Vote: Energy

This Document is Archived

Output Expense > Policy Advice on Energy and Resource Issues

This output expense provides policy advice on the effective operation of energy and resource markets (electricity, oil, gas, geothermal, coal, minerals and other natural resources). The outputs included in this output expense for 2007/2008 contribute to achieving the following business outcomes: Securing our energy future; Managing our natural resources; and Boosting the productivity of Auckland.

The outputs are:

• New Zealand Energy Strategy (NZES) - which will provide overall strategy and direction for the energy sector and better communicate Government energy policies, as well as identifying, developing and, where appropriate, implementing options for new initiatives or changes to current policy settings. This output has strong linkages with providing advice on climate change policies for the energy sector, and with the New Zealand Energy Efficiency and Conservation Strategy (NZEECS) work programme.
• Electricity - which relates to monitoring and advising the Government on effective governance and operation of the electricity market and implementation of regulations as required. The key area of focus will include ensuring electricity market arrangements promote electricity supply security, energy efficiency, and investment and retail competition.
• Fuels and Crown Resources - which relates to monitoring and advising the Government on effective operation of the gas and oil markets, including biofuels policy, fuel quality and implementation of regulations as required. The output also involves advice on the allocation and management of natural resources, particularly Crown-owned resources, and Treaty of Waitangi claims in respect of natural resources. Key areas of focus will be to continue to work with the Gas Industry Company to ensure delivery of the Government's gas objectives as set out in the Government Policy Statement on Gas, to improve the functioning of the market and ensure a smooth transition to the post-Maui environment, and to advise the Government on biofuels policy development and implementation.
• Energy and the Environment - which relates to contributing to policy advice on the development of New Zealand's response to climate change, monitoring and providing advice on plans and policies under the Resource Management Act 1991 (RMA), and contributing to the development of policy advice for freshwater. Key areas of focus include contributing (in conjunction with the Ministry for the Environment and other departments) to the development of climate change policy, with a particular focus on the energy sector and international negotiations on future commitments.

Service Performance

Output activities under this output expense will be delivered as agreed with the Minister and as detailed in the Ministry of Economic Development Output Plan in 2007/2008.

Generic quantity, quality and timeliness performance measures for all policy advice, Ministerial services and briefings supplied by the Ministry of Economic Development are detailed in Quality Standards for Policy Advice and Ministerial Servicing.

Costs: Output Expense - Policy Advice on Energy and Resource Issues

Output Expense > Management of the Crown Mineral Estate

This output expense provides services relating to the development and management of the Crown's petroleum and mineral resources, comprising all in-ground petroleum, gold and silver, and approximately half of the coal and other minerals. The three principal services provided under this output are allocation of interests in the Crown mineral estate and monitoring ongoing regulatory compliance, promoting international investment in exploration and production, and providing policy advice on matters affecting the Crown's interests in petroleum and minerals. The outputs included in this output expense for 2007/2008 contribute to achieving the following business outcomes: Securing our energy future; and Managing our natural resources.

The outputs are:

Permit Allocation and Regulatory Compliance

This output provides an efficient and effective management regime for the exploration of petroleum, mineral and coal resources, including allocating and managing prospecting, exploration and mining permits; managing the geotechnical resource data; and collecting all royalties, levies and fees payable to the Crown.

Service Performance

Where appropriate, comparative forecast figures for the previous year are shown in parentheses.

Quantity

Process an estimated:

• 180 (190) permit applications; and
• 240 (200) permit change applications including surrenders, extensions of land/duration and transfers.

Estimated Crown revenue collected:

• Royalties - $72.9 ($52.1) million; and
• Energy resource levies - $33.8 ($71.5) million.

Quality

Petroleum and mineral permits (including licences) will be monitored for compliance with work programme conditions to maintain the integrity of the allocation system by conducting on-site field inspections on:

• 40 (40) mineral/coal mining permits; and
• 30 (30) mineral/coal prospecting and exploration permits.

A minimum of 25 (25) compliance audits of energy resource levy or royalty payers will be undertaken and any shortfalls pursued.

Timeliness

• 90% (90%) of new permit applications that are priority one²⁶ will be processed within three months (60 working days) providing the receipt of the Land and Minerals Status Report, completion of iwi consultation, and all other permit holder obligations; and
• 90% of substantive changes to permits (including changes to area, minerals and duration) received will be processed within three months (60 working days) providing the receipt of the Land and Minerals Status Report, completion of iwi consultation, and all other permit holder obligations.

Petroleum and Minerals Investment

This output involves promoting New Zealand for international and domestic investment to enable the Crown's petroleum and mineral resources to contribute to the economic development of New Zealand by identifying and pursuing overseas organisations likely to invest in exploration and production, particularly in oil and gas; promoting relevant financial, geotechnical and other investment data; and promoting New Zealand's petroleum and mineral resources at key international conferences.

Service Performance

Where appropriate, comparative forecast figures for the previous year are shown in parentheses.

Quantity and Timeliness

• Conclude two (two) block offers for petroleum basins by 30 June 2008; and
• Host the New Zealand Petroleum Conference by 31 March 2008.

Petroleum and Minerals Policy

This output provides policy advice on the management of the Crown mineral estate, including periodic reviews of the Crown Minerals Act and preparation of minerals programmes and regulations prescribed under the Crown Minerals Act 1991.

Service Performance

Output activities under this output expense will be delivered as agreed with the Minister and as detailed in the Ministry of Economic Development Output Plan 2007/2008.

Generic quantity, quality and timeliness performance measures for all policy advice, Ministerial services and briefings supplied by the Ministry of Economic Development are detailed in Quality Standards for Policy Advice and Ministerial Servicing.

Costs: Output Expense - Management of the Crown Mineral Estate

Output Expense > Administration of Gas and Electricity Regulations

This output expense provides advice on the administration of gas and electricity safety and associated policy work; administers regimes on supply, quality and measurement for gas and electricity safety; and administers information disclosure for the gas industry. The following outputs are included in this output expense for 2007/2008.

Energy Safety Advice

This output relates to providing advice on energy safety issues associated with the safe supply and use of gas and electricity. The key areas of focus include providing support for the passage of the Energy (Miscellaneous Matters) Amendment Bill (LPG levy) in accordance with the legislative timetable, and reviewing and amending the Electricity Regulations 1997 and the Gas Regulations 1997, in particular, as required by the Electricity Act 1992 and the Gas Act 1992. The Review of the Gas Regulations will take into account a major review of the gas appliance safety regime.

Service Performance

Output activities under this output expense will be delivered as agreed with the Minister and as detailed in the Ministry of Economic Development Output Plan 2007/2008.

Generic quantity, quality and timeliness performance measures for all policy advice, Ministerial services and briefings supplied by the Ministry of Economic Development are detailed in Quality Standards for Policy Advice and Ministerial Servicing.

Energy Safety Enforcement and Conformance

This output relates to operating an effective investigation, compliance, enforcement and communication regime for gas and electricity safety, including reviewing and implementing changes in legislation, regulations and standards.

Service Performance

Where appropriate comparative forecast figures for the previous year are in parentheses.

Quantity

• 500²⁷ (80) audits of networks and distribution systems, and installations and appliances will be undertaken; and
• 85 (50-70) significant gas and electricity accidents and incidents, where there is serious injury or loss as defined in section 16 of the Electricity Act 1992 and section 17 of the Gas Act 1992,²⁸ are expected to be investigated.

Quality

The achievement of ISO 9001 certification for the performance of notifiable investigation process investigations by the end of June 2008.

Timeliness

• 90% (90%) of audit and inspection reports where ESS staff have performed the audits will be completed within 15 (30) working days of the audit or inspection; and
• 90% (90%) of accident investigations will be responded to and action commenced within 24 (24) hours of notification of the accident.

Petroleum Monitoring

This output relates to monitoring the quality of petroleum to ensure its safety.

Service Performance

Where appropriate comparative forecast figures for the previous year are in parentheses.

Quantity

• The Ministry will oversee the testing of a minimum of 90 (90) sample sets in accordance with a statistically-based sampling plan to meet the requirements of the Petroleum Products Specifications Regulations 2002.

Quality

• All testing laboratory reports on petroleum quality will be reviewed monthly to ensure that appropriate action has been taken on the test results and report recommendations.

Timeliness

• 95% (95%) of analysis of results from petroleum testing laboratories and recommendations will be completed within 15 (15) working days from receipt of reports.

Information Disclosure

Service Performance

Where appropriate comparative forecast figures for the previous year are in parentheses.

Quantity and Timeliness

• Annual compliance checks of all gas information disclosures will be undertaken, with 80% (80%) of checks completed within 60 (60) working days of their receipt by the Ministry; and
• Any cases of non-compliance will be followed up with the companies concerned within 30 (30) working days of the non-compliance being detected, with the aim of achieving full compliance within 120 (120) working days of the detection. (Note in some cases it is possible that prosecution could be required in order to achieve full compliance, and as a result there could be a considerable delay before full compliance is achieved.)

Quality

• All financial information disclosures will be accompanied by an audit certificate;
• All information disclosures will be accompanied by a declaration form completed by a director of the company concerned; and
• All information entered into the Ministry database will be subject to validation checks for accuracy and completeness.

Costs: Output Expense - Administration of Gas and Electricity Regulations

Output Expense > Provision of Climate Change Unit Register and Information

This output expense provides services relating to the development, implementation and operation of a register to enable the allocation and trading of emission units under the Climate Change Response Act 2002. This Act (and subsequent amendments) was passed in order to meet New Zealand's obligations under the Kyoto Protocol, which came into force on 16 February 2005. The register is scheduled to go live mid 2007, depending on the readiness of the United Nations international trading system (ITL). The first Kyoto Commencement Period will start on 1 January 2008.

Service Performance

Output activities under this output expense will be delivered as detailed in the Ministry of Economic Development Output Plan 2007/2008 and include:

• successful implementation of the register to the standards established by the United Nations Framework Convention on Climate Change (UNFCCC); and
• input into the Registry System Administrator (RSA) Forum coordinated by the Secretariat of the UNFCCC.

Quality

Once fully implemented, the register will:

• be available for public access 99% of the time excluding scheduled outages or an unplanned systems outage;
• provide all publicly accessible information as defined in the relevant legislation; and
• be successfully reconciled with the ITL upon their request.

Timeliness

The Climate Change Unit Register will be fully operational by 1 January 2008.

Once the register is fully implemented:

• new accounts within the register will be opened within two clear business days if they meet the criteria defined in the regulations; and
• transfers of units will be completed within 24 hours, except where rejected by the register or ITL due to their failure to meet defined acceptance criteria.

Costs: Output Expense - Provision of Climate Change Unit Register and Information

Output Expense > Energy and Resource Information Services

This output expense covers the provision of information and technical advice on energy and resources, the management of the response to any international disruption in oil supplies, and the management of New Zealand's energy-related international relationships and contributes to achieving the business outcomes: Securing our energy future; and Managing our natural resources.

Service Performance

Output activities under this output expense will be delivered as detailed in the Ministry of Economic Development Output Plan 2007/2008 and include:

• implementing Government decisions to ensure that New Zealand has ongoing access to adequate oil stock reserves;
• developing and maintaining improved information on energy supply and demand scenarios;
• leading cross government agency energy data and modelling coordination;
• updating and publishing crude oil, petrol and diesel prices; and
• managing New Zealand's international energy relationships.

Timeliness

• All publications and briefings will be produced to deadlines specified in the Ministry of Economic Development Output Plan.

Quality

• Generic quality performance measures for policy advice, Ministerial services and briefings as detailed in the Ministry of Economic Development's Quality Standards for Policy Advice and Ministerial Servicing will apply to this output expense; and
• All material produced for publication will be reviewed for completeness and accuracy prior to publication in accordance with internal systems and procedures and, where relevant, international requirements.

Costs: Output Expense - Energy and Resource Information Services

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