judgment

Greymouth Gas Turangi Ltd v Minister of Energy and Resources - judgment

Litigation

Sabin

Sabin Litigation

Filing Year For Action

The applicant (Greymouth Gas Turangi) was one of a group of companies active in the exploration of hydrocarbons in the Taranaki area and in the mining of such resources where they have been found in commercially exploitable quantities. 

On April 12, 2018, the Prime Minister announced that there would be a ban on issuing any permits for exploration or mining of petroleum products in all offshore regions of New Zealand (Oil and Gas Ban), with the Crown Minerals Act 1991 to be amended as such. At the same time, the Minister for Energy and Resources announced the terms for the invitation to bid for the 2018 block offer. In doing so, the ban was taken into account, so that potential offshore areas in Taranaki were excluded from offers where they had been included in prior years' offers.

Greymouth sought to judicially review a decision by the delegate of the Minister of Energy and Resources to decline an uncontested bid for a petroleum exploration permit (PEP) off the Taranaki coast on March 6, 2018 (before the Oil and Gas Ban was announced), as well as a separate ground challenging the legality of the Oil and Gas Ban.  

By consent, the decision was quashed, as the decision-maker had breached procedural fairness and committed errors of fact and law in evaluating Greymouth’s compliance history.  

Turning to the challenge to the Oil and Gas Ban, at issue was whether the Executive took steps which depended for their validity on the provisions in the Crown Minerals Act 1991, but were inconsistent with the Act in the period between the announcement of the Oil and Gas Ban on April 12, 2018, and when the amendment to the Crown Minerals Act 1991 enacting the Oil and Gas Ban came into force on November 13, 2018 via the Crown Minerals (Petroleum) Amendment Act 2018. Greymouth also argued that the rationale for the policy change was extraneous to the Act's purposes, namely to advance climate change concerns, when a division of Executive responsibilities explicitly required such concerns to be managed elsewhere. 

The Court declined these arguments, finding that neither the Prime Minister's policy announcement nor the Minister's announcement the same day depended on the powers in the Crown Minerals Act. Instead, they foreshadowed administrative action that was to ensue later. The Court also noted the second aspect of Greymouth’s challenge to the Oil and Gas Ban, where it was argued that the purposes and policy of the Crown Minerals Act 1991 were to be advanced only consistently with the purpose and that if other government policies, such as addressing concerns at climate change, were to arise, they would be dealt with separately from initiatives taken under the Crown Minerals Act 1991 The Court found that “It is tolerably clear that the ban on offshore prospecting was motivated in large part to address climate change policies, quite discretely from the management of Crown minerals”, and that the status of that policy aspiration was not a matter to which the government could be committed prospectively: subject to not governing by executive fiat, separation of policies on the management of Crown minerals from issues such as climate change policy was a matter that could be revisited and for which the government would answer, if at all, at the ballot box. The alleged inconsistency with the policy of advancing matters such as climate change by exercising powers other than under the Act cannot add anything to this ground of challenge.