1918 19th Century On the Land Electricity Iron Sands to Steel Think Big
Think Big

The Path to Think Big

A Plea for Forestry Research
A Belief in Technology
Think Big Intro
A Path to Think Big I
A Path to Think Big II
A Path to Think Big III
The Ammonia/Urea Plant
A Path to Think Big IV
The Big Decisions

The Ammonia/Urea Plant
– The Planning Issues 

A Slow Process

The decision had been made to locate the plant next to the Natural Gas Corporation and Shell-BP-Todd’s facilities at Kapuni in Taranaki.  This would allow low carbon dioxide content gas to be provided directly.  A change was necessary to the Waimate West County Council’s district scheme.

In an attempt to streamline the process of obtaining approvals, it was decided to use the procedures of the Town and Country Planning Act as a basis for discussion of the impact of the plant and not prepare a separate environmental impact report for audit by the Commission for the Enviroment before seeking the necessary town planning consents and water rights.  It was anticipated this would save six months. 

The Jasmad group of consultants, was commissioned in December 1978 to prepare the planning report.  This evaluation of the environmental, social and economic impacts of the proposal was  published in mid February 1979.  Petrocorp applied to the Waimate West County for the scheme change and to the Taranaki Catchment Commission for water rights and the procedures under the Town and Country Planning Act and the Water and Soil Conservation Act were set in train.  Hearings were held after objections had been received and by December 1979 both the County Council and the Catchment Commission had announced their decisions granting the consents sought.

These were appealed and the appeals were heard by the Town and Country Planning Tribunal in April 1980.  The Tribunal announced its decision on the 30 July and then on 13 October made amendments to it following submissions on two points of law.

Finally the County approved the scheme change and it became operative on November 3rd 1980.  Thus the overall process, streamlined as it was, took 2 years from the commissioning of the planning report, and Petrocorp were 15 months behind what must be admitted was an unrealistic target date for gaining site access.

The Environmental Defence Society Case

One of the appellants had been the Auckland based Environmental Defence Society (EDS), who persistently used legal processes to oppose the type of industrial development the ammonia/urea plant represented.

EDS appealed both against the granting of water rights and against the scheme change. The Society had earlier said in its newsletter the "ammonia/urea plant must take the prize for the most ill-conceived, badly planned and indecently rushed development of the year”.

In its appeal the EDS claimed that the use of natural gas for the purpose of making urea fertilizer was not a wise use and management of New Zealand’s resources and that thus, the land, being of high actual or potential value for the production of food, should be protected.

Although the Tribunal did not consider that they were required under the Act to arbitrate on this point, at the request of Petrocorp they heard evidence from both sides and commented on it.

In arguing its case the EDS witnesses, Professor Robin Court and TW Walker Professor Emeritus from Lincoln Agricultural College, pointed out that the principal source of nitrogen for agriculture is its fixation by clover, the cornerstone of New Zealands pastoral economy and that the quantity of nitrogen provided by the direct application of high cost fertilizer such as urea is small.  (An estimated 2 million tonnes being provided annually through the agency of clover as compared to the proposed supply of 80,000 tonnes from Maui gas.)

The witnesses maintained that the use of urea would add to the cost of food production and the natural gas resource should be used for transport fuels.  They argued that the proposed plant would create a shortage of capital elsewhere in the economy and push up interest rates. They also were sceptical about the Company’s ability to market its product saying that  adequate market research had not been done, that the product would have to be sold below cost when exported, and that the plant would have to be subsidised.

The Verdict

The Tribunal persuaded as a result of cross examination and of presentation of evidence by Petrocorp witnesses, that many of the EDS’s claims were unfounded.  The company had done its homework much more thoroughly than was suggested by the EDS.  For the expected costs of production, which were firmly based, the urea would be competitive on world markets.  Furthermore specific offers had been received from five international trading companies to purchase all the urea available for export.

There was a definite place for nitrogen fertiliser within New Zealand. Intensive cropping and horticulture were creating an increased demand and some could be used in forestry, and tactically within the traditional clover/ryegrass pastoral system.

The Tribunal was not prepared to accept the "broad generalisations and assumptions" of the EDS witnesses.  It concluded that the "use of natural gas in the manner suggested is a wise use and management of New Zealand’s resources".

On the question of the choice of site the Tribunal accepted the plant would be erected on land of high actual or potential value for the production of food but regarded this as being outweighed by other considerations such as the proximity to the existing Kapuni gas processing facility and the railway.  It concluded the use of the site was in fact, a wise use of the land resource. 

A Powerful Lobby

One powerful lobby which was concerned about the ammonia/urea facility was Federated Farmers.  It believed that agricultural production could be boosted by the use of nitrogen fertiliser but did not want to be forced to buy the local product in the event that imports could be obtained more cheaply.  It obtained assurances from the Government that this would not happen, and that import controls or tariffs would not be placed on imported urea.  Petrocorp expressed confidence that even in the absence of an export market the cost of product would be competitive to the local user.  This confidence was based on the belief that the cost to overseas plants of feedstock (naptha or natural gas) would inevitably rise with oil prices, increasing the price of urea in world markets.