013

WorkSafe New Zealand is responsible for

performing functions relating to safety in the

workplace.

Petroleum operators intending to drill a well are

required to have a Safety Case for the installation

that has been accepted by WorkSafe New Zealand.

A Safety Case identifies any hazards having the

potential to cause multiple fatalities of persons on

or near the installation, describes how the hazards

are or will be controlled and describes the safety

management system in place to ensure that the

controls are effectively and consistently applied.

Petroleum operators intending to drill a well must

also adhere to a well examination scheme, which

provides for the safety of wells by requiring

operators to implement arrangements for an

independent quality control check for the design,

construction, operation, maintenance, modification,

suspension and abandonment of new and existing

wells.

27. OMV requires various approvals from the government agencies that administer these marine

management regimes, but we must consider the impacts on the environment and existing interests

of activities regulated by these other regimes. Section 63 of the EEZ Act enables us to impose

appropriate conditions on the marine consent provided they do not conflict with measures required or

8

imposed under another marine management regime or the Health and Safety in Employment Act

1992.

28. We have carefully considered the need to impose conditions that largely mirror or replicate

obligations imposed under other regulatory regimes. We sought advice from legal counsel,

considered the decisions of other DMCs and thought carefully about the issues addressed by OMV

in their closing submissions and subsequent correspondence. We have not replicated conditions or

obligations imposed under other regulatory regimes unless by doing so we consider the conditions

are appropriate to avoid, remedy or mitigate any adverse effects of the proposed activities on the

environment and existing interests.

1.3 Procedural History

1.3.1 Timeline

29. OMV lodged its application for marine consent with the EPA on 3 June 2014. The procedural history

of the application is set out in detail in Appendix 3.

1.3.2 Requests for Information

30. The EPA sought further information from OMV on 30 June 2014. OMV responded to this request on

18 and 25 July 2014 and 1 August 2014.

31. The DMC sought further information from OMV on 22 August 2014. OMV responded to this request

on 10 and 17 September 2014.

32. The further information provided was published on the EPA website and addressed the following

matters:

(a) Information to validate the assessment of effects on the environment.

(b) Information on matters relevant to the assessment of the cumulative effects of the drilling

programme.

(c) The validation of noise assumptions made in the Impact Assessment.

(d) Further information on the discharge/deposition of drill cuttings and muds resulting from the

drilling programme.

(e) Information regarding the oil spill risk assumptions made in the Impact Assessment.

(f) Monitoring and mitigation proposed by OMV.

(g) Effects on existing interests and the benefits associated with the drilling programme.

(h) Other marine management regimes and their impact on the mitigation of effects.

9

33. The EPA made a further information request to OMV on 20 October 2014 on our behalf. The EPA

requested the Safety Cases approved by WorkSafe New Zealand and the DMPs approved by

Maritime New Zealand. This is discussed further in section 3 of this decision.

1.3.3 EPA Staff Report

34. The EPA commissioned a report (EPA Staff Report) for us under section 44(1)(b) of the EEZ Act. We

received this report on 5 September 2014, and it was available on the EPA website.

35. Mr Richard Johnson4 explained that the EPA Staff Report had been prepared in accordance with

sections 59, 60 and 61 of the EEZ Act. It is the work of multiple authors with relevant expertise in the

assessment and consideration of the drilling programme, including marine biology, drilling operations

and cultural matters.

36. The EPA Staff Report included consideration of the gap analysis completed by Environmental

Resources Management, the peer review by Genesis Oil and Gas Consultancy Limited and the

summary of submissions analysis prepared by Jacobs New Zealand Limited. The report by Ngā

Kaihautū Tikanga Taiao (NKTT) was not available at the time the EPA Staff Report was finalised.

37. The EPA Staff Report included a set of recommended consent conditions (based on those proffered

by OMV) for our consideration and stated “…based on the information provided to the EPA staff prior

to publishing of this report, we consider that the adverse effects can be appropriately mitigated and

that the information available is certain and adequate. Therefore, we can find no reason why the

Decision-making Committee (DMC) should not grant the application.”5 The report itself was written

before the expert evidence and submissions were available.

38. On 17 September 2014, OMV provided briefs of evidence that included revised proposed consent

conditions. These revised proposed conditions were significantly different to those proffered in the

application including the deletion of a number of conditions that OMV submitted ‘duplicated’ other

regulatory regimes. At our request, on 20 October, EPA staff provided an addendum to their Staff

Report, which provided comments on these revised proposed conditions (Addendum to EPA Staff

Report – 20 October 2014).

39. OMV proposed another set of revised consent conditions in their legal closing on 18 November

2014. At our request, the EPA provided written advice on these revised consent conditions on 27

November 2014 (EPA Comments on OMV’s Conditions – 27 November 2014).

40. We found the conditions and overall recommendation in the EPA Staff Report to be helpful and note

that they assisted our deliberations. We note the recommendations in the EPA Staff Report are not

binding in any way and record we have had regard to the staff advice in accordance with section

59(3) of the EEZ Act.

4 Applications Manager, EEZ for the EPA. 5 EPA Staff Report, page 78.

10

1.4 Context of Application

1.4.1 Transitional Provisions

41. As already noted, OMV’s drilling programme is classified as a “planned petroleum activity” under the

EEZ Act and is covered under section 166, which is a transitional provision of the Act. Section 166 of

the EEZ Act allows such activities to commence without a marine consent and continue until 28 June

2014, provided that an Impact Assessment was submitted to the EPA beforehand.

42. The transitional period for planned petroleum activities ended on 28 June 2014, and OMV was

required to apply for marine consent for those activities not completed by that date. OMV submitted

this application for a marine consent on 3 June 2014. Section 166(5)(b) of the EEZ Act permits, as

part of its transitional provisions, OMV to continue its drilling programme (including those activities

that require a marine consent) while this application is being considered or until such time as any

appeals are determined.

43. OMV is required to comply with a number of statutory requirements outside of the EEZ Act that apply

to the drilling programme. A number of these statutory requirements include provisions that are

relevant to protection of the marine environment and relevant to this application for marine consent.

1.5 Submissions

44. OMV’s application for marine consent was publically notified by the EPA on 1 July 2014. The

submission period closed on 29 July 2014 – 155 submissions were received by the EPA, and no

submissions were received out of time following an extension of the timeframe requirements by us

on 14 August 2014.

45. A summary of the decision requested by submitters is provided in Table 3 below.

Table 3: Overall Position of Submitters

Submitter Position Number of Submitters Percentage

Grant 4 2.6%

Grant with conditions 2 1.3%

Neutral 2 1.3%

Decline 146 94.2%

Other 1 0.6%

46. A summary of the issues raised by submitters is provided in Appendix 4. Key themes included:

(a) adverse environmental effects of oil spills, pollution, noise, ship strikes, habitat loss and

degradation;

11

(b) adverse effects of the drilling programme on marine mammals, particularly the Maui’s

dolphin and blue whales;

(c) OMV’s economic benefit analysis is incomplete and misleading;

(d) provision of inadequate information (for example, no systematic marine population surveys

to robustly assess the direct, indirect and cumulative impacts of the drilling programme on

potentially affected species); and

(e) numerous risks associated with this drilling programme (and oil drilling in general) such that

the application for marine consent should be refused.

1.6 The Decision-making Process

47. Evidence and submissions were heard over eight hearing days between 29 October 2014 and 18

November 2014. Hearing days were scheduled in Wellington, Nelson and New Plymouth.

48. We have convened on 24 occasions (including hearing days) to assess the application for marine

consent, determine whether further information was necessary, set hearing procedures, review

evidence, deliberate and write our decision. We formally closed the hearing on 9 December 2014.

49. We record our appreciation for the time and effort taken by parties who participated in this

application. We appreciated the expert evidence on the potential effects of the drilling programme

and the ability to question the experts on their assessments. The opportunity to question government

agencies (to which section 44 requests were made) was valuable in determining the “nature and

effect” of other marine management regimes in terms of section 59(2)(h) of the EEZ Act.

50. Consenting processes, particularly public hearings, can be time consuming and daunting for

submitters, and we acknowledge their participation. The involvement and input of submitters is

important, and their input was helpful.

51. We were disappointed that a number of submitters who wished to be heard in Nelson did not appear.

Holding hearings in different locations is time consuming and expensive. The failure of submitters to

appear at the hearing at short notice or with no notice may undermine the viability of future hearings

in multiple locations and the ability of other submitters to be heard in support of their submissions.

12

Description of the Existing Environment and Existing 2.Interests

52. Section 39 of the EEZ Act requires the Impact Assessment to describe, among other things, the

existing environment. It also requires the Impact Assessment to identify persons whose existing

interests are likely to be adversely affected by the activity and identify the effects of the activity on

existing interests. Section 2 of the Impact Assessment and expert evidence given at the hearing

described the existing environment of the application site, the wider permit area (Petroleum Mining

Permit 38160) and the South Taranaki Bight.

53. The information provided in the Impact Assessment and expert evidence is drawn from a range of

sources. A full list of references is set out in section 9 of the Impact Assessment. Where the source

of the information is not specifically stated in the following descriptions of the existing environment,

we have drawn from the Impact Assessment and further information received from OMV.

54. There are various descriptions of the area that encompasses the South Taranaki Bight. However,

experts and submitters loosely used it as including the western end of Cook Strait, Tasman and

Golden Bays, Farewell Spit and the coastline of the Kapiti Coast, the Manawatu-Whanganui Region

and South Taranaki.

55. The Maari field is located within the South Taranaki Bight. Over 400 offshore and onshore

exploration and production wells have been drilled in the Taranaki Region and South Taranaki Bight.

Numerous discoveries have been developed for the production of gas, gas condensate and oil.

2.1 Physical Environment

2.1.1 Geological Setting

56. The Taranaki Basin is a late Mesozoic extension on the landward side of the Gondwana margin.

Jurassic and earliest Murihiku marine and non-marine rocks present in the Taranaki Basin are

generally regarded as basement but may also have been the earliest basin-fill. The Taranaki Basin

lies at the southern end of a rift that developed sub-parallel to the Tasman Sea rift, which now

separates Australia and New Zealand. The structure of the Taranaki Basin has been formed by

movements along the Taranaki, Cape Egmont and Turi fault zones.

2.1.2 Oceanography

57. The South Taranaki Bight is exposed to two significant bodies of water – the Tasman Sea and Cook

Strait. From the westerly quarter, long period swells can arrive from the Southern Ocean, which are

enhanced by the predominant west to southwest winds. From the south, the wave conditions can

produce steep and energetic seas when strong southeast winds are present.

58. Wave data collected in the permit area between July 2003 and March 2004 illustrates that the

dominant wave approach direction is from the west-southwest, with peak wave periods

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predominantly in the range of 6–8 and 10–14 seconds. The mean significant wave height was 2.2 m,

with a maximum wave height of 6.71 m.

59. Annual wind roses produced for the permit area show the strongest winds are from the southeast

quarter, with the predominant wind from the west to southwest quarter. During the period between

July 2003 and March 2004 the strongest wind was 22.06 metres per second (ms-1), while the

average wind speed was 9.03 ms-1.

60. With respect to bathymetry, the Maari field lies on the western edge of the Farewell Rise. The

Farewell Rise is a subsea formation located approximately 45 km southwest of Opunake and in

water that is approximately 80–100 m deep. To the east of the Farewell Rise is a 2 km wide, shallow

trough marking the head of the D’Urville Sea Valley. The seabed has a gently sloping gradient

through the permit area, where it slopes down from approximately 100 m water depth on the eastern

side towards the west-northwest.

61. The dominant currents within the permit area are caused by the local and regional wind stresses on

the ocean surface in conjunction with tides. A wave-rider buoy was deployed in the permit area

between July 2003 and March 2004. The highest measured residual current speed in the mid-water

layer during this period was 0.52 ms-1, with a mean of 0.12 ms-1. The strongest currents were

directed towards the west and were typically associated with strong southeast wind events.

62. Dr Lincoln MacKenzie6 noted upwelling plumes originating along the Kahurangi Shoal off the west

coast of the South Island are primarily responsible for the productivity patterns in the South Taranaki

Bight. These plumes are highly variable (both spatially and temporally) and comprise cold, nutrient-

rich water that often becomes recruited into eddies, which are shed off the tip of Cape Farewell and

migrate through the South Taranaki Bight.

63. Thermal stratification of the water column is typically evident during spring and summer months.

Stratification patterns through the water column vary, with storm conditions causing significant

vertical mixing and the breakdown of the thermal structure in the colder months. The average sea

surface water temperature ranges between 17.3 degrees Celsius (°C) in summer and 13.6°C in

winter.

64. Waves and currents are the dominant mechanisms for sediment transport. Core samples collected

around the permit area in January 2012 indicated that the sediment profiles consist of a fairly uniform

muddy texture throughout the depth of the core with no noticeable sediment anoxia. Profiles of this

nature were also collected from the nearby Ruru and Maui sites so are considered typical of this

area.

65. The permit area lies in an area of high current flow which results in relatively lower deposition rates

of sediment content. Benthic surveys within the permit area have shown the seabed consists of

irregular mega-rippled bedforms with amplitude of approximately 0.1 m and some wave-induced

6 Senior Research Scientist at the Cawthron Institute appearing on behalf of OMV New Zealand Limited.

14

ripples. Video observations and surficial sediment samples suggest there is active bioturbation of the

upper sediments in the form of burrow holes and trail marks. Some larger holes have also been

observed. These could be a result of foraging fish habits, bioturbation from digging shrimp or as the

result of previous human activity from previous sample grabs.

2.2 Biological Environment

2.2.1 Benthic Ecosystems

66. Mr Rodney Asher7 and Dr Jennifer Skilton8 stated that benthic communities in the South Taranaki

Bight are dominated by soft sand/mud substrates that support a range of macro-faunal species

(polychaete worms, cumaceans, amphipods and bivalves). The offshore marine area is a uniform

physical environment with low habitat diversity and with no known taxa or communities of special

conservation/scientific interest.

67. Polychaetes are the most dominant taxonomic group around the permit area and are resilient to

suspended sediment, which is a common feature of the high-energy maritime environment of the

permit area.

68. Overall, the macro-benthic ecosystem around the permit area is considered to have low

environmental sensitivity.

2.2.2 Plankton and Primary Productivity

69. The productivity of the South Taranaki Bight is largely driven by the nutrient-rich upwelling plumes

from the Kahurangi Shoal off the west coast of the South Island. The eddies that travel northwards

and eastwards towards the South Taranaki Bight become nutrient depleted and phytoplankton rich.

The water contains high levels of chlorophyll-α, which is an indicator for plankton productivity.

70. Water column analysis undertaken within the permit area in July 2003 indicated that there are no

pronounced vertical trends in chlorophyll-α levels, which reflects the well mixed nature of the water

column around the permit area.

71. Dr MacKenzie stated that the South Taranaki Basin has high levels of biological primary productivity

upon which multiple species (including blue whales) seasonally depend. Despite this, the Impact

Assessment stated that the environmental sensitivity of primary production in the permit area was

low as it was a very small proportion of the total area for which high productivity has been identified.

2.2.3 Fish Species

72. Dr Alison MacDiarmid9 noted that fish populations around the permit area comprise demersal and

pelagic species, most of which are widely distributed from north to south and across different water

7 Owner/Manager of Biolive Invertebrate ID Service appearing on behalf of OMV New Zealand Limited. 8 Benthic Ecologist at REM Limited appearing on behalf of OMV New Zealand Limited. 9 Principal Scientist at NIWA appearing on behalf of OMV New Zealand Limited.

15

depths. The following species are most likely to be encountered within the permit area: snapper,

trevally, kahawai, gurnard, blue warehou, blue cod, bluenose, john dory, hāpuku, rig, school shark,

spiny dogfish, blue mackerel, jack mackerel, leatherjacket, red cod, tarakihi and kingfish.

73. Over the summer months a number of pelagic species visit the Taranaki coastline following the

abundance of food. The most common species include sunfish, flying fish, marlin, albacore, skipjack

and yellowfin tuna, mako and blue shark. These species could be present within the permit area.

74. Eighty-two species of New Zealand marine fish are listed as being in gradual decline, sparse or

range restricted, and some will be found in and around the permit area. Great white sharks may be

attracted to seal populations around offshore installations and are fully protected in New Zealand

waters.

75. The Ministry for Primary Industries advised that commercial fishers operating in and around the

permit area primarily target jack mackerel, with a bycatch of barracouta.

2.2.4 Marine Mammals

76. Ms Helen McConnell10 identified a list of marine mammals that may be present in and around the

permit area. She considered the likelihood of each species being present by assessing life history

characteristics, habitat preferences and records of previous sightings and strandings.

77. The key points of Ms McConnell’s analysis were as follows:

(a) Humpback whales are likely to be present in the permit area between May and December as

they travel towards their breeding habitat in waters off the Pacific Islands.

(b) Southern right whale sightings in Taranaki waters can be expected inshore of the permit

area in winter and in coastal waters during the breeding season. However, they may

complete their southward migration further off shore.

(c) Blue whales have recently been found to forage in the waters of Cook Strait and Taranaki,

but their elusive behaviour means that little detail is known of their distribution or habitat use.

(d) Pilot whales are common visitors to Taranaki waters during the summer months and are

likely to be observed in the permit area.

(e) It is unlikely that Hector’s dolphins11 routinely populate the permit area due to their typical

inshore distribution and the fact that their population concentrations do not overlap with the

permit area. However, the water depth at the WHP does not rule out the occasional

presence of Hector’s dolphins.

(f) New Zealand fur seals are likely to be present in the permit area, and they have a continual

presence at the offshore platforms in Taranaki. The closest fur seal breeding location to the

10 Marine Ecologist at REM Limited appearing on behalf of OMV New Zealand Limited. 11 Any reference to Hector’s dolphin in this decision also includes the subspecies of Maui’s dolphin, unless stated otherwise.

16

Maari field is at Sugar Loaf Islands off New Plymouth, where pupping occurs from mid-

November to mid-January.

2.2.5 Seabirds

78. The Impact Assessment included a list of the seabirds that could be present in the permit area. This

was based on information obtained from a variety of sources including the Department of

Conservation, the Ministry for Primary Industries and the Taranaki Regional Oil Spill Contingency

Plan.

79. A number of threatened seabird species may occasionally use the permit area as part of their broad

pelagic habitat. However, no known critical habitat occurs in the permit area.

2.2.6 Marine Reptiles and Corals

80. Marine reptiles occasionally visit Taranaki waters, mainly during the summer months when the

warmer currents push down the western side of New Zealand. Leatherback turtles and yellow-bellied

sea snakes have been observed within Taranaki waters (Department of Conservation, 2014c), but

are rarely seen.

81. Black coral within the EEZ is protected under the Wildlife Act 1953. There is no black coral

documented within the permit area (Ministry for Primary Industries, 2014a), although small areas of

coral habitat are located to the southeast of the permit area and on the continental shelf to the

northwest.

82. The WHP is in water that is much shallower than the habitat of black coral.

2.2.7 Sites of Conservation Significance

83. No marine reserves, marine mammal sanctuaries or areas of significant conservation value are in

the immediate vicinity of the permit area.

84. Marine reserves in the wider environment are located at Parininihi and Tapuae. The Sugar Loaf

Islands Marine Protected Area is close to New Plymouth. Further afield there are marine reserves in

the Greater Wellington Region at Kapiti and Taputeranga and in the Marlborough Sounds at

Westhaven, Tonga Island, Horoirangi and Long Island.

85. The West Coast North Island Marine Mammal Sanctuary extends 12 nautical miles (nm) offshore

from Oakura Beach in the south to Maunganui Bluff in Northland. The purpose of this sanctuary is to

provide protection to the Hector’s dolphin. The sanctuary covers 2,164 km of coastline.

86. The nearest marine mammal sanctuary in the South Island is located in Clifford/Cloudy Bay.

87. Numerous areas along the coastline of the South Taranaki Bight have also been identified as areas

of significant conservation value in the relevant regional and district planning documents (for

example, the Taranaki Regional Coastal Plan).

17

2.3 Existing Interests

2.3.1 Iwi Interests

88. The Taranaki Region is home to a number of iwi and hapū, and the drilling programme is located in

the rohe moana of Ngāti Ruanui. The Impact Assessment stated that there are iwi and hapū in the

Taranaki Region who “may not satisfy the definition of ‘existing interest’, but whose interests we have

considered as they each have coastal areas that are of high cultural importance to them for

collecting marine resources and protection of spiritual values”.

89. The Impact Assessment stated that there are no current Treaty of Waitangi claims in relation to the

permit area.

90. The EPA Staff Report noted that the information provided in the Impact Assessment was adequate

for completeness. Further information was requested from OMV about the existing interests

identified by Māori during consultation. It noted that the interests identified in the Impact Assessment

may not have been broad enough to cover those likely to be affected by a significant oil spill, whether

or not the spill reached land. Māori interests in such a case would extend beyond the Taranaki

Region and could potentially include a significantly larger number of iwi.

91. The EPA Staff Report stated there are lawfully established cultural activities that continue to be

exercised either separately or in association with iwi fisheries interests, such as kaitiakitanga,

rangatiratanga and the maintenance of mātauranga Māori. These are associated with preserving

Māori fisheries interests, the right of iwi to make decisions and act on issues affecting their fisheries

interests and the system of knowledge associated with Māori commercial and customary activities.

2.3.2 Fishing Interests

92. The permit area lies within Fisheries Management Area 7 (Challenger Region), although it is not

commonly used as a fishing ground for commercial fisheries. The Ministry for Primary Industries

confirmed that there was only one recorded fishing event in each of the 2010/11 and 2011/12 fishing

years. The species targeted were leatherjacket and tarakihi.

93. Little, if any, recreational fishing occurs in the permit area due to its remote location. No recreational

fishing can occur near the WHP due to the existing 500 m exclusion zone.

2.3.3 Commercial Shipping Interests

94. The permit area lies within the Taranaki Precautionary Area. All ships traversing this area must

navigate with particular caution to reduce the risk of maritime casualties and marine pollution.

95. The precautionary area is defined as a standing notice in the annual Notice to Mariners in the New

Zealand Nautical Almanac. The almanac lists the navigation hazards within the Taranaki

Precautionary Area, which contains the Pohokura, Maui, Maari, Tui and Kupe fields.

18

Statutory Framework 3.

3.1 Introduction

96. This section sets out the statutory framework under the following headings:

(a) Purpose and Principles of the EEZ Act;

(b) Section 20 – Restrictions on Activities in the Exclusive Economic Zone and Continental

Shelf;

(c) Decision-making Criteria; and

(d) Information Principles.

97. There are other laws and regulations relevant to our decision-making on this application for marine

consent, and these must be taken into account under sections 59(2)(k) and (l) of the EEZ Act. A

number of these other laws and regulations include environmental considerations and are discussed

further in section 13 of this decision.

3.2 Purpose and Principles of the EEZ Act

3.2.1 Purpose

98. Section 10(1) of the EEZ Act states:

“The purpose of this Act is to promote the sustainable management of the natural resources of the

exclusive economic zone and the continental shelf.”

99. ‘Sustainable management’ is defined in section 10(2) as follows:

“In this Act, sustainable management means managing the use, development, and protection of

natural resources in a way, or at a rate, that enables people to provide for their economic well-being

while—

(a) sustaining the potential of natural resources (excluding minerals) to meet the reasonably

foreseeable needs of future generations; and

(b) safeguarding the life-supporting capacity of the environment; and

(c) avoiding, remedying, or mitigating any adverse effects of activities on the environment.”

100. The resources to be sustainably managed under the EEZ Act are the “natural resources of the

exclusive economic zone and continental shelf”. Section 4(1) of the EEZ Act defines natural

resources as:

“(a) in relation to the exclusive economic zone, includes seabed, subsoil, water, air, minerals,

and energy, and all forms of organisms (whether native to New Zealand or introduced); and

19

(b) in relation to the continental shelf, means the mineral and other non-living resources of the

seabed and subsoil and sedentary species.”

101. The definition of sustainable management in section 10(2) of the EEZ Act refers to “managing the

use, development, and protection of natural resources in a way, or at a rate, that enables people to

provide for their economic well-being”. This must be done whilst sustaining the potential of natural

resources to meet the reasonably foreseeable needs of future generations, safeguarding the life-

supporting capacity of the environment and avoiding, remedying or mitigating any adverse effects on

the environment.

102. Section 4(1) of the EEZ Act defines ‘environment’ as:

“the natural environment, including ecosystems and their constituent parts and all natural resources,

of—

(a) New Zealand:

(b) the exclusive economic zone:

(c) the continental shelf:

(d) the waters beyond the exclusive economic zone and above and beyond the continental

shelf.”

103. Section 10(3) of the EEZ Act states:

“In order to achieve the purpose, decision-makers must—

(a) take into account decision-making criteria specified in relation to particular decisions; and

(b) apply the information principles to the development of regulations and the consideration of

applications for marine consent.”

104. The decision-making criteria referred to in section 10(3)(a) of the EEZ Act are set out in sections 59

and 60 of the Act. The information principles are found in section 61. These provisions are discussed

in detail later in this decision.

3.2.2 International Obligations

105. Section 11 of the EEZ Act states:

“This Act continues or enables the implementation of New Zealand’s obligations under various

international conventions relating to the marine environment, including—

(a) the United Nations Convention on the Law of the Sea 1982:

(b) the Convention on Biological Diversity 1992.”

106. New Zealand’s international obligations do not require additional considerations to be applied in

addition to the decision-making criteria and information principles contained in the EEZ Act. These

are already encapsulated in the EEZ Act and in other marine management regimes.

20

3.2.3 Te Tiriti o Waitangi – Treaty of Waitangi


“In order to recognise and respect the Crown’s responsibility to give effect to the principles of the

Treaty of Waitangi for the purposes of this Act,—

(a) section 18 (which relates to the function of the Māori Advisory Committee) provides for the

Māori Advisory Committee to advise the Environmental Protection Authority so that decisions

made under this Act may be informed by a Māori perspective; and

(b) section 32 requires the Minister to establish and use a process that gives iwi adequate time

and opportunity to comment on the subject matter of proposed regulations; and

(c) sections 33 and 59, respectively, require the Minister and the EPA to take into account the

effects of activities on existing interests; and

(d) section 45 requires the Environmental Protection Authority to notify iwi authorities, customary

marine title groups, and protected customary rights groups directly of consent applications

that may affect them.”

108. Matters of cultural relevance are addressed through the EPA’s obligation to notify relevant Māori

groups of applications for marine consent, the ability for the DMC to receive specialist advice on

matters pertaining to Māori (including from NKTT) and the requirement to take into account the effect

of activities on existing interests, which can include certain Māori interests.

3.3 Section 20 – Restrictions on Activities in Exclusive Economic Zone and

Continental Shelf

109. Section 20 of the EEZ Act restricts certain activities from being undertaken in the EEZ or in or on the

continental shelf unless they are authorised by or under the EEZ Act. An analysis of the activities

involved in OMV’s development drilling programme that require marine consent under section 20 of

the EEZ Act is set out in the Impact Assessment and in the evidence of Mr Craig Welsh.12

3.4 Decision-making Criteria

110. Sections 59 and 60 of the EEZ Act set out the matters we must consider in coming to a decision on

an application for marine consent.

“59 Environmental Protection Authority’s consideration of application

(1) This section and sections 60 and 61 apply when the Environmental Protection Authority is

considering an application for a Marine Consent and submissions on the application.

12 Managing Director of REM Limited appearing on behalf of OMV New Zealand Limited.

21

(2) The EPA must take into account—

(a) any effects on the environment or existing interests of allowing the activity, including—

(i) cumulative effects; and

(ii) effects that may occur in New Zealand or in the waters above or beyond the

continental shelf beyond the outer limits of the exclusive economic zone; and

(b) the effects on the environment or existing interests of other activities undertaken in the

area covered by the application or in its vicinity, including—

(i) the effects of activities that are not regulated under this Act; and

(ii) effects that may occur in New Zealand or in the waters above or beyond the

continental shelf beyond the outer limits of the exclusive economic zone; and

(c) the effects on human health that may arise from effects on the environment; and

(d) the importance of protecting the biological diversity and integrity of marine species,

ecosystems, and processes; and

(e) the importance of protecting rare and vulnerable ecosystems and the habitats of

threatened species; and

(f) the economic benefit to New Zealand of allowing the application; and

(g) the efficient use and development of natural resources; and

(h) the nature and effect of other marine management regimes; and

(i) best practice in relation to an industry or activity; and

(j) the extent to which imposing conditions under section 63 might avoid, remedy, or

mitigate the adverse effects of the activity; and

(k) relevant regulations; and

(l) any other applicable law; and

(m) any other matter the EPA considers relevant and reasonably necessary to determine

the application.

(3) The EPA must have regard to—

(a) any submissions made and evidence given in relation to the application; and

(b) any advice, reports, or information it has sought and received in relation to the

application; and

(c) any advice received from the Māori Advisory Committee.

(4) When considering an application affected by section 74, the EPA must also have regard to

the value of the investment in the activity of the existing consent holder.

22

(5) Despite subsection (3), the EPA must not have regard to—

(a) trade competition or the effects of trade competition; or

(b) the effects on climate change of discharging greenhouse gases into the air; or

(c) any effects on a person’s existing interest if the person has given written approval to

the proposed activity.

(6) Subsection (5)(c) does not apply if the person has given written approval but the person

withdraws the approval by giving written notice to the EPA—

(a) before the date of the hearing, if there is one; or

(b) if there is no hearing, before the EPA decides the application.

60 Matters to be considered in deciding extent of adverse effects on existing interests

In considering the effects of an activity on existing interests under section 59(2)(a), the

Environmental Protection Authority must have regard to—

(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.”

111. There is no explicit hierarchy in the extensive list of matters that must be taken into account under

section 59(2) of the EEZ Act. The relative importance of these depends on the specifics of each

marine consent application, the nature of the environment and the extent and nature of existing

interests. However, sections 59(2)(d) and 59(2)(e) include the qualifying words “the importance of

protecting”, which are not used in any of the other sub-clauses. This suggests Parliament intended

there should be particular emphasis on the protection of important biological resources.

112. The drilling programme is taking place in the EEZ, but we are required to take into account effects

that may occur from allowing the activities, including those that may occur outside the EEZ. This

clear requirement to take into account effects that may occur from allowing the activities, including

those effects that may occur outside the EEZ, is important, as some of the potential adverse effects

(particularly in relation to an oil spill) may occur within the Coastal Marine Area (CMA).

113. Section 59(2)(m) of the EEZ Act requires us to consider any other matter we think is relevant and

reasonably necessary to determine the application. We consider these ‘other matters’ in section 14

of this decision

114. Section 59(2) of the EEZ Act sets out matters we “must take into account”, and section 59(3) states

we “must have regard to” any submissions or evidence given to us, any advice or reports we have

23

sought and any advice from NKTT. We have had regard to these obligations in reaching our

decision.

3.5 Information Principles


“61 Information principles

(1) When considering an application for a Marine Consent, the Environmental Protection

Authority must—

(a) make full use of its powers to request information from the applicant, obtain advice,

and commission a review or a report; and

(b) base decisions on the best available information; and

(c) take into account any uncertainty or inadequacy in the information available.

(2) If, in relation to making a decision under this Act, the information available is uncertain or

inadequate, the EPA must favour caution and environmental protection.

(3) If favouring caution and environmental protection means that an activity is likely to be

refused, the EPA must first consider whether taking an adaptive management approach

would allow the activity to be undertaken.

(4) Subsection (3) does not limit section 63 or 64.

(5) In this section, best available information means the best information that, in the particular

circumstances, is available without unreasonable cost, effort, or time.”

3.5.1 Full Use of Powers

116. We are satisfied we have made full use of our powers to request and access information and

consider we have met our responsibility under section 61(1)(a) of the EEZ Act.

117. In this case, we have had the benefit of:

(a) the application by OMV and the Impact Assessment (including supporting technical

documents);

(b) the completeness and gap analysis by Environmental Resources Management;

(c) additional information supplied by OMV at the request of the DMC and EPA (refer to

Appendix 3);

(d) advice from other agencies with responsibility for other marine management regimes (refer

to Appendix 3);

(e) submissions from interested parties, including from parties with existing interests that may be

affected by the drilling programme;

24

(f) expert evidence, both written and oral, and supplemented by cross-examination and

questioning by us;

(g) non-expert evidence and representations in support of submissions;

(h) additional information supplied by OMV and other parties at our request during the hearing;

(i) legal representations in both opening and closing the hearing on behalf of OMV;

(j) legal advice from Luke Cunningham Clere (Office of the Wellington Crown Solicitor) and

EPA inhouse counsel in relation to issues of duplication and enforcement of conditions

imposed under the EEZ Act and/or required by other marine management regimes; and

(k) the EPA Staff Report (including the reports by NKTT and Genesis Oil and Gas Consultancy

Limited).

118. We also requested that OMV provide us with a copy of the Safety Cases that had been accepted by

WorkSafe New Zealand and the DMPs approved by Maritime New Zealand. This information was

requested on 20 October 2014 and eventually provided to us by OMV on 7 November 2014. The

importance of these documents to our decision-making is discussed in section 3.5.2 below.

3.5.2 Best Available Information

119. We are satisfied that we have been able to make our decision based on the best available

information in accordance with section 61(1)(b) of the EEZ Act.

120. Pursuant to section 61(1)(b) of the EEZ Act, we must make our decision based on the best available

information. “Best available information” is defined in section 61(5) of the EEZ Act. However, it is

important to note that best available information is not necessarily ‘all available information’. We are

required to exercise judgement about what information is the best available information for this

particular application, having regard to issues of cost, effort and time.

121. Shortly after our appointment we indicated that we did not have sufficient information regarding

potential cumulative effects of the drilling programme.

122. We also considered we needed to view the DMPs and Safety Cases to consider the nature and

effect of other marine management regimes and, if necessary, to impose conditions. OMV initially

refused to provide us with the Safety Cases and DMPs. Following further discussion during the

hearing, the documents were provided to us on 7 November 2014 along with an application under

section 158(1) of the EEZ Act seeking a direction under section 158(3)(b) of the Act prohibiting their

publication and communication.

123. In response, we issued a minute on 10 November 2014 advising that we had decided to exercise our

delegated power from the EPA to issue a direction under section 158(3)(b) of the EEZ Act on the

following terms:

(a) The publication and communication of the documents is prohibited.

25

(b) Any person who may be heard at the hearing of the application for marine consent is entitled

upon request to view under supervision (but not reproduce) the documents for the purpose

of participation in the proceedings. No other person will have access to the documents

during the proceedings.

(c) The direction applies until the conclusion of the proceedings relating to the application for

marine consent in accordance with section 158(4)(b) of the EEZ Act, unless otherwise varied

by the EPA.

124. On 11 November 2014 we issued a minute inviting submitters who indicated an intention to speak at

the hearing to comment in writing in relation to any of the information contained within the Safety

Case and DMP. In response we received comment from one submitter outlining a number of matters

of concern. Some of the matters raised by the submitter were out of scope (matters pertaining to

consultation, injection water and completion fluids), but matters relating to drilling muds are relevant

and have been considered in our decision-making.

125. On the basis of the above, we are satisfied that we have been able to make our decision based on

the best available information in accordance with section 61(1)(b) of the EEZ Act.

26

Context for Consideration and Evaluation 4.

126. Section 59(2) of the EEZ requires us to consider a number of relevant matters. These matters are

evaluated and considered as follows:

(a) Section 5 addresses potential effects on the environment and existing interests.

(b) Section 6 addresses potential effects on human health.

(c) Section 7 addresses the importance of protecting the biological diversity and integrity of

marine species, ecosystems and processes.

(d) Section 8 addresses the importance of protecting rare and vulnerable ecosystems and the

habitats of threatened species.

(e) Section 9 addresses the economic benefit to New Zealand of allowing the application.

(f) Section 10 addresses the efficient use and development of natural resources.

(g) Section 11 addresses the nature and effect of other marine management regimes.

(h) Section 12 considers the imposition of conditions to avoid, remedy or mitigate the adverse

effects of the drilling programme.

(i) Section 13 addresses other relevant regulations and laws.

(j) Section 14 addresses other matters potentially relevant to the drilling programme.

(k) Section 15 addresses the need for adaptive management.

127. The discussion on the topics listed in sections 5 and 6 of this decision is organised under the

following subheadings:

(a) The issues

(b) The effects

(c) Findings

(d) Conditions.

128. We note that section 63(1) of the EEZ Act states: “The Environmental Protection Authority may grant

a marine consent on any condition that it considers appropriate to deal with adverse effects of the

activity authorised by the consent on the environment or existing interests.”

129. Section 59(2)(j) of the EEZ Act requires us to take into account “the extent to which imposing

conditions under section 63 might avoid, remedy, or mitigate the adverse effects of the activity”.

130. We have wide discretion in terms of imposing conditions on this application for marine consent and

have carefully considered the conditions proffered by OMV in its closing legal submissions, as well

as those recommended by EPA staff. Our findings on the proffered conditions are set out in sections

5 and 12 of this decision.

27

Potential Effects on the Environment and Existing Interests 5.

5.1 Introduction

131. Sections 59(2)(a) and (b) of the EEZ Act require us to take into account the effects of allowing the

activity on the environment and/or existing interests. This requires us to take into account other

activities occurring in the vicinity of the application site, including those not regulated under the EEZ

Act, and the likely effects of these on the environment and existing interests. Section 59(3) of the

EEZ Act requires us to have regard to submissions and evidence, any advice provided to us in

relation to the application and any advice received from NKTT.

132. This section summarises our understanding of the key potential effects of the drilling programme on

the environment and existing interests based on the Impact Assessment, the EPA Staff Report

(including the report by NKTT), submissions and the expert evidence. It also outlines our findings on

these potential effects.

133. We have taken into account the definition of “effect” in section 6 of the EEZ Act and the requirement

to consider any potential cumulative effects and potential effects of low probability but high potential

impact.

134. We have taken into account the effects on the environment or existing interests of allowing the

activity that may occur outside of the EEZ in accordance with sections 59(2)(a)(ii) and (b)(ii) of the

EEZ Act. The area outside of the EEZ comprises “in New Zealand or in the waters above or beyond

the continental shelf beyond the outer limits of the exclusive economic zone”.

135. The key potential effects of the drilling programme on the environment and existing interests are

categorised under the following sub-headings:

(a) Benthic communities

(b) Planktonic communities

(c) Marine mammals

(d) Seabirds

(e) Fish

(f) Biosecurity

(g) Existing interests.

136. The potential effects of an oil spill event are considered under a separate sub-heading in this section.

We have adopted this approach as the potential effects of an oil spill may manifest across many of

the identified environmental values and existing interests. An oil spill event also has the potential to

generate effects on the environment outside of the EEZ.

28

5.2 Macro-benthic Communities

5.2.1 The Issues

137. The key potential adverse effects on macro-benthic communities are:

(a) the deposition of drill cuttings and muds onto the seabed;

(b) the presence of contaminants within the drill cuttings and muds; and

(c) the presence and removal of the ENSCO 107.

5.2.2 The Effects

Deposition of Drill Cuttings and Muds

138. A number of submitters expressed concern about the potential loss of marine habitat and the

degradation of the marine environment. Ms Janice Liddle13 expressed the sentiment that the “ocean

is not a dumping ground”. She said she had no faith in the dispersal modelling analysis undertaken

by MetOcean Solutions Limited.

139. Dr Peter McComb14 explained the modelling used to predict the dispersal and deposition of drill

cuttings and muds from the drilling programme. He noted the modelling predicted that the finer

cutting particles will settle very slowly through the water column and become more widely dispersed

by tidal and oceanic currents. The larger particles will settle much closer to the discharge point

beneath the WHP. He stated that the modelling predicted a maximum depositional thickness on the

seafloor of approximately 3 mm for each well and a cumulative maximum depositional thickness in

the range of 9–13 mm. He noted that a depositional thickness greater than 1 mm will not occur

beyond a 250 m radius from the WHP and that 90% of the drill cuttings and muds will settle to the

seabed within approximately 40 km of the WHP.

140. The dispersal modelling report noted two important assumptions had been made in the study: “First,

that the size distribution and settling velocities of the drill cuttings are based on a published dataset.

However, the rock type and drilling equipment used will determine the actual physical properties of

the cuttings to be discharged and the flocculation in the presence of OBM or SBM may act to change

the settling velocity distributions. Second, the simulations do not take into account the probable initial

velocity conditions, density-driven momentum or influence on localised flows due to the presence of

the drilling equipment.”

141. Mr Asher said that seabed sampling showed that the effects of the drilling programme on macro-

benthic communities (those organisms greater than 0.5 mm in size and living on or in the seabed to

a depth of 100 mm) will be localised and minor. He identified that changes do occur in the diversity

and abundance of some invertebrate species around structures but that the base communities

remain the same at the Maari site and at control areas. He noted that there are no detectable

13 Submission number 110317. 14 Managing Director of MetOcean Solutions Limited on behalf of OMV New Zealand Limited.

29

changes beyond a distance of 250 m from the WHP and concluded that adequate measures are in

place to mitigate adverse effects on macro-benthic communities.

142. Dr Skilton concluded that the drilling programme has the potential to change the physical, chemical

and compositional properties of the seabed sediment by reducing sediment quality and adversely

affecting macro-benthic invertebrate communities. However, she stated that sediment monitoring

indicated any adverse effects on sediment quality will be localised and no more than minor, provided

that the mitigation proposed by OMV is adhered to.

Contamination Effects on Sediments

143. 23 submitters raised concerns regarding the toxicity of the waste material generated by the drilling

programme. Many had concerns about the toxicity of WBMs and SBMs to marine life. Some

submitters stated that it is not acceptable to say that the ocean will dilute toxins, and they considered

some contaminants to be insoluble and likely to disperse.

144. Dr Skilton explained that macro-benthic ecological surveys by the Cawthron Institute show that none

of the metal concentrations of arsenic, nickel, iron, copper, cadmium, mercury, zinc, lead, chromium

and manganese displayed any radial trends near the WHP or the FPSO, with the exception of

barium. She noted metal concentrations at the monitoring sampling stations were similar to, or lower

than, concentrations at the benthic sediment monitoring control sites.

145. In supplementary evidence, Dr Skilton emphasised that concentrations of all metals/metalloids, total

petroleum hydrocarbons (TPHs) and polycyclic aromatic hydrocarbons (PAHs) fall below the

applicable ANZECC interim sediment quality guideline low trigger value levels at distances of more

than 250 m from the WHP and FPSO. Dr Skilton concluded that the drilling programme will not have

undue adverse effects on macro-benthic sediments and communities.

146. Dr Skilton explained that WBMs are largely soluble in the marine environment and display higher

capacity for dilution and dispersion than SBMs. She noted they are much less likely to settle on the

seafloor than SBMs. She stated that the precipitation of barite can cause the smothering of benthic

sediments and immobile macro-benthic species but that the bioavailability of this precipitate is very

low and it is not normally considered toxic. Dr Skilton concluded that the drilling programme will

“most likely” have minor effects on barium concentrations in sediments based on the results of

macro-benthic ecological surveys and background barium concentrations. Dr Skilton stated that

these results indicated that the drilling programme has had a minor influence on barium

concentrations in sediments and that the concentrations reduced to approximate background levels

within 1–2 km from the WHP.

147. Dr Skilton explained that effects of SBMs have the potential to be more adverse due to a relatively

high discharge of synthetics occurring within a small area and rapid settlement. She noted potential

effects on sediments included the contamination of sediments, sediment organic enrichment and

anoxia and the smothering of macro-benthic communities. Dr Skilton concluded that the deposition

of SBMs will present a medium localised environmental risk to the macro-benthic environment near

the WHP and noted that this conclusion is consistent with the approved DMP for the ENSCO 107.

30

Presence and Removal of the ENSCO 107

148. A number of submitters expressed concern about the potential loss of marine habitat and the

degradation of the marine environment. These submissions are relevant to the evaluation of the

potential effects associated with the presence and removal of the ENSCO 107.

149. Mr Asher stated that most of the effects of structures on macro-benthic ecology come from biological

fouling. He concluded that the presence of the ENSCO 107 is “unlikely” to alter macro-benthic

communities further, as the WHP has been operational since 2008 and these changes have already

occurred. He stated that the removal of the ENSCO 107 will result in temporary physical disturbance

of sediment and potential smothering of macro-benthic organisms but that recovery would begin

immediately and progressively with resettlement from populations nearby over two to three years.

150. Dr Skilton concluded that the removal of the ENSCO 107 will cause an upheaval of sediments that

may smother surface benthic sediments and sessile epifauna and noted that small-scale bathymetric

changes by way of three indentations where each spud can was located would remain. She

reiterated that the ENSCO 107 has been in this location before and that the rig legs had been placed

in the same indentations created from previous drilling operations. She noted this had avoided

additional indentations in the seabed and had minimised further benthic disturbance.

5.2.3 Findings

151. Having considered the information available, submissions and evidence, we find the following in

respect to the potential adverse effects of the drilling programme on benthic sediment and

communities:

(a) The dispersal and deposition modelling undertaken by MetOcean Solutions Limited is

satisfactory for the purposes for which it has been used, and the assumptions that informed

the model are reasonable. We are satisfied that the best available information has been

utilised in developing the dispersal and deposition model.

(b) The available baseline information on macro-benthic communities and the monitoring that

has been undertaken subsequent to previous drilling operations (within the permit area and

at other sites) provides us with sufficient confidence regarding the assessment of potential

effects on benthic sediment and macro-benthic communities.

(c) We agree with the conclusions of Mr Asher and Dr Skilton that the potential adverse effects

on macro-benthic communities from the deposition of the drill cuttings and muds, the

contamination of benthic sediments and the presence and removal of the ENSCO 107 will be

extremely localised, minor and temporary. Any long-term changes will be negligible. We note

also that both Mr Asher and Dr Skilton agreed, when questioned, that they would not regard

the observed changes in macro-benthic communities as significant or adverse.

(d) Barium is found within subsurface rock and most drilling muds. Its bioavailability is limited.

We accept the evidence of Mr Asher that there appears to be no direct correlation between

barium concentrations and macro-benthic taxa health in the monitoring undertaken to date.

31

(e) The potential for disturbance to macro-benthic communities associated with the presence of

the ENSCO 107 has been mitigated by the placement of the rig in the same location as the

previous drilling operations in 2008. The recovery of macro-benthic communities appears to

have occurred relatively rapidly.

(f) Given the relatively temporary, localised and minor scale of potential adverse effects on

macro-benthic communities, we accept any potential cumulative effects associated with the

drilling programme will be negligible in the context of the wider environment.

5.2.4 Conditions

152. Conditions have been proffered by OMV, and recommended by the EPA, with respect to the

management and monitoring of the potential effects of the drilling programme on macro-benthic

communities. We have carefully considered these conditions and have decided to impose the

following conditions in relation to benthic communities: Conditions 16, 17, 18, 19, 20, 21, 33 and 34.

5.3 Planktonic Communities

5.3.1 The Issues

153. The key potential adverse effects on planktonic communities are:

(a) the contaminants within the drill cuttings and muds discharged into the water column; and

(b) the increased turbidity in the water column from the discharge of drill cuttings and mud.

5.3.2 The Effects

Toxicity of Drill Cuttings and Muds to Phytoplankton and Zooplankton

154. 23 submitters raised concerns regarding the toxicity of the waste material generated by the drilling

programme. A number said that the drilling programme would adversely affect ecosystem processes

and the marine food chain.

155. Dr MacKenzie stated that the impact of drill cuttings and muds on flora and fauna in the water

column depends on its inherent toxicity, the concentration of contaminants and the duration of

exposure to organisms in the water column. He noted this is highly dependent on the rate and extent

of dilution and dispersion. He explained that, when drill cuttings and muds are discharged, most of

the material forms a plume that sinks rapidly to the seabed and that the remaining fraction of the

muds form another plume that drifts from the discharge point under the influence of the currents and

is widely dispersed and diluted in the process. His evidence aligned with the dispersion modelling

evidence presented by Dr McComb.

156. Dr MacKenzie identified that Neff (1987) maintained that, based on laboratory studies of acute and

chronic/sublethal toxicity of drilling muds and field observations of rates of dilution of drilling muds,

water column organisms are not exposed to drilling fluids long enough and at sufficiently high

concentrations to “elicit any acute or sub-lethal responses”.

32

157. Dr MacKenzie explained that SBMs have a propensity to clump and sink near the discharge location,

whereas WBMs disperse more widely. He also noted that Neff et al. (2000) stated “the effects of SBF

[i.e. SBM] cuttings on pelagic organisms are expected to be even less than those of WBFs [i.e.

WBMs] because of the low toxicity of SBFs (similar or lower than the toxicity of WBFs) and the

reduced exposure time due to rapid settling of SBF cuttings clumps and particles out of the water

column”.

158. Dr MacKenzie explained that potentially toxic metals such as chromium, cadmium, copper, arsenic,

mercury and lead (which may be contained in drilling fluids) are not bioavailable because they are

present almost exclusively as insoluble inclusions in drilling mud ingredients and cuttings minerals.

He noted field and laboratory studies have shown that metals in drilling fluids and cuttings are not

bio-accumulated by marine organisms (Neff, 2010) and do not present a hazard to pelagic marine

food webs. This was also explained by Ms Fleur Tiernan15 in relation to water quality matters.

159. Dr MacKenzie concluded that the weight of international evidence suggested that the inherent

toxicity of WBM and SBM constituents to phytoplankton and zooplankton is low and that adverse

effects are further minimised by the rapid flocculation, dilution and dispersal in open ocean

situations.

Increased Turbidity in the Water Column from the Discharge Plume

160. 110 submitters raised concerns with respect to the effects of pollution, amongst other issues, on

biodiversity and the integrity of the marine environment. Ms Jean Kahui16 raised concerns regarding

increased turbidity and the accumulative effects of all the drilling wastes.

161. Dr MacKenzie explained that the reduction of light intensity within the water column from the

discharge of drill cuttings and muds could have a localised negative effect on phytoplankton

photosynthesis. However, he concluded that any effects will be minor given the small volumes

discharged, the depth of the water, the rapid settling of most drill cuttings and the high-energy

environment.

162. Dr MacKenzie noted that the drill cuttings and muds are discharged at a depth of 10 m and that the

turbidity plume is not visible at the surface. The discharge and dispersal modelling data presented by

Dr McComb showed that the concentration of total suspended solids in the water column “rarely

exceeded the natural background value of 0.2 g/m3 or extended beyond 500 m from the point of

discharge”. Because the concentration of suspended solids was only slightly increased in the near

vicinity of the discharge, Dr MacKenzie concluded that the effect on water column turbidity is

expected to be small.

163. Finally, Dr MacKenzie identified that the total volume of drill cuttings and muds (including fluids)

discharged over the entire drilling period (420 days) is estimated to be in the order of 7,000 m3. He

considered that this volume is very small in comparison to the volume of water within the euphotic

15 Environmental Scientist for REM on behalf of OMV New Zealand Limited. 16 Submission number 110377 and on behalf of Frack Free Kapiti – submission number 110375.

33

zone that will flow through the ENSCO 107 over the drilling period. On this basis, he concluded that

the effect on water column turbidity (and hence phytoplankton productivity) is expected to be

negligible. Furthermore, given the natural sources of turbidity in the wider environment (such as

sediment re-suspension in the surf zone, tidal mixing in high current areas, plumes from local rivers

and phytoplankton blooms), Dr MacKenzie concluded any cumulative effects on turbidity in the wider

context of the South Taranaki Bight would be so small as to be immeasurable.

5.3.3 Findings


respect to the potential adverse effects of the drilling programme on plankton communities:

(a) We accept the evidence of Dr MacKenzie that the inherent toxicity of WBM and SBM

constituents to phytoplankton and zooplankton communities is low.

(b) Whilst we acknowledge the concerns of submitters regarding the toxicity of the waste

material discharged, we accept the evidence that the metals/metalloids in drilling fluids and

cuttings are not bioaccumulated by marine organisms and do not present a hazard to marine

food webs.

(c) The total volume of drill cuttings and muds discharged over the course of the drilling

programme will be so small as to be immeasurable compared with the sediment sources

entering the South Taranaki Bight from the surrounding environment. The effects, including

cumulative effects, on water column turbidity and phytoplankton productivity will be

negligible.

(d) The discharge and dispersal modelling data presented shows that the concentration of total

suspended solids in the water column will rarely exceed natural background values or extend

beyond 500 m from the WHP. Any potential effects associated with the discharge of drill

cuttings and muds will be further minimised by the rapid flocculation, dilution and dispersal

that will occur in the open ocean.

(e) The South Taranaki Bight is a highly dynamic and biologically productive region. The

upwelling and mixing processes result in a good supply of nutrients to fuel phytoplankton

productivity. The Kahurangi upwelling has a major effect that at times directly influences the

water column and plankton communities over the permit area. We accept the conclusion of

Dr MacKenzie that any potential effects from the drilling programme on nutrient dynamics

and plankton productivity will be minor.

5.3.4 Conditions


management and monitoring of the potential effects of the drilling programme on planktonic

communities. We have carefully considered these conditions and have decided to impose the

following conditions in relation to planktonic communities: Conditions 16, 17, 18, 19, 20, 21, 33 and

34.

34

5.4 Marine Mammals

5.4.1 The Issues

166. The key potential adverse effects on marine mammals are:

(a) noise and vibration from the drilling operations and support services;

(b) the discharge of drill cuttings and muds into the water column (including potential effects on

prey availability and foraging);

(c) the deposition of drill cuttings and muds onto the seabed; and

(d) the potential for ship strike and marine mammal migration issues.

5.4.2 The Effects

Noise and Vibration

167. 123 submissions raised concerns about the effects of the drilling programme on marine mammals,

particularly Hector’s dolphins and blue whales. Many of these submissions raised concerns about

the potential effect of an oil spill on marine mammals. Submitters such as Ms Liddle raised concerns

regarding the effects of noise on marine mammals.

168. Dr Simon Childerhouse17 stated that the area of interest is unlikely to be of particular biological

importance to any marine mammal species, although many species are likely to be present in the

broader area at certain times of year. He noted that noise from the drilling programme will be audible

to baleen whales, beaked whales and dolphins and that the frequency of the main noise energy from

drilling overlaps with baleen whales and the lower frequency end of dolphin sensitivity. He concluded

that, given most of the noise energy is in the lower frequencies, it is more likely to affect blue whales

rather than Hector’s dolphins.

169. Dr Childerhouse concluded that, while there may be some potential adverse noise effects, they will

only occur within the immediate vicinity of the WHP (within 200 m) and that any overall risks were

minor. He noted this conclusion is consistent with findings of the OSPAR Convention Report (2009),

in that injuries from noise from drilling operations are unlikely in marine mammals, except very close

to the source. A temporary threshold shift will only occur for cetaceans if they remain within 1 m of a

drilling operation for periods of approximately 10 minutes. Permanent threshold shifts will only occur

for high-frequency cetaceans if they remain within 1 m of the drilling operation and for periods of

more than 10 minutes;

170. Associate Professor Elizabeth Slooten18 stated that she had concerns about the lack of data on

the noise made by drilling platforms in New Zealand waters and that there is considerable

17 Senior Research Scientist at Blue Planet Marine on behalf of OMV New Zealand Limited. 18 Associate Professor in the Department of Zoology at the University of Otago on behalf of Climate Justice Taranaki and others.

35

uncertainty about the noise that would be produced and how audible it would be to marine mammals.

She stated that Dr Childerhouse’s assessment had ignored the fact that marine mammals also use

passive listening to interpret their environment.

171. Associate Professor Slooten stated that OMV had not provided any evidence of habituation of

marine mammals to the existing mining/drilling operations in the area and that a minimum of three

years of research would be required in order to describe biological and physical processes in the

area to be drilled.

172. Dr Childerhouse’s supplementary evidence stated that any significant sound energy from deep sub-

surface explosions will be unlikely to propagate from the source of the explosion into the water

column. He concluded it will not pose any risk to marine mammals.

Discharge of Drill Cuttings and Muds

173. 123 submissions raised concerns about effects on marine mammals, particularly Hector’s dolphins

and blue whales. Many of these submissions are concerned about the potential effect of an oil spill

on marine mammals. Others expressed concerns regarding the effects of the discharge of drill

cuttings and muds on the food sources of marine mammals and associated impacts on the health

and wellbeing of Hector’s dolphins.

174. Ms Tiernan said a consequence of discharging drill cuttings and muds was that elevated

concentrations of metals and metalloids such as chromium, copper, lead and zinc may be observed

for distances up to 250 m from the WHP. She stated that such water quality effects are likely to be

localised and short term given the mitigation measures in place to treat and to re-use drilling muds

where possible and the intermittent nature of the discharge of muds at the completion of each well.

She concluded that the discharges from the WHP are not likely to have an adverse impact on pelagic

marine life.

175. Ms McConnell considered the effect of increased turbidity and contamination on marine mammals

and noted that, because marine mammals return to the surface to breathe, the primary pathway for

direct uptake is through contaminant contact with the skin and mucous membranes or via secondary

ingestion during feeding. Although Ms McConnell noted that direct contact is feasible, she concluded

that the potential for adverse effects on marine mammals will be minimal for the following reasons:

(a) Dilution rates are such that concentrations of total suspended sediments and associated

contaminants will decrease rapidly with distance from the WHP.

(b) Modelling of metal concentrations from the discharge plume do not exceed the ANZECC

standards for water quality at the WHP.

(c) Modelling of total suspended sediments indicated that background concentrations rarely

extended beyond 500 m from the WHP.

(d) Marine mammals have ample opportunity to avoid the discharge plume as they are highly

mobile and the WHP is open to the ocean on all sides.

36

(e) No species of marine mammal is entirely dependent on habitat in the direct vicinity of the

WHP.

176. Ms McConnell noted that the potential indirect effects of increased turbidity on marine mammals

include reduced foraging efficacy and reductions in prey availability. Given that the plume modelling

by Dr McComb indicated that suspended sediment levels exceeding background concentrations will

seldom occur, Ms McConnell concluded that these effects are likely to be highly localised and of

minor significance.

Deposition of Drill Cuttings and Muds

177. Submitters expressed concern regarding the potential effects of the deposition of drill cuttings and

muds on the food sources of marine mammals and associated impacts on the health and wellbeing

of Hector’s dolphins.

178. Ms McConnell stated that the deposition of drill cuttings and muds will not have any direct effects on

marine mammals, as marine mammals that forage on the benthos are not permanently associated

with the seabed and can move away from affected areas.

179. Ms McConnell concluded that the indirect effects from the deposition of drill cuttings and muds do

not pose any significant concerns with regard to food chain effects. She noted that no marine

mammals present in the area rely exclusively on benthic prey for all of their nutritional requirements,

that the area of benthos that will covered by drilling waste is relatively small and that the benthic prey

sought by marine mammals will most likely be the larger mobile epifauna species that are more

resilient to deposition.

Presence of the ENSCO 107 and Support Vessels

180. 110 submitters raised concerns with potential effects of the drilling programme on biodiversity and

the integrity of the marine habitat. Some of these submitters specifically raised concerns with respect

to the issue of ship strike on marine mammals.

181. Ms McConnell discussed the potential effects of helicopter disturbance to seal colonies and that

helicopters have been documented to elicit behavioural changes in whales. She was unable to locate

any specific studies on the behavioural response of whales to aircraft but noted that some

behavioural effects on whales can be expected during close approaches by aircraft. She stated that

care needs to be taken by pilots operating in areas where marine mammals may be present and

noted that the Marine Mammals Protection Regulations 1992 address appropriate aircraft behaviour

around marine mammals.

182. Ms McConnell addressed ship strike and stated that blue whales are most at risk given their size and

their frequent presence near the WHP. She noted that all cetacean species are potentially at risk

from ship strike; however, large whales are at greater risk due to their more limited mobility. She

noted that two support vessels (Pacific Worker and Pacific Ranger) will support the drilling

programme. Vessel movements will increase from one return trip per week between New Plymouth

and the WHP to two and a half return trips per week. Ms McConnell considered that this represented

37

a very small increase in the potential risk of a ship strike incident, particularly given the shipping

routes off Taranaki and high levels of shipping traffic in the area around the WHP. She noted the

efficient operating speeds of the Pacific Worker and Pacific Ranger are below 14 knots, which

significantly decreases the risk of ship strike.

183. Associate Professor Slooten did not provide any evidence on the effect of ship strike in relation to the

drilling programme. She suggested that the cumulative effects of the drilling programme, along with

all other existing activities, should be considered.

5.4.3 Findings


respect to the potential adverse effects of the drilling programme on marine mammals:

(a) Although Associate Professor Slooten gave expert evidence, we found that she crossed the

line into advocacy at times. She avoided answering direct questions on the potential effects

on the Hector’s dolphin population if this application for marine consent was refused.

Instead, she speculated on a possible increase in the population if human activities did not

increase and fishing activities were eliminated along the west coast of the North Island. She

made a number of general statements and did not focus on the potential effects of the drilling

programme itself.

(b) We accept the evidence of Ms McConnell with respect to the summary of marine mammal

species that could be present in the South Taranaki Bight. We note that Ms McConnell,

Associate Professor Slooten and the Ministry for Primary Industries agree that the WHP is at

the extreme southern limit of the known habitat of the Maui’s dolphin sub-species. We also

note agreement that the water depth at the WHP and its distance offshore are outside the

known preferred habitat of Hector’s dolphins. We accept these animals might occasionally

visit the area.

(c) We accept the South Taranaki Bight is a foraging area for blue whales (Antarctic blue whale

and pygmy blue whale) and, as such, that the area should be considered to be habitat of a

threatened species in accordance with section 59(2)(e) of the EEZ Act. While Ms McConnell

was initially reluctant to concede that the South Taranaki Bight was habitat for this

threatened species, she stated in her supplementary evidence that the International Union

for the Conservation of Nature classification of blue whales (including Antarctic blue whale

and pygmy blue whale) is endangered.

(d) There is an absence of empirical data in the noise assessment by Dr Childerhouse, but we

accept that the assumptions used in his assessment are conservative and can be relied

upon in these circumstances as the best available information. However, given the lack of

empirical data regarding actual noise levels during operations, we conclude that

measurement is required in order to validate the assessments and confirm that actual noise

levels are within the assumed range described in the evidence of Dr Childerhouse. We

38

encourage OMV to discuss with Cawthron Institute the possibility of including underwater

noise level recordings as a part of their Offshore Taranaki Environmental Monitoring

Programme (OTEMP).

(e) The assessment of Dr Childerhouse indicated that the acoustic footprint of the drilling

programme would be much smaller than that of activities that are already permitted in the

area, such as seismic surveys.

(f) We accept the conclusions of Dr Childerhouse that cetaceans and pinnipeds will only show

significant behavioural responses at distances closer than 200 m from a drilling operation

and will not be affected further than 200 m.

(g) We accept the conclusion of Ms McConnell that further marine mammal surveys would be

unlikely to confirm the distribution of the Maui’s dolphin sub-species beyond the 12 years’

worth of survey data that already exists. We accept that she has used the best available

information without incurring unreasonable cost, effort or time for her assessment of

environmental effects.

(h) Potential cumulative effects on marine mammal fatalities associated with ship strike from

support vessels to the drilling programme will be very low given the very small increase in

vessel movements, the size of the vessels and their speed.

(i) We accept the conclusion of Ms McConnell that the deposition of drill cuttings and muds will

not have any direct effects on marine mammals, and we accept that marine mammals that

forage on the benthos are not permanently associated with the seabed and can move away

from any areas that may be affected by deposition.

5.4.4 Conditions


management and monitoring of the potential effects of the drilling programme on marine mammals.

We have carefully considered these conditions and have decided to impose the following conditions

in relation to marine mammals: Conditions 17, 18, 19, 21, 23, 25, 26, 27, 29, 30, 31, 32, 33 and 34.

5.5 Seabirds

5.5.1 The Issues

186. The key potential adverse effects on seabirds are:

(a) collision with structures via the attraction to artificial nocturnal lighting; and

(b) impacts on food sources and foraging from the discharge of drill cuttings and muds into the

water column.

39

5.5.2 The Effects

187. Submitters expressed concern about the potential loss of marine habitat and the degradation of the

marine environment. Some submitters expressed specific concern about potential adverse effects on

seabirds, including penguins.

188. Dr David Thompson19 stated that the “additional artificial nocturnal lighting” from the drilling

programme represent the most significant risk to seabirds. However, he concluded these changes

will have “very minimal” impacts on seabirds. He noted that the Department of Conservation had

confirmed that only one or two seabird collisions are reported annually and that no reports had been

received “in many years” from the offshore oil and gas industry in Taranaki.

189. Dr Thompson concluded that any potential risks to seabirds from the effects of the discharge of drill

cuttings and muds are negligible. Increased water turbidity may reduce the foraging efficiency of

diving seabirds that rely on visual foraging to capture prey from the water column. He considered this

to be an insignificant threat to foraging seabirds as the location of the WHP is probably beyond the

preferred foraging range of coastal species. He stated that it is not known to what extent foraging

seabirds are dependent upon particular areas that may be affected by the discharge of drill cuttings

and muds into the water column but noted that the displacement of seabirds to unaffected or less

affected areas nearby is unlikely to have a significant impact either at the individual or population

level.

190. The submission of Mr Paul Elwell-Sutton20 sought a requirement that seabird observations (species

and abundance) be part of any proposed monitoring in the vicinity of the WHP. Dr Thompson stated

that the resources required to gather this information would be relatively large given the relatively low

level of effects on seabirds. He concluded that it is very unlikely that such information would

substantially alter the mitigation approaches proposed.

5.5.3 Findings


respect to the potential adverse effects of the drilling programme on seabirds:

(a) We agree with Dr Thompson that any potential adverse effects on seabirds from the drilling

programme will be negligible at an individual and population level.

(b) We agree that a regional seabird survey is not needed. We consider this would be

unreasonable given the low potential risk.

5.5.4 Conditions


management and monitoring of the potential effects of the drilling programme on seabirds. We have

19 Seabird Ecologist at NIWA appearing on behalf of OMV New Zealand Limited. 20 Submission number 110456.

40

carefully considered these conditions and have decided to impose the following conditions in relation

to seabirds: Conditions 15, 26, 33 and 34.

5.6 Fish

5.6.1 The Issues

193. The key potential adverse effects on fish are:

(a) noise and vibration from the drilling operations and support services;

(b) the discharge of drill cuttings and muds into the water column and associated changes to

water quality; and

(c) the deposition of drill cuttings and muds onto the seabed.

5.6.2 The Effects

194. 59 submitters opposed the drilling programme on the basis that it would have possible negative

effects on fisheries. 110 submitters raised concerns about the effects of the drilling programme on

fish breeding. Ms Catherine Cheung21 expressed concern over the risks posed to fisheries.

195. Dr MacDiarmid stated that it is reasonable to expect some masking by rig noise of individual fish

calls in the vicinity of the WHP. However, given the principal sound-producing fish in the area (red

gurnard) are mobile and widely distributed, she concluded that any potential noise effects on the

gurnard population in the South Taranaki Bight are likely to be negligible.

196. Dr MacDiarmid concluded that it is “highly unlikely” that the discharge and deposition of drill cuttings

and muds will have a measurable impact on fish species. She cited the comparatively small quantity

of drill cuttings and muds discharged. Half of the drill cuttings and muds are expected to be

deposited on the seabed within 5 km of the WHP. Only a small volume of mostly fine material is

expected to be carried more than 40 km down current, and the discharge is estimated to rarely

exceed the natural background concentrations of total suspended sediments.

197. Dr MacDiarmid stated that the discharge and deposition of drill cuttings and muds will not have

significant effects on drifting planktonic fish eggs and larvae, as these will quickly pass through the

relatively small discharge plume.

5.6.3 Findings


respect to the potential adverse effects of the drilling programme on fish:

21 Submission number 110357.

41

(a) We agree with Dr MacDiarmid that any adverse effects of noise and the discharge/deposition

of drill cuttings and muds on fish species will be negligible and that fish have the ability to

move away from the discharge plume.

(b) The discharge/deposition of drill cuttings and muds will not have significant effects on drifting

planktonic fish eggs and larvae.

5.6.4 Conditions

199. While no conditions were proffered by OMV, or recommended by the EPA, in relation to the direct

management of the potential effects of the drilling programme on fish, a number of conditions were

recommended that relate to matters that are generally relevant to the management of fish. We have

carefully considered these conditions and have decided to impose the following: Conditions 16, 17,

18, 19, 20, 21, 33 and 34.

5.7 Biosecurity

5.7.1 The Issues

200. The key potential biosecurity issues are the introduction of unwanted organisms via the ENSCO 107

and the discharge of ballast water from support vessels.

5.7.2 The Effects

201. No submitters raised biosecurity matters as a key issue.

202. Dr Barrie Forrest22 advised that the Ministry for Primary Industries (MPI) is satisfied that the ENSCO

107 meets its standards for bio-fouling, ballast water and sediments. Given the high level of

biosecurity risk reduction that has been achieved, he concluded that there are no biosecurity

concerns with the deployment of the ENSCO 107 for the drilling programme.

203. Dr Forrest stated that the support vessel Pacific Worker was not subject to the same level of bio-

fouling risk reduction as the ENSCO 107 but noted the MPI assessment was that any risks were

“acceptable” and met their Craft Risk Management Standard for bio-fouling. He also stated that

Pacific Worker was required to meet related border standards for ballast water and associated

sediment, and accordingly, he concluded that there are not any significant biosecurity risks

associated with the use of Pacific Worker.

204. MPI also advised in its letter to the EPA (1 August 2014) that it is satisfied that the ENSCO 107 and

Pacific Worker have carried out the measures described in the Craft Risk Management Plans and

are not carrying any risk organisms from overseas.

205. Dr Forrest noted that, in the unlikely event that OMV brings an additional vessel from overseas to

support the development drilling programme, it must meet the Import Health Standard for ballast

22 Senior Marine Ecologist at the Cawthron Institute appearing on behalf of OMV New Zealand Limited.

42

water and associated sediment. We understand that OMV would support the vessel owner in

ensuring compliance with the Craft Risk Management Standard for bio-fouling, even though

compliance is not mandatory until 2018.

5.7.3 Findings

206. Having considered the information available, submissions and evidence, we find the evidence of Dr

Forrest was thorough, and we accept that appropriate risk reduction measures have been

undertaken. We also acknowledge that MPI has advised that it is satisfied that the ENSCO 107 and

Pacific Worker have carried out the measures described in the Craft Risk Management Plans.

5.7.4 Conditions

207. No conditions were proffered by OMV, or recommended by the EPA, in relation to the management

of biosecurity risks. We consider it appropriate to impose a condition requiring compliance with the

Craft Risk Management Standard – Biofouling on Vessels Arriving to New Zealand, 15 May 2014.

We are aware that compliance with this standard is voluntary until 2018. Therefore, we consider it

appropriate to avoid and minimise any biosecurity risk by imposing Condition 24.

5.8 Existing Interests

5.8.1 The Issues

208. The key potential adverse effects on existing interests are:

(a) the temporary loss of access to fishing grounds as a result of the presence of the ENSCO

107 and support structures/vessels;

(b) the discharge and deposition of drill cuttings and muds affecting primary production, which,

in turn, may affect fish abundance;

(c) the potential for contaminants in the drill cuttings and muds to accumulate in fish;

(d) the presence of the ENSCO 107 and support structures/vessels creating a potential

navigational hazard; and

(e) the existing interests of Māori in the EEZ, being lawfully established existing activities, rights

and practices. The drilling programme has the potential to affect these interests and access

to the fishery quota derived from the Treaty of Waitangi (Fisheries Claims) Settlement Act

1992.

5.8.2 The Effects

Fishing Interests

209. We received no evidence of potential effects on recreational fishing, so we have focused the

discussion in this section on commercial fishing interests. 59 submitters stated that the application

for marine consent should be refused due to possible adverse effects on marine fishing.

43

210. The Impact Assessment and the EPA Staff Report stated that the loss of access to fishing grounds

will be temporary and cover a small area. Both reports stated the discharge and deposition of drill

cuttings and muds will not adversely affect primary production and, therefore, will not affect

commercial fish populations.

211. The Ministry for Primary Industries had concerns that the drill cuttings and muds may contain

polychlorinated biphenyls (PCBs) and that these could enter the food chain of commercially

harvested fish, leading to potential bioaccumulation. Mr Barker confirmed that there are no PCBs in

the drill cuttings and muds used as part of the drilling programme, and Mr Asher noted that the use

of PCBs is banned in New Zealand. Therefore, PCBs will not enter the food chain.

212. OMV proposes to remove the well casing below the seabed in accordance with the Health and

Safety in Employment (Petroleum Exploration and Extraction) Regulations 2013 and the Crown

Minerals (Petroleum) Regulations 2007 regarding well abandonment. This means that there will be

no structures left on the seabed that could pose a hazard to commercial fishing activities.

Commercial Shipping

213. The Impact Assessment stated that the Maari field is within the Taranaki Precautionary Area

established by the International Maritime Organisation. This requires all ships travelling through this

area to navigate with particular caution given the high level of offshore petroleum activity. Maritime

Chart NZ 48 (Western Approaches to Cook Strait) also advises that “all ships should navigate with

particular caution in order to reduce the risk of marine pollution in the precautionary area”.

214. The Impact Assessment stated that the ENSCO 107 and support vessels have automatic

identification system technology, which allows their position to be monitored by other vessels. The

International Maritime Organisation also requires all vessels operating in the precautionary area to

be fitted with automatic identification system technology as a primary collision avoidance tool.

215. The Impact Assessment stated that OMV will follow international law and the requirements of the

Maritime Transport Act 1994 in order to prevent collisions. Mr Barker said that OMV has issued a

Notice to Mariners of the hazard to shipping and noted an existing 500 m safety zone is in place

around the ENSCO 107, preventing any vessels from entering this zone.

Māori Interests – OMV

216. OMV stated that they do not believe there is any requirement to consult with iwi under the EEZ Act.

In his evidence, Mr Zeilinger confirmed that OMV prides itself on consulting with affected parties

even where it is not legally required to.

217. OMV listed the iwi consultation undertaken in the Impact Assessment, noting that, although the WHP

was in the Ngāti Ruanui rohe, they had consulted with seven other iwi, including the Taranaki Iwi

Trust. In his closing legal submissions, Mr Duncan Laing23 confirmed through a statement by Mr

23 Counsel for the applicant.

44

Robert Dobbins24 that OMV’s consultation is ongoing and that, in the lead-up to the marine consent

application, OMV contacted 18 iwi and met with all who were willing to meet.

218. OMV concluded in the Impact Assessment that, while there are coastal areas that are of high cultural

importance to Māori for collecting marine resources and protection of spiritual values, OMV does not

consider that there are any customary areas or sites of heritage significance. They further concluded

that there will be no adverse effects from the ancillary activities of drilling on cultural interests other

than those specified elsewhere in the Impact Assessment.

Māori Interests – NKTT Report

219. NKTT outlined the importance of the relationship that Māori draw from Te Tiriti o Waitangi (the Treaty

of Waitangi). They explained the principles of partnership, active protection and rangatiratanga. The

report noted the unique relationship Māori have as Tiriti o Waitangi partners and the impact that

binding decisions can have on their ability to be afforded their treaty rights and practices. NKTT

recommended that we consider the proposed activities in terms of consistency with the principles of

Te Tiriti o Waitangi.

220. The NKTT report warns that the potential cultural impact on iwi and individual Māori covers a wide

spectrum beginning with the potential to alter cultural behaviour, the loss of tribal mātauranga, the

inability to manage and protect the mauri of the moana and kaimoana and an erosion of cultural

identity. NKTT stated that others might see the isolated location of the proposed activity as one of

lesser relevance, but Māori do not apply a spatial restriction on the ocean and instead respect it as a

whole. NKTT noted that many people were lost and drowned over time in these waters, therefore the

seabed is considered a wāhi tūpuna (ancestral site) aligned to the whakapapa and identity of the

people who remain.

221. The Impact Assessment noted that OMV has undertaken extensive consultation and developed good

relationships with Ngāti Ruanui, Ngā Ruahine and the Taranaki Iwi Trust and that they are committed

to developing these relationships into the future. However, NKTT stated that consultation has not

been consistent and meaningful with all affected iwi or their agents and that the breadth and

technical complexity of the application has highlighted capacity and capability issues within iwi and

individual Māori. They stated that these issues need to be addressed by the applicant and EPA to

improve better engagement with iwi and Māori in this process.

222. NKTT stated that the primary economic interest of Māori in this application for marine consent is in

relation to fisheries and its contribution to Māori development generally. Fisheries revenue is often

the main source of income for many iwi. Their reliance on the fishing industry is significant. NKTT

advised that Māori have the potential to gain economically from the drilling programme but noted that

the Impact Assessment does not quantify these potential benefits.

24 OMV Maari Asset Manager.

45

223. NKTT concluded that the drilling programme is unlikely to significantly impact the economic interests

of Māori but noted that an oil spill event may affect commercial stocks of fish, which would impact on

the availability of these “treaty assets”. They recommended that we give sufficient weight to the risks

and consequential effects and to the right of iwi to develop economic opportunities and manage their

sustainable tribal growth.

Māori Interests – EPA Staff Report

224. The EPA Staff Report also provides a useful discussion on Māori interests, cultural activities and

cultural associations. The report states that there are lawfully established cultural activities that

continue to be exercised either separately or in association with iwi fisheries interests such as

kaitiakitanga, rangatiratanga and the maintenance of mātauranga Māori. These concepts are

associated with preserving Māori fisheries interests, the right of iwi to make decisions and act on

issues affecting their fisheries interests and the system of knowledge associated with Māori

commercial and customary fishing activities.

225. The EPA Staff Report states that Māori cultural interests in the marine environment do exist, that

such interests underpin and are inextricably linked to existing interests recognised in the EEZ Act

and that traditional Māori activities are protected under the Treaty of Waitangi.

226. The EPA Staff Report concluded that the drilling programme is “unlikely” to have an impact on

whakapapa and mātauranga Māori. However, it noted that a significant oil spill would affect the

ability for Māori to continue to undertake their cultural practices in the area. This would lead to a loss

of knowledge and association.

227. Overall, the EPA Staff Report concluded that the risk of adverse effects on rangatiratanga,

kaitiakitanga and mātauranga Māori from the drilling programme is likely to be low.

228. The EPA Staff Report presented information on the Treaty of Waitangi (Fisheries Claims) Settlement

Act 1992. It stated that the risk of an oil spill represented a potentially significant impact to the rights

of Māori afforded by this settlement.

Māori Interests – Public Submissions

229. Public submissions on this matter were limited but noted the historical, environmental, cultural and

spiritual relationships that Māori have with this area. They noted the importance of protecting and

preserving the integrity and sustainability of our ocean and coastal waters, sea mammals, fisheries

and all who whakapapa and connect to the area. The well known Whanganui proverb was presented

as an illustration of this relationship: Mai i te kāhui maunga ki Tangaroa, ko au te awa, ko te awa ko

au. From the mountains to the sea, I am the river, the river is me.

5.8.3 Findings


respect to the potential adverse effects of the drilling programme on existing interests:

46

(a) Any potential adverse effects of the drilling programme on fishing and commercial shipping

will be temporary and negligible and are existing given the 500 m exclusion zone in place

around the WHP.

(b) We acknowledge the key potential issues identified in the NKTT Report, EPA Staff Report

and submissions and the importance of both customary and commercial fishing (and the

linkages between them). We particularly note that the customary concerns include ensuring

the continued access to customary fishing grounds, the sustainability of the customary

fishing grounds or mahinga kai and the continued quality and quantity of kaimoana and the

exercise of Māori rights to customary fishing in their rohe.

(c) No other existing activities have been identified as being potentially affected by the drilling

programme.

(d) While it is acknowledged that the duty to consult under the EEZ Act is not a legal

requirement, there is an expectation that appropriate consultation with iwi must occur. This is

consistent with the principles of the Treaty of Waitangi. The site is a cultural site of

significance for iwi, and in order for them to undertake their kaitiakitanga responsibilities, to

protect the mauri of the area and to maintain their mana, they must be kept informed on an

ongoing basis of activities in a timely and meaningful way. This should include all iwi and

Māori entities that may be affected by the drilling programme.

5.8.4 Conditions

231. No conditions were proffered by OMV, or recommended by the EPA, with respect to the

management of the potential effects of the drilling programme on existing interests.

5.9 Oil Spills

5.9.1 The Issues

232. Oil and gas development is a highly complex operation, and there are multiple and significant risks to

be managed. Offshore oil and gas operations are particularly challenging and require industry best

practices, technologies and safeguards that are robust, well tested and continually improved. If they

are to be well managed, these activities must be carried out by organisations with experience,

expertise, operational capability and access to substantial financial and intellectual resources.

233. As noted extensively in the submissions and expert evidence, an oil spill event has the potential to

cause widespread and significant adverse environmental effects. The key potential environmental

risks with respect to oil spills come from:

(a) fuel spills from support vessels, including the loss of inventory between support vessels and

the ENSCO 107; and

47

(b) major oil spills resulting from the loss of well control and multiple protective equipment

failures.

234. We consider a major oil spill from the loss of well control constitutes the most significant risk to the

environment.

235. Mr Welsh explained that the National Oil Spill Response Strategy sets the overarching framework for

the response of Maritime New Zealand and other parties to a marine oil spill event of any size. He

noted that the National Oil Spill Response Strategy includes the New Zealand Marine Oil Spill

Response System, which includes a three-tiered response approach. He outlined the three-tiers are:

(a) Tier 1 oil spills, which are the responsibility of the operator (a fuel spill from a support vessel

is likely to be a Tier 1 spill and would be resolved by OMV);

(b) Tier 2 oil spills, which are the responsibility of the relevant regional council where the spill

occurs in the CMA; and

(c) Tier 3 oil spills, which are generally more complex, of longer duration and have a greater

impact on the environment. A Tier 3 oil spill is the responsibility of Maritime New Zealand,

who coordinate the response under the National Marine Oil Spill Contingency Plan.

236. Mr Welsh explained that oil spill contingency planning is not new to New Zealand and that Maritime

New Zealand has been committed to maintain national and site-specific response systems since

1994. He concluded that the three-tiered oil spill response system utilised within New Zealand is well

established and that the National Oil Spill Response Strategy “will ensure that a spill response is

able to be carried out safely and efficiently whilst minimising the impact of oil pollution on the marine

environment”.

237. Mr Nigel Clifford25 said that part of the management response to address the potential risks

associated with oil and gas development involved not letting companies into the New Zealand

environment who don’t have appropriate capabilities and experience. He stated that they need to be

good corporate citizens, meet their liabilities and have a proven track record of delivering what they

promise before they are approved by Maritime New Zealand. He noted that operators must have a

financial assurance that a minimum amount of money will be available from a third party to meet

liabilities under the Maritime Transport Act 1994. These are Part 26A liabilities, which include strict

liability for clean-up costs and liability for damage.

238. Mr Clifford explained that the challenge with respect to oil spill response capabilities centred on

balancing “likelihood” against “consequence” and that, while the worst-case scenario events that

have been seen around the world are highly unlikely, they do have massive consequences. He noted

that the oil spill response systems around the world work on a “first strike/immediate response”

capability and then build to whatever level of response is required. He said that, with the possible

exception of the United States of America, no nation in the world holds all the equipment and

25 General Manager – Safety and Response Services at Maritime New Zealand.

48

resources needed to deal immediately with a major deep water well blowout. He said that

international response resources are owned by Oil Spill Responses Limited and are centralised in

Singapore and that OMV is required to maintain membership to this organisation.

239. Mr Clifford shared the lessons learned by Maritime New Zealand following the MV Rena event and

noted that, while the response was adequate, communication with the affected communities in the

first few days following the grounding and oil spill could have been better. He noted that

communication could have been quicker, clearer and more open so that people understood the

response and lines of responsibility.

240. Mr Wayne Vernon26 advised that the Safety Case for oil wells requires a Well Examiner’s Certificate

to confirm that the wells are properly designed, constructed and operated in an appropriate manner.

He stated that WorkSafe New Zealand’s consideration of well integrity does not include any

evaluation of environmental matters and that this is a key mechanism in order to avoid the potential

environmental effects associated with a well blowout. We return to this matter in sections 11 and 13

of this decision.

5.9.2 The Effects

241. The Impact Assessment noted that fuel spills from support vessels have a higher probability of

occurring than a major oil spill event from the loss of well control. However, it acknowledged that the

potential environmental effects of a major oil spill event are much greater. This was supported by the

evidence of Maritime New Zealand. Accordingly, the following sections focus on the potential

environmental effects of a major oil spill event.

242. A summary of the potential environmental effects resulting from a fuel spill is provided in Table 21 of

the Impact Assessment.

243. 110 submitters raised concerns about the potential adverse effects of an oil spill on the environment

and existing interests. The submissions identified the possibility of an oil spill adversely impacting

marine mammals, marine life in general and the economy/livelihood of people.

Trajectory Modelling

244. Dr McComb explained the trajectory modelling of an oil spill release to the sea surface at the WHP.

He outlined that an 11-year historical period was simulated for the spill of oil based on an 11-year

hindcast of the winds and ocean currents for New Zealand. The modelling assumed a worst-case

scenario release of 10,000 barrels per day for 150 days and predicted where the oil would end up

and the time it would take to beach. He highlighted that the model assumed there was no weathering

of the oil and no effective clean-up response. Therefore, there was no reduction in the spill volume

over time.

26 Chief Inspector of Petroleum, Geothermal and Major Hazards for WorkSafe New Zealand.

49

245. Dr McComb noted that oil is most likely to beach in spring and is least likely to beach in autumn.

Conservatively, he stated beaching is likely for 78.1–94.2% of spill events. The minimum time for

beaching ranged from 32.6 hours during winter to 68.2 hours during summer. In all scenarios, the

highest beaching concentrations were found to occur along the coastline from Whanganui to Kapiti.

The Behaviour and Effects of a Major Oil Spill

246. Dr Chris Battershill27 explained that the degree of environmental impact from an oil spill event will

depend on the amount of oil involved, the duration and repetition of exposure, seasonal

characteristics, sea conditions, the geomorphology of the coast where the oil beaches and clean-up

activity (amongst other things). He noted that the MV Rena event provided a useful and recent case

study of the environmental effects resulting from a moderate oil spill event.

247. Dr Battershill said that a lesson learned from the MV Rena event was that there needed to be faster

responses to sites of sensitivity and conservation significance (such as booming off habitat areas

around the Manawatu Estuary) and that these values should be identified before an event occurs.

248. Mr Clifford stated that the adverse environmental effects of the cargo of the MV Rena were greater

than the adverse effects of the fuel oil spill.

The Effects of Oil Spills on Plankton Communities

249. Dr MacKenzie stated that there have been numerous studies on the effect of major oil spills on

plankton communities and that these studies have found varying effects on the plankton. He stated it

is difficult to distinguish natural variability from oil spill effects but that minor effects were found in a

number of studies. He noted that, in some cases, phytoplankton biomass and productivity had an

initial decline but had then reached higher levels after the oil spill event, which was possibly due to

decreased zooplankton grazing pressure.

Effects on Wildlife (Mammals and Seabirds)

250. The potential effects of an oil spill event on wildlife were discussed in Tables 19 and 21 of the Impact

Assessment. Ms McConnell explained the factors that influence the severity of the effects of oil on

wildlife, including (i) the route of exposure, (ii) the duration of exposure, (iii) oil type, (iv) the species

affected, (v) seasonal characteristics and (vi) complicating factors.

251. Ms McConnell concluded that seabirds and the New Zealand fur seals are most at risk of immediate

debilitation from external oiling. She noted that, without treatment and rehabilitation, the chance of

survival of oil-affected individuals is low, due to an immediate reduction in waterproofing and

insulation, which are fundamental to survival in the cold marine environment.

252. Dr Thompson stated that detrimental effects of an oil spill depend upon the scale of the spill, the

movement of the oil following the spill (which will depend on weather conditions at the time) and the

time of year the spill occurred.

27 Chair of Coastal Sciences for the University of Waikato appearing on behalf of OMV New Zealand Limited.

50

253. With respect to shorebirds, Dr Thompson noted that season has a strong effect on the number of

birds present in the area. For example, North Island totals for banded dotterel and wrybill are at least

an order of magnitude higher in winter compared to summer.

Effects on Existing Interests

254. The EPA Staff Report detailed that a major oil spill event may have severe impacts on existing

interests, including impacts on marine resources resulting in income loss, impacts on cultural values,

contamination or loss of food resources (kaimoana and recreational fishing) and impacts on human

health (discussed in section 6 below).

255. Based on the worst-case scenario modelled and documented by Dr McComb, the EPA Staff Report

identified that an oil spill may have the following impacts on persons with an existing interest:

(a) Temporary displacement from commercial fishing grounds.

(b) Temporary displacement from sites of cultural significance, such as kaimoana-gathering

sites.

(c) Reduction in commercial, recreational or subsistence fish stocks.

(d) Contamination of fish stocks and resulting health impacts of consuming contaminated

species.

(e) Contamination of cultural assets and associated spiritual and economic losses.

(f) Reduction in public access to contaminated areas.

(g) Displacement from coastal shipping routes.

(h) Reduction in tourism due to spill impacts and associated economic losses.

(i) Reduction in air quality in areas contaminated by oil.

Effects on Human Health

256. Dr Battershill addressed the potential human health effects of a major oil spill. He noted that, during

the MV Rena event, a powerful hydrocarbon odour emanated from beached and wave-washed oil

and that, in the more severely inundated parts of the coast, this odour became quite overwhelming.

He explained that marine invertebrates may pick up hydrocarbons depending on the degree of oil

spill inundation along the coast and in shallow subtidal areas and that contamination could potentially

affect people if the marine invertebrates were eaten.

257. Dr Battershill acknowledged that he is not a human health expert when it comes to toxicity of marine

food items to people but noted that, during the peak contamination period for the MV Rena event, the

levels of PAH contamination in marine invertebrates did not exceed New Zealand or Australian limits

of concern for human health, based on advice from the MPI and District Health Boards.

51

5.9.3 Findings


respect to the potential risks and environmental effects of an oil spill event from the drilling

programme:

(a) We accept that the probability of a major oil spill event is extremely low given the mitigation

measures in place, the high level of confidence regarding drilling conditions (known geology

and the use of existing conductor slots), the pressure of the reservoir, the composition of the

oil (requiring the oil to be heated and pumped out) and the operational standards and

procedures in place.

(b) The potential effects of a major oil spill event on the environment and existing interests

would be significant. The adverse environmental effects of the MV Rena event demonstrate

what could happen and how challenging such incidents can be for New Zealand’s national oil

spill response capability.

(c) We are satisfied that Maritime New Zealand and other operators have the plans, structures,

processes, access to equipment and financial resources to respond to oil spill events. We

accept that the responsibilities, operational procedures and policies set out in the National

Oil Spill Response Strategy are continuously reviewed and updated.

(d) We accept that preparedness, planning and training by Maritime New Zealand and operators

can result in more effective and timely containment/control of oil spill events. We consider

this to be a primary mitigation measure.

(e) We understand that significant volumes of oil in the marine environment can be difficult to

recover or contain due to the realities of coastal topography, weather, logistics, responder

safety and limitations on containment equipment specifications and availability. We accept

that response measures are focused on using the best available technology, equipment and

resources to prevent an oil spill from occurring, stopping the amount of oil spilled at the

source of release and preventing any spilled oil from reaching sensitive coastal

environments.

(f) The oil trajectory modelling presented by Dr McComb is helpful in terms of understanding the

spatial characteristics of a major oil spill event from the Maari field and in determining the

coastlines most likely to be adversely affected. We accept that the modelling is not

attempting to characterise a single or typical event. We consider that the modelling of a

release of 10,000 barrels of oil per day for 150 days is extremely unlikely and bordering on

impossible in light of the evidence provided by Dr Zelt. We accept that MetOcean Services

Limited was trying to replicate a worst-case scenario event and the possible impacts of

different events.

52

(g) We accept the evidence of Mr Graeme Lawrie28 and Mr Welsh that the health, safety and

environmental measures employed by OMV conform with best international practice for spill

prevention measures and risk mitigation.

(h) We find that the critical mechanism for mitigation is ensuring well integrity and conclude that

the EPA, Maritime New Zealand and WorkSafe New Zealand all have roles to fulfil in

ensuring well integrity is achieved and maintained throughout the drilling programme. We

consider this matter further in the conditions below and in section 11 of this decision.

(i) We are satisfied that we have sufficient information regarding the risks and effects

associated with an oil spill event. We questioned the relevant experts and advisors from

Maritime New Zealand and WorkSafe New Zealand on this issue. We have particularly relied

upon the evidence of Mr Clifford and Dr McComb on the assessment of risks associated with

an oil spill event.

5.9.4 Conditions

259. We accept that Maritime New Zealand and WorkSafe New Zealand Limited have primary

responsibilities to regulate and apply conditions relating to maritime safety and oil spill preparedness

and response. That said, it is appropriate for any marine consent to address matters relating to the

potential environmental effects of such incidents if necessary and appropriate.

260. Therefore, we consider it appropriate to avoid and minimise any effects on the environment or

existing interests from an oil spill by imposing the following conditions. Conditions 5, 6, 7, 8, 9, 10,

11, 12, 13, 14, 15, 33 and 34.

28 Health, Safety, Security and Environment Manager for OMV New Zealand Limited.

53

Effects on Human Health 6.

6.1 The Issues

261. We are required to take into account effects on human health that may arise from effects on the

environment in accordance with section 59(2)(c) of the EEZ Act. The key potential effects on human

health related to the drilling programme are:

(a) the discharge of drill cuttings and muds into the water column and seabed; and

(b) algae blooms.

262. We acknowledge the health of workers on board the ENSCO 107 is subject to the requirements of

the Health and Safety in Employment Act 1992, which is administered by WorkSafe New Zealand.

6.2 The Effects

6.2.1 Drill Cuttings and Muds

263. The EPA Staff Report noted that there is potential for adverse effects on human health to arise from

the consumption of fish or shellfish that have been exposed to toxic substances discharged in drill

cuttings and muds. The EPA Staff Report outlined that metals such as mercury, cadmium, chromium

and lead are especially toxic to aquatic organisms and humans, and all of these elements are found

in the drill cuttings and muds. The EPA Staff Report noted that bio-concentration and bio-

magnification can result in higher levels of trace metals at the top of the food chain than those found

in the water column or sediment.

264. Ms Tiernan concluded that any environmental effects with regard to human health are likely to be

localised and short term. She noted that metal concentrations in the water column derived from the

residual muds in the drilling fluids are unlikely to have adverse effects on human health based on

compliance with the ANZECC 99% trigger levels at the WHP for most metals.

265. She stated that mitigation measures in place to treat and re-use drilling mud where possible will

minimise potential effects on human health. She noted that the concentrations of hydrocarbons in the

drill cuttings and muds are monitored twice a day to ensure that only those with hydrocarbon levels

less than 100 ppm are discharged. Where hydrocarbon concentrations exceed this figure, the muds

are either diluted with seawater to reduce the concentrations to below 100 ppm or transferred to a

support vessel for discharge at an approved land-based disposal facility.

6.2.2 Algae Blooms

266. Dr MacKenzie explained that frequent blooms of phytoplankton are normal and essential ecosystem

processes. Occasionally, blooms of some micro-algae species that produce natural plant toxins can

lead to contamination of filter-feeding shellfish and make these poisonous to consumers. The record

of toxic algal blooms in New Zealand shows that anthropogenic effects, such as coastal seawater

eutrophication, are not a factor in their incidence in New Zealand.

54

267. Dr MacKenzie informed us that there have been few documented toxic algae events along the coast

of the South Taranaki Bight. This region was affected by widespread blooms of the paralytic shellfish

poisoning dinoflagellate Gymnodinium catenatum in 2000–2003. These blooms of Gymnodinium

catenatum are natural phenomena, and they will probably reoccur at some time in the future. He

concluded that there is no evidence to suggest that past oil drilling activity or the existing oil

production platforms in the Maui and Maari fields are in any way associated with these events.

6.3 Findings


respect to the potential effects of the drilling programme on human health:

(a) We accept the evidence of Ms Tiernan that there will no adverse effects on human health.

We also accept that any metal concentrations in the water column derived from the residual

muds in the drilling fluids are unlikely to have adverse effects on human health.

(b) We are satisfied there is no evidence to suggest that past oil drilling activity or the existing oil

and gas production platforms in the Maui and Maari fields are in any way associated with

toxic algal blooms that have posed a risk to human health along the North Island’s west

coast in the past.

6.4 Conditions

269. We are aware that OMV is required to comply with the Health and Safety in Employment Act 1992,

the purpose of which is to promote the prevention of harm to all persons at work and other persons

in, or in the vicinity of, a place of work. We do not consider that a condition requiring compliance with

this legislation is needed on the marine consent.

55

The Protection of Biological Diversity and Integrity of 7.Marine Species, Ecosystems and Processes

270. We are required to take into account the importance of protecting the biological diversity and integrity

of marine species, ecosystems and processes in accordance with section 59(2)(d) of the EEZ Act.

271. The importance of protecting biological diversity and integrity of marine species, ecosystems and

processes was a key point of concern for 110 submitters. The concerns included effects associated

with oil spills, pollution, noise, ship strike that could impact on biological diversity and the loss of

habitat in the marine environment.

272. Mr Lyndon De Vantier29 stated that the application is incompatible with New Zealand’s national and

international obligations with respect to the conservation and recovery of globally threatened

species. He said that, as a signatory to the Convention on Biological Diversity 1992, New Zealand

should not be developing any further industries in the waters off Taranaki.

273. As set out in section 11 of the EEZ Act, the Act continues or enables the implementation of New

Zealand’s obligations under various international conventions relating to the marine environment,

including the United Nations Convention on the Law of the Sea 1982 and the Convention on

Biological Diversity 1992.

274. We consider there is nothing in these international instruments that would prevent us granting

consent. We do not agree they require any considerations additional to the decision-making criteria

and information principles set out in the EEZ Act.

275. Overall, we find that the expert evidence available to us supports the conclusion that the drilling

programme will not result in any significant or permanent adverse effects on biological diversity,

integrity of marine species, or ecosystems and processes. We consider that benthic macro-fauna

communities are likely to be the most at risk from the deposition of drill cuttings and muds and that

any adverse effects will be small, localised and temporary.

29 Submission number 110371.

56

The Protection of Rare and Vulnerable Ecosystems and 8.Habitats of Threatened Species

276. We are required to take into account the importance of protecting rare and vulnerable ecosystems

and the habitats of threatened species in accordance with section 59(2)(e) of the EEZ Act.

277. The importance of protecting rare and vulnerable ecosystems and the habitats of threatened species

was a key concern for 93 submitters. Submitters said that there was insufficient information on the

potential effects on rare and vulnerable ecosystems and habitats of threatened species. However,

they did not provide any direct examples of the relationship between their concerns and the drilling

programme.

278. Most expert witnesses on behalf of OMV did not specifically address the protection of rare and

vulnerable ecosystems or habitats of threatened species. The issue was only considered by these

witnesses in response to direct questioning.

279. The advice we received from the Department of Conservation (4 August 2014) confirmed that the

New Zealand sea lion and Hector’s dolphin have been declared as threatened species under section

2(3) of the Marine Mammals Protection Act 1978. Ms McConnell and Associate Professor Slooten,

as well as the Ministry for Primary Industries, agreed that the WHP is at the extreme southern limit of

the Maui’s dolphin sub-species. We also note agreement that the water depth at the WHP and its

distance offshore are outside the known habitat preferences of Hector’s dolphins. We accept these

animals might occasionally visit the area.

280. We note the studies of Torres (2013 and 2014) regarding foraging of blue whales (including Antarctic

blue whale and pygmy blue whale) in the South Taranaki Bight. We also note the agreement of

Associate Professor Slooten and Ms McConnell that the International Union for Conservation of

Nature classification of this species as endangered is appropriate.

281. Associate Professor Slooten, Ms McConnell and Dr Childerhouse gave evidence on the potential

adverse effects of the drilling programme on threatened species. We preferred the evidence of Ms

McConnell and Dr Childerhouse. This evidence was specifically focused on assessing the direct

potential impacts of the drilling programme on marine mammals and not generalised statements

regarding the totality of all human-induced impacts on Hector’s dolphins.

282. We find that the drilling programme will not impact on the protection of rare and threatened

ecosystems and habitats of threatened species. We acknowledge that, in the unlikely event of an oil

spill, there would be potential effects on marine mammals that are rare and threatened. We are

aware that the Department of Conservation has advised that a range of legislative regimes and

regulations provide for the protection and conservation of rare and vulnerable ecosystems and

habitats of threatened species. These include the Marine Mammals Protection Act 1978, Wildlife Act

1953, Marine Reserves Act 1971 and Marine Mammals Protection Regulations 1992. The drilling

programme will not interfere with any of the protection measures set out in these legislative regimes

and regulations.

57

The Economic Benefit to New Zealand 9.

283. We are required to take into account the economic benefit to New Zealand of allowing the drilling

programme in accordance with section 59(2)(f) of the EEZ Act.

284. Information on the potential economic benefit of the drilling programme was provided by Mr Zeilinger

and Mr Simon Harris.30 While Mr Zeilinger was able to provide us with useful information

demonstrating the significant economic benefit associated with OMV’s operations and the drilling

programme, we found the evidence of Mr Harris was superficial and not as rigorous as we would

expect.

285. Mr Zeilinger identified the employment opportunities directly generated by the operation of the Maari

field. He said that drilling, engineering and construction activities provide mid-term employment

opportunities for more than 420 full-time staff and contractors and that about 90 other employees

and direct contractors are responsible for the ongoing day-to-day operations of OMV (including

exploration and support functions).

286. Mr Zeilinger said that more than NZ$1.3 billion has been spent on the development of the Maari field

and that more than NZ$400 million has been budgeted for the implementation of the Maari Growth

Project. He noted that more than half of this investment can be classified as local content and that

local engineering companies based in New Plymouth benefit as significant suppliers of the

operations and development drilling programme at the Maari field.

287. OMV has been a major contributor of royalties and taxes. More than NZ$850 million was paid to the

Government by OMV between 2009 and 2013, and the Maari field generated more than NZ$400

million in the same period. Mr Zeilinger stated that the future contribution from the Maari field in taxes

and royalties depends on oil price assumption and well deliverability. He estimated that the Maari

field will generate over NZ$1 billion from this point forward and that approximately 40% of that value

generation can be attributed to the Maari Growth Project.

288. Mr Harris corrected paragraph 67 in his original evidence and stated that it should read

“approximately $1.5 billion in royalties and taxes over the life of the field”. This figure was $1 billion in

his original evidence. Both of these are undiscounted estimates.

289. Mr Harris stated in his supplementary evidence that the net present value of the benefits from

royalties and taxes from the Maari field is NZ$800 million (at an 8% discount rate). His evidence was

that this could range between NZ$750 million (at a 10% discount rate) and NZ$880 million (at a 5%

discount rate).

290. Mr Harris said that a large oil spill would have significant economic costs, particularly clean-up costs

and costs to the fishing and tourism sectors. He stated that the potential damage from a major oil

30 General Manager of Harris Consulting appearing on behalf of OMV New Zealand Limited.

58

spill along the coastline appeared to be greatest for the Nelson-Tasman Region, for which the fishing

and tourism sectors are most important.

59

The Efficient Use and Development of Natural Resources 10.

291. We are required to take into account the efficient use and development of natural resources in

accordance with section 59(2)(g) of the EEZ Act.

292. The EPA Staff Report stated that the Maari field is an existing production field with demonstrated

economic benefit at both a local and national level and is an efficient use and development of

resources.

293. We agree that the drilling programme is an efficient use and development of natural resources. The

drilling programme will use existing conductors and horizontal drilling to undertake the drilling

operation.

294. Dr Zelt said the objective of the drilling programme was to “optimise the efficient use and maximise

the value of the Maari asset by fully developing economic oil accumulations within reach of the

currently installed Maari facilities. The re-development will increase the average production rate of

the field, resulting in a higher overall ultimate recovery, and also target a yet to be developed

reservoir (Maari Mangahewa).”

295. Mr Andrew Annakin31 provided us with details of how petroleum permits are issued under an annual

block offer process in accordance with the Crown Minerals Act 1991. He explained that New Zealand

Petroleum and Minerals monitor the agreed work programme of a permit holder very closely and that

they have the ability to revoke a permit should an operator fail to meet their obligations.

296. We consider there is expectation within the legislative and regulatory regime that permit holders will

seek to explore and develop any natural resources within their permit area. In response to questions,

Mr Annakin agreed that permits were issued on the basis the permit holder would ‘use it or lose it’.

31 Policy Director at New Zealand Petroleum and Minerals.

60

The Nature and Effect of Other Marine Management 11.Regimes

297. We are required to take into account the nature and effect of other marine management regimes in

accordance with section 59(2)(h) of the EEZ Act. Section 7 of the EEZ Act defines what a marine

management regime is. The five government agencies operating marine management regimes

relevant to this application for marine consent are detailed in Table 2 of this decision:

(a) New Zealand Petroleum and Minerals (a branch of the Ministry of Business Innovation and

Employment) – responsible for managing the prospecting, exploration and mining permit

regime.

(b) The Department of Conservation – responsible for marine mammals and protected species

(including the assessment of Marine Mammal Impact Assessments).

(c) Maritime New Zealand – responsible for maritime rules for discharges and oil spills. Plans to

meet these rules include DMPs, which include a Spill Contingency Plan, Well Control

Contingency Plan and Environmental Monitoring Programme.

(d) The Ministry for Primary Industries – responsible for managing fisheries within the EEZ and

territorial waters and biosecurity at New Zealand’s boundaries.

(e) WorkSafe New Zealand– responsible for administering legislation to provide a safe

workplace. This includes responsibility for petroleum operators to submit a Safety Case with

respect to the design, construction, operation and maintenance of oil wells.

298. We requested information from these agencies in order to understand the nature and effect of the

marine management regimes they administer. Whilst some of these marine management regimes

may not specifically consider environmental risks or the controls necessary to avoid, remedy or

mitigate the environmental effects of activities, they all impose standards and requirements that are

relevant to the environmental matters that we must consider under section 59 of the EEZ Act.

299. OMV must comply with its legal requirement under these marine management regimes. However,

these marine management regimes do not all have protection of the environment as a key focus or a

duty to avoid, remedy or mitigate adverse environmental effects. There are gaps between the

requirements of the EEZ Act and the various marine management regimes, particularly with respect

to the management of well integrity.

300. We have given particular consideration to the matter of duplication and consistency between the

conditions of the marine consent and other marine management regimes and their requirements. We

have spent significant time considering this and the legal submissions and advice we received. We

have not imposed conditions that conflict with measures required by other marine management

regimes or the Health and Safety in Employment Act 1992. In order to deal with adverse effects of

the activities for which consent is sought, we have included conditions requiring compliance with

certain parts of those other regimes.

61

Best Practice 12.

301. We are required to take into account “best practice” when considering this application for marine

consent in accordance with section 59(2)(i) of the EEZ Act.

302. The Impact Assessment and evidence on behalf of OMV pointed to a number of specific areas that

demonstrate the application of best practice in this drilling programme.

303. We conclude that the information provided in the Impact Assessment, the Genesis Oil and Gas

Consultancy Limited Report and the evidence from other government organisations indicates that the

development drilling programme will be undertaken in accordance with industry-recognised best

practice.

62

Conditions 13.

304. In accordance with section 59(2)(j) of the EEZ Act, we are required to take into account the extent to

which imposing conditions under section 63 of the EEZ Act might avoid, remedy or mitigate any

adverse effects of the activity.


“(1) The Environmental Protection Authority may grant a marine consent on any condition that it

considers appropriate to deal with adverse effects of the activity authorised by the consent

on the environment or existing interests.

(2) The conditions that the EPA may impose include, but are not limited to, conditions—

(a) requiring the consent holder to—

(i) provide a bond for the performance of any 1 or more conditions of the consent:

(ii) obtain and maintain public liability insurance of a specified value:

(iii) monitor, and report on, the exercise of the consent and the effects of the activity

it authorises:

(iv) appoint an observer to monitor the activity authorised by the consent and its

effects on the environment:

(v) make records related to the activity authorised by the consent available for

audit:

(b) that together amount or contribute to an adaptive management approach.

(3) However, the EPA must not impose a condition on a consent if the condition would be

inconsistent with this Act or any regulations.

(4) To avoid doubt, the EPA may not impose a condition to deal with an effect if the condition

would conflict with a measure required in relation to the activity by another marine

management regime or the Health and Safety in Employment Act 1992.”

306. OMV initially proffered 37 consent conditions in section 8 of the Impact Assessment. Comments

were made on these proffered conditions in the EPA Staff Report. Expert witnesses made a number

of comments regarding these conditions in their pre-circulated statements of evidence. At our

request, EPA staff prepared an Addendum to the EPA Staff Report (20 October 2014) commenting

on conditions and recommending a number of revisions and new conditions to address

environmental effects.

307. OMV subsequently decided that it no longer supported all of the conditions that it had proffered in the

Impact Assessment. In opening submissions, OMV tabled Annexure A – OMV response to EPA

proposed amendments/rationalisation of draft consent conditions – 29 October 2014. This document

http://www.legislation.govt.nz/act/public/2012/0072/latest/link.aspx?search=sw_096be8ed80ecfe7d_63_25_se&p=1&id=DLM278828

63

commented on the EPA revised conditions and sought the deletion of a number of these, including

conditions OMV had initially proffered.

308. In summary, OMV stated that a number of conditions should be deleted because they do not relate

directly to an activity for which consent is sought under section 20 of the EEZ Act and that conditions

must deal with adverse effects.

309. OMV stated: “There is no specific prohibition on imposing a condition that would duplicate a measure

required under another marine management regime. Such a condition would be lawful, in contrast to

a condition that would conflict with another regime.”

310. However, OMV submitted that “if a condition would duplicate another marine management regime,

the condition would not be necessary to deal with adverse effects of the activity, because those

effects are already being dealt with by the existing marine management regime. The condition would

therefore be superfluous, which in our submission is relevant to the question of whether the condition

is appropriate.”

311. OMV also submitted that sections 63(3) and (4) of the EEZ Act impose important limitations on the

EPA’s power to impose conditions.

312. We were provided with legal advice from Mr Tim Smith32 and Ms Jacinta Bowe33, which outlined the

various enforcement mechanisms and penalties under other marine management regimes and the

EEZ Act.

313. The evidence of Mr Vernon illustrated the point that the various regulators have different focuses

and, in the case of WorkSafe New Zealand, “don’t have any jurisdiction over environmental matters”.

He explained that, if the Consent Holder had to ensure all activities undertaken under the marine

consent must comply with the current Safety Case accepted by WorkSafe New Zealand, it would be

a mechanism an environmental regulator could use to bring enforcement action within their

jurisdiction.

314. Mr Vernon stated that the well examination scheme and management systems to ensure well

integrity were of particular interest to environmental regulators and WorkSafe New Zealand. He

noted that, while there is an overlap, “it is possible to have a major environmental issue without there

being any safety implications”.

315. We have endeavoured to avoid unnecessary duplication where effects are appropriately managed

under other marine management regimes, such as with oil spill response requirements. We have

determined that some conditions that may appear to duplicate other requirements are appropriate

where they directly relate to the EPA exercise of statutory functions under the EEZ Act and the

avoidance and mitigation of adverse effects of the activity authorised by the consent on the

environment or existing interests.

32 Counsel for the Decision-making Committee 33 Counsel for the Decision-making Committee

64

316. We are mindful of the lack of empirical data underpinning the assessment of environmental effects in

relation to the dispersal and deposition modelling and the underwater noise assessment. While we

consider that we have the best available information on these effects, we consider it is reasonable

and appropriate to impose conditions requiring actual measurements to ensure the validity of the

assessments undertaken.

317. We are conscious that the assumed range of particle sizes and concentration levels of metal and

metalloids in the drill cuttings and muds are key assumptions in the effects assessment, and for this

reason, we consider these should be measured.

318. Similarly, the effects assessments were based on a discharge volume of 3,000 m3 of drill cuttings

and muds. We consider it appropriate to limit the scale of the activity by imposing a limit of 3,500 m3

and are satisfied on the basis of questioning the relevant expert witnesses that this is within the

scope of their assessment.

319. The Department of Conservation recommended the inclusion of a number of conditions on any

marine consent in order to avoid, remedy or mitigate adverse effects on marine mammals. They

made this recommendation in their letter dated 4 August 2014. Most of these conditions have been

incorporated into the conditions imposed regarding training personnel in marine mammal

identification, cetacean sightings and recordings, recording and reporting marine mammal contact

(such as ship strike, entanglement, death or injury), reporting and recoding seabird collisions,

helicopter pilot training, vessel avoidance of whale aggregations and reporting compliance

monitoring with conditions.

320. We have imposed a condition requiring the recording of refuelling events associated with the

exercise of the marine consent. The evidence supports the view that refuelling activities pose the

highest risk in terms of the probability of an oil spill.

321. Having given considerable thought to appropriate consent conditions, we are satisfied that we have

imposed conditions that have a valid purpose and deal with potential adverse effects of those

aspects of the drilling programme that are authorised by the consent on the environment or existing

interests. The conditions are fair and reasonable and do not conflict with any other marine

management regime or health and safety legislation.

65

Relevant Regulations and Other Applicable Law 14.

14.1 Relevant Regulations

322. Section 59(2)(k) of the EEZ Act requires us to take into account relevant regulations. Regulations are

defined in section 4 of the Act to mean regulations made under the EEZ Act. We have taken into

account the Exclusive Economic Zone and Continental Shelf (Environmental Effects – Permitted

Activities) Regulations 2013. These regulations state which activities are permitted activities for the

purpose of the EEZ Act and the conditions for undertaking those activities without a marine consent.

14.2 Other Applicable Law

323. Section 59(2)(l) of the EEZ Act requires us to take into account any other applicable laws. We have

taken into account the following relevant statutes and the regulations, rules and policies made under

them:

(a) Biosecurity Act 1993

(b) Fisheries Act 1996

(c) Health and Safety in Employment Act 1992

(d) Marine and Coastal Area (Takutai Moana) Act 2011

(e) Marine Mammals Protection Act 1978

(f) Maritime Transport Act 1994

(g) Resource Management Act 1991

(h) Wildlife Act 1953

(i) Crown Minerals Act 1991.

324. These laws have been discussed in earlier sections of this decision.

66

Other Relevant Matters 15.

325. Section 59(2)(m) of the EEZ Act enables us to take into account any other matter that we consider

relevant and reasonably necessary to determine the application for marine consent.

326. A number of matters were raised by submitters during the course of the hearing that could be

determined as other relevant matters in accordance with section 59(2)(m) of the EEZ Act.

15.1 Value of Investment

327. Mr Welsh considered that we should take into consideration the resources that OMV has invested in

developing the Maari field.

328. We accept that the value of investment undertaken by OMV is a relevant matter to be considered in

determining the application for marine consent. We accept the evidence of Mr Zeilinger that OMV

(along with its joint venture partners) has invested over NZ$1.3 billion in the development of the

Maari field.

15.2 Hydraulic Fracturing/Water Injection

329. Some submitters asserted that the activities being undertaken by OMV involve hydraulic fracturing

(‘fracking’).

330. Climate Justice Taranaki raised a series of questions for Mr Barker in advance of the hearing

regarding the topic of water injection, hydraulic fracturing and fracking. These sought clarification of

the chemicals involved in the water injection process, whether hydraulic fracking has been

conducted at the Maari field previously and whether fracking will be involved in the drilling

programme in order to create further fractures.

331. We received supplementary evidence from Dr Zelt on the chemicals used in the water injection

process, the water injection scheme undertaken between 2009 and early 2014 and the water

injection scheme into the future.

332. The techniques of concern to Climate Justice Taranaki and other submitters are related to production

activities and are not activities for which marine consent is sought as part of this application. Whether

OMV is undertaking hydraulic fracturing or not, we are satisfied that the potential effects that we are

obliged to consider in accordance with section 59 of the EEZ are appropriate and will be minimal.

15.3 Precautionary Approach

333. Mr De Vantier and Ms Cheung recommended that we adopt a precautionary approach in our

decision-making given New Zealand’s international obligations with respect to the Convention on

Biological Diversity 1992.

67

334. As already noted in this decision, we find that there is nothing in the Convention on Biological

Diversity 1992 that would preclude us from granting consent. We do not accept that international

instruments require considerations additional to the criteria and information principles set out in the

EEZ Act. The emphasis on the importance of protecting sensitive aspects of the environment, taking

into account uncertainty or inadequacy in information, and the requirement to favour caution and

environmental protection where information is inadequate or uncertain are central to the framework

by which New Zealand meets its obligations under international conventions.

15.4 New Technology

335. Ms Linda Hill34, Ms Jean Kahui and Mr Alistair McKee35 made a number of claims that the drilling

programme involves new technology and that this technology has environmental and safety risks.

They were particularly concerned about the horizontal drilling and the use of SBMs but were not able

to provide us with any specific information regarding whether the technology is new or the potential

environmental risks of these activities.

336. We do not accept that horizontal drilling and the use of SBMs constitute new technology with

inherent environmental and safety risks. Dr Zelt explained that horizontal drilling has occurred for

some time and that existing wells at the Maari field were horizontally side-tracked as early as 1998.

337. The horizontal drilling will be the longest to have occurred in New Zealand. This does not alter our

conclusions with respect to the potential environmental effects of the drilling programme.

34 Submission number 110362 35 Submission number 110378.

68

Adaptive Management 16.

338. Section 61(3) of the EEZ Act states that, if favouring caution and environmental protection means

that an activity is likely to be refused, the EPA must first consider whether taking an adaptive

management approach would allow the activity to be undertaken.

339. The EPA Staff Report noted that we can impose conditions on a marine consent in accordance with

section 63 of the EEZ Act in order to apply an adaptive management approach. The EPA Staff

Report also noted that they have considered whether an adaptive management approach could be

applied to any of the activities proposed by OMV should we determine that favouring caution and

environmental protection means the application is likely to be refused.

340. The EPA Staff Report stated that the application for marine consent is for activities that have already

commenced and are temporary and that an adaptive management regime is not appropriate.

341. Given our finding on potential effects for the drilling programme on the environments and existing

interests and our decision is to grant marine consent, we have not given any further consideration of

the need for an adaptive management approach in accordance with section 61(3) of the EEZ Act.

69

APPENDIX 1: MARINE CONSENT CONDITIONS

This marine consent authorises the activities described in Table A (below).

Table A1.1: Activities Authorised by this Marine Consent

Consent Category Authorised Activities

Section 20(1) and (2) – Exclusive Economic Zone and Continental Shelf

(a) The construction, placement, alteration,


structure on or under the seabed.


seabed.

Alteration of the equipment on the WHP.

(b) The construction, placement, alteration,


submarine pipeline on or under the seabed.

Installation of submarine pipelines (production tubing,

casing and associated fittings) under the seabed.

(d) The removal of non-living natural material

from the seabed or subsoil.

Drilling of the wells involving the removal of material

from the subsoil.

(e) The disturbance of the seabed or subsoil

in a manner that is likely to have an

adverse effect on the seabed or subsoil.


seabed.

(f) The deposit of any thing or organism in,

on, or under the seabed.

Deposition of drill cuttings and other materials on and

under the seabed.

Deposition of settling sediment from the plume

generated from the removal of the jack-up drilling

legs.

(g) The destruction, damage, or disturbance of

the seabed or subsoil in a manner that is

likely to have an adverse effect on marine

species or their habitat


seabed.

Section 20(3) and (4) – Exclusive Economic Zone

(a) The construction, mooring or anchoring long-

term, placement, alteration, extension,

removal, or demolition of a structure or part

of a structure


seabed.

(b) The causing of vibrations (other than

vibrations caused by the normal operation

of a ship) in a manner that is likely to have

an adverse effect on marine life

Generation of vibrations from drilling the wells.

70

This marine consent is granted subject to the following conditions:

1) This marine consent expires two years following the grant of this marine consent.

2) This marine consent must be exercised in general accordance with the application for marine consent,

dated 3 June 2014, supporting documents and evidence presented by the Consent Holder as set out in

Schedule 1, except where these are modified by the conditions below. Where there is a conflict between

the application material and evidence, the evidence must prevail.

3) A copy of this marine consent and any variations must be present at the Consent Holder’s head office in

New Zealand until its expiry date and on the ENSCO 107 while the development drilling activities are

being undertaken.

4) The Consent Holder must ensure all personnel, including but not limited to those of joint venture partners

and contractors involved in the development drilling authorised by this marine consent, are informed of

their obligations and required actions and responsibilities under this marine consent.

5) Any harmful substances deposited on the seabed under this consent must be discharged into the sea in

accordance with the requirements of the Discharge Management Plan. The Consent Holder must

provide the Environmental Protection Authority with the following:

a. A copy of the Maritime New Zealand approved Discharge Management Plan associated with this

marine consent within five working days of the grant of consent.

b. A copy of any Maritime New Zealand approved variations to the Discharge Management Plan

associated with this marine consent within five working days of Maritime New Zealand approving a

variation.

6) The Consent Holder must comply with regulations 64, 65, 66, 67, 68, 69, 70, 71, 72 and 76 of the Health

and Safety in Employment (Petroleum Exploration and Extraction) Regulations 2013 in respect of all

activities to which this marine consent relates.

7) The Consent Holder must make available to the Environmental Protection Authority, on request, the

records and reports required to be made and retained under regulations 72 and 76 of the Health and

Safety in Employment (Petroleum Exploration and Extraction) Regulations 2013.

8) The Consent Holder must ensure that at least one senior employee or suitably qualified or experienced

contractor is formally allocated responsibility for collating information on compliance management in

relation to this marine consent and for reporting information in accordance with the requirements of this

marine consent. The name and contact details of this person shall be provided to the Environmental

Protection Authority and updated as necessary.

71

9) The Consent Holder must ensure that a primary well control system is installed and maintained

throughout the drilling programme in accordance with the manufacturer’s specifications.

10) The Consent Holder must, within 20 working days of the grant of this marine consent, provide the

Environmental Protection Authority with a copy of the acknowledgement by Maritime New Zealand of its

acceptance of the Development Drilling Well Control Contingency Plan and Site Marine Oil Spill

Contingency Plan.

11) During the period the ENSCO 107 is positioned on site, the Consent Holder must conduct a daily

inspection of the ENSCO 107 and record the following information as an electronic inspection log to be

stored on the ENSCO 107 and made available on inspection or on request by the Environmental

Protection Authority:

a. Hydrocarbon or hazardous substance spill occurrences that have the potential to, or result in, an

uncontrolled discharge into water;

b. Rig activity (drilling and testing); and

c. Any non-compliance with the Maritime New Zealand approved Discharge Management Plan or any

subsequent approved variations to the Discharge Management Plan associated with this marine

consent and how those matters were resolved.

12) The Consent Holder must on request provide the Environmental Protection Authority with a record of

refuelling events associated with this marine consent carried out in accordance with section 4.4.4 of the

Maritime New Zealand approved Discharge Management Plan or any approved variations to the

Discharge Management Plan.

13) The Consent Holder must notify the Environmental Protection Authority within 24 hours of a spillage of

hazardous substances, including hydrocarbons, into water.

14) The Consent Holder must notify the Environmental Protection Authority in writing within 24 hours of any

loss of well control, emergency shut-in or failure of other equipment that has potential for an unplanned

release or discharge of hazardous substances, including hydrocarbons, into the environment.

15) In the event of an oil spill, the Consent Holder must liaise with the relevant regional councils and iwi

entities, the Department of Conservation, Maritime New Zealand and the Environmental Protection

Authority to determine whether monitoring is likely to detect any environmental effects and, if so, agree

on appropriate monitoring and timeframe. The results of the monitoring must be provided to the

Environmental Protection Authority on request and in a written summary report within three months of

the completion of the monitoring.

72

16) The Consent Holder must maintain an electronic log of the following:

a. The total volume of cement used per well drilled, estimated by dry weight;

b. The total volume of milling swarf removed to shore, estimated by weight at the land-based disposal

site;

c. The total volume of material removed through drilling from each well, estimated from length and

diameter of completed wells;

d. The total volume of material shipped to shore, including cuttings and muds (but excluding milling

swarf), estimated from the number of skips shipped;

e. The total volume of water-based muds used per well; and

f. The total volume of synthetic-based muds used per well.

The unit of measurement reported must be consistent for all materials.

The electronic log must be kept on the ENSCO 107 and be provided on request to the Environmental

Protection Authority.

17) The Consent Holder must collect as much of the milling swarf as is practicable for disposal at an

authorised land-based disposal facility.

18) The Consent Holder must take one representative sample per well of each of the following materials:

a. Drill cuttings produced while using water-based muds;

b. Drill cuttings produced while using synthetic-based mud; and

c. Water-based muds prior to their discharge into the water at the end of drilling.

Each sample must be assessed, as soon as practicable, for levels of arsenic, barium, cadmium,

chromium, copper, mercury, iron, lead, manganese, nickel and zinc.

The Consent Holder must maintain an electronic log of results to be kept on the ENSCO 107 and be

provided on inspection or on request to the Environmental Protection Authority.

19) The Consent Holder must ensure that all drill cuttings and drilling muds that are discharged into the

waters of New Zealand’s economic exclusive zone as a result of activities authorised by this marine

consent are released into the sea at least 10 metres below mean sea level.

73

20) Dry/unmixed cement must not be deposited on the seafloor under this marine consent.

The Consent Holder must maintain an ongoing electronic record of the following in relation to unmixed

cement:

a. Volume of dry/unmixed cement brought to the ENSCO 107;

b. Volume of dry/unmixed cement kept on the ENSCO 107;

c. Volume of unmixed cement used in drilling; and

d. Volume of dry/unmixed cement returned to shore at the end of the drilling programme.

This electronic record is to be kept on the ENSCO 107 and be provided on inspection or on request to

the Environment Protection Authority.

21) The combined total volume of subsea material removed as a result of activities authorised by this marine

consent, must not exceed 3,500 cubic metres, as estimated from length and diameter of completed

wells.

An electronic log recording the estimated amount of subsea material removed must be kept on the

ENSCO 107 and be provided on inspection or on request to the Environmental Protection Authority.

22) Alterations to the wellhead platform described in the application and undertaken in accordance with this

marine consent must take place on the topsides of the wellhead platform.

23) Drilling must commence from within existing conductors. The Consent Holder must record the depth in

metres below the seabed at which drilling commenced for each well in an electronic log. This electronic

record is to be kept on the ENSCO 107 and be provided on inspection or on request to the Environment

Protection Authority.

24) The Consent Holder must ensure compliance with the Craft Risk Management Standard – Biofouling on

Vessels Arriving to New Zealand (15 May 2014) of all vessels originating outside New Zealand’s

territorial waters (as defined in that standard) and brought into New Zealand’s territorial waters in

connection with the activities authorised under his marine consent.

74

25) The Consent Holder must ensure all offshore personnel involved in the development drilling authorised

by this marine consent, including but not limited to contractors, undertake environmental awareness

training on the requirements of the Marine Mammals Protection Act 1978 and Part 3 of the Marine

Mammals Protection Regulations 1992. The training must include marine mammal identification and

reporting protocols for coming into contact with marine mammals (such as strikes and entanglements),

incident reporting and emergency exceptions. This training must include specific Maui’s and Hector’s

dolphin reporting requirements (as per Conditions 27 and 30) and seabird collision reporting

requirements (as per Condition 28). The Consent Holder must also make available to all offshore

personnel marine mammal species identification guides relevant to New Zealand to help ensure

accurate identification of species.

26) If a strike, entanglement or injury results in a death and involves a Maui’s or Hector’s dolphin, the

Consent Holder must:

a. Notify the Department of Conservation immediately; and

b. Subject to the Consent Holder’s obligations under the Marine Mammals Protection Act 1978 and the

Health and Safety in Employment Act 1992, take all practicable steps to recover the carcass and

return the carcass to shore as soon as possible for collection by the Department of Conservation.

27) The Consent Holder must maintain an electronic log of all seabird collisions with the ENSCO 107 and

support vessels that occur throughout the exercise of this marine consent. The electronic log must

include:

a. The date and time of collision;

b. Weather conditions (including wind direction, approximate speed, the presence of precipitation, fog

or any other weather-related impact on visibility);

c. Species (where known);

d. The condition of the bird (dead, released alive and unharmed, or injured); and

e. Photographs (where practicable).

A digital copy of the log must be provided to the Department of Conservation and the Environmental

Protection Authority within one month of the day on which the legs of the ENSCO 107 are removed from

the seabed.

28) The Consent Holder must ensure helicopter pilots have been provided with environmental-awareness

training as well as identifying established terrestrial seal haul-out and breeding areas to identify the flight

paths that helicopters should use, subject to Civil Aviation Authority flight path restrictions, prevailing

weather and safety considerations, to minimise disturbance to those areas.

75

29) The Consent Holder must compile a written report six months after the grant of this marine consent and

every six months thereafter until the term of this marine consent has expired, detailing all cetacean

sightings from the ENSCO 107 over the previous six-month period. This must be provided to the

Environmental Protection Authority and the Department of Conservation electronically within four weeks

of each six-month reporting period. This report must include as a minimum:

a. The date and location of all cetacean sightings from the consented operation;

b. The species of cetacean (where known) and number of individuals (including presence of juveniles)

associated with each sighting;

c. The behaviour of cetaceans sighted, including their direction of travel;

d. Any cetacean injuries or mortalities observed;

e. The approximate size of each cetacean; and

f. Any physical interaction (including but not limited to vessel strike or entanglement) between any

cetacean and any equipment, vessels or other inanimate objects related to the Consent Holder

exercising this marine consent.

30) The Consent Holder must report any sightings of a Maui’s or Hector’s dolphin from the ENSCO 107 to

the Department of Conservation within 24 hours of the sighting and give details including location, time,

weather conditions, number and approximate size of individual dolphins.

31) The Consent Holder must ensure that all vessels associated with the activities authorised by this marine

consent avoid whale aggregations.

32) The Consent Holder must prepare a compliance monitoring report that must be provided to the EEZ

Enforcement and Compliance Manager of the Environmental Protection Authority every six months for

the term of this marine consent with the first report due on the seven-month anniversary of the grant of

this marine consent and the final report to be provided within three months of the day on which the legs

of the ENSCO 107 are removed from the seabed. This report must be provided electronically and will

need to be available on the ENSCO 107 for inspection or on request by the Environmental Protection

Authority. The report must, for the previous six months, report on monitoring relating to:

a. Condition 11;

b. Condition 14;

c. Condition 16;

d. Condition 18;

e. Condition 20;

f. Condition 21;

g. Condition 23;

h. Condition 27; and

i. Condition 29.

76

33) The Consent Holder must provide the Environmental Protection Authority on request the results (where

available) of the Environmental Monitoring Programme required by the Maritime New Zealand-approved

Discharge Management Plan and any approved variations to the Discharge Management Plan

associated with this marine consent.

Note: Working days are as defined in section 4 of the EEZ Act.

77

APPENDIX 2: ABBREVIATIONS AND ACRONYMS USED IN THIS DECISION

CMA Coastal Marine Area

DMC Decision-making Committee

DMP Discharge Management Plan

EEZ exclusive economic zone

EEZ Act Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012

EPA Environmental Protection Authority

EPA Staff Report EPA Staff Report prepared in accordance with section 44(1)(b) of the EEZ Act

FPSO floating production, storage and offloading vessel

km kilometre

m metre

m2

square metre

m3 cubic metre

mm millimetre

MNZ Maritime New Zealand

MPI Ministry for Primary Industries

ms-1

metres per second

NKTT Ngā Kaihautū Tikanga Taiao

nm nautical mile

OMV OMV New Zealand Limited

PAH polycyclic aromatic hydrocarbon

PCB polychlorinated biphenyl

ppm parts per million

SBM synthetic-based mud

TPH total petroleum hydrocarbon

WBM water-based mud

WHP wellhead platform

78

APPENDIX 3: PROCEDURAL HISTORY

Timeline for Application

3 June 2014 Application for marine consent lodged with the EPA by OMV

17 June 2014 EPA completeness of application check completed

30 June 2014 Letter sent to OMV requesting further information (EPA staff request #1)

10 July 2014 EPA appointed DMC including delegating decision-making powers to it

17 July 2014 EPA requested further information from the Department of Conservation, the Ministry

for Primary Industries, Maritime New Zealand and WorkSafe New Zealand

18 July 2014 EPA served copies of the OMV application on persons required by section 44A of

the EEZ Act

18 July 2014 OMV response received to part of EPA staff request #1

25 July 2014 OMV response received to part of EPA staff request #1

1 August 2014 OMV response received to part of EPA staff request #1

1 August 2014 Ministry for Primary Industries response received to EPA request for further

information

4 August 2014 Department of Conservation response received to EPA request for further

information

12 August 2014 Maritime New Zealand response received to EPA request for further information

22 August 2014 DMC requested further information from OMV

10 September 2014 OMV response received to part of DMC request

17 September 2014 OMV response received to part of DMC request

10 October 2014 WorkSafe New Zealand response received to EPA request for further information

15 October 2014 DMC requested further information from New Zealand Petroleum and Minerals and

MNZ

20 October 2014 Letter sent to OMV requesting further information (EPA staff request #2)

24 October 2014 New Zealand Petroleum and Minerals response received to DMC request for further

information

7 November 2014 MNZ response received to DMC request for further information

13 November 2014 WorkSafe New Zealand response received to DMC request for further information

9 December 2014 Closure of hearing

18 December 2014 Decision date

79

APPENDIX 4: SUMMARY OF SUBMISSIONS

The following tables provide an overview of the issues raised by submitters. Issues are provided against the relevant subsections of section 59(2) of the EEZ

Act.

Table A5.1: Reasons for Support (in full or part)

EEZ Act s 59(2) Reasons for

Submissions

Key Words No.

Submitters

Indicative Comments %

General EEZ purpose EEZ purpose 1 Application is consistent with the purpose of the EEZ. 0.6

(a) & (b) Effects on

the environment or

existing interests

Existing

activity

Existing activity, existing

consented operations

3 The application allows the continuation of an existing activity. 1.9

(j) Imposing

conditions

Conditions Oil spill, controlled

activity, insurance,

compensation

2 Given the possible severity of effects on marine and coastal

environment, conditions requiring adequate insurance should

be imposed regarding spill response and insurance.

Exploration should be in a controlled atmosphere.

1.3

Table A5.2: Reasons for Neutrality

EEZ Act s 59(2) Reason for

Submissions

Key Words No.

Submitters


(f) Economic

benefit

Economic

benefit

Economic benefit, taxes,

royalties

1 The Ministry of Business, Innovation and Employment (MBIE)

projects that the Maari Growth Project will deliver $377

million in royalties and $449 million in corporate taxes, which

is significantly in excess of the figures OMV submitted, which

can be explained by the different exchange rates used.

0.6

(j) Imposing

conditions

Conditions Oil spills, conditions 1 Requested more information regarding how OMV will

respond to oil spills and implement best practice.

0.6

(l) Other applicable

law

Consistent

with other

legislation

Crown Minerals Act 1991 1 Maari Growth Project is entirely consistent with the Crown

Minerals Act 1991 and the permit conditions of each permit

participant to the Maari field.

0.6

80

Table A5.3: Reasons for Opposition (in full)


Submissions

Key Words No.

Submitters


(a) Effects on the

environment or

existing interests

of allowing the

activity

Cumulative

effects

Cumulative effects,

cumulative impacts

103 The application does not take into account synergistic and

cumulative effects on endangered marine species and

biodiversity, including those of other exploration activities in

the vicinity. Concerns about the cumulative effects of seven

wells in the vicinity.

66.5

NZ brand 100% pure image, clean

green image, green

image, NZ brand

7 The application will have implications for New Zealand’s

brand and clean green image.

4.5

Māori cultural

values

Tikanga Māori,

tūrangawaewae, kaitiaki,

kaitiakitanga, Māori

interests, iwi, whakapapa,

spirituality

8 Concerns around the implications of the application for Māori

cultural values. The proposal could have effects on

tūrangawaewae. The application is inconsistent with

kaitiakitanga.

5.2

Tourism Tourism 3 Concerns that the application will affect tourism in the area. 1.9

Impact on

coastal

communities

and industry

Employment, livelihood,

aesthetics, coast, industry

57 Concerns about the potential for the application to have

effects on coastal communities, including industry and

livelihoods. The short-term and long-term impacts on coastal

communities have not been addressed. Could affect

aesthetic beauty of the natural environment.

36.8

Effects of

climate

change

Climate change 10 Concerns around the effects of climate change associated

with burning fossil fuels generally.

6.4

(b) Effects on the

environment or

existing interests

of other activities

undertaken in the

area/vicinity of

application

Recreational

effects

Diving, recreation

(general), fishing,

fisheries, food gathering

59 Application should be declined due to the possible negative

effects on industry, marine farming, fishing and diving.

Possible effects on general recreation and amenity in the

area, particularly for coastal communities. Potential effects on

fisheries.

38.1

Water quality Contaminated waste,

coexist, completion fluid,

WBMs, SBMs, pollution,

toxicity, chemical

23 Concerns around the potential damage and environmental

caused by oil spills and pollution in the marine environment

(particularly the habitats of threatened species) and to

coastal communities. Questions the method for disposing of

14.8

81


Submissions

Key Words No.

Submitters


pollution, oil spill,

accidental discharge, MV

Rena, heavy metals,

hazardous event,

hazardous substances,

contamination, discharge

of harmful substances and

contaminants, corrosive

metals

contaminated waste, as type of ingredients disposed of are

toxic to marine life.

Noise and

vibration

Noise, seismic testing,

seismic activity, seismic

surveying, vibrational

drilling

103 The implications of seismic testing and vibration drilling on

marine life, in particular, marine mammals, including Maui’s

dolphins and blue whales. Examples of previous strandings

provided that are potentially linked to seismic testing.

66.5

(c) Effects on

human health

Human health Human health 94 Concerns about the implications of the contaminated waste

and water contamination on human health, particularly

related to the potential for toxic contaminants to enter the

water.

61.0

(d) Protecting

biodiversity and

marine integrity

Biodiversity

and marine

integrity

Fish breeding, ecosystem,

Westland petrel, tissue

sampling, sustainable

management, seabirds,

biodiversity, marine

ecology, penguins,

seabirds, environmental

damage

110 Concerns about the effects of the application on the marine

environment, including oil spills, pollution, noise, ship strikes,

habitat loss and degradation.

71.0

(e) Protecting rare

and vulnerable

ecosystems and

the habitats of

threatened

species

Rare and

vulnerable

ecosystems

Rare and vulnerable

ecosystems

93 EPA is required to take this into account. Not enough

information has been provided regarding rare and vulnerable

ecosystems.

60

Habitats of

threatened

species

Endangered species,

Maui’s dolphin, blue

whale, habitat loss and

degradation, marine

mammals, threatened

species

123 Concerns about the effects of the application on marine

mammals and particularly the Maui’s dolphins and blue

whales in the area. The Impact Assessment makes

erroneous assumptions about the distribution of Maui’s

dolphins and underestimates/misrepresents the risk.

79.4

82


Submissions

Key Words No.

Submitters


(f) Economic

benefit

Economic

implications

Economy, economics,

economic implications,

economic impacts, costs,

commercial gain (1),

discounting rates,

opportunity cost

107 OMV’s economic benefit analysis is incomplete and

misleading. The Impact Assessment doesn’t provide

information specific to the economic benefit of OMV’s

application but rather benefits relating to the oil and gas

industry nationwide. There are potentially economic losses

associated with the application (for example, fishing, local

economy), and the application fails to take this into account.

The cost-benefit analysis is not clear.

69.0

(g) Efficient use

and development

of natural

resources

Efficient use

and

development

of natural

resources

Alternative energy,

alternative fuel source

2 There is a general need to move away from fossil fuels

towards renewable energy and fuel sources.

1.3

(h) Other marine

management

regimes

Other marine

management

regimes

Marine Protection Area

(MPA), marine mammal

observer (MMO), passive

acoustic monitoring (PAM)

2 Application ignores the likelihood that MPAs with be created

within zones potentially affected by the activities. Current

monitoring through MMOs and PAM will not be enough.

1.3

(i) Best practice Better

available

technology

Better available

technology

1 Better technology needs to be available to deal with

contaminated waste before further consent for drilling

application occurs.

0.6

(j) Imposing

conditions

Monitoring

and

compliance

conditions

Monitoring, compliance

conditions

3 Discussion around the environmental effects of the

application and the implications of monitoring and

compliance. All the monitoring required under the legislation

will not be enough to mitigate the effects.

1.9

(k) & (l) Relevant

regulations and

any other

applicable law

Other

applicable law

Crown Minerals Act 1 Inconsistent with the Crown Minerals Act 1991. 0.6

(m) Other matters Consultation

conducted/

required

Consultation 3 The application does not provide an analysis of the results of

the consultation process. All iwi and hapū not consulted.

Concerns over consultation and decision-making process,

including data-heavy information documentation.

1.9

83


Submissions

Key Words No.

Submitters


Information

requirements

Lack of population

surveys, lack of evidence,

lack of information,

independent peer review,

conflict of interest,

independent experts

98 No systematic marine population surveys have been

undertaken to robustly assess the direct, indirect and

cumulative impacts of the programme on potentially affected

species. Full effects of discharge cannot be assessed without

full disclosure of the contaminants involved.

63.2

Risks

associated

with the

application

Risk 105 There are numerous risks associated with the application and

oil drilling in general such that the application should not be

granted. There are risks of OMV’s activities on critically

endangered species and risks to marine life and coastal

biodiversity as a result of oil spills. The application does not

adequately analyse these risks. The risks to the community

are not clear.

67.7

Documents

DECISION ON MARINE CONSENT APPLICATION OMV New …3. The drilling programme was not able to be completed before 28 June 2014. As such, OMV lodged an application for marine consent