24 Jun 2021

Refining NZ yet to talk to government about Marsden Point's future

3:13 pm on 24 June 2021

The country's only oil refinery expects to decontaminate and decommission its equipment, but is not yet required to have a clean-up plan in place for the polluted groundwater and land at Marsden Point.

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Refining NZ expects to decontaminate and decommission its equipment at Marsden Point oil refinery. Photo: RNZ/Nikki Mandow

The government faces clean-up problems at industrial sites elsewhere, but despite that, its officials have had very little communication about this with Refining NZ.

"Ministry for the Environment has not engaged with Refining NZ about the future of the refinery at Marsden Point," the ministry told RNZ.

The ministry puts the onus on the regional council and district council as regulators - but Treasury is warning that "councils and regional regulators face a conflict of interest in regulating large industrials that are large employers within their region".

Experts say the refining operations have minimal if any impacts on the environment, though reports show 400,000 litres of petroleum hydrocarbon leaks into the groundwater each year.

Local iwi are asking the government for more information about the state of the site and its future.

Experts say the refining operations have minimal if any impacts on the environment, though reports show 400,000 litres of petroleum hydrocarbon leaks into the groundwater each year.

Refining NZ is moving quickly, to get shareholder approval to shut down refining next year.

It would stay open as a terminal for tankers to offload masses of ready-to-use fuel for the Northland and Auckland markets.

The company is only required to produce an overall site clean-up plan if it shuts down completely - or by 2041, 20 years after the issuance of new consents - which ever comes first.

"The requirement for a remediation plan is triggered by the conclusion of all activities on site and is not required for a conversion to a terminal ... we will continue to operate in the way we are currently consented to do," a spokesperson said.

The company declined an interview.

Pollution contained

Its new resource consents are for 35 years and allow the site at Te Whara or Bream Head to be run as an import terminal.

The local iwi - the Patuharakeke Trust Board and Te Parawhai ki Tai - withdrew their opposition to the consents, and their long duration - as opposed to 20-year consents - once the requirement for a future clean-up plan was added in.

The consents were granted in April, partly on the basis of expert reports that the plant had "minor or less than minor adverse effects" on the environment.

However, the site is polluted, and it is unclear to what state it would have to be remediated; this is similarly unclear at Tiwai Point aluminium smelter, where the government has complained about being "blind" to the environmental legacy that might be left behind.

At Marsden Point, 400,000 litres of fuels leak each year, floating on the groundwater in a plume up to about a metre deep under the tangle of steel refinery plant, from where it is routinely pumped out.

Huge amounts of groundwater are also pumped out - consents allow for up to 2700 cubic metres per day - which works to contain the likes of leaked benzene, toluene, and xylenes.

The aquifer straight under the site is too contaminated to be used for anything else, according to expert reports.

These backed the issuing of consents, saying the pollution is being well managed.

"Overall harbour water quality in the vicinity of the refinery was high," Refinery NZ chief executive Naomi James told a top Environment Ministry executive in April.

Rigourous monitoring and management was in place.

"Operation of a groundwater hydraulic containment system and hydrocarbon recovery programme [are] reducing the extent of legacy contamination over time as part of our ongoing remediation of the site," James said.

However, the Patuharakeke Trust Board remains concerned about the change of use.

It would not be interviewed but confirmed it is asking the government for more details, about the state of the refinery site and its future.

Read the email from Refining NZ's chief executive on the Marsden Point resource consent renewal (PDF, 700KB)

'No role in addressing the issues'

A new Official Information Act (OIA) response shows there has been virtually no communications between the refining company and the Environment Ministry about contamination or remediation.

The communications since the start of 2020 consist of a single stock exchange announcement, and James' email in April.

The ministry told RNZ:

"MFE [Environment Ministry] is not a regulator in this regard and therefore has had no role in addressing the issues relating to the site at Marsden Point."

The ministry has not provided Environment Minister David Parker with any advice about Marsden Point, according to the OIA response.

The only relevant briefing was a generalised one it gave him in February, titled 'Contaminated and orphan sites liability regime'.

It has refused to release that briefing to RNZ on the grounds that doing so might constrict the free flow of advice from officials.

Read the Official Information Act request to the Environment Ministry

'Costly remediation'

The MFE briefing is a follow-up to one from Treasury, also in February, that was released earlier.

It warns the country is facing "a changing industrial landscape where several large industrial operations are nearing end of life after 50 or more years of operation".

"Their decommissioning is likely to require complex, challenging and costly remediation."

RNZ is asking, exactly which operations?

The regulators of the refinery are the Northland Regional and Whangārei District councils.

The regional council said it was too early to remediate the entire refinery site seeing as the import operations would be carrying on (if shareholders gave the nod).

"Critically, the new operations at the site will still need to comply with the current resource consent," the council said.

"In particular, the current consent requires ongoing groundwater monitoring and management of the migration of contaminants within the site, to prevent the escape of ground-based contaminants."

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