Proposals involving fracking require referral to the EPA for assessment

The Environmental Protection Amendment Regulations (No. 2) 2020 (WA) (Amendment Regulations) have recently commenced, with the effect that all onshore oil and gas exploration and production proposals involving hydraulic fracture stimulation (fracking) in Western Australia will now need to be referred to the Environmental Protection Authority (EPA) for assessment under the Environmental Protection Act 1986 (WA) (EP Act).

Background

Fracking is an underground oil and gas extraction process, used to stimulate the flow of oil and gas. It involves the injection of fluids and proppants (solid material such as sand or ceramic beads) under high pressure into low permeability rock to induce small fractures for the purpose of increasing the rock’s permeability.[1] These fractures enable oil and gas, previously held tightly within the rock, to flow to the well.

Ban and moratorium on onshore fracking and establishment of an independent inquiry

On 5 September 2017, the State Government announced that it had implemented a ban on fracking for existing and future petroleum titles in the South-West, Peel and Perth metropolitan regions of Western Australia and a moratorium on the use of fracking throughout the rest of the State.[2]

At the same time, the State Government announced an independent scientific panel inquiry (Inquiry) into fracking in Western Australia. The purpose of the Inquiry was to report on the potential impacts arising from the implementation of fracking on the onshore environment of Western Australia outside of the South-West, Peel and Perth metropolitan regions.

Following this announcement, on 8 December 2017, the State Government gazetted the Petroleum and Geothermal Energy Resources (Hydraulic Fracturing) Regulations 2017 (WA) (Hydraulic Fracturing Regulations),[3] which legislated a permanent ban on fracking in the Perth Metropolitan, Peel and South-West regions, and a moratorium on fracking in the rest of the State until 30 June 2020.

Findings of the Inquiry

On 12 September 2018, the Inquiry panel handed its report to the State Government and, on 27 November 2018, the Inquiry panel’s final report and appendices were published (Final Report).[4]

The Inquiry had over 9500 public submissions, with the panel making 91 findings regarding risks, public concern and regulation of onshore fracking, and 44 recommendations as to how those risks and concerns might be reduced, should the State Government choose to lift the moratorium on fracking.[5]

Overall, the Inquiry found that the international standards for the design, construction and operation of an individual petroleum well, incorporating fracking, if properly executed and located, posed a low level of risk to the environment and people.[6] The Inquiry, however, identified the opportunity to further reduce risk with a set of recommendations for additional regulation.

Recommendation 34 of the Final Report was that the EPA should assess all onshore unconventional oil and gas developments associated with fracking.[7] This recommendation was consistent with an earlier inquiry made by the WA Legislative Council’s Standing Committee on Environment and Public Affairs.[8]

The State Government accepted in principle all 44 recommendations of the Inquiry and, in July 2019, released its implementation plan in response to those recommendations.[9] Action 7 of that plan provided for all applications for onshore fracking exploration and production proposals to be referred to the EPA for assessment under the EP Act.[10]

Limited lifting of the moratorium

On 6 September 2019, the State Government gazetted the Petroleum and Geothermal Energy Resources (Hydraulic Fracturing) Amendment Regulations 2019 (WA) which amended the Hydraulic Fracturing Regulations and lifted the moratorium placed on fracking in respect of certain areas of Western Australia that were subject to petroleum titles in force as at 26 November 2018.[11]  Fracking, however, was still prohibited in the South-West, Peel and Perth metropolitan regions and, additionally, in gazetted public drinking water source areas or within two kilometres of such an area, in national parks, and on the Dampier Peninsula. The moratorium also remained over certain other residual areas of the State. The prohibitions on fracking that remained under the Hydraulic Fracturing Regulations meant that fracking would only be permitted over 2% of Western Australia.[12]

Overview and effect of the Amendment Regulations

The Amendment Regulations amended regulation 2C of the Environmental Protection Regulations 1987 (WA) (EP Regulations), which sets out what proposals are a “prescribed class” for the purposes of the EP Act.

Regulation 2C of the EP Regulations now provides that a petroleum activity is of a “prescribed class” if it is the subject of an environment plan (or a revision to an environment plan) submitted under the Petroleum and Geothermal Energy Resources (Environment) Regulations 2012 (WA), it is carried out under an existing petroleum authority area (as defined in the Hydraulic Fracturing Regulations) and it involves fracking.

In effect, regulation 2C of the EP Regulations now means that any oil or gas exploration or production activity onshore in Western Australia that involves fracking will be a proposal that is of a “prescribed class” for the purposes of the EP Act.

Consequently, once the Department of Mines, Industry Regulation and Safety receives notice that a petroleum title holder wishes to undertake fracking which meets the definition of “prescribed class” outlined above, it will need to refer that proposal to the EPA.[13] 

Following referral of the proposal to it, the EPA will decide whether or not to assess the proposal. If the EPA determines the likely effect of the proposal on the environment is not so significant as to warrant an assessment, it will decide not to assess the proposal. If, however, the EPA decides it will assess the proposal, the proponent will be subject to the EPA’s assessment process and the EPA will determine the level of assessment necessary for the proposal.

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