Industry Support for Health, Safety and Environmental Review

15 December 2010

MEDIA RELEASE

Industry Support for Health, Safety and Environmental Review

The Petroleum Exploration and Production Association substantially support the findings of a comprehensive review of controls on offshore oil exploration activities in New Zealand, undertaken in the wake of the Gulf of Mexico disaster earlier in the year.

Association Executive Officer John Pfahlert was commenting today on the release by the Minister of Energy and Resources of a report commissioned by the Ministry of Economic Development, which compares New Zealand’s offshore regulatory environment for oil exploration with several overseas jurisdictions.

“It’s been known for some years that there are gaps in the current system regulating offshore oil exploration. These include an absence of any requirement to prepare environmental impact assessments in advance of work occurring, the lack of any public consultation process over proposed work plans, and the absence of a consenting regime which imposes any conditions which would control the environmental effects of activities” said Mr Pfahlert.

The report identifies, that with one exception (the lack of an environmental permitting regime in the exclusive economic zone) no major gaps or serious omissions were identified….in the NZ regulatory system, said Mr Pfahlert.

“These are currently standard operating procedures within the Territorial Sea, and in many overseas jurisdictions, and we look forward to further dialogue with officials in the new-year as the new legislative requirements are implemented.”

Mr Pfahlert said that the one area where industry believes more immediate attention is warranted, and which the report identifies, is additional resourcing for the Department of Labour to deliver a more effective petroleum inspectorate function.

“This is an area where staffing has been reduced over the years, and which now warrants increased support, particularly in light of the increased workload from petroleum, geothermal and coals seam gas operations – all of which are now the responsibility of one inspector.” Said Mr Pfahlert

ENDS

SUMMARY of RECOMMENDATIONS

The report makes the following recommendations (in order of priority):

• Government to investigate as a matter of priority, options for cost recovery and the provision of other additional sources of funding to ensure that appropriate technical expertise, organisational capacity (including training) and funding (including cost recovery) are available to DoL and MNZ to fulfil their functions. At the same time, DoL and MNZ identify expanded opportunities for interagency cooperation, coordination, and sharing of expertise and resources;

• Ministry of Economic Development (Crown Minerals) be legally empowered to require and consider relevant HSE information (including strategic environmental assessments) at the resource allocation stage;

• DoL to continue to have lead responsibility for health and safety but that an interagency review be undertaken as a matter of priority to determine ways in which regulatory coordination and organisational capability to monitor and enforce health and safety can be improved and that consideration be given to establishing a specialist offshore process safety

unit;

• The current regulatory approach to Safety Cases be maintained but DoL investigate ways in which the regulatory consideration of individual Safety Cases might be enhanced or improved;

• An environmental regulatory framework for petroleum permitting, based on EIAs, be established within the exclusive economic zone;

• An agency be allocated responsibility for environmental assessment and decision making within the exclusive economic zone;

• Government investigate whether current levels of insurance and liability are sufficient and consider ratifying international instruments which provide additional or stronger levels of insurance and liability in relation to both shipping and installations involved in offshore petroleum activities ;

• Consideration be given in the future to consolidating the offshore environmental jurisdiction in relation to offshore oil and gas activities within one agency.

(Taken from Comparative Review of Health, Safety and Environmental Legislation for Offshore Petroleum Operations: MED September 2010)

ENDS

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