15 Oct 2020

Energy watchdog wins court battle for safety buffer zones

11:20 am on 15 October 2020

After a four-year fight an energy sector watchdog has won a precedent-setting battle which could see safety buffer zones imposed around hundreds of oil and gas wells and dozens of petrochemical installations in Taranaki.

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File photo. Photo: 123RF

The Environment Court has decided that setbacks of 250 metres for well heads and 650 metres for production stations must be included in the South Taranaki District Plan to minimise the risk of injury or death to members of the public in a fire or explosion.

The New Plymouth District Council and Stratford District Council are also parties to the decision. As is Federated Farmers which says its members have been left scratching their heads wondering what it means for them.

In 2016, Taranaki Energy Watch found it had an unlikely ally when the oil and gas sector joined it in calling for buffers zones to be included in South Taranaki's District Plan.

But the alliance didn't last long after farmers labelled the move a land grab, and the zones were quietly removed.

Energy Watch appealed the plan to the Environment Court.

And now in its fourth and final decision, the court has ruled safety setbacks are required.

Energy Watch spokesperson Sarah Roberts said experts from both sides recognised the risk involved.

"What became clear from the experts talking was that the fatality risk potentially went outside the boundaries of the sites and so the separation distances needed to recognise how far away each should be from one another. I guess in Resource Management Act processes it's called incompatible activities."

Roberts said the oil and gas sector had always knew deaths could occur without appropriate buffer zones.

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Photo: RNZ / Robin Martin

"The Kupe production station has a consequence distance shown in one of their plans where 600m was the inner circle and then out to a 1000m, so potentially someone would be killed or injured out to approximately that range if there was a fire or an explosion."

The South Taranaki District Plan will now spell out where fatalities could be expected around the district's five production stations and up to 50 well sites in the unlikely event of a catastrophic explosion.

There will also be tangible consequences for neighbours of energy installations.

Homes within 250m of a well head or 650m of a production station will need resource consents for renovations affecting more than 20 percent of the floor area.

And any new properties will also require consents.

The president of Taranaki Federated Farmers, Mark Hooper, said this was the area causing most worry.

"That is going to be the biggest concern and it does raise the question of as to whether there's a case for compensation in light of this and I don't know where that is at, but it will be a question that is on some people's minds."

Hooper said farmers had previously come to a commercial arrangement with their oil and gas neighbours over safety setbacks.

He said now there was a lack of clarity over whether farming could continue inside the new zones.

"Because you know there is a risk of the loss of land use in this space and I think that is the last thing farmers want to see happen.

"So at least there is some clarity on those distances so we know what we are dealing with now, but in terms of the future implications of this there's still some uncertainty around that."

Hooper said Federated Farmers was yet to decide whether it would lodge an appeal.

South Taranaki District Council group manager of environmental services, Liam Dagg, said the decision struck a balance between managing risk and recognising property rights.

"It's really going to come down to sensitive new activities such as housing that may want to locate within the risk contours of some of these high hazard facilities. So, obviously on a property scale there's going to be implications, but district wide that's reasonably small scale."

Dagg said the council had previously assumed existing regulations dealing with safety risk at petrochemical facilities were sufficient, but now accepted this had to be addressed in the District Plan.

He said the council would not appeal.

"We're happy with where the cards have fallen. We'll be interested if there's any application for costs from the appellant, but for us we're more interested in getting the council seal applied to the document at the end of this year and making it fully operable in 2021."

Energy Watch's Roberts said case law established during the legal battle was already being referred to in similar situations around the country.

She said the decision was a victory for people who find themselves unwittingly neighbours to these installations.

"Our whole premise is around supporting our local communities and being able to establish what it is appropriate for us to be living next door to. For the families it gives them some sense of 'are we safe or are we not' and it also addresses the issues of land use rights."

The Petroleum Exploration and Production Association, which as also a party to the case, said it was yet to fully consider the implications of the Environment Court decision.

It was also not yet clear whether New Plymouth and Stratford districts would apply the same rules around petrochemical facilities in their areas.

The decision

  • Existing well sites will require a Quantitative Risk Assessment (QRA) to determine an Unacceptable Risk area or separation distance for sensitive activities such as housing or companies must accept the 250m fatality consequence distance established by the risk experts. The distance is 250m from each existing and consented well on a site.
  • Existing production stations will require a QRA to determine a separation distance or accept a 650m fatality consequence distance established by the experts. The distance is set from the boundary of the site.
  • Existing homes (sensitive activities) that are already inside the Unacceptable Risk area or 250m from existing wells or 650m from existing production stations will require a resource consent if they wish to increase their gross floor area up to 20 percent (discretionary activity) and over 20 percent (non-complying activity).
  • It's now a non-complying activity to establish new homes within the Unacceptable Risk area or 250m from existing wells or 650m from an existing production station.
  • All new well sites and production stations will require a QRA to establish an Unacceptable Risk distance and internalise the fatality risk within the boundary of their site or the area that they have control over.
  • New petroleum exploration or production activities in residential areas are now a prohibited activity.
  • A publicly available schedule must be maintained for: production stations/gas treatment plants without an Unacceptable Risk contour or separation distance (Rimu Production Station and Kapuni Gas Treatment Plant) and well sites where the Unacceptable Risk area or 250m separation distance from wells extends beyond their boundary.
  • Council planning maps must include the Unacceptable Risk contours for Maui, Kapuni and Kupe Production Stations

There are also new standards for seismic surveys using explosives which mean electronic detonators will be required as well as mandatory reporting of the misfire details to landowners and the South Taranaki District Council. Misfires will be recorded on a map.

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