Part B: Why the pipeline ruptured

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4.  How the pipe was damaged

4.1  The first task the terms of reference set for the Inquiry was to examine the causes and contributory factors of the RAP outage.

4.2  This Part examines those questions, as follows:

• This chapter sets out what we learned about how and when the pipe was damaged.
• Chapter 5 looks at whether there were any other factors arising from how the RAP was operated that might have contributed to the rupture.
• Chapter 6 considers how the RAP is protected.
• Chapter 7 discusses the lessons that we think emerged and the changes we think are needed.

4.3  In terms of resilience, these questions relate to prevention and whether enough is being done to avoid damage to this critical infrastructure.

Investigations in 2017

4.4  After the pipeline ruptured in 2017, Refining NZ commissioned technical assessments of the section of pipe that had been removed, to try to understand what might have caused the damage. The Northland Regional Council (NRC) also carried out an investigation into the incident to assess whether they had a basis for a prosecution for an unauthorised discharge under the Resource Management Act 1991 (RMA).

4.5  We reviewed those technical reports and NRC’s investigation file. Between them, Refining NZ and NRC had reached a view that the damage had been caused by someone excavating to look for swamp kauri logs, in the second half of 2014, as follows:

• They knew that the damage must have happened after July 2014, when Refining NZ had last inspected the pipeline with an “intelligent pig”[1] and no damage to the integrity of the pipeline had been identified.
• The gouges on the damaged section of pipe were consistent with it having been struck several times by the bucket of a large digger.
• From interviews with the landowner and others, NRC found that the landowner had given permission for someone to use a digger to look for swamp kauri logs on the property in 2014.
• No other large digger had been on the property since 2014.

4.6  NRC was not able to establish an exact sequence of events or who might have been driving the digger when it struck the pipeline.

The swamp kauri industry

4.7  Swamp kauri is a unique and valuable wood, sourced from logs and stumps that have been buried and preserved in peat swamps, often for many thousands of years. Most swamp kauri is found in Northland, where there used to be extensive kauri forests. Much of this land has now been converted to farmland.

4.8  Extracting swamp kauri is controlled by local authorities under the RMA. In Northland, it is a permitted activity as long as it is not in an indigenous wetland or removing indigenous forest. Kauri logs can be extremely large and some are buried several metres deep. Extracting the logs can be a major exercise requiring heavy machinery.

4.9  Swamp kauri must be milled at a registered sawmill, and only if the Ministry for Primary Industries has issued a milling statement for the timber. Milling statements are only issued if the wood has been salvaged without damaging indigenous forest land. The sawmill usually provides photographs and other information on the location to support an application for a statement. These controls mean that sawmills must work with the people who extract the logs so that they have reliable information on where the wood was found.

Our investigation into what happened in 2014

4.10  To see if we could establish any further facts about the physical cause of the rupture and resulting outage, we engaged a private investigator to meet with relevant individuals on our behalf.[2]

4.11  The property where the pipeline ruptured is a small rural lifestyle block on the outskirts of Ruakākā. It was bought as bare land in October 2013 by the person who owned the land at the time (the landowner). He and his partner kept some horses on the property and a few cattle. In July 2014, they moved an empty house onto the property, which they intended to renovate and eventually live in. In the meantime, they were living in Waipū or staying on a boat at the Marsden Point marina, coming to the property regularly to care for their animals and work on the house.

The approach from someone wanting to look for swamp kauri

4.12  The landowner told us that shortly after the house had been moved there, a man approached him while he was at the property one evening. The man did not give his name. He asked if he could “scratch around” to look for swamp kauri logs on the property and indicated what any logs could be worth. This man was a contractor who would try to sell the swamp kauri he extracted and share the proceeds with the landowner. The landowner was interested, because he needed money to do up the house and thought there might be timber that he could use as well. He said that the man could look around.

4.13  The landowner knew that the RAP ran through his property and where it was (it is marked by signs on the paddock gates and painted fence posts). He recalls that he told the man about the pipeline and that he made clear he should not dig in that area.^[3]

4.14  Receipts and invoices from local cartage companies show that a 16-tonne digger was delivered to the property twice that year. The relevant dates are shown in Table 4.

Table 4: Dates the digger was taken to and from the Ruakākā property

4.15  Kauri Ruakaka Ltd (KRL),^[4] which is a local sawmill, owned the digger. The manager of KRL confirmed to our investigator that he arranged and paid for its transport on each of these occasions.[5] KRL sometimes bought kauri logs from the contractor.[6] KRL did not charge for the use of the digger or pay the contractor for his time.

4.16  The person from the transport company who delivered the digger to the Ruakākā property in August 2014 told us that he understood it would be used to look for swamp kauri. That is what was recorded on the relevant invoice.

4.17  Our investigator talked with two other property owners in a nearby area who had allowed the same contractor to dig on their land under similar arrangements. They had been approached in the same way and all the arrangements were based on “a handshake” rather than any written contract.

The sequence of work on the property

4.18  A neighbour told us that he saw someone using the digger right over the pipeline area around these dates, but he could not see the person driving it. He stopped his car and waved at the driver to indicate that he should stop but he did not know whether the driver saw him. He stopped at the top of the driveway to try to call the 0800 number on the sign there that warned about the RAP, to let them know what was happening, but the call did not connect. He did not follow up and try again later.

4.19  Our investigator spoke to the person who it seemed was likely to have been operating the digger. When NRC had spoken to this person during their investigation in 2017, he had said that he could not remember being there or working on the property. However, he confirmed to our investigator that he had been using the digger to look for logs on the property in August 2014 and that he had operated the digger in the area over the pipeline. He stated that he had only smoothed out the land in that area and he had not struck the pipe. He had not returned to the property after that.

4.20  The landowner told us that when he went to the property after the digger had gone, he was very angry at the way the land had been left. He said here were holes everywhere, which meant that it was not safe for his animals, and kauri stumps and logs had been left sitting there. He confirmed that there was a big hole near the pipeline, perhaps about 1 to 1.5 metres deep and over a large area. The pipe itself was not visible when he saw the hole. He said that it did not occur to him that he should tell anyone about the digging.

4.21  The landowner had a small digger of his own, which he used to fill up most of the holes as best he could. He pushed some topsoil into the big hole, but it was much too big for him to fill on his own.

4.22  We saw an email from the cartage company to KRL sent on 15 October 2014, before the digger’s second visit. It records that the landowner’s partner had just spoken to them, and:

She wanted to know what was happening about the Kauri that was dug up on their property …
She was wondering if they were going to be picked up and when the paddock was going to be reinstated so she [could] graze her horses in that area.

4.23  This email strongly suggests that the damage was done while the digger was being used at the property on its first visit between 26 and 28 August 2014. The return visit of the digger 10 days after this email was probably in response to this request to fix up the damage to the property.

4.24  Both the contractor and the KRL manager told us it was the manager who operated the digger when it returned in October 2014 to fix up the land. The manager told us that he only worked in the front paddock, not in the back paddock where the pipeline is.

4.25  There is nothing to suggest that a large digger, capable of excavating so deeply as to strike the pipeline, had been on the property since these events in 2014.

Our findings on the cause

4.26  We concluded that it was highly likely that the pipeline had been struck by the contractor who operated the digger in the easement area between 26 and 28 August 2014. We think it is more likely than not that he knew what had happened, because the pipeline must have been struck quite hard and the impact would have caused noise and vibration. The sound of striking a metal pipe would have been quite different from hitting a buried log.

4.27  We inferred that the contractor had put some soil back over the pipeline to cover up the fact that he had hit it. He then left the property and did not return. Two days later, the digger was moved back to the Mangawhai site at which the contractor had been working previously.

4.28  The landowner later put some more soil in the hole. We accept that he did not realise that the pipeline had been exposed and damaged when he did this. The KRL manager brought the digger to the site again in October and reinstated the site more fully.

5. Were there any other contributing factors?

5.1  We considered whether there were any other factors that might have contributed to the eventual rupture of the pipeline, some three years after it was damaged. In particular, we considered whether:

• the 2016–2017 project to increase the operating pressure on the RAP, so that it was able to transport more fuel, might have been relevant to the eventual failure of the damaged section of pipe; or
• Refining NZ should have carried out more inspections of the RAP – for example, before it increased the operating pressure – which would have helped it to detect the damage earlier and fix it before the pipeline ruptured.

How we assessed the maintenance and operation of the RAP

5.2   We engaged Fueltrac Pty Australia Ltd to provide us with an independent expert assessment on these questions and others. An engineer from Fueltrac with expertise in the petroleum industry reviewed the information and reports provided by Refining NZ, visited the refinery and the Wiri terminal, met with representatives from both companies, and met with an independent expert engaged by Refining NZ.

5.3   We asked Fueltrac to review what was being done against the legal requirements in New Zealand and standard industry practice.[7] The legal rules governing high-pressure pipelines of this kind are set out in:

• the Health and Safety at Work Act 2015 (which replaced the Health and Safety in Employment Act 1992); and
• the Health and Safety in Employment (Pipelines) Regulations 1999 (made under the old Act but continuing in force).

5.4  The Regulations require a pipeline to be built and operated in accordance with industry standards and specify four sets of formal Standards from which an operator can choose. Refining NZ has elected to follow AS/NZS 2885.3 (1997) Pipelines – Gas and liquid petroleum – Part 3: Operation and Maintenance (the 1997 Standard).

5.5  These standards are developed in Australia and adopted in New Zealand. We noted that the 1997 Standard that is listed in the regulation is out of date. In Australia, this standard has been revised twice and significant changes have been made. The Standard currently operating in that country was issued in 2012. Our understanding is that the 2012 Standard sets out current industry practice in Australia and New Zealand.

5.6  Our assessment work therefore took account of the New Zealand legal requirements in the Act, the Regulations, the 1997 Standard, and current industry practice as set out in the 2012 Standard.

5.7  We consider that New Zealand law should require the industry to meet the current industry standards. We recommend that MBIE should amend the relevant regulations to bring them up to date.

The project to increase the operating pressure

5.8  Across 2016 and 2017, Refining NZ carried out a project to increase the operating pressure of the RAP so that its carrying capacity would increase. The pipeline had operated at 87 barg from 1985 to 1999, which was under its maximum allowable operating pressure of 90.4 barg. In 1999, the operating pressure was reduced to 75 barg after a second pumping station was installed at Wellsford. The project aimed to return the operating pressure back to 87 barg, to increase the throughput volume.

5.9  Refining NZ commissioned a number of technical reports on the options for improving performance, a stress analysis of the pipeline, a pressure surge analysis, and the condition of the pipeline. These reports, along with design plans and a hazard study, were submitted to the certifying agent, Lloyd’s Register. In June 2017, Lloyd’s accepted these as demonstrating compliance with the relevant standards and design parameters. Refining NZ increased the operating pressure of the RAP in five steps, between 28 June and 2 August 2017. The pipeline ruptured six weeks later, on 14 September 2017. At the time, it was operating at a pressure of 82–83 barg.

5.10  After the incident, independent engineers reviewed the operating pressure profiles for the three months before the rupture. They concluded that there had been no pressure surge events or times when the pressure had exceeded the maximum allowable surge pressure. Specialist engineers also analysed the damaged section of pipe. They concluded that the damage to the pipe had significantly reduced its capacity to withstand internal pressure so that, with repeated stress fluctuations over time, it eventually failed.

5.11  Fueltrac reviewed all this information. They noted:

• The pipeline was considered to be in better condition than the industry average from a corrosion point of view and was able to be operated safely up to a pressure of 87 barg, and that it was operating within its design limits.
• The gouge made by the digger reduced the pressure the pipe could withstand, so that over time, a crack associated with the gouge propagated, leading to the eventual rupture.

5.12  In Fueltrac’s opinion, it was likely that the increase in operating pressure increased the “magnitude of the stress fluctuations within the pipe” and so reduced the time it took for the damaged area to fail. However, it was not otherwise relevant to the failure. If the pipe had not been damaged, there was nothing to suggest that the increase in pressure would have led to a problem.

Should the pipe have been inspected before the pressure was increased?

5.13  The 2012 Standard on pipeline maintenance requires periodic in-line inspections to identify factors that might affect the integrity of the pipeline.^[8] We were told that these inspections are a significant investment of time and money: the equipment must come from overseas and the cost is around $800,000 for each inspection. The frequency of such inspections is based on factors such as:

• the past reliability of the pipeline;
• historical records;
• current knowledge of the pipeline’s condition;
• the rate of deterioration (corrosion) of the pipeline; and
• the statutory requirements.

5.14  The RAP had in-line inspections in 2006, 2009, and 2014. Based on the 2014 results, the next inspection had been set for 2019. In addition, as a precaution in response to successive and unusual wet periods, Refining NZ had scheduled an additional inspection for October 2017 to check for pipeline movements and areas of bending strain. This inspection took place in November 2017 and served as a post-incident inspection as well. A further and more accurate post-incident inspection took place in December 2017. Based on that data, the recommendation is for another inspection to be carried out in 2022.

5.15  Fueltrac reviewed the chronology of in-line inspections across the life of the RAP so far, along with the reports resulting from the more recent inspections. They concluded that the frequency of the in-line inspections was appropriate and in keeping with the 2012 Standard.

5.16  We specifically asked Fueltrac whether there was any reason for Refining NZ to have carried out an additional inspection before it began the project to increase the pressure in the RAP. They advised that, based on what was known about the condition of the pipeline at that time, there was no reason for Refining NZ to have been concerned and to consider such a step.

Our findings on the possibility of other contributing factors

5.17  Based on the extensive information and analysis provided by Refining NZ, as well as the independent review of that material by Fueltrac, we have concluded that there were no other factors in the way Refining NZ operated and maintained the RAP that contributed to its rupture and the outage.

5.18  We set out in paragraph 5.5 that the legal requirements in New Zealand have not kept pace with changes in the industry standards. The New Zealand law refers to the 1997 Standard, which has now been revised twice. The industry currently works to a 2012 Standard, although we understand that is now being revised as well.

5.19  We are concerned by this situation. For something this important, for safety as well as the protection of nationally critical infrastructure, we think the law should not be allowed to become out of date. We draw this to the attention of MBIE, which has responsibility for administering the Health and Safety at Work Act 2015 and the standards-setting system in New Zealand.^[9]

6. Protection of the RAP

6.1  The Inquiry examined the systems in place in 2014 to 2017 to protect the RAP from damage by external interference. We wanted to assess whether there was anything more that might have been done to protect against or detect the damage that occurred.

6.2  We reviewed the information provided to us by Refining NZ and its contractor, First Gas Ltd, against the relevant law and the 2012 Standard. In May 2019, Refining NZ also provided us with a report on the same topic that they had recently commissioned from another Australian expert, GPA Engineering Pty Ltd.[10] We asked the pipeline expert assisting us to provide us with her assessment of the activities that protect the RAP. This activity is also governed by the legal requirements and standards set out in paragraph 5.3.

6.3  In this chapter we look at:

• the arrangements between Refining NZ and First Gas Ltd for protecting the RAP from damage from external interference;
• the measures in place to try to prevent damage from occurring; and
• the measures in place to detect risks or damage, once it has occurred.

Refining NZ’s contract with First Gas Ltd[11]

6.4  Refining NZ contracts First Gas Ltd (previously Vector Gas Ltd), which has considerable expertise in managing pipelines, to carry out many of the protection activities on its behalf. First Gas owns nearly 5,000 kilometres of gas distribution pipelines and 2,500 kilometres of high-pressure gas transmission pipelines in the North Island.

6.5  Because First Gas has a high-pressure gas pipeline in the same trench for most of the length of the RAP, it is efficient for First Gas to carry out these activities for both pipelines at the same time. The contract between Refining NZ and First Gas covers the length of the RAP, from Marsden Point to Wiri.

6.6  The parties have revised the contract periodically to change the services to be provided. The 2012 revision was the relevant contract in 2014 when the RAP was damaged. Since then it has been revised in late 2014, 2015, and 2018.

Measures to prevent damage

Restrictions on activities above the pipeline

6.7  Two mechanisms impose legal restrictions on what can be done above or close to the pipeline: easements over the land where the RAP is laid, and designations over the same area under the RMA:

• Refining NZ has legal easements over each title of land where the RAP is laid.[12] In rural areas, the easement is 12 metres wide (6 metres on either side of the pipeline). In urban areas and along road reserves it is 6 metres wide (3 metres on each side of the pipeline). The easement gives Refining NZ the right to enter the easement area to inspect and carry out work on the pipeline. It requires the landowner to ensure that, in the easement area, no trees or shrubs are planted and no structure is built without Refining NZ’s consent. The surface can be used for agricultural or pastoral activities, including digging to a depth of up to 0.375 metres, without consent. Consent must be sought for any deeper digging.
• Designations under the RMA to protect the RAP are included in the district plans of the relevant local authorities. They extend over much the same area as the easement (generally 12 metres wide, reducing to 6 metres within road and rail corridors) and require a person to obtain consent from Refining NZ before erecting any building or structure on the designated corridor, putting up a fence or other improvement that extends more than 0.4 metres below ground, or doing anything on the land that could endanger the pipeline or inhibit its operation.[13]

6.8  On behalf of Refining NZ, First Gas assesses and issues the permits to people who seek consent to carry out a restricted activity in the easement or designation area. It also oversees any such work. If it becomes aware that someone has carried out restricted work without a permit, First Gas will try to contact them to explain the need for a permit.

Communication activities

6.9   As well as imposing legal restrictions on what can be done on the land, the easement and designation serve a communication purpose. Having an easement on titles to land means that any purchaser of land is likely to be informed about the RAP and the restrictions on what can be done in the area at the time of purchase. The designation, shown on district plans available to the public, means that others who might engage in excavation or construction activities are able to find out about its location as well.

6.10  First Gas carries out a number of tasks to communicate more directly with landowners and occupiers. It does this for its own pipeline in the easement and on behalf of Refining NZ for the RAP. First Gas:

• maintains a database of property owners and monitors changes in ownership;
• asks new landowners to provide contact details for occupiers;
• mails a safety information pack to new landowners and occupiers, as well as further safety information twice a year;
• provides a landowner liaison service; and
• carries out an annual phone survey of a sample of landowners (since 2018).

6.11  First Gas also communicates with others who might become involved in work on the land that could affect the pipe. First Gas:

• maintains a database of contractors working in relevant areas and sends them safety information on a regular basis;
• maintains contact with local authorities so that it can advise Refining NZ about any relevant subdivision or land use consents;
• provides a free 24-hour, 7-day-a-week phone service for emergencies and to help with third-party work on pipeline easements; and
• supports the “BeforeUdig” service, which is a private service that enables anyone planning excavation work to get information on any underground pipes or cables that might be in the area.

6.12  Along the length of the RAP, signs and notices identify where it is located and state that there is a dangerous pipeline below ground. The signs are on the gates at the entrance to paddocks, on north- and south-facing fences that cross the easement, and at the roadside. When the RAP runs across paddocks, the fenceposts on each side of the pipeline are painted white to indicate where the pipeline runs. In urban areas, the signs are attached to independent stands, power poles, and kerbs.

6.13  A marker or warning tape is also laid in the trench along the entire length of the pipeline, about a metre above the pipe itself, so that if someone digs there, they will see the warning tape before they reach the pipe.

How the communication worked for the Ruakākā property

6.14  The property where the pipeline was damaged illustrates the challenges for these communication activities. Nobody has ever lived at the property and it did not have a habitable building on it. On learning of the change of ownership for the property in 2013, Vector Gas (now First Gas) sent a new-owner information pack to the address. It was returned. They identified an accountant in Warkworth as an alternative contact address and sent the information to that address. They used that address for all the mailouts until an information pack was returned to them in 2016. They were given the address of the landowner’s new accountant and they then sent the information to that address. After the 2017 rupture, First Gas contacted that accountant’s office and telephoned the landowner directly. The landowner asked them to address mail to the address of the property from then on.^[14]

6.15  The landowner told us that he had previously owned a farm elsewhere that had the RAP running across it. When he bought the Ruakākā property, he was told about the easement on the title and understood that it meant he should not dig to any depth in that area. He knew that he could carry out normal surface cultivation. He knew about these constraints from his previous experience owning land with the RAP under it and from the easement on the title to the Ruakākā property. He said that he did not recall ever receiving any mailed information packs about the RAP for the Ruakākā property, either directly or through his accountant.

6.16  First Gas told us that they often have to use registered addresses, which are usually at the offices of lawyers or accountants, when mailing information to landowners. Many properties, especially in rural areas, are owned by businesses, trusts, or other organisations, and it is common for them to use a registered address. First Gas considered that the system of registered addresses generally works well, and it is reasonable for them to rely on it. They see difficulties in trying to implement a system to follow up on mail sent to such addresses to check it has been passed on or to try to establish personal contact with landowners in such cases. Cost was one factor, but not the only one.

Independent assessments of these preventive measures

6.17  Fueltrac assessed these preventive measures against the legal requirements and the 2012 Standard. They found that the protective activities were generally good. While acknowledging that the 2012 Standard provides for judgement to be exercised about how it is implemented, to take account of individual circumstances, they identified some areas that they thought warranted more attention. The specific points identified were:

• The desirability of prioritising face-to-face visits where possible: Section 7.3.2.2 of the 2012 Standard makes clear that the basic requirement is to visit landowners or occupiers to give them information about the pipeline. The option of mailing out information is given as a possibility where it is not possible to contact people personally. The length of the RAP and number of properties affected makes it challenging to expect regular personal contact with all owners or occupiers. Until 2015 there was no provision in the Refining NZ or First Gas contract for visits to landowners, unless they were asked to attend to, advise on, or oversee work. Since 2015, the contract has required First Gas to visit new landowners within a month. Other communication has largely been by mail. Since the 2017 outage, Refining NZ and First Gas have changed the contract to include a new full-time role of a dedicated liaison person for the pipeline. They have told us that this person now visits new landowners and occupiers in person and is working towards visiting all landowners and occupiers each year. We have been advised that the experience in Australia is that the more personal the contact, the better the level of engagement with the need to protect a pipeline.
• Communication with the community, and neighbours in particular: Each part of section 7.3 of the 2012 Standard refers to the need to communicate with the community and/or general public, as well as stakeholders, about the pipeline, its dangers, and the limits on what can be done in the easement area. Section 4.8 specifically mentions neighbours. The contract between Refining NZ and First Gas requires systematic interaction with all the main stakeholder groups, including landowners and occupiers, but does not cover neighbours or the general public and community at large.[15] Refining NZ works to engage generally with the local community near the Marsden Point refinery (for example, through sponsorships, scholarships, and involvement in community events), but this is not the same as systematic communication with the people living and working close to the pipeline on the matters the Standard says they should be informed about.
• Communication about the dangers of interference with the pipeline: The samples of communication material provided to the Inquiry focus on the restrictions (what not to do), the help available, and contact information. All of this information is important, but the 2012 Standard also specifies that people should be informed about the hazards and dangers of interference (see sections 7.3.2.2 and 7.3.2.3.) The samples provided do not contain any significant information of this kind. This information is an important reinforcement, because it makes clear that the restrictions are not just to protect the pipeline but also to protect people, property, and the environment.

6.18  The May 2019 report from GPA Engineering also identified these first two issues as areas in which there was scope to strengthen the current arrangements. Refining NZ has indicated it is considering implementing the suggestions on all three issues.

Measures to detect damage

Inspection and detection mechanisms

6.19  The second group of protections aims to detect risks and possible damage. The two main ways are through in-line inspections of the pipe itself, using pigs and visual surveillance inspections carried out by people travelling the length of the RAP by aeroplane, vehicle, and on foot. These checks are periodic and each looks at a different aspect. Between them, they increase the chances of detecting risks or damage but they cannot provide complete certainty.

6.20  The various in-line inspections have already been discussed in chapter 5.

6.21  First Gas carries out a regular programme of surveillance inspections along the length of the RAP to look for risks or damage that might affect either the gas or the petroleum pipeline, as follows:

• Vehicle patrols along roads: In the Auckland urban area, where about 30 kilometres of the RAP follows roads and road reserves, they carry out daily vehicle patrols. Vehicle patrols around the Ruakākā area were required every three months under the 2012 contract. We were told that in practice, they are carried out fortnightly. These patrols aim to inspect areas where the pipe runs along or crosses a road. They are not designed to monitor activity on rural land, although they might pick up obvious unauthorised activity.
• Aerial inspections: There are monthly aerial inspections of the RAP in both urban Auckland non-road patrol areas and all rural areas. Before the 2017 incident, these inspections were usually done in a fixed-wing aeroplane flying at a height of 500–750 feet. Three times a year the inspection would be done in a helicopter. Helicopter inspections are more expensive, but they can fly lower, more slowly, and can pause and hover. The system was changed after the incident and all aerial inspections are now done by helicopter. The aerial inspections aim to identify current activity of interest, land movement, and obvious changes to the surface of the land.
• Foot patrols: Before 2018, First Gas carried out occasional foot patrols in areas where there had been a problem. Since May 2018, Refining NZ requires foot patrols to be carried out annually along the easement in rural areas.
• Geohazard patrols: Every year a geologist flies over the pipeline by helicopter to look for geohazards. Refining NZ also engages a consultant to walk the easement every five years for this purpose.

Inspection of this part of the RAP in 2014

6.22  Table 5 sets out the sequence of the different surveillance inspections in the second half of 2014, along with the times at which we know diggers were operating on the property. None of the aerial or vehicle inspections identified a problem at the property.

Table 5: Inspections of the Ruakākā section of the RAP in late 2014

6.23  We asked First Gas to explain why the disturbance to the land was not identified by the surveillance activity in September, October, or November 2014. They told us that the fixed-wing flights used then could only detect what they described as “gross disturbance” of the land. They explained that the people doing the flights looked for things like significant planting, creation of new tracks, new soil, house construction, slips, subdivision activity, and trenching. Something that simply looked like bare earth could have been disturbed by ordinary cultivation, cropping, stock damage, spraying, or similar. All of these are permitted activities, so they would not note them down or report disturbance of this kind. They added that it would be very hard to detect unauthorised digging that was covered up again, unless it was occurring during an inspection.

6.24   

The Inquiry discussed with Refining NZ and First Gas some photographs that had been taken of the property on 26 October 2014 and 9 November 2014, which showed a large patch of bare earth in the easement area. First Gas confirmed that an aerial inspection at that time would have been unlikely to note and report that kind of soil disturbance, because it could easily have been caused by permitted activities.

Figure 4: Aerial photographs showing the soil disturbance, October/November 2014

6.25  We understand that it is not possible to see what is happening on the land in detail when looking from a fixed-wing plane: Visibility is not always good and cloud cover can be a problem. We commend Refining NZ and First Gas for now using helicopters for all their monthly aerial surveillance flights.

6.26  We questioned whether there were other changes that could be made to improve the chances of detecting unauthorised activity in the easement area. We were concerned that the systems were unlikely to assess whether a large patch of bare earth directly over the pipeline was caused by shallow cultivation or deeper disturbance, such as digging with machinery.

6.27  The Inquiry was told that the procedure has been for those carrying out the surveillance simply to note down and include matters in reports if they were clearly unauthorised or obviously likely to be a concern. They would then follow up on what was usually a small list of items to check. Refining NZ told us that since the 2017 outage, more attention has been given to potential issues. We suggested that First Gas and Refining NZ should consider reversing their approach, so that all material soil disturbance in the easement area is recorded and followed up on, to check whether it is problematic. This approach would take more resources but could increase the chances of detecting unauthorised activity and possible damage. Refining NZ and First Gas have indicated they are willing to do this.

6.28  Refining NZ submitted to the Inquiry that, even if the damage in this case had been detected earlier, they would have been required to shut down the pipe immediately once they saw the extent of the damage. They calculated that the time to repair the pipeline, and therefore the outage period, would have been similar. The main difference would have been that there would not have been an uncontrolled leak of fuel. We did not attempt to verify this advice.

6.29  This more intensive level of follow up would not necessarily be appropriate for all the pipelines that First Gas monitors across the country. However, some pipelines are more important than others. We consider the RAP to be a particularly critical part of national infrastructure, given its role in supplying fuel to Auckland and jet fuel to Auckland Airport.

6.30  In our view, although the surveillance activity meets the current legal requirements and the 2012 Standard, Refining NZ needs to work with its contractor to explore how to make the surveillance activity more effective.

Our findings on how well the RAP was protected

6.31  We find that Refining NZ operates and maintains the RAP in accordance with the legal requirements and standard industry practice.

6.32  We acknowledge that the 2012 Standard allows for judgement on what is appropriate for the specific circumstances. Nonetheless, we find that there are areas where there is scope for further improvement. We discuss these in the next chapter.