Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Protecting taxpayers from potential oil spill costs


Hon Julie Anne Genter
Associate Minister of Transport

20 June 2019

PĀNUI PĀPĀHO

MEDIA STATEMENT

Proposal to better protect taxpayers from cost of potential oil spills

Offshore oil and gas operators would be required to hold higher levels of insurance to ensure they can cover the cost of an oil spill under proposed new rules announced today by Associate Minister for Transport Julie Anne Genter.

Cabinet has agreed to consult on increasing the amount of insurance that oil and gas operators are required to hold. Currently, operators are required to hold insurance worth around $27 million. The new proposal would require them to hold levels of insurance proportionate to the risk posed by the installation, up to a maximum level of $1.2 billion.

“While the likelihood of an oil spill is low, if one occurs it could have significant environmental, financial and cultural impacts and cost tens or even hundreds of millions to clean-up,” Julie Anne Genter said,

“Communities and taxpayers shouldn’t be left to foot the bill for clean-up of an oil spill, like we saw with the Rena. It’s only fair that operators are able to cover the clean-up cost of a worst-case scenario oil spill.

“Under the proposed regime, operators would be required to hold insurance proportionate to the risk posed by their installation poses.

“The proposed upper limit has been set at $1.2 billion to future-proof the regime in the event that a future installation proceeds in a higher-risk, deep water location.



“For existing operators, the amount of financial insurance required would be well below the upper limit of $1.2 billion.

“I understand that the amount of insurance or financial insurance estimate for current production installations in Taranaki ranges from about $170m to $360m.

As part of the proposed new regime, the Minister has also introduced a Bill to amend the Maritime Transport Act 1994 (the Act) to provide certainty in relation to the liability of insurers (or, in the case of financial security, the persons providing the financial security) to the Crown and to other third parties who are affected by the pollution.

The Bill clarifies that rules may specify the types of liability that will need to be insured against, and may provide for the insurance or other financial security to cover the cost of well control measures and other costs of implementing marine oil spill contingency plans. The rules will also propose the amount of insurance or financial security required to be held.

“Under the existing Act owners of offshore oil and gas installations face unlimited liability for the cost of pollution damage and clean-up resulting from a spill from their facilities in New Zealand waters. The Amendment Bill does not change their unlimited liability.

“Members of the public and interested parties will have the opportunity to have their voice heard on the Bill during the Select Committee process.

“The remainder of the regime, including the increased limits for financial assurance, will be implemented through marine protection rules. Consultation on these draft rules will occur alongside the Bill.

The Government last year announced an end to new offshore oil and gas permits, while allowing existing permits to run their course. Part of that deliberate, planned and managed transition over the coming decades is ensuring the existing operations are well managed and risks are mitigated where possible,” said Julie Anne Genter.

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

SCOOP COVERAGE: CHRISTCHURCH MOSQUES TERROR ATTACK


'Public Safety': Next Firearms Reform Plan Announced

The next Arms Amendment Bill will:

• Establish a register of firearms and licence holders to be rolled out over 5 years
• Tighten the rules to get and keep a firearms licence
• Tighten the rules for gun dealers to get and keep a licence
• Require licences to be renewed every five years
• Introduce a new system of warning flags so Police can intervene and seek improvement if they have concerns about a licence holder’s behaviour
• Prohibit visitors to New Zealand from buying a gun... More>>

 

Gordon Campbell: On Being Australia's Pacific Go-Fers

Inevitably, there was an aspect of ‘what might have been’ about the weekend’s meeting in Canberra between PM Jacinda Ardern and her Australian counterpart, Scott Morrison... More>>

ALSO:

RNZ: Trades Hall Bombing Case Re-Opened, Evidence Released

The cold case has been reopened and the police have recently revealed more details about the bomb's components - including that it was wrapped in a 1977 edition of The Evening Post. More>>

Safety: Govt Targets Fewer Deaths On The Road

“Most roads deaths and serious injuries are preventable and too many New Zealanders have lost their lives or been seriously injured in crashes that could have been prevented by road safety upgrades,” said Associate Transport Minister Julie Anne Genter. More>>

ALSO:

Pay Rise Delay: Teachers Unions Plan Legal Action Against Novopay

Both of the teachers unions - NZEI and the PPTA - have confirmed they will be taking legal action against Novopay. More>>

ALSO:

Gordon Campbell: On What’s Wrong With Wellington

For many Wellingtonians, it hasn’t been the normal hardships – the workings of central government and the lousy weather – that have recently pushed their tolerance into the red zone. It has been the inability of local government to maintain even the basics. More>>

ALSO:

Emission Statement: 'Consensus Reached' On Agriculture

Today the Government launched a consultation document, informed by the work of the Interim Climate Change Committee (ICCC), on how to bring agriculture into the emissions trading scheme, a key part of the Government’s plan to tackle climate change and reduce New Zealand’s emissions. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels