An offshore drilling platform (Getty Images)
An offshore drilling platform (Getty Images)

PoliticsJune 13, 2019

Ludicrous but true: mining consent decisions don’t factor in greenhouse emissions

An offshore drilling platform (Getty Images)
An offshore drilling platform (Getty Images)

Those trying to oppose an “ambitious” offshore drilling project on the grounds of climate change are out of luck. Green MP Gareth Hughes explains why, and sets out his views on what should be done about it.

Update, 14 June: the Petroleum Exploration and Production Association of New Zealand (PEPANZ) has responded. Their comments are appended to the end of this article.

Today, in 2019, if I wanted a consent to drill a deep sea oil well, or mine for coal, the greenhouse gas pollution produced would be considered, right? Wrong. Thanks to laws passed under previous Labour and National governments, climate change pollution cannot be considered in consent applications.

You might have heard about the ridiculous situation facing OMV’s application to drill for fossil fuels in the Great South Basin, offshore Otago. OMV is an Austrian oil and gas company, listed as one of the 100 companies responsible for seventy percent of modern global climate pollution. They have applied for marine consents to drill up to ten wells. This has been described as one of the most ambitious drilling programmes in New Zealand’s history.

Two hundred and sixty people have made submissions arguing against the climate impact of drilling for fossil fuels. But their main point can’t even be considered, despite science telling us that these are fossil fuels we can’t afford to burn.

Thanks to the law that governs how the Environmental Protection Authority (EPA), considers the application, we have an ironic situation. The public get to submit on “…the immeasurable trace quantities of potentially harmful substances that may – if spilled – end up washing off the deck of a drilling rig through its rainwater run-off systems,” but not climate change.

The very thing that’s melting the poles and glaciers; changing global weather patterns; causing stronger storms, floods and droughts; killing coral, increasing sea levels and threatening the greatest extinction event in millions of years can’t be considered, nor the fossil fuels that are causing it.

The fact greenhouse gas emissions cannot be considered is not an anomaly or an accident, it’s a design feature. The EPA is actually barred from considering the greenhouse gas emissions under our EEZ Act, passed under the previous National government. I tried to amend this law when it was passed in 2012. National’s argument was that the EEZ Act, which deals with applications in our Exclusive Economic Zone at sea, simply mirrored our main terrestrial environmental law, the Resource Management Act.

Like OMV’s case, this led to the farcical situation where Nova Energy wanted a consent to build a huge new 360 MW power station to burn fracked gas – a potent fossil fuel – but the pollution couldn’t be considered. I worked with the community, local iwi and 3000 petitioners in response to this application. In submissions, people could comment on the impact of the dust off the roads coming from the trucks building the power station, but not the 425-817,000 tonnes of carbon dioxide it would release!

I won’t bore you with all the legislative language (but here is a fascinating legal history), however, I will say that cases which have gone as far as our Supreme Court have shown that Section 104(1)(a) of the RMA prevents local authorities from controlling emission of greenhouse gases. In addition, the discharge of carbon dioxide as a result of burning coal is irrelevant to whether consents should be granted. Should climate change be irrelevant to our major environmental law?

The previous Labour-led government considered that emissions were best left to central over local government. This train of thought was continued under the National government. They thought that the actual discharge of pollution to the air could be dealt with by a carbon price and a National Environmental Standard… which never arrived. Sir Geoffrey Palmer QC, the original architect of the RMA writing in 2015 said “So New Zealand’s key environmental statute is disabled from considering what is a critical issue relating to climate change” and followed on to say “…the mitigation of global warming under the RMA is important and the law as it stands is clearly deficient.”

In 2006, former Green Party co-leader Jeanette Fitzsimons tried to repeal the climate provisions that had created a “huge hole” in the RMA. “Putting a price on carbon is a useful thing to do, but we actually have to deal with climate change at every level of the economy,” she said. “We have to deal with it in regional and local councils, we have to deal with it in businesses, we have to deal with it as individuals, and we have to deal with it internationally. Nobody can challenge a company’s right to burn oil, coal or gas in a way that is possible to challenge the right to take water or use the wind. Meridian Energy said that that created an un-level playing field, and I agree with that.”

As scientists warn, and many countries and New Zealand councils can attest, we are facing a climate emergency. New Zealand’s greenhouse gas emissions are among the highest in the world per person and have continued to rise unabated for decades. It’s ridiculous in this day and age that the pollution that is causing the crisis can’t be considered in an application for a coal mine, oil well or new intensive dairy farm. Charles Dickens once wrote “the law is an ass”. In this case it’s a threat to survival.

Later this year the government will be considering an RMA Amendment Bill. The Green Party will be working hard to persuade our partners in parliament to redress this damaging, historical flaw in our environmental law.

CEO of Petroleum Exploration and Production Association of New Zealand Cameron Madgwick responds to Gareth Hughes:

Before I start making this case, let’s be very clear: climate change is a real and serious issue the world must respond to by lowering greenhouse gas emissions from all sources.

My concern with Gareth’s article is that it gives the impression our laws don’t consider this issue. In reality they do in a number of ways, but most importantly through the Emissions Trading Scheme (ETS) which puts a price on emissions.

This is far and away the best policy tool because it gives flexibility for people to find the best ways to adapt. It means lower emitting energy sources like natural gas are more likely to be developed ahead of higher emitting sources.

The RMA and EPA processes rightly consider the direct impacts of activities, but as it happens there are very few direct emissions from drilling. The emissions come from the burning of those fuels (i.e. when they are used) and the ETS applies to that.

This is why successive Labour and National Governments have avoided changing the law in the way Gareth argues for, because the ETS already addresses the issue of emissions.

Remember too there are many uses of natural gas and oil that don’t involve burning anything. Everything from medical products, cellphones, computers, plastics and clothing are all made using petroleum products.

The policy tools we use are very important because they have real costs to New Zealanders. NZIER estimates ending new exploration permits could cost $28 billion and the Government’s own commissioned research thinks growth in GDP could shrink between 10 – 21% as a result of the Zero Carbon Bill.

What this means is that policies should focus on lowering emissions at the least possible cost to New Zealanders. Complicating the RMA and EPA in the way Gareth suggests wouldn’t achieve that.

It’s worth pointing out how important this drilling is to New Zealand, given new figures show we have just 11 years of natural gas reserves left.

Around 400,000 New Zealand homes, schools, hospitals and businesses rely on natural gas. It provides energy for cooking, heating and hot showers and powers many of our factories and industries.

It’s also helping us transition to a lower carbon world. Natural gas has half the emissions of coal, and it enables renewable electricity by providing a crucial back-up at the flick of a switch.

A strong supply of New Zealand natural gas means we could reduce the amount of coal we burn, keep electricity prices down and avoid the need to import LNG from Australia.

Finally, we actually agree the current law is crazy… but in a different way. Taking public submissions over the discharge of a 250ml cup is expensive and totally unnecessary. Once again, it’s not the best use of anyone’s time or resources!  

Keep going!