IN CONFIDENCE Energy and Resources Weekly Report To Hon Dr Megan Woods Minister of Energy and Resources Week beginning Monday 27 November 2017 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Energy and Resources Weekly Officials' Meeting Agenda 11 :30am - 12:30pm Monday 27 November 2017 Item Subject Person Oral Item/ Paper Action Required (Decision / Inform /Noting/ Discussion) 1. RSB (2) Update Marcos Pelenur Oral Item Discussion 2. Seismic Survey Update Craig Barry Oral Item Discussion 3. Fuel Markets Financial Study David Buckrell Oral Item Discussion (8#0736 17-18) 4. Implications of emerging technology Andrew Hume Oral Item Discussion 5. Retail power price review Andrew Hume Oral Item Discussion 6. Onshore Financial Assurance Marcos Pelenur Oral Item Discussion (AM#0681 17-18) 7. 8. 9. Singapore David Darby Oral Item Discussion Weekly Report Minister Any other business Ministry of Business, Innovation & Employment officials attending: James Stevenson-Wallace, General Manager, Energy and Resource Markets Tim Townsend, Acting Manager, Sector Development Policy David Darby, Manager, Commercial Analysis & Investment Ilana Miller, National Manager, Minerals Andrew Hume, Manager, Energy Markets Policy Craig Barry, Acting National Manager, Petroleum Marcos Pelenur, Manager, Resource Markets Policy David Buckrell, Principle Policy Advisor, Resource Markets Policy MBIE-MAK0-17157744 2 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Action points from last Officials' Meeting Item Actions Name Letters of relevant MBIE to please send through - soft deadline, All delegations, Relevant 4pm 1 December letters of Expectations r I -- - Retail power review • - -- - price MBIE to provide draft terms of reference by Andrew Hume 4pm, 24 November MBIE to provide draft terms of reference RAP Regulatory Bill All Andrew Hume Systems MBIE to provide update at next Weekly Marcos Pelenur meeting Singapore MBIE to draft colleagues Hydrogen MBIE to prepare a plan for announcement in Dave Darby MBIE-MAK0-17157744 Cabinet paper with RSI Dave Darby December (e.g. any engagement the Minister can do, press releases etc.) 3 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI 1. Managing the Estate Applications overlapping Schedule 4 land Comment: Oceana Gold (New Zealand) Limited currently have three extension of land applications to existing exploration permits in the Coromandel (gold and silver). These three applications intersect land classified as Schedule 4 land. Figure 1 details the areas that intersect Schedule 4 land for each application. All of these permits are located north of State Highway 25A. Next Steps: Officials will provide you with a further update before a final decision is made. Figure 1: Details of Schedule 4 overlap y�.•- EP 60149.02 - EOL S4 Overlap MBIE-MAK0-17157744 4 s 9(2)(f)(iv) Under the CMA only minimum impact activities can be conducted on Schedule 4 land. s 9(2)(f)(iv), s 9(2)(b)(ii) Before any work can be conducted on Schedule 4 land Oceana will need a minimum impact activity consent from the Department of Conservation. Responsible Manager: Ilana Miller MBIE-MAKO-17157744 5 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI 2. Tracking of Priority Developments Electricity power price review Comment: We provided a briefing and draft Terms of Reference on Friday 24 November. This should enable you to consult with your colleagues on the shape of the review Next Steps: Terms of Confirm Reference with you in December 2017. Responsible Manager: Andrew Hume Refinery to Auckland pipeline update: Comment: You have indicated your initial preference for powers of inquiry for the review. We will brief you on a draft Terms of Reference and advice on the next steps as soon as possible. Next Steps: Officials to brief you on next steps as soon as possible. Responsible Manager: Andrew Hume Fuel margins review Comment: Next Steps: You received a report back on the review on the 23 November Discuss next steps with (8#0736 17-18) for discussion at the Energy and Resources Officials Officials on 27 November meeting on Monday 27 November. Responsible Manager: Andrew Hume MBIE-MAK0-17157744 6 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI 3. Policy Developments Offshore financial assurance Comment: In September 2017 improvements were made to the offshore financial assurance regime, through an amendment to Marine Protection Rules Part 102, which is provided for under the Maritime Transport Act 1994. The regime ensures that offshore petroleum installations have the appropriate insurance to cover costs if a significant oil spill occurred in New Zealand waters. Next Steps: Officials will provide you with a briefing in December 2017. MBIE officials are working with the Ministry of Transport and Maritime New Zealand to develop Guidance to explain how the revised rule will be implemented. The draft Guidance is expected to be released for public consultation in December 2017. You will be provided with further information about the improvements and the Guidance before the public consultation begins. Responsible Manager: Marcos Pelenur Amendments to the Crown Minerals Act 1991 (CMA) through the Regulatory Systems Amendment Bill (2) (RSB (2)) Comment: The Minister for Economic Development is expected to forward a briefing on RSB (2) to you this week. MBIE-MAK0-17157744 7 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI 3. Policy Developments Further detail is provided in the briefing you will receive from the Minister for Economic Development. The amendments in relation to section 41A will address the current inconsistency around change of control of permit operators. As well as amending section 41A, consequential amendments will be made to sections of the Act that relate to notification of change of control and notices of revocation. These will ensure that the legislative system functions properly following the amendment to section 41A. You were briefed on these amendments on 10 November 2017 [briefing 0718 17-18 refers]. Responsible Manager: Marcos Pelenur I Comment: iiJ· IP__,_ ----------- Next Steps: �iii• IP_ ._li_r. _ -------,1 Responsible Manager: Tim Townsend Council of Energy Regulators Comment: Earlier this year, MBIE, the Commerce Commission, the Electricity Authority and the Gas Industry Company partnered together to form the Council of Energy Regulators (CER). The purpose of the CER is to contribute to the efficiency, effectiveness and transparency of NZ's energy regulatory system by providing a forum for high level collaborations and information sharing. This forms part of MBIE's regulatory stewardship role and ensuring the energy regulatory system is coherent and adaptable, particularly in the face of emerging technologies. Next Steps: For your information. The CER is an MBIE-led initiative, mirroring that of the Council of Financial Regulators (which has been established for some time, and provides a similar function for the financial markets regulatory system). CER meetings are held quarterly and involve CEO's from the member agencies. The final meeting for the year will be MBIE-MAK0-17157744 8 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI 3. Policy Developments scheduled for December, and will provide a good opportunity to reflect on the first year of the CER's operation. At the last CER meeting, an action was agreed to publish text about the CER on member agencies' websites, and to circulate media lines. It is also intended for these media lines to be sent to Energy News to coincide with the text being published on agency websites. This will increase the visibility of the CER and its purpose to stakeholders. The proposed media and website text have been provided to your office for review. Responsible Manager: Andrew Hume 4. Regulatory Reform & Implementation and Operational Matters Proposed Energy Revision Bill Comment: MBIE has submitted proposals into the Parliamentary Counsel Office's Revision Programme 2018 to 2020. This regular (3-yearly) programme is a requirement of the Legislation Act 2012 that aims to make our law more accessible to people. It involves rewriting Acts in clearer, up-to-date language, and in a modern drafting style and structure, but without substantively changing the law. This is achieved through "revision Bills" that do not implement any policy changes. Next Steps: The Attorney-General may discuss the proposed Revision Programme 2018 to 2020 with you. We recommend you support the inclusion of an Energy Revision Bill, noting the intent of the bill We identified the following Acts within your portfolio that meet the and that it will not include any policy changes. criteria for a revision Bill: • • • • • • • Atomic Energy Act 1945 Electricity Act 1992 Energy Companies Act 1992 Energy Efficiency and Conservation Act 2000 Energy (Fuels, Levies, and References) Act 1989 Gas Act 1992 Petroleum Demand Restraint Act 1981 The Attorney-General is required to prepare, consult on, and present to the House a 3-yearly revision programme for each new Parliament. He is due to receive advice on the proposals for the 2018 to 2020 programme, and may want to discuss it with you. Responsible Manager: Andrew Hume and Marcos Pelenur MBIE-MAK0-17157744 9 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI 4. Regulatory Reform & Implementation and Operational Matters COAG Energy Council - item regarding air conditioners withdrawn Next Steps: Comment: lli)_i---------------, '8-IPm _ lli)_i-------,1 �- fPJ_ • __ Responsible Manager: Andrew Hume ,. - -- - I Comment: Next Steps: -----------------, W till_:.lliJi _ e will keep you informed of progress. Responsible Manager: Andrew Hume MBIE-MAK0-17157744 10 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI 5. Stakeholder Issues Stevenson Mining Limited granted resource consent for the Te Kuha project Comment: Next Steps: On 21 November 2017 the West Coast Regional Council and Buller District Council granted the necessary resource consents subject to 186 conditions to allow Stevenson Mining Limited to develop the Te Kuha open cut coal mine 12km southwest of Westport. The Te Kuha open cut coal mine project covers about 144 hectares of land including 12 hectares of public conservation land classified as stewardship land under the Conservation Act, and about 130 hectares of land which is part of the Westport Water Conservation Reserve (including about 30 hectares of mine access road). Within the next two weeks officials will provide you with a briefing seeking a joint decision with the Minister of Conservation on whether to approve or decline Stevenson Mining Limited's application for access to the 12 hectares of public conservation DOC and MBIE made a joint submission on the consent application land. neither supporting nor opposing the proposal. The MBIE portion of the submission highlighted the potential economic benefits of the proposal, and DOC's portion highlighted the impacts of the proposed Te Kuha mine on conservation values. The Crown subsequently provided evidence on the application and participated in the expert caucusing and consent hearing. This was to ensure that if the approval was granted it would be subject to robust consent conditions to ensure the loss of conservation values are minimised and the site adequately rehabilitated. This involved one expert from MBIE. The decision is now subject to a 15 working day appeal period. An appeal must be lodged with the Environment Court. Officials expect this decision to be appealed. Though Resource Consents have been granted, Stevenson Mining still requires access to the land under Section 61 of the Crown Minerals Act 1991 to allow mining operations to proceed. Stevenson Mining applied for an access arrangement from DOC on 20 March 2014 for access to the 12 hectares located on public conservation land. On 21 December 2016 the permit became a Tier 1 permit requiring joint approval from the Minister of Conservation and the Minister for Energy and Resources. On 12 April 2017 the Buller District Council rescinded its September 2016 decision to grant an access arrangement to Stevenson Mining over the 100 hectares of the Westport Water Conservation Reserve after Forest & Bird applied for a judicial review. On 16 October 2017 the High Court heard the case into whether the Reserves Act 1977 allows councils the discretion to approve access to the Westport Water Conservation Reserve land. The High Court's decision has been reserved. Stevenson Mining will need to reapply for an access arrangement over the Westport Water Conservation Reserve land once the High Court's decision has been released. MBIE-MAK0-17157744 11 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI 5. Stakeholder Issues Depending on the High Court's decision, this subsequent access arrangement application applying to this land may or may not require a joint decision involving the Minister of Energy and Resources and the relevant minister. Responsible Manager: Ilana Miller MBIE-MAK0-17157744 12 * MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI NZ Petroleum & Minerals permits approved FROM THURSDAY, 16 NOVEMBER 2017 TO WEDNESDAY, 22 NOVEMBER 2017 Full Surrender Permit Permit Type Number 323038 Minerals Mining Full Surrender 55322 Minerals Mining AUREON LIMITED Partial surrender 60180 Minerals Exploration Strategic Materials Pty Tasman Ltd Partial surrender - area decreased by 270.766 hectares New Permit 60375 Minerals Exploration Ophir Gold Limited Marlborough Granted for a period of 4 years to explore for gold over an area of 100.955 hectares New Permit 60376 Minerals Mining NGA MAUNGA WHAKAHIIO KAIPARA NGAHERE LIMITED Auckland Granted for a period of 40 years to mine for sand over an area of 28.033 hectares New Permit 60408 Minerals Mining Gavin John Williams Southland Granted for a period of 1 O years to mine for gold over an area of 49.451 hectares Permit activity MBIE-MAK0-17157744 Location Comment West Coast Regional West Coast Council Permit surrendered in full Permit surrendered in full Client West Coast 13 * MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Access Arrangements under consideration by ERM and other Crown agencies requiring Joint Ministerial Approval Agencies Permit number Applicant Land Status and Location Comment DOC and ERM EP 40547 Conservation Seeking access to New Zealand Tungsten Whakaari Area - Stewardship Area. exploration drilling. Mining Limited QueenstownGlenorchy, Lakes District LINZ & ERM MP 41808 LINZ & ERM EP 51630 Oceana Gold (New Zealand) Limited Oceana Gold (New Zealand) Limited LINZ & ERM EP 40813 Oceana Gold (New Zealand) Limited The Crown land covers commercial forest operated by Crown Forest Licensee, Matariki Forests and administered by LINZ in the Waikato region. DOC & ERM MP 41808 Oceana Gold (New Zealand) Limited Crown Land - Waihi DOC & ERM MP 41289 Rangitira Developments DOC stewardship land at Limited the southern end of the Buller Plateau. DOC & ERM CML 37168 Roa Mining Company Crown land - Grey district. Limited MBIE-MAK0-17157744 Crown Land - Waihi out The applicant currently has a licence to occupy the Crown land. The Crown land covers commercial forest operated by Crown Forest Licensee, Forests and Matariki administered by LINZ in the Waikato region. 14 carry Joint wildlife application. MINISTRVOFBUSINESS, • INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Upcoming Meetings, Events and Announcements Upcoming meetings: None confirmed at present Meeting with / Purpose Time Monday 27 November Tuesday 28 November Wednesday 29 November Meeting with Hon Phil Twyford to discuss Housing Insulation Grant Scheme with Officials 12.00- 13.00 EECA Officials fortnightly meeting 15.30- 16.00 Electricity Authority monthly meeting 16.15- 16.45 Thursday 30 November Friday 1 December MBIE-MAK0-17157744 15 MINISTRVOFBUSINESS, • INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Upcoming speeches & communications: Event or announcement Activity Date Speech / media release due MBIE Contact Upcoming Cabinet Papers and Briefings Upcoming Cabinet Papers Title of paper Comment Provided by To be considered by Cabinet Committee on Contact Upcoming Briefings, Aide Memoires and Reports Subject Comment Due date Contact Regulatory Systems Amendment Bill (3) Overview and next steps To provide you with an overview of Regulatory Systems Amendment Bills (RSBs) and the progress of the third RSB. November 2017 Hannah Sherwood •- -- - MBIE-MAK0-17157744 16 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI OIA Requests Ministerial OIAs Number Name MOIA17-009 • OIA17-014 • OIA17-015 I Date received Date due to Minister's Office Date due to requestor Relates To/ Status Update 20 Nov 17 11 Dec 17 18 Dec 17 List of reports, aide memoires, briefings, memos, etc. received by the Energy & Resources Minister. Status: Gathering information. I 22 Nov 17 13 Dec 17 20 Dec 17 Background and Context on the Petroleum, Minerals and Energy Sectors. Status: Scoping i1 I 22 Nov 17 13 Dec 17 20 Dec 17 Aide Memoire: The role of green minerals in New Zealand's transition to a low emissions economy. Status: Scoping. OIA17-016 i1 I 22 Nov 17 13 Dec 17 20 Dec 17 OIA17-018 • Weekly Report dated 13th November 2017. Status: Scoping. I 22 Nov 17 13 Dec 17 20 Dec 17 Weekly Report dated 6th November 2017. Status: Scoping. MBIE-MAK0-17157744 17 MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Number OIA17-019 Name • I Date received 22 Nov 17 Date due to Minister's Office Date due to requestor Relates To/ Status Update 13 Dec 17 20 Dec 17 Date due to Minister's Office (if applicable) Date due to requestor 03 Oct 17 N/A 29 Nov 17 Copy of the old Crown Minerals Act section 41 practice statement. Status: Drafting. 03 Oct 17 N/A 29 Nov 17 Information regarding a previous OIA and mining tender. Status: Gathering information. Parts 1 to 6 responded. Part 7 extended. 6 Sep 17 22 Nov 17 29 Nov 17 All documents, reports and analysis, including emails, relating to Thompson & Clark's contract work for MBIE in the Advantage NZ 2013 Petroleum Conference. Status: Gathering information. Aide Memoire: Update on possible upcoming offshore seismic surveying. Status: Scoping. Departmental OIAs Number Name 1718-0524 1718-0443 • 1718-0349 MBIE-MAK0-17157744 I I Date received 18 Relates To/ Status Update MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Number Name Date received Date due to Minister's Office (if applicable) Date due to requestor Relates To/ Status Update 1718-0400 22 Sep 17 24 Nov 17 1 Dec 17 A copy of the Wiri pipeline report referred to on Morning Report. Status: Drafting. 1718-0401 22 Sep 17 24 Nov 17 1 Dec 17 A copy of the Wiri pipeline report referred to on Morning Report. Status: Drafting. 1718-0646 8 Nov 17 N/A 6 Dec 17 Information regarding 2017 and 2016 Block offer consultations. Status: Gathering information. 1718-0676 12 Nov 17 N/A 8 Dec 17 Copies of documents relating to previous OIA Status: Gathering information. 1718-0525 16 Oct 17 4 Dec 17 11 Dec 17 Copy of 2013 Epithermal Block consultation document. Status: Drafting. In consultation with iwi. 1718-0678 14 Nov 17 5 Dec 17 12 Dec 17 Block Offer iwi consultations. Status: Gathering information. 1718-0675 14 Nov 17 N/A 12 Dec 17 Historic fees paid for exploration permits Status: Scoping. 1718-0686 15 Nov 17 6 Dec 17 13 Dec 17 A copy of the Wiri pipeline report referred to on Morning Report. Status: Drafting. MBIE-MAK0-17157744 19 Offer MINISTRY OF BUSINESS, INNOVATION & EMPLOYMENT HIKINA WHAKATUTUKI Number Name I 1718-0705 1718-0711 I 1718-0722 1718-0669 MBIE-MAK0-17157744 I Date due to Minister's Office (if applicable) Date due to requestor 20 Nov 17 N/A 18 Dec 17 Copy of consent to partial takeover of NZO&G. Status: Scoping. 21 Nov 17 12 Dec 17 19 Dec 17 Copy of Aide Memoire: Potential Offshore Gas Resources in the South Island. Status: Scoping. 22 Nov 17 13 Dec 17 20 Dec 17 Energy and Resources Sectors: overview and slide-packs. Status: Scoping. 30 Nov 17 12 Jan 17 19 Jan 17 Fuel Market Financial documents. Status: Scoping. Date received 20 Relates To/ Status Update Performance Study