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Assessment of Effects on the Environment July 2013

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Assessment of Effects on the Environment July 2013 Volume Two of Two Replacement Land Use Consent and S127 Consent Application to Modify the Discharge to Air Consent - Assessment of Effects on the Environment July 2013 The Economic Contribution and Impact of Brookby Quarry Prepared for: Brookby Quarries Ltd. Date: July 2013 Status: Final The Economic Contribution and Impact of Brookby Quarry Brookby Quarries Ltd. Document reference: BRO001.13 Brookby Quarry Resource Consent/Report/Final Report v3.docx Date of this version: 09 July 2013 Report authors: Greg Akehurst, Tom Worley Disclaimer Although every effort has been made to ensure accuracy and reliability of the information contained in this report, neither Market Economics Limited nor any of its employees shall be held liable for the information, opinions and forecasts expressed in this report. Market Economics Limited Level 5, 507 Lake Road PO Box 331 297, Takapuna www.me.co.nz Auckland 0740, NZ P 09 915 5510 Contents EXECUTIVE SUMMARY ........................................................................................... 1 1 INTRODUCTION ......................................................................................... 4 1.1 REPORT AIMS .................................................................................................... 5 2 APPROACH ................................................................................................ 6 3 AUCKLAND’S GROWTH FUTURE ................................................................. 8 3.1 THE AUCKLAND PLAN – A VISION FOR GROWTH ......................................................... 8 3.2 SCALE AND TIMING OF GROWTH ............................................................................. 9 3.3 OTHER RELEVANT INFORMATION IN THE PLAN .......................................................... 11 3.4 IMPLEMENTING THE AUCKLAND PLAN .................................................................... 11 3.5 RESIDENTIAL GROWTH CONCLUSIONS .................................................................... 12 3.6 BUSINESS AND INFRASTRUCTURE GROWTH ............................................................. 13 3.7 IMPLICATIONS FOR AGGREGATE SECTOR ................................................................. 14 4 AGGREGATE USE .......................................................................................16 4.1 HISTORICAL NEW ZEALAND AGGREGATE PRODUCTION .............................................. 16 4.2 HISTORICAL PER CAPITA AGGREGATE PRODUCTION AND DEMAND ............................... 17 4.3 REGIONAL AGGREGATE DEMAND ......................................................................... 18 4.4 DIFFERENCES BETWEEN AGGREGATE SUPPLY AND DEMAND ........................................ 18 4.5 AGGREGATE TRADE BETWEEN AUCKLAND, WAIKATO AND NORTHLAND (2000-11) ......... 19 4.6 FUTURE AGGREGATE DEMAND............................................................................. 19 5 BROOKBY QUARRY ...................................................................................23 6 BROOKBY COSTS AND BENEFITS ...............................................................26 6.1 TRANSPORT COSTS ............................................................................................ 26 7 CONCLUSIONS ..........................................................................................29 Tables TABLE 3.1: - SUMMARY OF NEW DWELLING GROWTH SCENARIOS FOR AUCKLAND 2011-2041 ............................... 9 TABLE 3.2: SUMMARY OF NEW DWELLING GROWTH OVER TIME 2011-2041 ..................................................... 10 TABLE 4.1: NEW ZEALAND AGGREGATE PRODUCTION (MILLION TONNES) 2000-11 ............................................ 16 TABLE 4.2: AGGREGATE PRODUCTION PER CAPITA ........................................................................................ 17 TABLE 4.3: REGIONAL AGGREGATE DEMAND (MILLION TONNES PER YEAR) ......................................................... 18 TABLE 4.4: DIFFERENCE BETWEEN REGIONAL AGGREGATE SUPPLY AND DEMAND (MILLION TONNES PER YEAR) ......... 18 TABLE 4.5: AGGREGATE SUPPLY TO AUCKLAND (MILLION TONNES) ................................................................... 19 TABLE 4.6: PROPORTION OF REGION’S TOTAL AGGREGATE PRODUCTION EXPORTED TO AUCKLAND........................ 19 TABLE 4.7: PROJECTED POPULATION GROWTH 2011-2031 ........................................................................... 20 TABLE 4.8: PROJECTED AGGREGATE DEMAND AT 2011-2031 ........................................................................ 20 TABLE 5.1: PRODUCTION CAPACITY OF OPEN AUCKLAND QUARRIES ................................................................. 23 Figures FIGURE 4.1: PROJECT FUTURE AGGREGATE DEMAND (STANDARD- AND HIGH-GROWTH SCENARIOS) ..................... 22 FIGURE 5.1: OPEN AND CLOSED QUARRIES IN THE AUCKLAND REGION AS AT 2011 ............................................. 24 FIGURE 6.1: AUCKLAND’S PROJECTED AGGREGATE SUPPLY AND ASSOCIATED COSTS (WITH AND WITHOUT BROOKBY EXPANSION) ........................................................................................................................................... 28 Executive Summary Ever since the Romans perfected the art of building structures out of concrete, aggregate has been a vital component of all built form. It provides the bulk and structure to concrete used in buildings of all forms, as well as roads, and infrastructure, comprising between 75% and 90% of their volume. This means that access to suitably located aggregate is a vital component of the economy and of any economic growth. In the Auckland context, aggregate sources are being exhausted over time. Urban expansion not only places demand on aggregate for construction, it also reduces access to key aggregate sources by either building over the top of them, or by protecting the land as key conservation/water catchment reserves. New Zealand, unlike Australia, does not adequately plan for aggregate supply. The planning regimes do not facilitate the early identification of aggregate sources and zone or designate them such that they can be held in reserve to be developed at some future time. Rather, the RMA is an enabling piece of legislation that allows development to occur in most locations assuming the negative impacts on the environment are avoided or mitigated sufficiently. The nature of rock aggregate is such that it needs to be transported over short distances in order to be cost effective and to minimise wider environmental costs to society. The transport cost of a 60km trip is double that of a 30km trip. The alternatives to Auckland sourced aggregate are a minimum of 50km away (some over 70km). This means that the total cost of aggregate sourced from Auckland is over 40% less than aggregate originating from Waikato Region and over 50% less than that from Northland. Remaining supply in the Southern part of Auckland Region is dominated by 3 key quarries that have consented access to the greywacke resource that runs through the western edge of the Hunua ranges. They include; the Stevenson’s quarry at Drury, the Winstone’s quarry at Hunua and the Brookby quarry. Currently the Brookby quarry under its existing consents can provide the market with up to 1.3 million tonnes of high quality aggregate annually (that contains a high polished stone value and high weathering resistance/hardness). The demand for aggregate from Auckland is based on residential growth driving demand for new housing, new suburbs and roads as well as from expansion in the wider economy. This is driven both from the residential growth and wider growth pressures originating from growth in exports and from increases in demand for Auckland products from other parts of New Zealand. Auckland’s growth is currently being planned for by Auckland Council who are in the process of pulling 7 previous district plans together into the Unitary Plan. Council have also prepared their vision for Auckland’s future in the Auckland Plan and the Economic Development Strategy. These documents provide guidance when estimating likely future demand for aggregate. Two scenarios of future growth have been analysed. First, a medium residential growth future to 2031 and average aggregate demand per capita (based on the past 12 years) are 1 combined to generate an estimated growth path. Under these assumptions, it is anticipated that by 2031 Auckland Region will be consuming approximately 16 million tonnes of aggregate annually. This is approximately 86% more than current consumption. To reflect the aspirations of Auckland Council to grow both the size and performance of the economy and thereby grow the income of Aucklanders, a second scenario has been developed that draws from the growth goals work and the Economic Development Strategy. In this scenario, the economy grows by 5% annually to 2031 in order to elevate Auckland into the top 10 cities in the OECD in terms of GDP per capita. This level of growth is allied with export growth of 6% per annum and productivity growth of 2% per annum. It is recognised that these targets are a stretch and are aspirational. This means that they should form an upper limit to growth. Under these assumptions it is expected that annual aggregate demand will grow from the 8.6 million tonnes in 2011 to over 20 million tonnes by 2031. The ‘Southern Initiative’ forms a central plank to Auckland Councils strategy to deal with growth pressures. This is an area bounded on the west by the Manukau Harbour and covers Mangere, Otara, Manukau Central, Manurewa, Takanini and Papakura. This area
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