Australian governments require petroleum and Greenhouse Gas (GHG) companies to conduct their activities to a high standard of environmental protection.
The petroleum industry's environmental record in Australia, particularly in offshore areas, has been exemplary. The objective based Environment Regulations (outlined below) provide companies with flexibility in managing environmental protection requirements.
Australian Regulatory Environment
Regulation of Offshore Petroleum and Greenhouse Gas Projects in Commonwealth Waters
Current Australian Government legislation relevant to environmental management of offshore petroleum exploration and production, and GHG development activities includes:
- Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGSA) and its Regulations;
- Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act);
- Environment Protection (Sea Dumping) Act 1981;
- Protection of the Sea (Prevention of Pollution from Ships) Act 1983; and
- Historic Shipwrecks Act 1976.
Of particular relevance to the petroleum and GHG industries are the complementary requirements of the OPGGSA and EPBC Acts. Under these two Acts, there are four main environmental approvals that may be required for petroleum industry activities:
- an Environment Plan under the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations, 2009, (the Environment Regulations) is required for every activity;
- approval under Chapter 4 of the EPBC Act to undertake an activity that is likely to have a significant impact on a matter of National Environmental Significance (NES);
- permits under Chapter 5, Part 13, of the EPBC Act to undertake activities that may potentially affect protected species, in particular cetaceans (whales and dolphins); and
- permits under Chapter 5, Part 15, Division 4, of the EPBC Act to carry out activities in a Commonwealth Marine Reserve.
Offshore Petroleum and Greenhouse Gas Storage Act 2006
Petroleum exploration and production, and GHG activities in Australia's offshore areas are subject to the environmental requirements specified in the OPGGSA and associated Regulations. The OPGGSA replaced the Petroleum (Submerged Lands) Act 1967 from 1 July 2008.
The OPGGSA contains a broad requirement for titleholders to operate in accordance with "good oil-field practice". Specific environmental provisions relating to work practices essentially require operators to control and prevent the escape of wastes and petroleum.
The Act also requires that activities are carried out in a manner that does not unduly interfere with other rights or interests, including the conservation of the resources of the sea and sea-bed, such as fishing or shipping. In some cases, where there are particular environmental sensitivities or multiple use issues it may be necessary to apply special conditions to an exploration permit area. The holder of a petroleum title must maintain adequate insurance against expenses or liabilities arising from activities in the title, including expenses relating to clean-up or other remedying of the effects of the escape of petroleum.
Environment Regulations under the OPGGSA
The Environment Regulations provide an objective based regime for the management of environmental performance for Australian offshore petroleum exploration and production, and GHG activities in areas of Commonwealth jurisdiction. Key objectives of the Environment Regulations include:
- to ensure operations are carried out in a way that is consistent with the principles of ecologically sustainable development;
- to adopt best practice to achieve agreed environment protection standards in industry operations; and
- to encourage industry to continuously improve its environmental performance.
A key feature of the regulations is the requirement that an operator submit an Environment Plan to the National Regulator (NOPSEMA) before commencing any petroleum activity. An accepted Environment Plan will establish the legally binding environmental management conditions that must be met by the operator of an offshore petroleum activity. An Environment Plan must:
- be appropriate for the nature and scale of the activity;
- demonstrate that the environmental effects and risks of the activity will be reduced to as low as reasonably practicable;
- demonstrate that the environmental effects and risks of the activity will be of an acceptable level;
- provide for appropriate environmental performance objectives, environmental performance standards and measurement criteria; and
- incorporate an appropriate implementation strategy (including an oil spill contingency plan) and monitoring, recording and reporting arrangements.
The Environment Regulations can be accessed on the petroleum environment website.
Guidance for the Preparation of an Environment Plan can be accessed at the National Regulator (NOPSEMA) website.
Environment Protection and Biodiversity Conservation (EPBC) Act 1999
While the Environment Regulations under the OPGGSA manage day to day petroleum activities and apply to any activity that may have an impact on the environment, the EPBC Act (Chapter 4) regulates assessment and approval of proposed actions that are likely to have a significant impact on a matter of National Environmental Significance (NES). Actions that are likely to have a significant impact on a matter of NES require approval by the Commonwealth Environment Minister; the assessment process is administered by the Department of Sustainability, Environment, Water, Population and Communities. The EPBC Act does not replace the need for an Environment Plan to be approved under the Environment Regulations before an action can proceed.
The EPBC Act places the onus on the proponent for ensuring an action is either approved or is unlikely to have a significant impact on a matter of NES. If a person is unsure whether approval is required, they should refer the action to the Commonwealth Environment Minister for clarification as to whether the action would be a 'controlled action' under the EPBC Act. If an activity is not judged to be a controlled action, the proponent is free to carry out the activity, provided it is done within the parameters specified in the original referral.
Matters of NES protected by the EPBC Act are:
- nationally threatened species and ecological communities;
- migratory species;
- Commonwealth marine areas;
- World Heritage properties;
- National heritage places;
- Ramsar wetlands; and
- nuclear actions (including uranium mining).
A range of EPBC Act Policy Statements are available which provide guidance on the practical application of the EPBC Act. The Significant Impact Guidelines 1.1 - Matters of National Environmental Significance is the primary source of guidance as to whether an action is likely to have a significant impact on a matter of national environmental significance. Details of the environment legislation and the steps to gain environment approval can be found on the EPBC Act or by calling the Department of the Sustainability, Environment, Water, Population and Communities’ Community Information Unit on 1800 803 772.
Potential proponents are encouraged to speak to the Department of Sustainability, Environment, Water, Population and Communities, and the Department of Resources, Energy and Tourism at an early stage of their project planning.