Petroleum and Geothermal Energy (Energy Resources) Amendment Bill 2021 (SA) Summary

Articles Written by John Keeves (Partner)

On 25 August 2021, the Petroleum and Geothermal Energy (Energy Resources) Amendment Bill 2021 (SA) (Bill) was introduced in the South Australian House of Assembly.

The Bill is part of reforms to the Petroleum and Geothermal Energy Act 2000 (SA) (Act) and the associated regulations, which includes amendments such as:

  • expanding the scope of existing provisions to include a specific licence for generation of hydrogen;
  • changing the environmental reporting process to include more public consultation
  • expanding the Minister’s powers in relation to rehabilitation of land that is or has been the subject of a licence under the Act.

As part of the proposed Bill, the title of the legislation will be changed from the Petroleum and Geothermal Energy Act 2000 (SA) to the Energy Resources Act 2000 (SA).

The reforms process began in February 2021 with the release of an issues paper and public consultation was undertaken between 11 February and 26 March 2021. The Bill was drafted based on these public consultations and, once drafted, further public consultations were undertaken from 3 June to 25 June 2021.

The Department for Energy and Mining indicated, at least in relation to the first round of public consultations, that no major concerns were received and there was strong support for the amendments to expand the scope of the Act to include renewable hydrogen. 

Key amendments

The key amendments introduced in the Bill can be summarised as follows:

Hydrogen

Expansion of the definition of a regulated substance to include hydrogen, including hydrogen compounds or other substances that are a by-product of the production or generation of hydrogen.

Introduction of the term ‘generating hydrogen’ to ensure that any form of hydrogen generation is captured regardless of the source where the hydrogen is derived.

Introduction of Hydrogen generation licences to cover hydrogen generation that is not covered by the existing Act, such as hydrogen resulting from electrolysis of water or from imported liquefied natural gas.

Environmental statements and reporting

Introduction of Ministerial determination of environmental impact assessment criteria, such that the Minister may determine, and subsequently vary or revoke, environmental impact assessment criteria by notice in the Gazette.

Introduction of a requirement for licensees to undertake consultation on proposed statements of environmental objectives, in accordance with regulations.

Introduction of a requirement for the Minister to undertake public consultation, in accordance with regulations, on environmental impact reports and statements of environmental objectives.

Geological investigations

Introduction of a power for the Minister or authorised officers to enter land, conduct investigations on the land, and take or remove specimens from the land for purposes of geological investigations.

Rehabilitation of land powers

Introduction of a power of the Minister to extend or reinstate a licence where the holder of the licence has failed to comply with the Act and the licence has been extended or reinstated in order for the licensee to take action to rehabilitate the land.

Introduction of a power of the Minister to issue a rehabilitation direction even after a licence has expired or been cancelled or surrendered to the holder of that licence, but provided such a direction may only be issued to the person holding the licence immediately before its expiration, cancellation or surrender.

Incident reporting

The definition of ‘serious incident’ to be replaced by ‘immediately reportable incident’ and instead of prescribing the types of incidents that will be immediately reportable in the Act, ‘immediately reportable incidents’ are to be prescribed in the relevant statement of environmental objectives.

The definition of ‘reportable incident’ also to be amended to refer to incidents prescribed in the relevant statement of environmental objectives.

A licensee will be required to provide the Minister with an initial report of an immediately reportable incident within 24 hours after the licensee becomes aware of the incident and a comprehensive report must be provided within 3 months.

Gas storage licences

Amendment to provisions relating to gas storage licences to enable withdrawal of stored regulated substances.

Transmission pipelines

Revision to the definition of ‘transmission pipeline’ to no longer be limited to pipelines for conveying a regulated substance from the place of its production or to a place to be stored in a natural reservoir, in order to allow, among other things, for transmission of imported substances by pipelines.

Management system

Introduction of a requirement for licensees to establish and maintain a management system that complies with any requirements prescribed by the regulations in relation to regulated activities.

Priority charge

Introduction of a charge on property, if the owner of the property is liable to pay a debt to the Crown under the Act, which has priority over any other interest in, or encumbrance on, the property.

Penalties

There has been amendments to a number of penalty provisions to substantially increase penalties in cases of contravention of the Act, in a number of cases from $120,000 to $250,000.

Conclusion

The suite of amendments will update the Act and set the scene to facilitate expected innovations in South Australia’s energy landscape, including, importantly, hydrogen production.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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