Non-notified marine consenting for offshore exploration drilling

Tuesday 3 September 2013

Authors: David Coull, Andrew Beatson and Chris Gordon

Late last week, the Government released a discussion document on activity classifications under the EEZ Act. The d​​iscussion document addresses two key issues:

  • whether the EEZ Act should be amended to introduce a non-notified discretionary activity classification (with regulations to include offshore exploration drilling within this category); and

  • the proposed transfer of the regulation of the discharge of harmful substances from offshore structures and production facilities on ships (and the dumping of waste) from Maritime New Zealand to the EPA (and the appropriate classification of those activities under the EEZ Act).

These proposals have been introduced by way of a Supplementary Order Paper to the Marine Legislation Bill which is currently before Parliament. Although that Bill is currently awaiting its committee stage and third reading, it is expected to be enacted in the near future.

This column comments on the first proposal identified above.

New non-notified discretionary classification

Under the EEZ Act and regulations as they currently stand, offshore exploration drilling in the EEZ is a discretionary activity which, after the current transitional arrangements expire in June 2014, will require a marine consent.

The discussion document proposes the introduction of a non-notified discretionary classification, in addition to the existing permitted, discretionary and prohibited activity categories.

The implications of a non-notified discretionary classification include:

  • a marine consent must still be sought and obtained from the EPA for exploration drilling in the EEZ;

  • the EPA, after considering the operator's EIA, any other relevant information and any matters raised at any hearing, will have the discretion to approve or decline the application;

  • the time required for operators to obtain a marine consent will be marginally reduced (and, importantly, there will be greater certainty as to the relevant timelines);

  • the non-notified discretionary process will likely result in some costs savings for operators (although these are not likely to be material in the overall context of the cost of an offshore exploration well in the EEZ); and

  • reduced ability for issue-motivated groups or those with an ideological objection to offshore exploration activity to delay, frustrate or create unnecessary costs for operators by uninformed or emotive participation in the marine consenting process or court proceedings.

Given the highly technical nature of the matters the EPA will likely consider at any hearing on a marine consent application, it is hard to see what meaningful substantive input an issue-motivated group can have on the merits of the matters being considered.

A raft of new regulation

The proposed new activity classification does not mean that the Government is abrogating appropriate protection of the offshore environment and/or undermining other HSE considerations.

This is underscored by the raft of new legislation that has been introduced in recent years regulating all aspects of offshore exploration activity - this includes the recent Crown Minerals Act reforms, new HSE regulations (including mandatory safety cases), bio-security law reform, new and proposed changes to New Zealand's maritime legislation, the new DoC Seismic Code, and the EEZ Act and marine consent process itself.

It is also underscored by the rigour the EPA is applying in respect of offshore exploration drilling in the upcoming 2013/2014 season and the relatively stringent conditions associated with the less regulated "permitted activity" category under the Exclusive Economic Zone and Continental Shelf (Environmental Effects-Permitted Activities) Regulations 2013 – both of which give an indication of the approach the EPA is likely to take to any non-notified marine consent application for offshore exploration drilling.

There is no doubt that the proposals to amend the Marine Legislation Bill will not be satisfactory to everyone – and we have already seen the Environmental Defence Society issue a press release complaining about the public consultation process and that the outcome has been pre-determined. Notwithstanding any such objections, it is clearly the case that it is in everyone's interests – the Government, the petroleum sector and environmental lobby groups – for there to be appropriately rigorous scrutiny of marine consent applications and associated EIAs. And one expects that is precisely what the EPA will do.


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • David Coull

    Partner Wellington
  • Andrew Beatson

    Partner Wellington
  • Chris Gordon

    Partner and Chair Wellington
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