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Moving minerals law away from promotion

First published in Energy and Environment on November 21, 2019.

The review of the Crown Minerals Act has been released and as expected focuses on changing the purpose of the law away from the promotion of mining.

There is also consideration of non-interference provisions, decommissioning fields, the compliance regime, involvement of Maori and how to deal with petroleum exploration of on-shore Taranaki.

Another suggestion is to give more flexibility around existing oil and gas permits including extending their area and expiry if the economy is to transition safely from gas.

After many months in the making the review has a deadline for submissions of December 20. The changes will still require legislative change, which the Government wants to complete by late 2020.

Despite the CMA having impacts across the entire minerals sector much of it is focussed on oil and gas. Energy and Resources Minister Megan Woods says in the document, there would be major shifts away from fossil fuels and towards renewable energy, which would be a challenging transition affecting many parts of society.

“I also reiterate this Government’s commitment to a just transition away from fossil fuels - one that is fair, equitable and inclusive.”

Woods said people expected a more socially conscious sector, which takes iwi/hapū and community views into consideration and to first avoid, and, where not possible, mitigate adverse effects to the environment.

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“But the sector also has a role to play in providing us with the raw materials and energy we need to achieve our objective of a productive, sustainable and inclusive economy. This is especially true of the minerals used in technologies central to the transition towards renewable energy.”

The review of the CMA would build on the recently released Resource Strategy to build “a world leading environmentally and socially responsible minerals and petroleum sector that delivers affordable and secure resources, for the benefit of current and future NZers”.

The review suggests the current law’s primary focus on maximising the economic contribution of minerals and petroleum should change to look at other aspects of wellbeing (natural, human, social or financial capital).

It says the Government’s economic priority has now shifted to transitioning to a more productive, sustainable and inclusive economy. Specifically, phasing out offshore oil and gas exploration, no new mines on conservation land, a hydrogen vision and climate change law.

The document asks whether the purpose of the CMA should be amended from promoting mining considering the “Government’s priority for a productive, sustainable and inclusive economy”.

“Submissions on the Crown Minerals (Permitting and Crown Land) Bill showed there was widespread objection to the proposed purpose statement due to the express purpose to “promote” the sector. Many individual submissions recommended that “promote” be replaced with “manage” or “administer” and that the purpose statement should reflect a wider range of considerations. In contrast, many industry submitters were supportive of the proposal to include a purpose statement with a promotional element.”

The Government has explicitly ruled out revisiting the decision to ban any new oil and gas exploration permits for outside of onshore Taranaki, but one section also asks: “Do you think the current settings concerning offshore petroleum permits fully contribute to the Government’s goals, including transitioning to a low emissions economy that is productive, sustainable and inclusive, and providing secure and affordable energy?”.

The suggestion is the rapid expiration of permits may leave NZ with a gas shortage. There is around 71,000 square kilometres of offshore exploration permits. Approximately 56% will expire by 2021; 75% by 2025 and the rest by 2030. This does not include partial permit area relinquishments or the full surrender of permits prior to expiry.

Officials suggest the rules around partial relinquishments expiring could be reconsidered as could the restrictions on extending the acreage outside existing permits and the limits on extending permits.

The review does not cover the proposed ban on new mines on conservation land saying this will be subject to another discussion document “in the coming months”.

Other aspects of the CMA review are covered elsewhere in this week’s Energy and Environment including a full summary of all questions being asked.
First published in Energy and Environment on November 21, 2019.

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