Offshore petroleum and greenhouse gas regulation amendments

Articles Written by Tom Barrett (Senior Associate)

Background to the amendments

The Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009 (Cth) (Regulations) prescribe the regulatory regime for upstream petroleum and greenhouse gas activities in offshore areas in respect of environmental matters. Following a comprehensive review of the efficiency and effectiveness of the Regulations, the Regulations were amended by the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment (Environment Measures) Regulation 2014 (Cth) (New Regulations), which came into effect on 28 February 2014.

The New Regulations facilitate the streamlining of environmental approvals for offshore petroleum and greenhouse gas activities under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) and the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). To assist in this process and to improve efficiency, the National Offshore Petroleum Safety and Environment Management Authority (NOPSEMA) has been made the sole regulator for petroleum activities in Commonwealth waters. The New Regulations also implement the findings of the comprehensive review of the Regulations.

Key Amendments

Introduction of an offshore project proposal

The amended Regulations require an "offshore project proposal" (as defined by the Regulations) to be submitted to the Regulator before the commencement of an "offshore project", in order for the proposal to go through a 4 week public consultation process and be accepted by the Regulator.

Under the amended Regulations, an 'offshore project' is a project consisting of activities undertaken for the recovery of petroleum other than on an appraisal basis, including any conveyance of recovered petroleum by pipeline. Specifically, an 'offshore project' can include drilling, construction of facilities or pipelines, operation of facilities or pipelines and other petroleum activities undertaken for the purpose of the recovery of petroleum other than on an appraisal basis. However, an 'offshore project' does not include drilling for exploration or appraisal purposes, or other petroleum exploration activities such as seismic surveys.

The requirement to provide an 'offshore project proposal' is intended to capture large-scale petroleum developments that are likely to significantly impact matter protected under Part 3 of the EPBC Act and to ensure a mandatory public consultation process for those developments. Under the amended Regulations, NOPSEMA is the relevant "Regulator" for a petroleum activity and the responsible Commonwealth Minister is the relevant "Regulator" for a greenhouse gas storage activity.

The prescribed form and content of the required proposal is set out in the amended Regulations, as well as the specific circumstances when a proposal is not needed. When an 'offshore project proposal' is submitted, a fee must be paid to NOPSEMA for the consideration of the proposal. The amended Regulations also outline the criteria by which the 'offshore project proposal' will be suitable for publication on the Regulator's website for public comment, and the responsibilities of the Regulator and proposal applicant after the publication of the proposal.

Amendments to the content, submission and approval of an environment plan

Under the amended Regulations, the title holder, as opposed to the operator, must now submit an environment plan for an activity to the Regulator before commencing the activity.

There are also changes to the environment plan submission requirements, including prior consultation with relevant persons and an amendment of the environmental assessment and implementation strategy requirements that need to be included in the environment plan.

Importantly, a title holder can only submit an environment plan for an activity that is, or is part of, an 'offshore project' where the Regulator has accepted the 'offshore project proposal' that includes that activity or approval has been granted by the Environment Minister under specific sections of the EPBC Act. Therefore, a person who wants to undertake activities that are, or are part of, an 'offshore project', must first submit and receive acceptance for an 'offshore project proposal' and then subsequently submit and receive acceptance of an environment plan before commencing the activity.

Any environment plan submitted by a title holder must now set out "environmental performance outcomes", being a measurable level of performance required for the management of environmental aspects of an activity to ensure that environmental impacts and risks will be of an acceptable level. This requirement is intended to clarify a title holder's obligation to set specific, measureable benchmarks for its environmental performance, that can be monitored and enable a determination as to whether those outcomes are being met.

The amended Regulations also set out specific criteria for the acceptance of an environment plan, such as that the Regulator cannot accept an environment plan for an activity undertaken in any part of a declared World Heritage property.

To improve transparency in relation to proposed activities, the amended Regulations require the Regulator, after receiving an environment plan, to publish certain information, including a description of the activity or stage of the activity to which the environment plan relates and the location of the activity, on its website to inform the public about the receipt of the plans and to provide high level information about the activity to which the plan relates.   

The amended Regulations also prescribe the process for modifying, revising or resubmitting an environment plan if it does not meet the acceptance criteria, and grants the Regulator the power to request additional information before making a decision. After an environment plan has been approved, a summary of the accepted plan must be submitted to the Regulator for public disclosure, including a summary of the arrangements for monitoring and an oil pollution emergency response.

Transfer of responsibility from the operator to the title holder

A major amendment to the Regulations is the transfer of responsibility for the submission of an environment plan, and compliance with the environment plan and the Regulations generally, from the operator of an activity to the title holder. The rationale behind this change is that all activities are carried out at the request of the title holder, who is the person who has the legal authority to exercise and exploit the rights conferred by the title. Therefore, the title holder should be responsible for complying with the Regulations and be liable for any breach.

Under the amended Regulations, it is the title holder's responsibility to obtain an approved 'offshore project proposal' and environment plan. Subsequently, the title holder will commit an offence under the Regulations if it undertakes an activity where there is no environment plan in force for that activity, undertakes an activity contrary to the environment plan, unless consent has been obtained from the Regulator, or undertakes an activity after a new or increased environment risk has been identified.

The title holder is also responsible for notifying a 'reportable incident' and submitting a written report when a 'reportable incident' occurs, and submitting a written report when a 'recordable incident' occurs. The amended Regulations clarify and strengthen the incident reporting requirements and provide that a title holder commits an offence if it does not comply with the relevant notification and reporting requirements.

A title holder must also submit a report to the Regulator in relation to its environmental performance for an activity, at the intervals provided for in the environment plan.

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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