Before the Independent Hearings Panel For New Plymouth District Council
Under the Resource Management Act 1991
In the matter of hearings into the provisions of the proposed New Plymouth District Plan
And in the matter of hearing topic - Strategic Objectives
Statement of Evidence of Nik Pyselman on behalf of Todd Energy Limited
Date: 18 June 2021
Level 4, 20 Customhouse Quay, Wellington 6011 PO Box 2791, Wellington 6140 DX SP20002, Wellington Tel +64 4 472 6289 Fax +64 4 472 7429
Solicitor on the record Stephen Quinn [email protected] Tel +64 4 474 3217 Contact solicitor Emma Manohar [email protected] Tel +64 4 918 3016
7103193.2Todd Energy Limited - Nik Pyselman - corporate(7103193.2).docx
INTRODUCTION
1 My full name is Nikolas Jan Pyselman. I am the Environment Manager at Todd Energy Limited (TEL).
2 I am authorised to provide evidence on behalf of TEL.
QUALIFICATIONS AND EXPERIENCE
3 I hold Science (Environmental, Geography) and Commerce (Economics) degrees from Victoria University, Wellington, which I obtained in 2002.
4 I have previously worked in Local Government as a policy analyst (Northland Regional Council) and from 2006-present have lived and worked in the New Plymouth District. From 2006-2016 I was a consultant planner. In this role I worked throughout Taranaki and New Zealand on a range of projects.
5 Projects within the New Plymouth District included Private Plan Changes to the Operative New Plymouth District Plan (2005), commercial accommodation developments, industrial / residential developments, contaminated land projects, infrastructure projects (roads, powerlines and natural gas pipelines), and energy projects including a range of natural gas related projects and developments (peaking power plants, wellsites and production facilities).
6 I have been in my current role as TEL’s Environment Manager for 5 years.
7 I have a good working knowledge of the operative and proposed New Plymouth District Plans, Taranaki’s natural gas industry and the social, economic and environmental strengths and challenges within the New Plymouth District.
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CODE OF CONDUCT
8 I have read the Code of Conduct for Expert Witnesses set out in the Environment Court's Practice Note 2014. I have complied with the Code of Conduct in preparing my evidence and will continue to comply with it while giving oral evidence before the panel.
INVOLVEMENT WITH THE PROPOSED PLAN
9 My evidence is in respect of submissions on the Proposed New Plymouth District Plan (Proposed Plan) by TEL (submission no. FS 199) in relation to the Topic: 'Strategic Direction - Urban Form and Development'.
10 I assisted in drafting TEL’s submission and further submission on the Proposed Plan.
SCOPE OF EVIDENCE
11 My statement of evidence covers the following matters:
11.1 Clarification of Section 42A Report Strategic Direction – Urban Form and Development statement;
11.2 Overview of Todd Corporation and TEL;
11.3 Summary of TEL’s operations in the New Plymouth District;
11.4 Information on industry benefits to the District, Regional and National economies; and
11.5 Conclusions and recommendations.
12 In preparing my evidence I have considered the following:
12.1 Submissions on the Proposed Plan by TGL (submission no. 561);
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12.2 Submissions on the Proposed Plan by Chorus (submission no. 547);
12.3 The New Plymouth District Council proposed District Plan – notified, 23 September 2019;
12.4 Section 42A Report Strategic Direction – Tangata Whenua;
12.5 Section 42A Report Strategic Direction – Historic and Cultural;
12.6 Section 42A Report Strategic Direction – Natural Environment;
12.7 Section 42A Report Strategic Direction – Urban Form and Development;
12.8 District Wide Matters: Section 32 Report – Overview and Strategic Direction, August 2019; and
12.9 The expert planning evidence of Mr St Clair.
SECTION 42A REPORT CLARIFICATION
13 TEL confirms that it supports the Officers recommended amendments to UFD-20. The S42A Report – UFD, Paragraph 226, page 48 is potentially misleading.
14 TEL would like to clarify that in its further submissions it did not oppose the inclusion of climate change matters in the Proposed Plan, SD-UFD objectives or submission points 311.27, 311.33 that directly relate to UFD-20.
TODD CORPORATION AND TEL
15 Todd Corporation (Todd) is one of New Zealand’s largest companies. The family-owned business employs around 1000 people, with interests in energy, property development, minerals, healthcare, technology, and
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philanthropy. Todd has been involved with natural gas exploration and development in Taranaki for around 60 years.
16 TEL, a wholly owned subsidiary of Todd, is a 100% Permit holder for the onshore McKee and Mangahewa fields and a joint venture partner in the Pohokura natural gas field. TEL’s head office is in New Plymouth and directly employs around 250 local people.
17 TEL supplies around 40% of New Zealand’s natural gas requirements. Around 75% of this natural gas originates from the New Plymouth District.
18 TEL contributes to the New Plymouth district through community wellbeing and economic growth, producing natural gas for New Zealand in an environmentally and socially responsible way. Core areas of focus for TEL include community wellbeing, education and training, environment and tangata whenua. TEL actively partners and supports the community in a number of areas such as:
18.1 - WOMAD Taranaki;
18.2 Taranaki Coastguard;
18.3 Taranaki Surf Life Saving;
18.4 Todd Energy Aquatic Centre;
18.5 Big Brothers Big Sisters Taranaki;
18.6 Taranaki Retreat;
18.7 St Johns Ambulance;
18.8 The Len Lye Centre;
18.9 Tikorangi and Huirangi Schools literacy and numeracy programme;
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18.10 Everett Park Scenic Reserve;
18.11 Taramokau Conservation Area, and
18.12 support for hapū business and employment opportunities, and specific iwi projects.
19 TEL is a Lifeline Utility, as defined under Schedule 1, Part B of the Civil Defence Emergency Management Act 2002. Lifeline Utilities provide essential infrastructure services to the community and have requirements under the National Civil Defence Emergency Management Plan.
20 As a Lifeline Utility, TEL’s wellsites and production facilities remained fully operational during the recent COVID 19 pandemic lockdown, to ensure reliable and affordable energy was available to New Zealander’s during this emergency.
21 TEL is committed continue providing affordable and reliable energy to New Zealanders to support our countries transition to a low emissions economy.
TEL’S ENERGY ACTIVITIES IN THE NEW PLYMOUTH DISTRICT
Background
22 The McKee oil and gas field was discovered in 1979 by Petrocorp, a State-Owned Enterprise (SOE). This field began producing through the newly constructed McKee Production Station in 1984 and was on sold by the Government in 1988.
23 The McKee field primarily produced oil from up to 12 wellsites. Continuous oil production from this field ceased in 2018, however some natural gas is still produced. The Mangahewa natural gas field came into commercial production in 2001. TEL began operating both fields in 2006.
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24 To accommodate the growth in Mangahewa natural gas production, and to produce LPG and electricity, the McKee Production Station required several expansions, including the addition of an 11MW electricity generation system. As a result, its name was changed to the McKee Mangahewa Production Station (MMPS). A recent image of MMPS is attached as Appendix A.
Energy System Approach
25 TEL’s energy activities must be thought of, and managed as, ‘energy systems’, interconnected through essential pipeline infrastructure networks.
26 The Proposed Plan recognises specific nationally important facilities through the Major Facility Zone. However, these facilities are only one component of the energy system. MMPS, Methanex and the tank farms would have no energy without specific wellsite and pipeline infrastructure to connect the network.
27 Wellsites and pipeline infrastructure are equally critical components of the energy system and require the same recognition as Major Facilities. Without the feed stock they supply and distribute, we cannot have Major Facilities or a significant natural gas resource for New Zealand.
TEL’s Energy System
28 The natural gas required for MMPS to operate currently comes from 20 producing natural gas wells, over four Mangahewa wellsites and one McKee wellsite. TEL’s share of natural gas from the Pohokura natural gas field is sent via pipeline to MMPS for further processing/distribution.
29 Raw natural gas flows via TEL’s gathering pipeline network to MMPS for processing and distribution. At MMPS, water and light condensate are removed, and the remaining natural gas is further processed to recover LPGs.
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30 Depending on national demand requirements, natural gas is then:
30.1 run through MMPS electricity generation units;
30.2 exported via pipeline to Todd Generation’s 100MW McKee Peaker Plant;
30.3 exported via pipeline to Methanex; and
30.4 exported via pipeline for use around the North Island.
31 Light condensate is exported via a pipeline to the Tank Farms, where it is stored for overseas transport through Port Taranaki. LPGs is tankered from MMPS for distribution around New Zealand.
32 Formation water that is removed at MMPS is transported via pipelines and re-injected back into the depleted McKee formation through several McKee wells.
33 A plan illustrating the above energy system is attached as Appendix 2.
34 Due to decline and resource variability within the fields, TEL is generally required to drill around 2-4 new Mangahewa wells per year to maintain its current supply of natural gas.
35 To facilitate drilling, TEL owns the Bentec EURO 450T drilling rig. This is a modern rig specifically designed to reduce drilling time and associated temporary environmental impacts (such as light, noise, heavy traffic). This rig has a horizontal range of 2-3 kilometres, minimising the requirement for new wellsites, as more targets can be reached from a specific location. This is a critical asset for New Zealand’s energy system as there are a very limited supply of modern onshore drilling rigs within New Zealand. When the rig is not in use by TEL, it can be used by other companies or is repurposed for geothermal drilling.
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REGIONAL AND NATIONAL ECONOMIC BENEFITS FROM THE NATURAL GAS INDUSTRY
36 The New Plymouth District’s natural gas energy system is a significant contributor to the productivity and economic growth of the district, region and nation.
37 Natural gas and LPG are used extensively by over 10 000 businesses and around 250 000 households in New Zealand. Natural gas currently makes up 21% of New Zealand’s energy supply and underpins 16% of New Zealand’s electricity generation1.
38 For example, the two TEL suppled natural gas fired peaker power plants in the New Plymouth District (McKee and Junction Rd) can provide electricity for around 140 000 households, roughly double what is required for Taranaki’s entire population.
39 Natural gas is crucial to New Zealand’s electricity systems. It provides essential back up for renewable generation at times when demand exceeds supply, or when hydro lakes and wind are low.
40 New Zealand’s natural gas is 100% produced in Taranaki, with around 65% of that being produced in the New Plymouth District.
41 The Taranaki petroleum industry contributes around $2.5 Billion per annum to New Zealand’s Gross Domestic Product2. Taranaki has the highest GDP per capita in New Zealand (Year End March 20203). Driven by Taranaki’s highly productive energy and food industries.
1 https://www.energymix.co.nz/ 2 https://www.energyresources.org.nz/oil-and-gas-new-zealand/the-importance-of-oil-and- gas-to-the-new-zealand-economy/ 3 https://www.venture.org.nz/assets/Uploads/Taranaki-Trends-Winter-2021.pdf
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42 The Taranaki petroleum industry generates around 10 000 jobs nationally, many of these highly skilled. Around 6500 of these jobs are in Taranaki, with 4 000 directly employed by the industry4.
CONCLUSIONS AND RECOMMENDATIONS
43 TEL Energy Activities in the New Plymouth District must be considered and managed as integrated energy systems. Wellsites and pipeline infrastructure are as important as, and integral to, the continued operation of Major Facilities.
44 The regional and national benefits derived from the New Plymouth District’s Major Facilities are given recognition in the proposed Strategic Objectives. Energy Activities and pipeline infrastructure are an integral part of the Lifeline Utility energy system, and the Regional and National benefits that are derived from this.
45 Energy Activities and the economic benefits they derive should be given recognition in the proposed Strategic Objectives through amending UFD 13(5), UFD 21 and creating UFD NEW1, as further outlined in the evidence of Mr St. Clair.
Nikolas Jan Pyselman
18 June 2021
4 https://www.energyresources.org.nz/assets/Uploads/NZIER-Economic-impact-of-ending- new-oil-and-gas-exploration-permits-outside-onshore-Taranaki-February-2019.pdf (Table 8, page 22).
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Appendix A: A recent image of McKee Mangahewa Production Station
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Aerial image of the McKee Mangahewa Production Station, viewed from the northeast, looking back to the southwest (2019)
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Appendix 2 - Energy System overview
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See Sheet 3 PMP 38154 Legend for Details OMV NZ Production Limited Todd Producing Wellsites and Facilities Pohokura Production ° Station Methanex Facilities Owned by Others Motunui Todd Pohokura Onaero Todd Pipeline Compound Waitara Maui/Firstgas Pipeline
Petroleum Permits Brixton Land Parcels y 3 hwa Hig te Sta
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GENERAL NOTES LOCATION DRAWN C. GRAHAM 16/06/21 TITLE 1. Coordinates are in terms of New Zealand Transverse Mercator TARANAKI CHECKED G.JOHNSTON 16/06/21 TODD ENERGY LIMITED 2. All Todd assets shown are within New Plymouth District PROJECT No. SCALE 1:75,000 DISCLAIMER 05131 ORIGINAL SIZE A3 GIS data and imagery are for indicative purposes only. ASSETS OVERVIEW Cadastral information sourced from LINZ. Crown copyright reserved. PLAN 0 412.5 825 1,650 2,475 3,300 DRAWING No SHEET REVISION Meters NO DATE BY CHKD. 05131-162-GIS 1 0 1:75,000 REVISIONS 0 1,710,000 0 0 0 0 0 , , 0 0 T 8 8 R u 6 S T 6 , d , d r
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GENERAL NOTES TITLE DRAWN C.GRAHAM 18/06/21
1. Coordinates are in terms of New Zealand Transverse Mercator CHECKED G.JOHNSTON 18/06/21 2. All Todd assets shown are within New Plymouth District TODD ENERGY LIMITED PROJECT No 05131 DISCLAIMER MCKEE MANGAHEWA GIS data and imagery are for indicative purposes only. LOCATION TARANAKI Cadastral information sourced from LINZ. Crown copyright reserved. ASSETS OVERVIEW SCALE 1:30,000
ORIGINAL SIZE A3
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GENERAL NOTES LOCATION DRAWN C. GRAHAM 18/06/21 TITLE 1. Coordinates are in terms of New Zealand Transverse Mercator TARANAKI CHECKED G.JOHNSTON 18/06/21 TODD ENERGY LIMITED 2. All Todd assets shown are within New Plymouth District PROJECT No. SCALE 1:5,000 DISCLAIMER 05131 ORIGINAL SIZE A3 GIS data and imagery are for indicative purposes only. MOTUNUI Cadastral information sourced from LINZ. Crown copyright reserved. ASSETS OVERVIEW 0 25 50 100 150 200 DRAWING No SHEET REVISION Meters NO DATE BY CHKD. 05131-162-GIS 3 0 1:5,000 REVISIONS Legend Todd Producing Wellsites and Facilities ° Facilities Owned by Others f ar ton h ew t W t Todd Pipeline N g S B S in r L i K d a n g Maui/Firstgas Pipeline e e r Highways d Port Taranaki R e d H y ut l che B n B Pl r e a kw a te r R d
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GENERAL NOTES TITLE DRAWN C.GRAHAM 18/06/21
1. Coordinates are in terms of New Zealand Transverse Mercator CHECKED G.JOHNSTON 18/06/21 2. All Todd assets shown are within New Plymouth District TODD ENERGY LIMITED PROJECT No 05131 DISCLAIMER NEW PLYMOUTH GIS data and imagery are for indicative purposes only. LOCATION TARANAKI Cadastral information sourced from LINZ. Crown copyright reserved. ASSETS OVERVIEW SCALE 1:10,000
ORIGINAL SIZE A3
0 65 130 260 390 520 650 Meters 1:10,000
DRAWING No SHEET REVISION NO DATE BY CHKD. 05131-162-GIS 4 0 REVISIONS