BP slick exposes NZ safety gulf

The US government can barrel oil giant BP into stumping up $28 billion to clean up the mess created by its disastrous deep water oil drilling operation in the Gulf of Mexico – but could you see that happening here?

Don’t worry, citizens. It will be at least 18 months before anyone starts deep water drilling on the floor of our extensive offshore continental shelf. At least, that’s what experts like Crown Minerals chief petroleum geologist Richard Cook says. That’s plenty of time to get an extended, exclusive economic zone safety regime in place, according to economic development minister Gerry Brownlee.

However, as I learn more about the attitude and the pace of regulatory development to cover offshore oil and gas investigation and exploitation around New Zealand, my confidence in the environmental safety of our waters and shores is evaporating as rapidly as a petrol sniffer’s sanity.

Cabinet papers I’ve dredged up show our bureaucrats have been working on the development of a regulatory regime to govern the environment in the world’s fourth-largest set of deep water basins since 2005.

It took three years before environment minister Trevor Mallard could take a detailed proposal for exclusive economic zone [EEZ] legislation to Cabinet. Mallard’s paper required his colleagues to take no less than 149 individual decisions, including one to note that the proposed EEZ legislation “will not fill all gaps in management of the EEZ, as there is no dedicated and comprehensive marine protection tool that can give a very high level of protection to parts of the EEZ for conservation or biodiversity purposes.”

In June 2008, Mallard announced the plan to “help safeguard New Zealand’s ocean eco-systems”. By August, the government would legislate to place the whole EEZ environmental management process in the hands of a single EEZ Commissioner, within the Ministry for the Environment. The Commissioner would vet applications for prospecting and mining consents and monitor performance. He would pass recommendations on to the Minister, whose decisions could be subjected to appeal in the Environmental Court.

The Mallard plan never made it off the launch-pad before the 2008 election. Despite a change of government, the Ministry for the Environment still expected the EEZ bill would be in the hands of a select committee before the end of 2009. New environment minister Nick Smith and the incoming government had other ideas –specifically, the creation of the comprehensive Environment Protection Agency [EPA} that Smith announced earlier this month.

Under the Smith plan, the EPA will be responsible for efficient regulation, as a stand-alone Crown agency, with its own board and 50 staff, monitored by the Ministry, accountable “at arm’s length distance” to the Minister, and up and running by July next year. That is less than six months out from when Crown Minerals predicts the first deep water drilling might start.

However, Smith’s announcement skirts round the issue of EEZ environmental regulation by the EPA. While he said “the government is determined to ensure that New Zealand's marine environment is properly protected as we expand petroleum exploration and development in the EEZ” he stopped short of saying it would be the EPA’s role. His list of EPA functions is remarkably qualified: “Exclusive Economic Zone (proposed)”.

Smith’s statement gives some hints of what is going on behind the scenes. There had been “robust analysis” of his stand-alone EPA plan.

"Further work is being done by the Environment and Economic Development Ministries on strengthening the regulatory environment in New Zealand's Exclusive Economic Zone that falls outside the jurisdiction of the Resource Management Act.... [i.e. beyond 12 nautical miles from the shoreline – note added]

A Cabinet paper released with Smith’s announcement reveals more. The government has the EEZ regulatory framework developed in Labour’s last day. In the paper, Smith says:

“In principle, I support the underlying policy for the EEZ Bill, and consider the EPA could perform the proposed regulatory consenting functions. This would require changes to the governance and operational provisions in the draft EEZ Bill that would not be possible until final Cabinet decisions are made on the EPA ... It may be possible to combine the two work streams through the legislative process, should the analysis identify the EPA as appropriate to undertake any of the EEZ functions.”

In short, the argument over who will regulate EEZ regulatory functions [which are currently limited to offshore operations under the oversight of the transport agency, Maritime New Zealand,] is still to be decided. The government is having a private re-run of the environment-versus-economic development debate that drove the decision to test public opinion with the proposal to lift schedule 4 protection from a limited amount of the Crown conservation estate.

The “further work” to be done by the environment and economic development ministries includes a cheap, quick review of New Zealand and international best practice, led by Brownlee’s ministry. External consultants are currently being asked to submit their proposals:

“to compare the design and operation of New Zealand’s health, safety and environmental legislation for offshore petroleum operations with practice in other relevant jurisdictions, and make recommendations for improving the legislative structure, institutional capabilities and practices within New Zealand to meet international best practice.”

Interested consultants have been given an indicative price for the job - $100,000 – a deadline [first draft by 27 August, completion by 3 September], and a clear statement of the commissioning minister’s expectations. On 5 May, the New Zealand Herald quoted Brownlee saying:

"New Zealand has very high environmental standards and particularly, safety requirements. Just what happened in the Gulf at the moment seems somewhat unclear and I think the whole of the oil producing world will be wanting to find out exactly what went wrong to make sure that if it was something that can be mitigated against, that's what happens."

In Parliament, this month, the Minister tried to wipe away concerns that our small country also runs the risk of sustaining Gulf-scale human and environmental damage because of evident gaps in government management of safety and environmental risks from offshore mineral exploration and exploitation in the New Zealand EEZ.

“I am of the strong view that any of the oil companies that might be interested in pursuing their options will themselves, for the sake of their own liability, want to make sure that they are as safe as they possibly can.”

The Minister’s trust in the self-preserving instincts of big oil is touching, but New Zealanders are unlikely to share it when they discover our search for a “world’s best practice” regime is scheduled to end just when the international quest for it is beginning.