5.2.1 Australia's energy resource knowledge base
5.2.2 Offshore resource exploration and development
5.2.3 Onshore resource exploration and development
5.2.4 Market development
The Australian Government uses the following policy objectives, principles and elements to support the sustainable development of Australia’s energy resources.
Policy objective
To support the sustainable development of Australia’s energy resources, including by:
- ensuring that Australia’s energy resources are sustainably developed for the benefit of all Australians
- providing reliable and competitively priced supplies of energy resources
- enhancing Australia’s role as a leading reliable global supplier of energy resources.
Principles
- The efficient commercial development of our energy resources should be promoted to provide the highest-value return for the community.
- Energy resource development should be safe and sustainable, and consistent with all relevant national environmental and health and safety standards and obligations.
- The development of Australia’s energy resources should contribute to our ongoing domestic energy security.
- The development our energy resources should enhance Australia’s international competitiveness.
- Our energy resource development framework should interface appropriately and effectively with other relevant markets or regulatory frameworks to support efficient investment in upstream development and downstream supply capacity.
Framework elements
The government’s energy resource development framework has four central elements:
- the energy resource knowledge base, including pre-competitive data acquisition and dissemination
- offshore resource exploration and development arrangements
- onshore resource exploration and development arrangements
- domestic and international market development.
Reflecting Australia’s constitutional arrangements, Australia’s energy resource development framework is governed by policies at the national, state and territory, and local government levels. Four specific resource development components, as well as a number of intersecting policy frameworks, shape the overall business environment (Figure 5.2).
Onshore petroleum and mineral resources are regulated by the state or territory in which they are located.
The Australian Government is responsible for offshore petroleum resources (from the limit of the coastal waters to the limit of Australia’s continental shelf), although in some cases those resources can be cooperatively managed with the relevant state or territory in cross-jurisdictional projects.
The government also has a key role in the regulation of onshore and offshore projects that trigger certain matters of national environmental significance under the Environment Protection and Biodiversity Conservation Act 1999. Other important enabling Australian Government policies that affect energy resource development include those concerning native title, land access, fiscal arrangements, infrastructure provision and workforce development.
5.2.1 Australia’s energy resource knowledge base
A comprehensive dataset of Australia’s energy resources is important for attracting early commercial interest. The Australian Government, through Geoscience Australia, provides companies and other interested parties with pre-competitive geoscientific information. This information base and the pre-competitive information program is developed in consultation with state and territory agencies and industry to ensure strategic targeting and relevance.
The information helps businesses to assess the potential risks and rewards of more detailed exploration and can substantially enhance prospectivity (the chance of finding and commercialising resources). Because of the ‘public good’ nature of this information, it is collected or acquired by government and made available to interested parties at minimal cost.
The Australian Energy Resource Assessment is a comprehensive and integrated scientific and economic assessment of Australia’s energy resources, both onshore and offshore. It integrates geological and economic information to aid investment decision-making, examines all renewable and non-renewable resources individually, and provides information on the current status of those resources and their potential to 2030.
5.2.2 Offshore resource exploration and development
Offshore petroleum activities in Australia are regulated by the Australian, state and Northern Territory governments.
Operations beyond state and territory coastal waters are governed by the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and related regulations (this area is commonly referred to as 'Commonwealth waters'). Offshore petroleum activities in both state/territory and Commonwealth waters are also regulated under the Environment Protection and Biodiversity Conservation Act.
The legislation covers exploration for petroleum resources, their production and the geological storage of greenhouse gases and sets out a framework of rights, entitlements and responsibilities of governments and industry. It provides for a system of petroleum exploration, retention and production lease arrangements as well as core environmental and operational safety regulations.
While ultimate responsibility for Australia’s offshore areas beyond three nautical miles from the territorial baseline rests with the Australian Government, the regulatory regime is jointly administered and offshore petroleum industry activities are supervised cooperatively with each state and the Northern Territory through ‘joint authority’ arrangements.
Regulation of petroleum activities in offshore waters
On 1 January 2012, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) became the regulator of petroleum activities in Commonwealth waters. NOPSEMA performs regulatory functions in relation to occupational health and safety; the structural integrity of facilities, wells and well-related equipment; environmental management; and the regulation of day-to-day petroleum operations. At the same time, the National Offshore Petroleum Titles Administrator (NOPTA) was established to provide advice to the joint authorities, administer titles and manage data.
These reforms retain the joint authority, comprising the Australian Government minister and the relevant state or Northern Territory minister, as the key decision-maker on petroleum titles in Commonwealth waters. Other reforms include the provision for statutory timeframes to prevent unnecessary delays in title decisions. State and Northern Territory governments have also been given the option of conferring their regulatory and administrative powers in their coastal waters on NOPSEMA and NOPTA.
Exploration acreage release
The Australian Government administers the annual offshore petroleum exploration acreage release which facilitates petroleum exploration in Australia’s offshore areas. Each year, the Department of Resources, Energy and Tourism releases offshore exploration acreage for competitive bidding by prospective explorers. This enables industry to plan for the longer term and provides certainty in the release process.
In support of the acreage release, Geoscience Australia provides comprehensive pre-competitive geological and geophysical data to assist explorers in assessing the areas on offer. Ready access to this geoscientific information encourages new companies to consider Australian exploration opportunities.
The government is currently considering whether there are benefits in using a cash bidding basis for some acreage release, rather than the current work program bidding arrangements.
Offshore retention leases
Retention leases provide security of title over petroleum resources discovered through an exploration permit that are not yet commercial but have genuine development potential (that is, development is likely to be commercially viable within 15 years). They were introduced in 1985 to encourage oil and gas explorers to work in deeper water and commercially challenging areas. The retention lease holder is expected to address barriers that prevent the commercialisation of petroleum resources in the lease area during the retention lease term. Retention leases are issued for five years and can be renewed for further five-year periods, subject to meeting set criteria.
5.2.3 Onshore resource exploration and development
Onshore resources-related activities in Australia are generally the responsibility of state and territory governments. While each maintains separate legal and regulatory frameworks, those regimes are similar in content and administration and are generally based on exploration and production titles.
Increasingly, national cooperation is occurring on resource development frameworks and regulatory arrangements. The Standing Council on Energy and Resources has an active role in setting policy and regulatory direction to improve the governance of Australia’s energy resource development.
5.2.4 Market development
Australia’s energy resource market development framework promotes openness, transparency and competition in the markets. It seeks to secure access to key economies and global markets, add value to existing markets, foster participation in emerging markets, and plan for periodic fluctuations in demand for our energy resources.
The Australian Government uses bilateral, multilateral and ministerial engagement mechanisms to promote trade and investment opportunities by engaging with other governments and by facilitating their engagement with Australian industry.