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Sequestration

27

[C]arbon sequestration strategies can significantly reduce the level of [atmospheric greenhouse gases] and, in the case of [geo]sequestration, provid[e] an important option for continued reliance on [fossil] fuels

David Hayes and Joel Beauvais1

I Introduction

 

Carbon sequestration is one of the most controversial forms of greenhouse gas mitigation.2

Carbon sequestration describes the process whereby greenhouse gases from the atmosphere are captured, stored and avoided. There are two main forms of sequestration: biosequestration and geosequestration. Biosequestration or bioenergy involves biological processes such as photosynthesis to capture and store carbon dioxide as carbon. Biosequestration will normally take the form of a solid such as vegetation like trees (biomass) but can be made into liquid (biofuels) or be decomposed into gas (biogas). Biosequestration can also be take place with the manipulation of agricultural practices and the enhancement of soil quality. In a similar manner, geosequestration otherwise known as carbon capture and storage (CCS) captures greenhouse gases before release and permanently stores them in a geological reservoir. The reason sequestration is so controversial is that there are live problems as to permanence, leakage, additionality, measurement and verification.

 

As carbon sequestration is so divisive, the legislature has been slow to disaggregate carbon sequestration property law rights. The existing rights which do exist are awkward. For instance, New Zealand’s legal framework for forestry is divided into four with Crown indigenous, private indigenous, Crown exotic, and private exotic each with its own statute and unique provisions. After the various mechanisms for forestry are analysed and carbon sequestration rights effected by way of biofuels or soil are discussed, this chapter submits that New Zealand perpetuates this incoherency by failing to disaggregate rights so that emissions units can be traded freely. Australia, by contrast, is far more advanced. Such legislative incoherency is particularly applicable to geosequestration. Legally, the capture, transportation, injection and storage of greenhouse gases such as carbon dioxide is both uncertain and inequitable. Legislative clarification of all of these carbon sequestration legal rights would simplify the process when agriculture participants finally enter the NZETS.

 

II Forestry

 

            It is projected that over the first commitment period of the Kyoto Protocol (2008 – 2012) New Zealand forestry will offset about 27 per cent of New Zealand’s total greenhouse gas emissions as at 1990.3This offset refers to the process of carbon sinks which “sequester (suck up) [greenhouse gases] from the atmosphere and store it.”4Thus, any emissions trading scheme in New Zealand without forestry would have been labelled as ineffective, inefficient and inequitable.5Lough and Cameron argue that given the contribution that such activities make to New Zealand’s greenhouse gas emissions profile, any incentives to reduce emissions and enhance sinks are crucial.6The inclusion of forestry is, moreover, economically efficient.7It would have been inequitable for the Crown to retain the benefits of forestry while imposing burdens across the entire economy.8In this respect, putting forestry into the NZETS has been labelled “globally unique”9and “trailblazing.”10The reason that sequestration is so controversial is that there are risks of impermanence, leakage, additionality as well as the imposition of monitoring and verification requirements. In order to explain these sequestration terms a useful analogy is trees. Trees lack permanence because although trees may sequester carbon, trees can be cut down and be burnt so that there is no overall benefit to the atmosphere only the creation of delay.  There is also the possibility of carbon leakage where tree sequestration in one area may led to trees being cut down elsewhere to enable land to be used for food or grazing with no atmospheric benefit. The planting of trees should be additional to the status quo. This means that if trees are planted for erosion or biodiversity purposes, there is no need for any additional financial incentives because the sequestration would have occurred anyway. Additionally, there is a need for careful measurement and verification of the carbon sequestered because if the carbon stored in trees is estimated, there can be disparities between estimates and actual measurements. These problems can be applied universally to all forms of sequestration. For forestry these matters have been factored into the NZETS.11

A          Forestry in the NZETS

Rules known as “land use, land use change, and forestry” (LULUCF) in Article 3.3 of the Kyoto Protocol allow for offsetting of the greenhouse gas emissions profile.12As reflected in the NZETS, a baseline is set up with forestry being divided between that grown pre-1990 and post-1989. This ensures that trees grown post-1989 are additional to trees grown pre-1990. As a general rule if forestry grown pre-1990 is deforested, a party (or participant under the NZETS) must account for the carbon lost by the transfer of equivalent emissions units. In this context, deforestation means the direct human-induced conversion of forested land to non-forested land;13afforestation means the direct human-induced conversion of land that has not been forested for a period of at least 50 years to forested land;14and reforestation is the direct human-induced conversion of non-forested land to forested land on land that was forested but has been converted to non-forested land (in essence, replanting).15Hence, pre-1990 forests are essentially treated as a deforestation liability as no emissions units are available for increases in carbon stored.16If forestry is grown post-1989, the party or participant is rewarded over time with emissions units for the carbon stored in the forest except if carbon is released liability for the emissions units will accordingly accrue. Central is the definition of forest land in the CCRA 2002:17

forest land –

(a)     means an area of land of at least 1 hectare that has, or is likely to have, tree crown cover from forest species of more than 30 [per cent] in each hectare; and

(b)     includes an area of land that temporarily does not meet the[se] requirements… but [the land] is likely to revert to land that meets the[se] requirements… but

(c)     does not include [tree crown cover of an average width of less than 30 metres]

 

As such, the legislative provisions in the CCRA 2002 relating to forestry are detailed and complicated due to a number of explicit exceptions.18For instance, forest species are defined as a tree species capable of reaching at least 5 metres in height at maturity but does not include tree species grown or managed primarily for the production of fruit or nut crops.19If the pre-1990 forest owner deforests less than two hectares in five years, deforestation liability will not accrue.20A differentiation is also made between indigenous trees and exotic forestry with the former only applying to post-1989 forestry and not pre-1990 forestry.21Importantly, post-1989 forestry is not required (unlike deforestation of pre-1990 forests) to become participants in the NZETS. Even though deforestation may occur for post-1989 trees, if a forest owner is not a participant, no emissions units would have been collected and therefore none would be due.22The inequity for pre-1990 forest owners is remedied by the allocation of emissions units free of charge to pre-1990 forests in accordance with the Pre-1990 Forest Land Allocation Plan which aim to compensate for land devaluation.23In addition, forest owners who owned less than 50 hectares of pre-1990 forest land were eligible for an exemption from deforestation liabilities but applications are now closed.24Applications for the associated tree weed deforestation exemption are also now closed.25

B          Indigenous Forestry: Forests Act 1949

Instead of the CCRA 2002, pre-1990 indigenous forestry is regulated by the principle of sustainable management in the 1993 amendments to the Forest Act 1949.  The amendments call for sustainable forest management to maintain “the ability of the forest growing on that land to continue to provide a full range of products and amenities in perpetuity while retaining the forest’s natural values.”26The presumption is that no privately owned indigenous timber may be milled or exported unless harvested under a sustainable forest management plan or permit.27In order to mill an indigenous forest, the owner may apply for approval a draft sustainable forest management plan.28 The Crown will consult with relevant parties and if approved such a plan will run with the land.29A similar alternative procedure30is that the owner may apply for a sustainable forest management permit to allow harvesting and milling of indigenous timber. The difference between a plan and a permit is the length of term (50 years versus 10 years) which usually relies on the forest size (large versus small).31The permit is specific, detailing the quantity of timber that may be harvested and milled. Such a permit will also run with the land.32In 2004, the Forests Act 1949 was extended controversially to include indigenous forestry granted to Maori under the South Island Landless Natives Act 1906.33owned indigenous forestry itself, of course, is governed by the Conservation Act 1987. Perhaps most importantly, the provisions in the Forests Act 1949 do not derogate from RMA 1991 requirements as the provisions have “a thrust different from, and [operate] outside of, the RMA [1991]” and supplementary resource consents may be required.34A proposal to selectively log an indigenous forest, therefore, was accepted to fund a pest management programme.35

C         Crown Owned Exotic Forestry: Crown Forestry Assets Act 1989

Crown owned exotic forestry, by contrast, is governed by the Crown Forestry Assets Act 1989. Under that Act, responsible Ministers have limited powers to deal with Crown forest land. The Act recognises that Crown alienation will prevent any return of land to Maori as part of the Treaty of Waitangi settlement process. The Court of Appeal has held that any such alienation of forestry lands could potentially be in breach of the Treaty.36With a Crown forestry licence, however, a transfer of standing exotic forestry can take place.37Crown forestry licences are binding on successors in title to the Crown but such a crown forestry licence does not confer on a licensee any estate or interest in that land.38Section 13 provides that Crown forestry assets “growing or standing on, or fixed to, or under or over, any land may be transferred… notwithstanding that neither the land nor any interest in land is being transferred.”39In this respect “the assets and the land shall be regarded as separate assets each capable of separate ownership.”40If a final recommendation is made under the Treaty of Waitangi Act 1975 for the return of the licensed land to Maori ownership (with accompanying compensation),41the licensee will be given notice that the licence will be terminated in a lengthy specified period up to 70 years.42Compensation is payable as Crown forestry licences themselves require an annual market rate fee for the use of the licensed land.43Crown forestry land is at the centre of the Maori settlement process and its transfer to Maori has been litigated as to the extent of Maori rights44and the scope of Maori claimants.45It has also been argued that due to the extensive crown forest land holdings when land is returned, Maori are being penalised under the CCRA 2002 for deforestation.46 This has resulted in free allocation of emissions units.47In this light, the NZETS recognises the Crown responsibility to give effect to the principles of the Treaty.48

D         Privately Owned Exotic Forestry: Forestry Rights Registration Act 1983

The last category, private land with mainly exotic forestry, uses conventional property law mechanisms to define legal rights. There are three typical ways of growing such trees to gain the protection of the registration provisions of Land Transfer Act 1952. The first method is that a person who owns the fee simple title to land may cut trees as owner of that land. Trees, as a fixture, form part of the land.49An alternative method is that a person may cut the trees under a lease agreement with the land owner. If there is a forestry lease, a right to cut is through the creation of tenants’ fixtures.50Rent may be paid annually or as a share of the stumpage when the forest is harvested.51If the lease is not specific as to ownership of the trees, the lessee may be liable to the landowner under the law of waste if the trees are cut.52 The principal problem with a lease is that if the lease is of an area less than the total area in the title and the term of 20 years of more, such a lease could be deemed a subdivision under the RMA 1991 which may require a resource consent.53The third method is that there may be a profit à prendre to cut the trees. The profit à prendre may be granted in an ordinary contractual form or in accordance with the forestry right provisions of the Forestry Rights Registration Act 1983. The benefit of a forestry right is the creation of rights to “establish, maintain and harvest” trees whereas in the profit à prendre’s ordinary form, there cannot be the establishment of the trees but only the grant of harvesting rights.54Another problem with the ordinary form is provisions of the Sale of Goods Act 1908 whereby “goods” include things that are part of the land but are to be severed under a contract for sale.55)This means that if an ordinary profit à prendre contained an obligation to cut timber then this is held to be a species of timber cutting right contract subject to the Sale of Goods Act 1908.56The forestry right (deemed to be a profit à prendre)57 avoids these difficulties through legislative amendment while including ancillary rights such as access as well as construction rights necessary for the exercise of the forestry right.58A forestry right also has the advantage of not requiring a full survey as boundaries may be referred to in a diagram or aerial photograph.59

E          Ministry of Agriculture and Forestry Afforestation Schemes

The Permanent Forest Sink Initiative (PFSI), Afforestation Grant Scheme (AGS), East Coast Forestry Project (ECFP), and the Sustainable Land Management (Hill Country Erosion) Programme (HCEP) are all current projects designed to encourage tree planting.60Under the Forests Act 1949, the PFSI is designed to facilitate permanent afforestation requiring registerable covenants which run with the land.61Harvesting may not take place for the restricted period of 99 years unless the harvesting is consistent with approved harvesting practice.62The landowner will receive emissions units for “the net increase in carbon stock by the forest sink area” which during the first commitment period under the Kyoto Protocol (2008-2012) will be Assigned Amount Units (AAUs).63If there is a net decrease, the landowner becomes liable for the loss of carbon stock.64The AGS involves grants for the establishment of forests but there are no rights to emissions units because there are no obligations for deforestation. A 10 year Crown agreement is entered into and there is an undertaking not to harvest the land within the term of the agreement, to take reasonable precautions against damage, to remedy any damage and allow monitoring as well as reporting access. The scheme is intended for small forest owners who do not wish onerous obligations. Any rights seem solely contractual. The HCEP works in a similar manner to the AGS for the avoidance of soil erosion outside of the ECFP. The ECFP is a contestable fund where landowners enter 50 year covenants to maintain forest cover on the ground land to prevent soil erosion.65Such covenants are either ECFP covenants,66QEII covenants67Conservation covenants could also be available.68

F          Alternative Legal Mechanisms

Other less effective legal mechanisms to grow trees exist such as a contract, covenant, licence coupled with an interest, easement, encumbrance and caveat. A thorough, firm and detailed analysis of these mechanisms is beyond the purview of this thesis as this is a particularly complex area of law. Another author will need to attend to such a task. Here, nonetheless, it must be emphasised that these other legal mechanisms are “not [as] simple and transparent” as a legislative right.69

Such mechanisms will need meticulous legal drafting. It is appropriate to tabulate and summarise the problems associated with each mechanism:

 

Contract A mere contractual right will not survive the indefeasibility of the Land Transfer Act 1952.70
Covenant A covenant requires that there is land which is benefited and land which is burdened by the covenant.71 Whether a covenant creates a caveatable interest in land depends upon whether the view is taken that the particular covenant is an equitable interest72 (such as exclusive occupation).73 If a covenant is to burden land with no benefit to accrue to other land, it is known as being “in gross.”74 The Law Commission states that “covenants in gross cannot run with the land.”75 It recommends legislative amendment should enable covenants in gross to run with land which would overcome this problem.76
Forestry Supply Contracts In provisions of the Forests Act 1949 not currently in force, registered forestry supply contracts are deemed to be a covenant running with the land.77 If available, these would avoidthe aforementioned difficulties.
A Licence coupled with an Interest Difficult issues are also raised by a licence coupled with an interest. In short, if the equitable doctrine of proprietary estoppel is tied to a licence, an interest in land capable of supporting a caveat will be present.78
Easement Easements like covenants traditionally require two parcels of land.79  Although the creation of an easement in gross does run with the land80 and carbon sequestration provisions can be drafted like those for communal gardens,81 an easement of unlimited storage within a confined space has been held unable to exist because such a claim amounts to joint exclusive occupation.82 If worded defectively such as a prohibition on cutting down trees“the law has been… chary of creating any new negative easements.”83
Encumbrance An encumbrance is an inelegant mechanism for all sorts of desired obligations by way of a mortgage. These obligations can be achieved using an infinitesimal annuity or rentcharge payable to the landowner.84 In 2010, the Law Commission recommended that legislative amendment should prevent the registration of encumbrancesfor collateral purposes and instead covenants in gross should be made to run with the land.85
Caveat A caveat allows any person entitled to or beneficially interested in land to prevent dealings of the land in question.86 On the one hand if an emissions unit is likened to a profit à prendre, easement or a covenant / licence supported by equity, a caveat will be supported.87 This would ensure the “environmental benefit” of any carbon sequestration right is upheld.88 On the other, mere contractual rights will not support a caveat.As described above, for specified purposes an NZU is an “unsecured debt”,89 a “financial instrument”90 and an “investment security.”91 It is well established that shares and unsecured debts will not support a caveat.92 The numerus clausus principle described abovelimits the creation of new proprietary rights. Applying this principle, damagescould be suitable which would prevent any proprietary remedy.93 Obviously, both interpretations have merit.

G         Australian Carbon Sequestration Rights

New Zealand would do well to learn from Australian states that have legislated for a disaggregated carbon sequestration right.94 New South Wales, Tasmania, and Queensland define the carbon sequestration right as a profit à prendre. The New South Wales definition explains that the profit from the land is the rights to carbon sequestration created by any existing or future tree on the land.95 This reclassification of a profit à prendre has been subject to criticism as sequestration conceptually involves storing carbon on the land rather than taking something amorphous (a carbon sequestration right) from the land.96 Hence, the equitable profit à rendre has been proffered as more accurate.97 South Australia creates a chose in action whereby ownership of the carbon is presumptively deemed to be in the holder of the owner of the vegetation until separated by a forest property agreement such as a carbon rights agreement. Such an agreement when registered will bind successors in title to the land.98 On the other hand, Western Australia creates a carbon right as a separate interest in land defined as a hereditament and encumbrance.99 To ensure access and monitoring, covenants can provide for such rights to be attached to the carbon right to run with the land.100 Victoria, conversely, creates a sui generis “forest carbon right” which is a collective term to describe a “carbon sequestration right”, “forestry right” and “soil carbon right.”101 These are all interests in land.102 Helpfully, a Forestry and Carbon Management Agreement allows for access and monitoring while allowing the agreement to be recorded on the title although not registered.103

For present purposes, all these provisions disaggregate a carbon right conceptually distinct from a forestry right and all construct an interest capable of binding successors in title. A disaggregated carbon sequestration right can avoid a tragedy of the anti-commons when the legislature has clarified the content of the property rights.

 

H         National Environmental Standard for Plantation Forestry

 

Forestry has also faced inconsistent RMA 1991 regulation which has inhibited the potential of sequestration to reduce greenhouse gas emissions. The problem is highlighted by forestry company PF Olsen’s Ltd who deal with 12 regional, 3 unitary and 41 district bodies who each have different rules as to forestry activities.104 Such problems are exemplified by re-litigation of the same issues across the country: forestry crossing many boundaries, duplication of functions, and inconsistent regulation compared to similar land uses such as agriculture.105 A solution is the proposed National Environmental Standard for Plantation Forestry. Of course, forestry involves disturbance to water bodies for culverts, extensive earthworks including quarrying for roading, the creation of nuisances and can involve the destruction of ecosystems.106 While these are proposed to be to an extent permitted activities in rural zones, activities affecting fire risk, flood hazards, geothermal or karst protection areas, heritage, indigenous forests, infrastructure, nationally significant water bodies, outstanding natural features or landscapes, the potential for wilding trees or water yield effects may require more stringent regulation in district and regional plans in certain circumstances.107 The NES brings about welcome coherence avoiding council plan changes as well as avoiding submission, research, monitoring, enforcement and remediation costs for needless compliance.108 It will increase investment certainty and facilitate efficient environmental outcomes.109

 

III Biosequestration / Bioenergy

 

Sequestration by forestry reduces greenhouse gases as the carbon dioxide released is theoretically equal to the amount absorbed during biological growth. Bioenergy is a broader term to describe processes of sequestration and covers biomass (wood), biofuels (traditionally ethanol), and biogas (methane). Importantly, wood can be converted into other forms.110 Wood’s predominant use with respect to energy is burning for residential heating. Wood is also burnt for heat required during wood processing in New Zealand by Redstag Timber, Pan Pac Forest Products, Nelson Pine Industries, Juken Nissho, Carter Holt Harvey and Norske Skog.111 Biogas usually comes from landfills. It is captured and combusted for electricity at Greenmount, Hampton Downs, Horotiu, Redvale, Rosedale, Silverstream, Southern and Whitford Landfills.112 Biofuels in New Zealand take the form of biodiesel (tallow, canola, and used cooking oils) and bioethanol (whey ethanol) although sugarcane ethanol from Brazil is imported.113

It is important to recordthat life cycle analysis has shown that all these forms of bioenergy can release additional greenhouse gases because of the use of fossil fuels during cultivation, production and transport as well as land use changes such as deforestation.114 This applies especially to biofuels with leakage if forests are cut down for biofuel production or other crops such as food are forced to cut down such forests. This can be over and above ploughing the land, fertilizer use, and extensive water use which all have the potential to increase greenhouse gas emissions overall. Biofuels raise other concerns too such as the “food-versus-fuel debate” where if a car owner fills up a 50 litre tank with maize produced biofuel (an inefficient biofuel) that maize would be enough to feed one person for a year.115

 

Against this background, the 2008 amendment to the Energy (Fuels, Levies, and References) Act 1989 which obliged fuel retailers to sell a proportion of liquid biofuels was subsequently repealed by the legislature.116 The Sustainable Biofuel Bill 2009 has also languished.117 The 2008 legislative requirement was that 0.5 per cent of biofuels were required to be in liquid fossil fuels sold domestically increasing to 2.5 per cent by 2012.  ((Energy (Fuels, Levies, and References) Amendment Act 2008, sch 1.)) The select committee introduced sustainability criteria into the Act after concerns from the PCE that biofuels such as palm oil which can increase greenhouse gas emissions could be imported.118 These criteria included principles that biofuels emit at least 35 per cent less greenhouse gas over their life cycle than fossil fuels, that biofuels do not compete with food production and that biofuels do not reduce indigenous biodiversity or adversely affect land with high conservation value.119 As the PCE has stated these sustainability criteria are difficult to enforce.120 The alternative, however, of letting the market decide could see the importation of unsustainable biofuels anyway. New Zealand does have an emerging biofuel market with the government’s non-legislative Biodiesel Grants Scheme which grants up to 42.5 cents per litre for specified biodiesel production that manufactured in New Zealand and is not exported.121In the United States,122 Canada,123 United Kingdom124and New South Wales in Australia125 there are biofuel retailer legal obligations.

 

IV Soil

Another method of reducing greenhouse gas emissions is recognised under Article 3.4 of the Kyoto Protocol which provides for forest management, revegetation, cropland management and grazing land management.126 Forest management are practices designed to increase carbon sequestration of existing forests such as pest-control.127 Revegetation is the reversion of pasture to unmanaged vegetation such as scrub which does not meet the definition of forest.128 Cropland management is direct drilling of crops without ploughing and the use of harrows.129 Tilling dries out soil resulting in carbon loss. The draining of wetlands, likewise, results in greenhouse gas emissions.130  Grazing land management involves manipulating vegetation and livestock activities.131 This can include fertilization and irrigation intensity. Under the Kyoto Protocol, New Zealand has elected not to account for carbon stock change for such activities.132 These activities are left to the voluntary carbon market. It is observed above that New Zealand does not create a disaggregated carbon sequestration right and there are difficulties with the existing legal mechanisms. This is particularly so for soil sequestration.133 It is conceivably because “USA grasslands…  are far more degraded (in plant species content, productivity and soil status) than those [of] New Zealand.”134 In this respect “[t]he heavy reliance of the New Zealand agricultural sector on livestock will tend to act as a drawback to a potential soil carbon offset programme. In general, there are fewer options to farmers with grazing lands (vs. cropland) to alter practices [to] increase [soil] carbon content.”135 Soil offsets moreover pose implementation problems because of permanence, additionality, leakage, measurement, and verification.136 The Chicago Climate Exchange has attempted to resolve these complications with detailed provisions for aggregators (essentially brokers), third party verification and a fund for soil carbon reversals.137 In New Zealand although there is the theoretical potential for soil carbon offsets on the voluntary market, the current legal tools which ascribe soil carbon rights with land rights are inflexible. Advances in soil carbon science could well see biochar (charcoal) added to New Zealand soils as a carbon sink while increasing soil fertility.138 Despite such potential, there are numerous scientific obstacles to overcome andit is anticipated that a disaggregated soil carbon legal right will be reactive rather proactive.

 

V Geosequestration

Geosequestration or carbon capture and storage (CCS) in simple terms is “the injection [of] a greenhouse gas… into an underground geological storage formation for the purpose of permanently storing that substance underground” to avoid that greenhouse gas from entering the atmosphere.139 The whole process involves separation of the greenhouse gas from other gases at a discharge point, gas compression, transportation (via pipeline, ship, rail or road), injection into a storage reservoir and lastly monitoring of that storage reservoir.140 There are different reservoirs such as deep saline aquifers, depleted oil and gas fields and unmineable coal seams.141 Sequestration may also be able to take place in the ocean water column and mineral carbonates.142   Relevantly, developments overseas have seen CCS flow from enhanced oil (and gas) recovery as well as acid gas disposal activities.143

 

In New Zealand, the NZCCS Partnership has taken the lead to better understand the technical, commercial, regulatory, legal, and social considerations requiring attention.144 The Partnershipstates that although Marsden Point Oil Refinery, Kapuni Urea Plant and Kapuni Gas Treatment Plant already separate carbon dioxide from other gases, this is in small quantities and if the Huntly Power Station was to engage in post-combustion capture an extensive retrofit with chemical solvents would be required.145 The Partnership describes that existing pipelines in New Zealand would not be suitable for high pressure carbon dioxide transport.146 The Partnership explains that New Zealand already has an onshore underground storage of natural gas known as the Ahuroa Gas Storage Project and New Zealand has numerous developed and tested hydrocarbon reservoirs which could be suitable for CCS.147 Importantly, the Partnershipelucidate that “storage sites are not huge cavern but “solid rock” that act like a sponge”148 and carbon dioxide “is not a gas at reservoir depth, but acts like a dense liquid.”149 It is accepted that as New Zealand is tectonically active, faulting will limit potential sink formations.150 Although promising and developing internationally, commentators advise that given the current status of the technology, implementation in New Zealand prior to 2020 is not feasible.151

A          Ownership of the Reservoir

The first legal question for geosequestration is the ownership of the reservoir where the greenhouse gases are to be stored.152 All of the New Zealand commentators in this area (Baker,153 Barton,154 McGettigan,155 and Severinsen156 ) prima facie agree that neither the RMA 1991, nor the CMA 1991 to the extent applicable, clearly assign ownership of the reservoir. The RMA 1991 is not concerned with ownership but rather use157 while it seems that under the CMA 1991158 neither the Crown159 nor a mining permit holder160 have rights to the reservoir beyond rights of mineral ownership. In this context, a reservoir is hard to define as a mineral.161 This leaves two alternatives: the landowner as owner of the fee simple title above the reservoir or that there is no ownership after all. In New Zealand, the Land Transfer Act 1952 defines “land” as including “waters, watercourses… plantations, gardens, mines, minerals, and quarries… unless specially excepted.”162 An application of the maxim of cujus est solum, ejus est usque ad coelum et ad inferos (the landowner owns up to the heavens and down to the centre of the earth) is clearly present. In the United Kingdom, Bocardo v Star Energy UK Onshore Ltd held that trespass existed where petroleum wells were drilled at depths greater than 800 feet below the complainants land.163 While nothing had been done to reduce the strata to actual possession, as “the paper title carries…. title to the strata below the surface, [the landowner] must be deemed to [possess] the subsurface strata too.”164 It accepted that an absolute application of the maxim “is plainly no longer tenable [as the earth] is not flat.”165 It can be added that exercising such rights of possession are difficult requiring resource consents166 and any conferral of ownership traditionally requires compensation if the crown assumes ownership of the property. Severinsen, consistent with other authorities, concludes that “property right[s] not expressly conveyed should be treated as retained.”167

 

B          Ownership of Injected Gas

The second question is who owns the greenhouse gas once injected.168 There is simplicity in the argument that once captured a greenhouse gas becomes owned, if it is injected into reservoir and thereby becomes part of the land as liquid in a sponge, the landowner must prevent any torts to adjoining landowners from arising. If the liquefied gas undergoes a chemical transformation in the reservoir, which can occur when carbon dioxide is injected into a saline aquifer, attachment to the land will be cemented by its degree of annexation.169  If the gas leaves the reservoir given its tendency to rise, it becomes unattached but emanating from the land. If the liquefied gas is designed to be incapable of escaping, such permanence logically indicates attachment to land as the object of annexation.170 In this sense, the term disposal rather than storage encapsulates the core of the process.171 This conclusion is important because land ownership has a degree of permanence whereas a company which injects greenhouse gases will lack permanence. Thus, it is difficult to share Severinsen’s confidence that it will be “an extreme case”172  if the Crown assumes liability when an injector “ceases to exist”173 because an injector company would be well advised to dissolve in order to disclaim liability and insolvency will also form a real obstacle to liability. Severinsen takes the opposing view that carbon dioxide once injected should not become part of the land because the landowner and injector have different interests.174 His different interests framework does not answer the actual question of annexation. If the landowner is found to have possession of the substrata sufficient for ownership,it follows that the landowner would also have management and control of the nuisance (including chattels) emanating from the particular land.175 Ascribing ownership to the landowner may be “fundamentally unjust” but the common law provides certainty not equity.176 This means any landowner must assign liability from greenhouses gases escape to the injector who has undertaken such activities.177

 

C         Injection: The Resource Management Act 1991

The question logically arises as to how New Zealand has dealt with reinjection activities in the past. The reinjection of geothermal water, for instance, is only regulated by the RMA 1991. The injection of natural gas to mineral reservoirs178 and the flooding of mineral reservoirs with water,179 by contrast, have been part of mining permit conditions under the CMA 1991 as well as the RMA 1991. Although geothermal water and carbon dioxide are relatively inert, carbon dioxide is not the only greenhouse gas of concern. A starting point will be that all activities are regulated by the RMA 1991. Greenhouse gases (excluding methane because it is a mineral)180 are natural and physical resources which must be sustainably managed.181 However, as seen, regional councils must not have regard to the effects of discharges of greenhouse gases on climate change except with regards to renewable energy.182 Injecting a greenhouse gas into land is a contaminant discharge183 but as regional councils are unable to consider its effect on climate change, the regional council will be limited to consider the effects of the activity on the immediate vicinity. In considering such an application, regional councils have inadequate geological expertise and such matters would inevitably require referral to the EPA.184 Any applicant would of course have difficulties prospecting, exploring, or testing under the RMA 1991.185 The greatest drawback is poor provisions in the RMA 1991 for long-term liability including monitoring.

 

D         Injection: The Crown Minerals Act 1991

In terms of the applicability of the CMA 1991, Barton and McGettigan both take issue with the verb “to mine” which is defined as meaning to “take”, “win”, “extract”, “obtain” and that no verb is used such as to deposit, inject, store, dispose or sequester.186 The definition of petroleum is the most relevant with reference to hydrocarbons (which can include carbon dioxide) and which may be “returned to a natural reservoir for storage purposes.”187 This definition explicitly requires that such petroleum is “naturally occurring”; that such petroleum “has been mined”; that the petroleum is returned to a reservoir in “the same or an adjacent area”; and that there is a hydrocarbon “and” carbon dioxide.188 Hence, methane storage unlike other greenhouse gases poses no problem due to the CMA 1991.

 

The CMA 1991, nonetheless, should not be dismissed out of hand.189 Although a standalone piece of legislation would be preferable,190 the CMA 1991 provides comprehensive provisions relating to prospecting, exploration, access to land, notation on land titles and work programmes. The CMA 1991 provisions of competitive tender allocation in mineral programmes are superior to the RMA 1991’s first-in-first-served rule of resource allocation. Most importantly, CCS will often take place next to oil or gas operations.191 Petroleum extraction provides space for CCS activities and carbon dioxide injection can aid petroleum recovery.192 A solution, “unit development” of CCS and mining activities could resolve resource allocation qualms although a competitive tendering allocation could mean one activity displaces another.193 Such “unit development” may also be appropriate for more than one CCS injector. Permit holders under the CMA 1991 fiercely guard rights conferred and a lack of harmonisation with the CMA 1991 will be detrimental to CCS development. It is noteworthy that critics of CCS label the enhancement of greenhouse gases from such fossil fuel recovery as leakage. How the resource is allocated between a CCS injector and a water extractor who both desire access to a saline aquifer is anyone’s guess with a fight between the RMA 1991 and the CMA 1991. It is suggested that from a policy perspective that competitive tendering is desirable despite the RMA 1991’s preference for a first-in-first-served basis of resource allocation.194 There are, nonetheless, deficiencies in the CMA 1991 which go beyond minerals. Barton states that in New Zealand there are insufficient duties to plug and abandon wells beyond curt reporting requirements.195 It is a “serious mistake”that orphan wells, which are unplugged and abandoned, release greenhouse gases in New Zealand.196

E          Uncertainty

All New Zealand commentators agree that the current legal framework is “awkward, uncertain and wholly inappropriate in regulating [carbon dioxide] storage.”197 Greenhouse gas storage has coherent legislative frameworks in United States,198 Canada,199 United Kingdom,200 and Australia.201 In New Zealand under s 168(1)(n) of the CCRA 2002 as amended in 2008202 the Governor General may by Order in Council make regulations prescribing criteria for registering participants who undertake an “other removal mechanism.”203 A voluntary participant can gain emissions units for the “storing of carbon dioxide after capture” where “the result [is] a reduction from emissions reported in New Zealand’s annual inventory report under the [UNFCCC].”204 Exact prescriptive details have yet to be finalised. These details will be no doubt developed in tandem with the need for legislative clarification of carbon capture and storage activities.

 

F          Transportation

The law relating to the compression and transportation of carbon dioxide is convoluted. Severinsen states that the Hazardous Substances and New Organisms Act 1996 does not make carbon dioxide a hazardous substance,205 yet McGettigan points out that compressed gases can have controls placed on them by road and rail206 under the Hazardous Substances (Compressed Gases) Regulations 2004 and the Hazardous Substances (Tank Wagons and Transportable Containers) Regulations 2004.207 If transported by ship the Maritime Transport Act 1994 applies. Such statutes, however, do not cover pipelines which on land are governed by the Gas Act 1992 (although carbon dioxide is not currently defined as a gas)208 and the Health and Safety in Employment (Pipeline) Regulations 1999. Pipelines at sea are governed by the Submarine Cables and Pipelines Protection Act 1996. Although the principal focus here has been on the applicability of the RMA 1991 to CCS activities, as McGettigan clarifies, the RMA 1991 does not apply to activities offshore more than 12 nautical miles.209 This means the Maui gas field, New Zealand’s largest geological storage reservoir, is governed by different statutes210 which are currently under reconsideration to allow the environmental effects of marine activities to be considered by the EPA.211

 

G         Long-term Liability and Monitoring

In New Zealand once injection has taken place long-term liability and monitoring of contaminated land is not legally complex because without any contaminated land regime all liability can fall on the landowner and, in a landowner’s absence, the Crown.212 Any monitoring is imaginary. This is highly unsatisfactory as the injector can just walk away from liability once land becomes contaminated. At the extremes either the injector is made fully liable for all liability under the polluter pays principle or the Crown ought to assume full liability.213 Between these two extremes, commentators have suggested a variety of solutions. Bonds could be imposed under the RMA 1991 but as McGettigan explains there is difficulty quantifying the cost of remediation and even if quantification was possible the cost of obtaining a discharge permit could be prohibitive.214 Another solution would be for the injector to have to reapply for resource consents every 35 years to keep the gas down the reservoir but such an analysis stretches the statutory language for consent duration and is inconsistent with the conclusion above that liability shifts to the landowner.215 There could also be mandatory private insurance with a liability cap but this is disadvantageous due to a lack of risk analysis and a temporal limit.216  An industry funded and publicly administered trust fund is the solution advocated by McGettigan.217 Severinsen takes a more nuanced approach that “maintenance and monitoring costs rest initially with the injector, but are eventually transferred to the state.”218 Severinsen’s approach is appealing because there is a public interest in reducing greenhouse gas emissions and McGettigan’s solution will effectively penalise a fledgling industry.

 

VI Conclusion

New Zealand became one of the first countries in the world to introduce sequestration activities into an emissions trading scheme. Nonetheless, such a globally unique approach has detractors. While permanence, leakage, additionality, measurement, and verification problems have seen pragmatic solutions in forestry, such solutions are left wanting for other forms of sequestration. The legal system for New Zealand forestry is divided. Non-legislative initiatives which augment carbon sequestration are fragmented. When consideration is given to biofuels and soil sequestration, New Zealand lags behind the disaggregation legal initiatives of traditional common law jurisdictions. The addition of geosequestration to the mix shows how far New Zealand has to travel. Simple questions such as the legal mechanisms for capture, transportation, injection and storage of greenhouse gases such as carbon dioxide are uncertain. All New Zealand commentators agree that the current state of the law is unsatisfactory. It is argued here that the current law is also inequitable. The legislature seriously needs to attend to such rights.

  1. David Hayes and Joel Beauvais “Carbon Sequestration” in Michael Gerrard (ed) Global Climate Change and US Law (Chicago, American Bar Association, 2007) 691 at 691. []
  2. At 692; Geoff Bertram and Simon Terry The Carbon Challenge: New Zealand’s Emissions Trading Scheme (Bridget Williams Books, Wellington, 2010) at 45; Klaus Bosselmann “Achieving the Goal and Missing the Target: New Zealand’s Implementation of the Kyoto Protocol” (2005) 2 Macquarie J Int’l & Comp Envtl L 75 at 96; Alexander Gillespie Burning Issues: The Failure of the New Zealand Response to Climatic Change (Dunmore Press, Palmerston North, 1997), ch 6. Alexander Gillespie “Burning Follies: The Creation and Failure of the New Zealand Response to Climate Change” (1997) 1 NZJEL 43 at 49; Alexander Gillespie “Defending the Irresponsible: A Reply to Chapman and Gray” (1998) 2 NZJEL 233 at 234; Alexander Gillespie “Sinks and the Climate Change Regime: The State of Play” (2003) DELPF 279 at 301; Michael Jeffrey “Carbon Capture and Storage: Wishful Thinking or a Meaningful Part of the Climate Change Solution” (2010) 27 (2) Pace Envtl L Rev 421 at 471; Marianna Parry “A Property Law Perspective on the Current Australian Carbon Sequestration Laws, and the Green Paper Model” (2010) 36 Monash U L Rev 321 at 329; Michelle Passero “The Nature of the Right or Interest Created by a Market for Forest Carbon” (2008) 3 CCLR 248 at 249; Ailsa Ceri Warnock “The Climate Change Regime: Efficacy, Compliance and Enforcement” (2004) 8 NZJEL 99 at 118. []
  3. Peter Lough and Alastair Cameron “Forestry in the New Zealand Emissions Trading Scheme: Design and Prospects for Success” (2008) 3 CCLR 281 at 283. []
  4. Gillespie “Sinks”, above n 2, at 279. []
  5. Laura Cooper and Lisa Daniell “Forestry Sector” in Karen Price and others Emissions Trading Scheme (New Zealand Law Society, Wellington, 2011) 11 at 11; Lough and Cameron, above n 3, at 282; Greg Milner-White “The Legal Implications of Climate Change for Forestry in New Zealand” (2007) 11 NZJEL 141 at 171; Karen Price “Forestry” in Karen Price and others The Emissions Trading Scheme – Advising Your Client on Their Obligations (New Zealand Law Society, Wellington, 2010) 31 at 31; Vernon Rive “New Zealand Climate Change Regulation” in Alastair Cameron (ed) Climate Change Law and Policy in New Zealand (Lexis Nexis, Wellington, 2011) 165 at 200. []
  6. Lough and Cameron, above n 3, at 283. []
  7. At 283. []
  8. At 283. []
  9. At 281. []
  10. Toni Moyes “Greenhouse Gas Emissions Training in New Zealand: Trailblazing Comprehensive Cap and Trade” (2008) 35 Ecology LQ 911 at 911. []
  11. Lough and Cameron, above n 3, at 281. []
  12. Kyoto Protocol 1998, art 3(3). []
  13. United Nations Framework Convention on Climate Change “Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol on its First Session, held at Montreal” 28 November – 10 December 2005, Decision 16/CMP1 (FCCC/KP/CMP/8/Add3, 30 March 2006) <http://unfccc.int> at 5. []
  14. At 5. []
  15. At 5. []
  16. Derek Nolan (ed) Environmental and Resource Management Law (4th ed, LexisNexis, Wellington, 2011) at 1060. []
  17. CCRA 2002, s 4(1), definition of “forest land”. []
  18. Alastair Cameron (ed) Climate Change Law and Policy in New Zealand (LexisNexis NZ, Wellington, 2011) at 306. []
  19. CCRA 2002, s 4(1), definition of “forest species”. []
  20. CCRA 2002, sch 3, pt 1. []
  21. CCRA 2002, s 4(1), definition of “indigenous forest species” , “exotic forest species”, “forest land”, “post-1989 forest land” and “pre-1990 forest land”. []
  22. CCRA 2002, s 190. []
  23. Climate Change (Pre-1990 Forest Land Allocation Plan) Order 2010; See generally Chye-Ching Huang “The Constitution and Takings of Private Property” (2011) 24 (4) NZULR 621 at 630. []
  24. CCRA 2002, ss 168(1)(ca) and 183. []
  25. CCRA 2002, s 184. []
  26. Forests Act 1949 [FA 1949], s 2(1). []
  27. FA 1949, ss 67C and 67D. []
  28. FA 1949, s 67F. []
  29. FA 1949, s 67K(6). []
  30. FA 1949, s 67M(6)(a). []
  31. FA 1949, ss 67M(2) and 67E(3). []
  32. FA 1949, s 67M(7). []
  33. Forests Amendment Act 2004; Nicola Wheen “Foul Play?Government and the SILNA Forests” (2003) 6 NZJEL 279. []
  34. Royal Forest and Bird Protection Society v Gisborne District Council ENC Wellington W026/2009, 7 April 2009 at [23]. []
  35. At [93]. []
  36. New Zealand Maori Council v Attorney General [1987] 1 NZLR 641 (CA); New Zealand Maori Council v Attorney-General [1989] 2 NZLR 142 (CA). []
  37. Crown Forests Assets Act 1989 [CFAA 1989], s 11(2). []
  38. CFAA 1989, ss 15-16. []
  39. CFAA 1989, s 13. []
  40. CFAA 1989, s 13. []
  41. CFAA 1989, s 36 and sch 1. []
  42. CFAA 1989, s 17; Laws of New Zealand Forestry (online ed) at [77]. []
  43. CFAA 1989,  s 29. []
  44. KT1 v Attorney General CA 188/04, 17 May 2006. []
  45. Haronga v Waitangi Tribunal [2011] NZSC 53. []
  46. Joshua Williams “Land Use for Pre-1990 Forestry: Who Bears the Cost of the New Zealand Emissions Trading Scheme?” (LLB(Hons) Dissertation, University of Otago, 2008) at 23. []
  47. Climate Change (Pre-1990 Forest Land Allocation Plan) Order 2010, sch 1, cl 3(1). []
  48. CCRA 2002, s 3A. []
  49. Land Transfer Act 1952, s 2, definition of “land”. []
  50. Tom Bennion and others New Zealand Land Law (2nded, Brookers, Wellington, 2009) at 591. []
  51. Laws of New Zealand Forestry (online ed) at [8]. []
  52. George Hinde and others Hinde McMorland & Sim Land Law in New Zealand (online looseleaf ed, LexisNexis NZ) at [11.098]. []
  53. RMA 1991, s 218. []
  54. Laws of New Zealand Forestry, above n 51, at [9] []
  55. Waimiha Sawmilling v How [1920] NZLR 681 (SC and CA); Macklow Bros v Frear (1913) 33 NZLR 264 (SC); Hira Te Akau v Pukeweka Sawmills Ltd [1924] NZLR 615 (SC); Bray v Anderson [1956] NZLR 347 (SC []
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  57. Forestry Rights Registration Act 1983, s 3. []
  58. Forestry Rights Registration Act 1983, s 2A(1)(d). []
  59. Forestry Rights Registration Act 1983, s 5(1). []
  60. Ministry of Agriculture and Forestry “Review of MAF Afforestation Grant Schemes” (2011) <www.maf.govt.nz> at 7. []
  61. Forests Act 1949, s 67ZD(5)(b). []
  62. Forest (Permanent Forest Sink) Regulations 2007, reg 4 and 7. []
  63. Forest (Permanent Forest Sink) Regulations 2007, reg 10 and 11. []
  64. Forest (Permanent Forest Sink) Regulations 2007, reg  9. []
  65. Forestry (East Coast) Grant Regulations 2000, reg 13 (4). []
  66. Forestry (East Coast) Grant Regulations 1992; Forestry (East Coast) Grant Regulations 2000; Ministry of Agriculture and Forestry “East Coast Forestry Project Grant Guidelines” (2007) <www.maf.govt.nz>. []
  67. Queen Elizabeth the Second National Trust Act 1977, s 22(6); See generally Debra Donahue “The Law and Practice of Open Space Covenants” [2003] 7 NZJEL 119; Kellie Ewing “Conservation Covenants and Community Conservation Groups: Improving the Protection of Private Land” [2008] 12 NZJEL 315. []
  68. Conservation Act 1987, s 27; Reserves Act 1977, s 77. []
  69. Baker & McKenzie and Buddle Findlay “Mechanisms for Recognising Rights to Carbon Sequestered by Land-Based Activities in New Zealand” (2008) Ministry of Agriculture and Forestry <www.maf.govt.nz> at 12. []
  70. Bennion, above n 50, at 283. []
  71. At 901; See Property Law Act 2007, s 307. []
  72. Composite Buyers Ltd v Soong (1995) 38 NSWLR 286 (SC) at 288. []
  73. Enjoin Twenty Four Ltd v Van Tilbory (1991) 1 NZ ConvC 190,989 (HC) at 190,998. []
  74. Law Commission A New Land Transfer Act (NZLC R116) at [7.4]. []
  75. At [7.4]; See ANZCO Foods Waitara Ltd v AFFCO New Zealand Ltd [2006] 3 NZLR 351 (CA) at [76]; Bezett v Aspen Grove Ltd (2005) 6 NZCPR 753 (HC) at [31]; Property Law Act 2007, s 306(b); Hinde, above n 52, at [17.040]; Bennion, above n 50, at 901. []
  76. Law Commission, above n 75, at [7.58]. []
  77. FA 1949, ss 68A-68C; Forests Amendment Act 1996, s 2. []
  78. Bennion, above n 50, at 461-462 and 492; Allen v Hogan Developments Ltd (2001) 4 NZ ConvC 193,420 (HC) at 193,428. []
  79. Re Ellenborough Park [1955] 3 All ER 667 (CA) at 673. []
  80. Property Law Act 2007, s 291. []
  81. Mulvaney v Gough [2002] EWCA Civ 1078. []
  82. Grigsby v Melville [1973] 1 All ER 385 (Ch) at 392; Batchelor v Marlow [2001] EWCA Civ 1051; Copeland v Greenhalf [1952] 1 All ER 809 (Ch); Pitman v Nickerson (1891) 40 NSR 20 (SC); Bennion, above n 50, at 856-857; Hinde, above n 52, at [16.006(c)]. []
  83. Phipps v Pears [1964] 1 AC 76 (QB) at 83; Parry, above n 2, at 348. []
  84. Hinde, above n 52, at [15.163]; Menere v Jackson Mews Management Ltd [2010] 2 NZLR 347 (SC). []
  85. Law Commission, above n 75, at [7.61]. []
  86. Land Transfer Act 1952, s 137(1). []
  87. Bennion, above n 50, at 279; For a profit à prendre: Ellison Ellison v Vukicevic (1986) 7 NSWLR 104 (SC); Permanent Trustee Australia Ltd v Shand (1992) 27 NSWLR 426 (SC); For easements: North Shore City Council v Bungalo Holdings HC Auckland M920/IM00, 18 August 2000 at [20]; For a licence: Allen v Hogan Developments Ltd (2001) 4 NZ ConvC 193,420 (HC) at 193,428; For a covenant: Enjoin Twenty Four Ltd v Van Tilbory (1991) 1 NZ ConvC 190,989 (HC) at 190,998. []
  88. PPSA 1999, s 16, definition of “emissions units”; SA 1978, s 2; SMA 1988, s 37. []
  89. CCRA 2002, s 159(3). []
  90. SMA 1988, s 37, definition of “commodity”. []
  91. PPSA 1999, s 16, definition of “investment security”. []
  92. Bennion, above n 50, at 285; For unsecured debt: Holt v Anchorage Management Ltd [1987] 1 NZLR 108 (CA) at 117; For shares: Waiteitei Angora Farm v Cann HC Auckland M647/98, 17 April 1989 at 12. []
  93. Keppell v Bailey (1834) 39 ER 1042 (Ch) at 1049. []
  94. Conveyancing Act 1919 (NSW), s 87A; Forestry Rights Registration Act 1990 (Tas), s 3; Forestry Act 1959 (Qld), s 61J; Forestry Property Act 2003 (SA), s 3A(1); Carbon Rights Act 2003 (WA), ss 3 and 6(1)(a); Climate Change Act 2010 (Vic), s 22. []
  95. Conveyancing Act 1919 (NSW), s 87A. []
  96. Katrina Cuskelly “Legal Frameworks for Regulating Biosequestration in Australia” (2011) 28 EPLJ 348 at 355; Samantha Hepburn “Carbon Rights as New Property: The Benefits of Statutory Verification” (2009) 31 Sydney LR 239 at 242; Steven Kennett, Arlene Kwasniak and Alastair Lucas “Property Rights and the Legal Framework for Carbon Sequestration on Agricultural Land” (2005) 37 Ottawa L Rev 171 at 197; Parry, above n 2, at 337. []
  97. Hepburn, above n 97, at 243; See generally: Clos Farming Estates v Easton [2002] NSWCA 389 at [60]; Peter Butt Land Law (6thed, Thomson Reuters, Sydney, 2010) at 513; Brendan Edgeworth “Profits a Rendre: A Reincarnation?” (2006) 12 APLJ 200. []
  98. Forestry Property Act 2003 (SA), s 9. []
  99. Carbon Rights Act 2003 (WA), s 6(3). []
  100. Cuskelly, above n 97, at 357. []
  101. Climate Change Act 2010 (Vic), s 21. []
  102. Climate Change Act 2010 (Vic), s 25. []
  103. Climate Change Act 2010 (Vic), s 32. []
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  105. At 20-24. []
  106. At 7. []
  107. At 45. []
  108. At 91. []
  109. At 91. []
  110. EECA Business “Wood Energy: Using Wood as a Renewable Energy Source” (2011) EECA EnergyWise <www.energywise.govt.nz> at 1. []
  111. Bioenergy Association of New Zealand “Heat Plant in New Zealand: Heat Plant Sized Greater Than One Hundred Kilowatts Thermal Segmented by Industry Sector” (2008) <www.bioenergy.org.nz> at 89-103. []
  112. Electricity Authority “List of Generation Projects: Generating Stations List as at October 2011” (2011) <www.ea.govt.nz>. []
  113. Parliamentary Commissioner for the Environment Some Biofuels are Better than Others: Thinking Strategically about Biofuels (Wellington, 2010) at 27. []
  114. At 18. []
  115. Nicola Colbran and Asbjørn Eide “Biofuel, the Environment, and Food Security: A Global Problem Explored Through a Case Study of Indonesia” (2008) 9 Sustainable Dev L & Pol’y 4 at 5; See generally: Frank Rosillo-Calle and Francis Johnson (ed) Food versus Fuel: An Informed Introduction to Biofuels (Zed, London, 2010). []
  116. Energy (Fuels, Levies, and References) Biofuel Obligation Repeal Act 2008. []
  117. Vernon Rive “New Zealand Climate Change Regulation” in Alastair Cameron (ed) Climate Change Law and Policy in New Zealand (Lexis Nexis, Wellington, 2011) 165 at190. []
  118. PCE, Biofuels, above n 114, at 17; Kerry Puddle “Unilateral Trade Measures to Combat Climate Change: A Biofuels Case Study” (2007) 11 NZJEL 99. []
  119. Energy (Fuels, Levies, and References) Amendment Act 2008, s 9. []
  120. PCE, Biofuels, above n 114, at 19. []
  121. Energy Efficiency and Conservation Authority “Biodiesel Grants Scheme” (2011) <www.eeca.govt.nz>. []
  122. Energy  Independence  and Security Act of 2007 42 USC §17001; United States Environmental Protection Agency “Renewable Fuel Standard” (2011) <www.epa.gov>. []
  123. Canadian Environmental Protection Act SC 1999 c 33, s 332(1); Environment Canada “Renewable Fuels Regulations” (2010) <www.ec.gc.ca>. []
  124. Energy Act 2004 (UK), pt 2; United Kingdom Department of Transport “Renewable Transport Fuels Obligation” (2011) <www.dft.gov.uk>; Directive 2003/30/EC on the Promotion of the Use of Biofuels and Other Renewable Fuels for Transport [2003] OJ L 123/42. []
  125. Biofuels Act 2007 (NSW). []
  126. Kyoto Protocol 1998, art 3(4). []
  127. United Nations Framework Convention on Climate Change “Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol on its First Session, held at Montreal” 28 November – 10 December 2005, Decision 16/CMP1 (FCCC/KP/CMP/8/Add3, 30 March 2006) <http://unfccc.int> at 5. []
  128. At 5. []
  129. At 5. []
  130. Hayes and Beauvais, above n 1, at 695. []
  131. United Nations Framework Convention on Climate Change “Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol on its First Session, held at Montreal” 28 November – 10 December 2005, Decision 16/CMP1 (FCCC/KP/CMP/8/Add3, 30 March 2006) <http://unfccc.int> at 5. []
  132. Baker & McKenzie and Buddle Findlay, above n 70, at 4. []
  133. Land Transfer Act 1952, s 2; Kennett, above n 97, at 178-185. []
  134. AgResearch “Soil Carbon and Pastoral Agriculture: Carbon Market Business Opportunities” (2009) Ministry of Agriculture and Forestry <www.maf.govt.nz> at 11. []
  135. ICF International “Final Report: Voluntary Carbon Market Opportunities – Soil Carbon Management in New Zealand” (2008) Ministry of Agriculture and Forestry <www.maf.govt.nz> at 18. []
  136. Robert Carpenter “Implementation of Biological Sequestration Offsets in a Carbon Reduction Policy: Answer to Key Questions for a Successful Domestic Offset Program” (2010) 31 Energy L J 157 at 166-181; Brant Leonard “Carbon Sequestration as Agriculture’s Newest Market: A Primer on Agriculture’s Role in Carbon Cap-And-Trade” (2010) 15 Drake J Agric L 317 at 326-334. []
  137. Chicago Climate Exchange “Sustainably Managed Rangeland Soil Carbon Sequestration Offset Project Protocol” (2009) InterContinential Exchange <https://www.theice.com>. []
  138. Ministry of Agriculture and Forestry “Other Climate Change Initiatives” (2011) <www.maf.govt.nz>; See also: Darrell Fruth and Joseph Ponzi “Adjusting Carbon Management Policies to Encourage Renewable, Net-Netgative Projects such as Biochar Sequestration” (2010) 36(3) Wm Mitchell L Rev 992. []
  139. [1] Greenhouse Gas Geological Sequestration Act 2008 (Vic), s 5; See generally: Juliette Addison, John Bowman and Paul Watchman “Carbon Sequestration” in Paul Watchman (ed) Climate Change: A Guide to Carbon Law and Practice (Globe Business Publishing Ltd, London, 2008) 287; Nigel Bankes, Jenette Poschwatta and Mitchell Shier “The Legal Framework for Carbon Capture and Storage in Alberta” (2008) 45 (3) Alta L Rev 585; Victor Der “Carbon Capture and Storage: An Option for Helping to Meet Growing Global Energy Demand while Countering Climate Change (2010) 44 (3) U Rich L Rev 937; Trent Dougherty and others “Reconciling King Coal and Climate Change: A Regulatory Framework for Carbon Capture and Storage” (2009) 11(1) VJEL 1; Nicola Durrant Legal Responses to Climate Change (Federation Press, Sydney, 2010); Victor Flatt “Paving the Legal Path for Carbon Sequestration from Coal” (2009) 19 (2) DELPF 211; David Hodgkinson and Renee Garner Global Climate Change: Australian Law and Policy (LexisNexis Butterworths, Chatswood, 2008); Nadine Hoffman “The Emergence of Carbon Sequestration: An Introduction and Annotated Bibliography of Legal Aspects of CCS” (2011) 29 (1) Pace Envtl L Rev 218; Thomas Kerr “Legal and Regulatory Developments: The Path Forward to Advance Carbon Dioxide Capture and Storage as a Climate Change Solution” (2007) 11/12 IELTR 232; David Dell “Climate Change and Property Law” in Dennis Mahony (ed) The Law of Climate Change in Canada (Canada Law Book, Toronto, 2010)ch 17; Jeffrey Moore “The Potential Law of On-Shore Geologic Sequestration of CO2 Captured from Coal-Fired Power Plants” (2007) 28 (2) Energy L J 443; A M Warburton and others “Geosequestration Law in Australia” in Tim Bonyhady and Peter Christoff (ed) Climate Law in Australia (Sydney, Federation Press, 2007) 142; Brad Wylynko and Jessica Smith “Developing a Regulatory Regime for Carbon Geosequestration in Australia” in Wayne Gumley and Trevor Daya-Winterbottom (ed) Climate Change Law (Thompson Reuters, Sydney, 2009) 111. []
  140. Joshua McGettigan “Burying Climate Change Underneath the Ground: A Carbon Capture and Storage Regulatory Framework for New Zealand” (LLB(Hons) Dissertation, University of Otago, 2009) at 6-8. []
  141. At 9. []
  142. At 9; See also: Karen Scott “The Day after Tomorrow: Ocean Co2 Sequestration and the Future of Climate Change” (2005) 18 (1) Geo Int’l Envt’l L Rev 57. []
  143. Barry Barton “Carbon Capture and Storage Law for New Zealand: A Comparative Study” (2009) 13 NZJEL 1 at 25; Philip Marston and Patricia Moore “From EOR to CCS: The Evolving Legal and Regulatory Framework for Carbon Capture and Storage” (2008) 29(2) Energy L J 421; David Schwartz “The Natural Gas Industry: Lessons for the Future of the Carbon Dioxide Capture and Storage Industry” (2008) 19 (3)  Stanford L & Pol’y Rev 550. []
  144. Chris Baker “CCS in New Zealand – Case Studies for Commercial Scale Plant Final Report” (2010) Coal Association of New Zealand <www.cleancoal.org.nz> at 12. []
  145. At 20. []
  146. At 35. []
  147. At 24. []
  148. At 24. []
  149. At 24. []
  150. Barton, above n 145, at 4. []
  151. Shannon Page, Ian Mason and Arthur Williamson “Carbon Capture and Storage: An Appropriate Technology for New Zealand?” (paper presented to the Sustainability Society Conference, Auckland New Zealand, 12 December 2008) at 7. []
  152. Owen Anderson “Geologic CO2Sequestration: Who Owns the Pore Space?” (2009) 9 (1) Wyo L Rev 97; Ross Ashcroft “Carbon Capture and Storage: A Need for Re-Conceiving Property Interests and Resource Management in the Australian Legal System” (2008) Lawasia J 70; Dougherty, above n 141;Bryan Endres “Geologic Carbon Sequestration: Balancing Efficiency Concerns and Public Interest in Property Rights Allocations” (2011) U Ill L Rev 623; Blayne Grave “Carbon Capture and Storage in South Dakota: the Need for a Clear Designation of Pore Space Ownership” (2010) 55 (1) SD L Rev 72;Tracy Logan “Carbon Down Under – Lessons From Australia: Two Recommendations for Clarifying Subsurface Property Rights to Facilitate Onshore Geologic Carbon Sequestration in the United States” (2010) 11(2) San Diego Int’l L J 561;John Sprankling “Owning the Centre of the Earth” (2008) 55 UCLA L Rev 979. []
  153. Baker, above 146. []
  154. Barton, above n 145. []
  155. McGettigan, above n 142. []
  156. Greg Severinsen “Towards an Effective Legal Framework for the Geo-sequestration of Carbon Dioxide in New Zealand” (2010) 16 Cant LR 331. []
  157. RMA 1991, s 122. []
  158. CMA 1991, s 92. []
  159. CMA 1991, s 2, definition of “crown owned mineral” and “mineral”. []
  160. CMA 1991, ss 25 and 2, definition of “mining”. []
  161. McGettigan, above n 142, at 25-26. []
  162. Land Transfer Act 1952, s 2, definition of “land”. []
  163. Bocardo SA v Star Energy UK Onshore Ltd (2010) 3 All ER 975 (SC); See Barry Barton “To the Centre of the Earth?”[2010] NZLJ 345. []
  164. At [31]. []
  165. At [19]. []
  166. Sprankling, above n 154, at 1023. []
  167. Severinsen, above n 158, at 351; See also: Waugh v Attorney-General [2006] 2 NZLR 812 (HC); Roberts v Rodney District Council [2001] 2 NZLR 402 (HC). []
  168. David Adelman and Ian Duncan “The Limits of Liability in Promoting Safe Geologic Sequestration of CO2” (2011) 22 (1) DELPF 1; Dougherty, above n 141;Peter Glaser and others “Global Warming Solutions: Regulatory Challenges and Common Law Liabilities Associated with the Geologic Sequestration of Carbon Dioxide” (2008) 6 (2) Geo J L & Pub Pol’y 429;Nathan Hoffman “The Feasibility of Applying Strict-Liability Principles to Carbon Capture and Storage” (2010) 49 (2) Washburn L J 527; Allan Ingelson, Anne Kleffner and Norma Nielson “Long-Term Liability for Carbon Capture and Storage in Depleted North American Oil and Gas Reservoirs – A Comparative Analysis” (2010) 31(2) Energy L J 431; Alexandra Klass and Elizabeth Wilson “Climate Change and Carbon Sequestration: Assessing a Liability Regime for Long-Term Storage of Carbon Dioxide (2008) 58 (1) Emory L J 103; Sumit Som “Creating Safe and Effective Carbon Sequestration” (2008) 17 (1) NYU Envt’l L J 961. []
  169. Auckland City Council v Ports of Auckland [2000] 3 NZLR 614 (CA) at [72]. []
  170. At [72]. []
  171. Barton, above 145, at 8. []
  172. Severinsen, above 158, at 367. []
  173. At 367. []
  174. At 346. []
  175. Hall v Beckenham Corporation [1949] 1 KB 716 at 723-724; See also: Black v Christchurch Finance Company Ltd (1893) NZPCC 448 (PC); Wintrup v Mitchell [1895] 15 NZLR 232 (SC). []
  176. Severinsen, above 158, at 346. []
  177. At 356. []
  178. Todd Pohokura Ltd v Shell Exploration NZ Ltd HC Wellington CIV-2006-485-1600 13 July 2010 at [425] []
  179. Greymouth Petroleum Acquisition Company Ltd v Petroleum Resources LtdHC Auckland CIV-2003-404-6984 22 December 2003 at [23]. []
  180. CMA 1991, s 2, definition of “mineral”. []
  181. Severinsen, above 158, at 337; See generally: Sara Bergan and Alexandra Klass “Carbon Sequestration and Sustainability” (2008) 44 (1) Tulsa L Rev 237. []
  182. RMA 1991, s 70A. []
  183. RMA 1991, s 15. []
  184. Baker, above n 146, at 44; McGettigan, above n 142, at 60; Severinsen, above n 158, at 361. []
  185. Barton, above 145, at 9; McGettigan, above n 142, at 26. []
  186. At 6. []
  187. CMA 1991, s 2, definition of “petroleum”. []
  188. CMA 1991, s 2, definition of “petroleum”; Barton, above n 145, at 8. []
  189. Severinsen, above n 158, at 368. []
  190. Ministry of Economic Development “Reviewing the Crown Minerals Act 1991: Discussion Paper” (August 2010) <www.med.govt.nz> at 11. []
  191. Barton, above n 145, at 23; Martin Edwards “Interactions between Petroleum Operations and Carbon Capture and Storage Operations in Australian Offshore Waters” (2009) 26(2) EPLJ 152. []
  192. Severinsen, above n 158, at 358. []
  193. At 358; CMA 1991, s 46. []
  194. McGettigan, above n 142, at 56. []
  195. Barton, above n 145, at 28. []
  196. At 28. []
  197. McGettigan, above n 142, at 62; Baker, above n 146, at 43; Barton, above n 145, at 35; Severinsen, above n 158, at 369. []
  198. United States Environmental Protection Agency “Federal Requirements under the Underground Injection Control (UIC) Program for Carbon Dioxide (CO2) Geologic Sequestration (GS) Wells” (2008) 73 Federal Register43520; Act Regulating Carbon Sequestration 2009 Mont Code Ann § 82-11-183; Act Relating to Carbon Sequestration 2008 Wyo Stat Ann § 35-11-313; An Act Relating to the Ownership and Use of Carbon Dioxide Captured by a Clean Coal Project 2011 Tex Nat Res Code Ann §119.001; Carbon Capture and Sequestration Act 2009 Okla Stat, title 27A § 3-5-101; Carbon Dioxide Reduction Act 2007 Kansas Stat Ann §55-1636; Carbon Dioxide Sequestration 2009 W Va Code §22-11A-1; Carbon Dioxide Underground Storage 2011 ND Cent Code § 47-31-03; Clean Coal Futuregen for Illinois Act 2011 20 ILCS §1108; Geologic Sequestration of Carbon Dioxide Act 2009 11 Louisiana RS § 30:1101; Geologic Sequestration of Carbon Dioxide Act 2011 Mississippi Code Ann § 53-11-1. []
  199. Carbon Capture and Storage Funding Act SA 2009 c C-2.5; Carbon Capture and Storage Statutes Amendment Act SA 2010 c 14; Crown Minerals Act SS 1984-85-86 c C-50.2; Oil and Gas Conservation Act RSS 1978 c O-2; Petroleum and Natural Gas Act RSBC 1996 c 361. []
  200. Energy Act 2008 (UK); Energy Act 2010 (UK); Energy Act 2011 (UK); Directive 2009/31/EC on the Geological Storage of Carbon Dioxide [2009] OJ L 140/114. []
  201. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth); Barrow Island Act 2003 (WA); Greenhouse Gas Geological Sequestration Act 2008 (Vic); Greenhouse Gas Storage Act 2009 (Qld); Offshore Petroleum and Greenhouse Gas Storage Act 2010 (Vic); Petroleum and Geothermal Energy Act 2000 (SA). []
  202. Climate Change Response (Emissions Trading) Amendment Act 2008, ss 50-52. []
  203. CCRA 2002, sch 4, pt 2; International Energy Agency “Carbon Capture and Storage: Legal and Regulatory Review” (1st  ed, 2010) <www.iea.org> at 29. []
  204. CCRA 2002, sch 4, pt 2, subpt 2. []
  205. Severinsen, above n 158, at 338. []
  206. Hazardous Substances and New Organisms Act 1996, s 140(5). []
  207. McGettigan, above n 142, at 18. []
  208. Barton, above n 145, at 34. []
  209. McGettigan, above n 142, at 60. []
  210. CMA 1991; Continental Shelf Act 1964; Territorial Sea, Contiguous Zone, and Exclusive Economic Zone Act 1977. []
  211. Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill 2011, s 39. []
  212. Simon Schofield “Waste Management Law in New Zealand” (2010) 14 NZJEL 223 at 257-258. []
  213. Barton, above n 145, at 30-31. []
  214. McGettigan, above n 142, at 40-41. []
  215. Resource Management Act, s 123. []
  216. McGettigan, above n 142, at 57. []
  217. At 58. []
  218. Severinsen, above n 158, at 364. []