Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary
Greenhouse Gas Titles and Other Measures) Bill 2019 [and] Offshore Petroleum
and Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous
Measures) Bill 2019
Bills Digest No. 82, 2019–20
PDF version [669KB]
Sophie Power
Science, Technology, Environment and Resources Section
11
February 2020
Contents
Purpose of the Bills
Structure of the Bills
Commencement
Background
Committee consideration
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Date introduced: 4
December 2019
House: House of
Representatives
Portfolio: Industry,
Innovation and Science
Commencement: Various
dates as set out in this Digest
Links: The links to the
Bills, Explanatory Memoranda and second reading speeches can be found on the
home pages for the Offshore
Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas
Titles and Other Measures) Bill 2019 and the Greenhouse
Gas Storage (Regulatory Levies) Amendment (Miscellaneous Measures) Bill 2019 or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at February 2020.
Purpose of
the Bills
The purpose of the Offshore Petroleum and Greenhouse Gas
Storage Amendment (Cross-boundary Greenhouse Gas Titles and Other Measures)
Bill 2019 (the Main Bill) is to amend the Offshore Petroleum
and Greenhouse Gas Storage Act 2006 (OPGGS Act) including to:
- provide
for single greenhouse gas titles that are partially located in Commonwealth
waters and partially located in state and Northern Territory coastal waters and
- strengthen
and clarify the monitoring, inspection and enforcement powers of the National
Offshore Petroleum Safety Environmental Management Authority (NOPSEMA) during
an oil pollution emergency originating in Commonwealth waters.
The purpose of the Offshore Petroleum and Greenhouse Gas
Storage (Regulatory Levies) Amendment (Miscellaneous Measures) Bill 2019 (the
Regulatory Levies Bill) is to amend the Offshore Petroleum
and Greenhouse Gas Storage (Regulatory Levies) Act 2003 (Levies Act)
to clarify the application of levies in relation to cross-boundary greenhouse
gas titles.
Structure of
the Bills
The Main Bill contains four schedules:
- Schedule
1 contains amendments to provide for the administration and regulation of cross-boundary
greenhouse gas titles (that is, titles that straddle the boundary between state
or Northern Territory coastal waters and Commonwealth waters)
- Schedule
2 provides that the greenhouse gas provisions of the OPGGS Act and Regulations
apply, and are taken to always have applied, to the states and the Northern
Territory
- Schedule
3 makes minor policy and technical amendments and
- Schedule
4 amends the monitoring, inspection and enforcement powers of NOPSEMA within state
and territory jurisdictions during an oil pollution emergency originating in
Commonwealth waters.
The Regulatory Levies Bill contains three schedules:
- Schedule
1 clarifies that levies imposed by the Levies Act are effectively
imposed on cross-boundary greenhouse gas titles
- Schedule
2 provides that the Levies Act binds, and is taken always to have bound,
the Crown in right of each of the states and the Northern Territory and
- Schedule
3 makes a technical correction to section 2 of the Offshore Petroleum
and Greenhouse Gas Storage (Regulatory Levies) Amendment Act 2019.
Commencement
The provisions of the Main Bill will commence as
follows:
- Parts
1 and 2 of Schedule 1 commence on a day to be fixed by Proclamation or, if the
provisions do not commence within a six month period of Royal Assent, on the day
after the end of that period
- Part
3 of Schedule 1 will commence either immediately after the commencement of
Parts 1 and 2 of Schedule 1 to the Bill or immediately after the
commencement of Schedule 2 of the Timor Sea Maritime
Boundaries Treaty Consequential Amendments Act 2019 (Maritime
Boundaries Treaty Act), whichever occurs later. However, Part 3 will not
commence if Schedule 2 of the Maritime Boundaries Treaty Act does not
commence
- Schedule
2, Division 1 of Part 1 of Schedule 3, and Part 2 of Schedule 3 all commence
the day after Royal Assent
- Division
2 of Part 1 of Schedule 3 has a retrospective commencement of 26 July 2018
- Parts
1 and 3 of Schedule 4 commence at the start of the day after Royal Assent or on
the commencement of Division 1 of Part 1 of Schedule 1 to the Offshore Petroleum
and Greenhouse Gas Storage Amendment (Miscellaneous Amendments) Act 2019,
whichever is later
- Part
2 of Schedule 4 commences on a day to be fixed by Proclamation. However, if the
provisions do not commence within the period of six months of the commencement
of the Part 1 of Schedule 4, they commence on the day after the end of
that period
- Part
4 of Schedule 4 will commence either immediately after the commencement of Part
1 of Schedule 4 or immediately after the commencement of Schedule 2 to the Maritime
Boundaries Treaty Act, whichever occurs later. However, Part 4 will not
commence if Schedule 2 of the Offshore Petroleum and Greenhouse Gas Storage
Amendment (Miscellaneous Amendments) Act does not commence.
The provisions of the Regulatory Levies Bill will commence
as follows:
- Schedule
1 will commence at the same time as Part 1 of Schedule 1 of the Main Bill (but
will not commence at all if that Part does not commence)
- Schedule
2 will commence at the same time as Schedule 2 of the Main Bill (but will not
commence at all if that Schedule does not commence) and
- Schedule
3 has a retrospective commencement of 28 October 2019.
Background
Regulating offshore petroleum
and greenhouse gas activities in Australia
Responsibility for the regulation of offshore petroleum
and greenhouse gas storage activities in Australian waters is divided between
the Commonwealth Government and state and territory governments. Under the
Offshore Constitutional Settlement (OCS), the states generally have
jurisdiction over activities in their own internal waters, and in the zone of
‘coastal waters’, which extends three nautical miles seaward of the territorial
sea baseline.[1]
The Commonwealth Government has jurisdiction for the regulation of petroleum
and greenhouse gas activities for offshore areas beyond coastal waters
(generally those areas more than three nautical miles from the Territorial sea
baseline).[2]
This area is referred to as ‘Commonwealth waters’.
The OPGGS Act regulates offshore petroleum
exploration and production, and greenhouse gas injection and storage activities
in Commonwealth waters. The OPGGS Act is supported by a range of
Regulations covering matters such as safety and environmental performance.[3]
The offshore petroleum legislation, Regulations and guidelines are intended to
provide for the exploration and production of petroleum and greenhouse gas
resources, setting out a framework of rights, entitlements and responsibilities
of government and industry.[4]
Under this framework, the Australian Government
administers the offshore regulatory regime together with relevant adjacent
state and Northern Territory government involvement through ‘Joint Authority’
arrangements.[5]
In short, the Joint
Authorities make certain major decisions under the OPGGS Act
including releasing offshore petroleum exploration areas, granting and
cancelling offshore petroleum titles, imposing or varying title conditions, as
well as decisions about resource management.[6]
The OPGGS Act also establishes two Commonwealth
statutory authorities which perform regulatory functions under the OPGGS Act
and Regulations:
What is greenhouse gas storage?
Greenhouse gas storage, also known as carbon capture and
storage (CCS), is the process of capturing carbon dioxide (CO2) from
industrial processes and then transporting and injecting that CO2
into a secure geological formation for long-term underground storage. The key
aim of CCS is to prevent large amounts of CO2 from being released
into the atmosphere and hence to reduce greenhouse gas emissions which
contribute to climate change.[9]
CCS has been criticised as ‘technically complex and
expensive’.[10]
However, the potential role of CCS in reducing greenhouse emissions and meeting
international climate commitments has been acknowledged by both the
International Energy Agency (IEA)[11]
and the Intergovernmental Panel on Climate Change (IPCC).[12]
Offshore
greenhouse gas storage legal framework
The OPGGS Act regulates the exploration, assessment
and testing of geological formations and the transportation to, and storage of,
greenhouse gases in suitable geological formations in the seabed under
Commonwealth waters.[13]
The OPGGS Act provides for the responsible
Commonwealth Minister to grant a range of offshore greenhouse gas titles that
allow the titleholder to explore for and develop greenhouse gas storage sites
in offshore areas.[14]
NOPTA is then responsible for the day-to-day administration of these titles.[15]
Offshore greenhouse gas titles that may currently be granted under Chapter 3 of
the OPGGS Act include:
-
greenhouse gas assessment permits—which authorise exploration in
the permit area for potential greenhouse gas storage formations and injection
sites
-
greenhouse gas holding leases—which authorise exploration in the
lease area for potential greenhouse gas storage formations and injection sites.
Holding leases are generally designed to allow certain existing titleholders
exclusive rights in relation to an identified greenhouse gas storage formation,
where they are not currently in a position to inject and permanently store a
greenhouse gas substance, but are likely to be in such a position within 15
years[16]
-
greenhouse gas injection licences—which authorise the licensee to
carry out greenhouse gas injection and storage operations in the licence area
-
greenhouse gas search authorities—which authorise operations
relating to the exploration for potential greenhouse gas storage formations or
potential greenhouse gas injection sites (but not to make a well) and
-
greenhouse gas special authorities—which authorise the holder to
carry on certain greenhouse gas-related operations in the authority area (but
not to make a well).[17]
Status of offshore greenhouse
gas storage in Australia
NOPTA advises that there have been two greenhouse gas
acreage release rounds by the Australian Government for offshore greenhouse gas
storage exploration, one in 2009 and the other in 2014.[18]
Currently, there are four active greenhouse gas assessment permits in
Commonwealth offshore waters. All four permits are located in offshore
Victorian waters, and were awarded to the ‘Crown in right of Victoria’ as the
sole titleholder.[19]
CarbonNet
Project
The four Victorian permits are related to the CarbonNet Project, which is investigating the
potential for establishing a commercial scale CCS network in the Latrobe
Valley. The network would involve multiple CCS projects transporting CO2
via a shared pipeline and injecting it into deep offshore underground storage
sites in the offshore Gippsland Basin.[20]
CarbonNet’s prioritised site, Pelican, is located offshore from Ninety Mile
Beach in Bass Strait. In 2018, a marine
seismic survey was carried out to obtain additional geological
information.[21]
The project commenced drilling an appraisal well in early December 2019. The aim
of the drilling program is to confirm that the site is suitable for carbon
storage.[22]
As the Assistant Minister indicated in her second reading speech,
the proposed storage site under the CarbonNet Project straddles the
boundary between Commonwealth waters and state coastal waters.[23]
Hydrogen Energy Supply Chain Project
The CarbonNet Project is related to another
project, the Hydrogen Energy Supply Chain Project.[24]
This project, in the Latrobe Valley in Victoria, is described as ‘a
world first trial to demonstrate hydrogen production from brown coal and safe
and efficient transport of liquefied hydrogen to Japan’.[25]
Hydrogen has many potential uses, including to
heat buildings and power vehicles, and many countries, including Australia, are
investing in or supporting hydrogen due to its potential for decarbonising
energy systems.[26]
However, hydrogen can be produced in a number of ways. ‘Clean’
or ‘green’ hydrogen is produced using renewable energy or fossil fuels with carbon
capture and storage.[27]
Australia released a National Hydrogen Strategy last year which
highlights the opportunities of the clean hydrogen export industry for
Australia.[28]
According to the second reading speech, the
Bills ‘aim to help realise this opportunity for Australia’, in particular
because the Hydrogen Energy Supply Chain project ‘relies on suitable carbon
capture and storage that the CarbonNet Project will provide’ and the ‘two
projects are highly interdependent’.[29] The Assistant Minister further advised that the ‘Australian government
has invested heavily in both the CarbonNet and Hydrogen Energy Supply Chain
projects, providing total funding of almost $150 million’.[30]
Committee
consideration
Senate
Economics Committee
The Bill was referred to the Senate Economics Legislation
for inquiry and report by 7 February 2020.[31]
In its report,
the Committee noted that it had received five submissions, ‘all of which were
generally supportive of the [B]ills’.[32]
However, the Committee did note the concerns raised by the Australian Petroleum
Production and Exploration Association (APPEA) in relation to the oil spill
emergency provisions. These concerns are discussed in further detail in the
‘Key issues and provisions’ section of this Digest. The Committee recommended
the Bills be passed, but also that the Department of Industry, Science, Energy
and Resources publicly respond to the concerns raised by APPEA in its
submission.[33]
Details of the inquiry can be found at the inquiry
webpage.
Senate
Standing Committee for the Scrutiny of Bills
The Senate Scrutiny of Bills Committee had no comment on
the Bills.[34]
Policy
position of non-government parties/independents
At the time of writing, non-government parties and independents
do not appear to have commented on the current Bills.
Position of
major interest groups
In its submission to the Senate inquiry, the Australian
Petroleum Production and Exploration Association (APPEA) supported the polluter
pays principle but nonetheless raised concerns about the amendments relating to
oil spill emergencies.[35]
These are discussed in the ‘Key issues and provisions’ section of this Digest.
Although it does not appear to have commented directly on
the Bill, The Australia Institute has expressed concerns about Commonwealth
government funding being directed to the Hydrogen Energy Supply
Chain project. As noted elsewhere in this Digest, the Bills will help to
facilitate this project. The Australia Institute considers that that
‘public funds should not be used to produce coal- and gas-based hydrogen’ but
should instead be directed to lowering the cost of renewable hydrogen
production.[36]
Financial
implications
According to the Explanatory Memorandum, the Bills are
expected to have nil financial impact.[37]
However, the Explanatory Memorandum also notes:
The amendments relating to the creation and administration of
cross-boundary GHG [greenhouse gas] titles will enable the CarbonNet project to
proceed with its proposed project site in the Gippsland Basin, offshore
Victoria. The project could also facilitate a future commercial-scale Hydrogen
Energy Supply Chain (HESC) project, which would produce hydrogen from brown
coal resources, and requires suitable carbon capture and storage resources. The
Australian Government has invested $96 million in the CarbonNet project and $50
million in the HESC project.[38]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bills’ compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bills are compatible.[39]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights had no comment
on the Bills.[40]
Key issues
and provisions
Cross-boundary greenhouse gas titles
Schedule 1 of the Main Bill amends the OPGGS Act to
provide for the grant and administration of single greenhouse gas titles over
areas that are partly located in Commonwealth waters and partly located in state
or Northern Territory coastal waters (‘cross-boundary greenhouse gas titles’).
This section of the Digest sets out a brief overview of some of the key relevant
provisions relating to cross-boundary greenhouse gas titles and Cross-boundary
Authorities. Many of the amendments in Schedule 1 are technical or are consequential
to the introduction of cross-boundary greenhouse gas titles and Cross-boundary
Authorities. These provisions are adequately explained in the Explanatory
Memorandum to the Bill and are therefore not discussed in detail in this Digest.
Cross-boundary
Authorities
Item 23 of Schedule 1 inserts a proposed Part
1.3A into the OPGGS Act in order to establish Cross-boundary
Authorities, consisting of the responsible Commonwealth Minister and the
relevant state or Northern Territory Resources Minister.[41]
This is similar to current Joint Authority arrangements for petroleum titles in
Commonwealth waters, as outlined earlier in this Digest. Under proposed subsections
76A(6) and (7), a state or the Northern Territory must consent to being a
member of the Cross-boundary Authority for the offshore area of the relevant state
or the Northern Territory.
Under proposed section 76B, the Cross-boundary
Authorities have the functions and powers that the Act or regulations confer on
them. The main functions of a Cross-boundary Authority include the grant of
cross-boundary greenhouse gas titles (these are discussed further below). Proposed
subsection 76D(2) sets out certain decisions which must be made by
consensus, including the decision to grant a cross-boundary title, specify a
condition in a cross-boundary title, or to extend the term of the title: that
is, both the Commonwealth Minister and the state or Northern Territory Minister
must agree about the decision.[42]
Other decisions are made in the same way as the existing Joint Authorities,
with the responsible Commonwealth Minister having the casting vote in the event
of disagreement or if the responsible state or Northern Territory Minister does
not communicate his or her opinion to the responsible Commonwealth Minister.[43]
Proposed section 76L provides for any or all of the
functions or powers of a Cross-boundary Authority to be delegated to a public
service employee at the Senior Executive Service (SES) level or an employee of
the relevant state or Northern Territory. However, delegation is possible only
if there is one delegate for the Commonwealth member and one delegate for the state
or Northern Territory member.[44]
Under proposed subsection 76L(6), if the delegates are unable to agree
on a matter, they must refer it to the Cross-boundary Authority.
Cross-boundary
greenhouse gas titles
Chapter 3 of the OPGGS Act provides for the grant and
administration of greenhouse gas titles over blocks in an offshore area. The
different types of titles are outlined in the Background section of this
Digest. Schedule 1 of the Main Bill amends a range of provisions in Chapter 3 of
the OPGGS Act to provide for the grant and administration of the
proposed cross-boundary greenhouse gas titles. This includes, for example,
provisions for:
- the
grant and renewal of cross-boundary greenhouse gas assessment permits[45]
- the
grant and renewal of cross-boundary greenhouse gas holding leases[46]
and
- the
grant of cross-boundary greenhouse gas injection licences.[47]
These new cross-boundary greenhouse gas titles can be
granted over areas that are partly located in Commonwealth waters and partly in
state or territory coastal waters. As the Assistant Minister stated in her
second reading speech:
Upon the grant of the cross-boundary title, the title area
becomes Commonwealth waters for all purposes of the OPGGS Act. The title area
will be regulated under the OPGGS Act in the same way as other greenhouse gas
titles located in Commonwealth waters. NOPSEMA will have regulatory
responsibility for environmental management, safety and well integrity. Titles
administration will be undertaken by the National Offshore Petroleum Titles
Administrator.[48]
So, for example, under proposed section 295B, the
entirety of the permit area of a cross-boundary greenhouse gas assessment
permit is taken to be in the offshore area of the relevant state or the
Northern Territory, for all purposes of the OPGGS Act and regulations
relating to greenhouse gas exploration, injection and storage. This includes
the part of the permit area that is in state or Northern Territory coastal
waters. The Explanatory Memorandum states that ‘this enables the cross-boundary
permit to be effectively regulated under the GHG-related provisions of the OPGGS
Act and regulations’.[49]
Proposed section 323B and proposed section 360A are the
equivalent provisions for cross-boundary greenhouse gas holding leases and
injection licences respectively.[50]
Example:
cross-boundary greenhouse gas assessment permits
Most of the proposed provisions relating to the grant and
administration of cross-boundary greenhouse gas titles appear to be broadly similar
to the existing provisions for other greenhouse gas titles under the OPGGS
Act, with appropriate adjustments, for example, to recognise the role of
the Cross-boundary Authorities. So, for example, under existing section 291 of
the OPGGS Act, the responsible Commonwealth Minister may grant a greenhouse
gas assessment permit subject to whatever conditions the Minister thinks
appropriate. Proposed section 291A, inserted by item 28 of
Schedule 1, would similarly enable the relevant Cross-boundary Authority to
grant a cross-boundary greenhouse gas assessment permit subject to whatever
conditions the Cross-boundary Authority thinks appropriate.
Proposed subsection 291A(3) is similar to existing
subsection 291(3), in that it provides that cross-boundary assessment permits are
subject to a statutory condition that the permittee will not carry on ‘key
greenhouse gas operations’ under the permit unless the responsible Commonwealth
Minister has approved the operations under proposed section 292A (which
is similar to existing section 292).[51]
In deciding whether to approve a key greenhouse gas operation, the Minister
must have regard to a number of matters, including the potential impacts that
the operation could have on petroleum exploration or recovery operations under
existing or future petroleum titles,[52]
as well as the public interest (under proposed subsection 292A(8)). In
this context, the Explanatory Memorandum gives the following examples:
For example, the Minister might consider that there was a
public interest in enabling an onshore electricity generation plant to be
constructed on a zero-GHG [greenhouse gas] emissions basis. Or the Minister
might consider that there was a public interest in ensuring that commerciality
of a major new petroleum discovery was not compromised by drilling of GHG
exploration wells.[53]
Validity of
Victorian greenhouse gas titles
Item 1 of Schedule 2 inserts proposed subsection
287A into the OPGGS Act to provide that the greenhouse gas
provisions in the OPGGS Act (and relevant regulations) apply, and are
taken to always have applied, to the States and the Northern Territory. Proposed
subsection 287A(2) provides that this new subsection has effect in addition
to section 35. Section 35 states that the OPGGS Act applies to
individuals and corporations. This amendment is intended to remove any doubt
about the validity of greenhouse gas assessment permits that have been granted
to the Crown in right of Victoria.[54]
Enhanced oil
spill emergency powers
Schedule 2A of the OPGGS Act currently confers a
range of powers on NOPSEMA inspectors for the purpose of monitoring compliance
with the environmental management provisions of the offshore petroleum regime.
Schedule 4 of the Bill extends the monitoring, inspection
and enforcement powers of NOPSEMA inspectors in Schedule 2A within state and territory
jurisdictions during a declared oil pollution emergency. NOPSEMA stated in its
submission to the Senate inquiry that these amendments ‘ensure that NOPSEMA is
able to rapidly and comprehensively respond in the event of an oil pollution
emergency originating in Commonwealth waters’.[55]
Declaring an
oil pollution emergency
Oil pollution emergencies will be declared under proposed
clause 2A in Schedule 2A of the OPGGS Act.[56]
Under proposed clause 2A, if the Chief Executive Officer (CEO) of
NOPSEMA is satisfied that there is an emergency that has resulted, or may
result, in oil pollution, and that the emergency is attributable to one or more
petroleum activities of a petroleum titleholder, then the CEO may declare that
there is a declared oil pollution emergency. Petroleum titles are issued under
the OPGGS Act over areas in Commonwealth waters. However, under proposed
subclause 2A(16), it is immaterial whether the oil pollution is in Commonwealth
waters, within the coastal waters of a state or the Northern Territory, or on
land or in waters within the limits of a state or territory.
Under proposed subclause 2A(2), NOPSEMA must
publish a copy of the declaration on its website as soon as practicable after
the declaration is made. NOPSEMA must also give a copy of the declaration to
the relevant Commonwealth Departmental Secretary and the petroleum titleholder,
and the ‘designated public official’[57]
of the relevant state, Northern Territory or designated external territory (as
appropriate).[58]
Proposed clause 2A also empowers the NOPSEMA CEO to declare that an
environment plan is a ‘declared environment plan’.
An oil pollution emergency declaration must be revoked
under proposed subclauses 2A(8) to (14) if the NOPSEMA CEO is satisfied that
the emergency no longer exists. Again, NOPSEMA must publish a copy of the
revocation instrument on its website as soon as practicable after an instrument
of revocation is made and give a copy to the titleholder and relevant
designated public officials.
In its submission to the Senate Committee inquiry, APPEA
expressed concern that ‘a declared oil pollution emergency, enacted by the CEO
of NOPSEMA, provides significant powers to NOPSEMA’, and considered that there is
a ‘paucity of description’ in the Explanatory Memorandum as to what constitutes
a declarable oil pollution emergency. [59] APPEA suggested the
Explanatory Memorandum should include ‘descriptions of events and or
significance’ that would constitute a declared oil pollution emergency such as
‘circumstances of imminent significant risk to the safety of personnel,
facilities and potential significant impact to the environment’.[60]
Oil
pollution environmental inspections
During a declared oil pollution emergency, proposed
subclause 3(2A) provides that NOPSEMA inspectors may conduct an inspection
(called an oil pollution environmental inspection) to determine
either or both of the following:
- whether
the oil pollution emergency provisions of a declared environment plan have been,
or are being, complied with and
- whether
a significant incident direction has been, or is being, complied with.[61]
Oil pollution environmental inspections will be separate
to the existing general power of NOPSEMA inspectors to conduct environmental
inspections under existing subclause 3(2) of Schedule 2A of the OPGGS Act.
However, the new oil pollution environmental inspection powers do not limit the
general power to conduct an environmental inspection, and an oil pollution
environmental inspection may be conducted concurrently with an environmental inspection.[62]
Emergency
response premises
Clause 4 of Schedule 2A of the OPGGS Act currently enables
NOPSEMA inspectors to enter (without a warrant) and search ‘offshore petroleum
premises’.[63]
Item 32 extends this clause to empower NOPSEMA inspectors to exercise
the powers specified in clause 4 at ‘emergency response premises’ during
declared oil pollution emergencies.
‘Emergency response premises’ are defined in proposed
clause 2B (inserted by item 28 of Schedule 4). Under proposed
subclause 2B(1), for premises other than aircraft or vessels, emergency
response premises are premises being (or proposed to be) used for:
- implementing
the oil pollution emergency provisions of a declared environment plan
- planning,
directing, coordinating, or providing logistical support for the implementation
of the oil pollution emergency provisions of a declared environment plan
- compliance
with a significant incident direction or
- planning,
directing, coordinating, or providing logistical support for compliance with a
significant incident direction.
Under proposed subclause 2B(2), for aircraft or
vessels, emergency response premises are premises being used, prepared for use,
or positioned for use, for:
- implementing
the oil pollution emergency provisions of a declared environment plan
- observing,
planning, directing, coordinating, or providing logistical support for the
implementation of the oil pollution emergency provisions of a declared
environment plan
- compliance
with a significant incident direction or
- observing,
planning, directing, coordinating, or providing logistical support for
compliance with a significant incident direction.
As the Explanatory Memorandum notes, proposed subclause
2B(3) of the definition:
... ensures that such inspections can be undertaken wherever
response operations are located, whether in an offshore area, in or above the
coastal waters of a State or the NT, or on, in or above the land or waters of a
State or Territory (subclause 2B(3)). Response operations are typically managed
at onshore coordination centres or forward operating bases, with operational
response activities taking place wherever oil pollution has occurred or may
occur.[64]
This definition also means that the Bill extends the kinds
of places where NOPSEMA may conduct environmental inspections without a
warrant.[65]
In its submission to the Senate Committee inquiry, APPEA expressed concern
about warrant-free inspection and seizure powers, suggesting that warrant-free
activities should be strictly limited and only authorised in very exceptional
circumstances.[66]
However, the Explanatory Memorandum notes that the extension of the relevant
powers by the Bill is ‘limited to extremely extenuating circumstances where an
oil pollution emergency has been declared’ and ‘to premises directly in
connection with the response to the declared oil pollution emergency’.[67]
Items 36–37, 39–42 and 44 of Schedule 4 similarly
modify the operation of other relevant clauses in Schedule 2A to extend the
powers of NOPSEMA inspectors, and enable NOPSEMA inspectors to exercise the
powers specified in the relevant clause at emergency response premises during
declared oil pollution emergencies.
Inspecting
regulated business premises
Clause 5 of Schedule 2A of the OPGGS Act enables
NOPSEMA inspectors to enter (without a warrant) and search regulated business
premises,[68]
if satisfied, on reasonable grounds, that documents or things are likely to be
at those premises that are relevant to compliance with an environmental
management law.
Item 34 of Schedule 4 inserts proposed subclause
5(1A) to empower NOPSEMA inspectors to exercise the powers specified in
that subclause at regulated business premises during declared oil pollution
emergencies. The powers in proposed subclause 5(1A) are equivalent to
the powers that a NOPSEMA inspector can exercise at regulated business premises
during an environmental inspection.[69]
However, the inspector must be satisfied that there are likely to be at those
premises plant, substances, documents or things that relate to compliance or
non-compliance with the oil pollution emergency provisions of a declared
environment plan or a significant incident direction given by NOPSEMA.[70]
Power to
require assistance
Item 35 inserts proposed subclause 7(2A) to
provide that, if there is a declared oil pollution emergency, NOPSEMA
inspectors may, to the extent reasonably necessary, require a titleholder to
provide reasonable assistance and facilities for the purpose of conducting an
oil pollution environmental inspection that relates to the titleholder’s
petroleum title. Under proposed subclause 7(2B), reasonable assistance
includes appropriate transport to or from emergency response premises,
reasonable accommodation and means of subsistence while the inspector is at the
premises, and arranging for the inspector to be present on an aircraft or
vessel that is being deployed or used for or in relation to implementing the
oil pollution emergency response provisions of an environment plan or complying
with a significant incident direction.
Extended
geographical application of polluter pays obligations
Part 6.1A of the OPGGS Act implements ‘polluter
pays’ obligations by setting out a statutory duty which requires petroleum titleholders
to take certain actions in the event of an escape of petroleum occurring as a
result of operations within the title area. This duty, set out in section 572C,
requires the titleholder to take reasonably practical steps to eliminate or
control the escape of petroleum, clean up the escaped petroleum, remediate
damage to the environment and carry out appropriate environmental monitoring of
the impact of the escape. However, currently, the titleholder is only required
to take these actions in the offshore area (that is, Commonwealth waters).[71]
This means the obligation does not currently extend to state or territory
coastal waters.
Items 3–5 of Schedule 4 of the Main Bill extend the
geographical application of this obligation to the land and waters of a state,
the Northern Territory or a designated external Territory.[72]
This means that, under an amended subsection 572C(2), if any of the
escaped petroleum has migrated to land or waters of a state, the Northern
Territory or a designated external territory, the titleholder is also required,
on that land or in those waters, to clean up the escaped petroleum, remediate
any resulting environmental damage, and monitor the environmental impacts of
the escape.
Under the existing sections 572D and 572E of the OPGGS
Act, if the titleholder fails to comply with this duty, NOPSEMA or the
responsible Commonwealth Minister may instead do ‘any or all of the things’
that they consider, on reasonable grounds, that the titleholder has failed to
do. The costs and expenses incurred by NOPSEMA or the Commonwealth in doing
those things are a debt due to NOPSEMA or the Commonwealth and are recoverable
in a court of competent jurisdiction (such as the Federal Court).
In its submission to the Senate Committee inquiry, APPEA raised
concerns about procedural fairness in sections 572D and 572E of the OPGGS
Act which APPEA considered ‘seem to give NOPSEMA and the Minister near
limitless authority to take whatever action they deem appropriate and seek
reimbursement after the fact, without the need to consult the titleholder’.[73]
However, these sections do require NOPSEMA or the Minister to base their decisions
on reasonable grounds, and the actions that NOPSEMA and the Minister can take are
also limited to the actions set out in subsection 572C(2) (cleaning up escaped
petroleum, remediating environmental damage and monitoring the environmental
impacts of the escape).
In light of the extended geographical application of the polluter
pays obligations, items 6 and 7 of Schedule 4 also amend sections 572D
and 572E to require NOPSEMA and the responsible Commonwealth Minister
respectively to consult the designated public official of the relevant state or
territory prior to taking any action within the jurisdiction of the state or
territory where a titleholder has failed to comply with their polluter pays
obligations.
Similarly, under section 572F, if a state or territory (or
an agency or authority acting on behalf of the state or territory) incurs costs
or expenses in cleaning up the petroleum, remediating environmental damage
caused by the escaped petroleum or carrying out environmental monitoring of the
impacts, those costs or expenses are a debt due to the state or territory and
are recoverable in a court of competent jurisdiction. Items 8 to 13 of
Schedule 4 make minor amendments to section 572F which do not change the
operation of the section.
Item 14 of Schedule 4 inserts proposed section
572G to clarify that the polluter pays provisions in Part 6.1A of the OPGGS
Act are not intended to exclude or limit the operation of any state or territory
law, where that law is capable of operating concurrently with Part 6.1A. As the
Explanatory Memorandum notes:
States and Territories will therefore have the ability to
exercise any relevant powers in their own legislation, utilising their own
spill response capacity in their jurisdiction.[74]
Directions for significant offshore petroleum incidents
Section 576B of the OPGGS Act provides that, if
there is a significant offshore petroleum incident (as defined in
section 576A) in a petroleum title area, NOPSEMA may give a specific direction
to the titleholder to deal with the escape of petroleum resulting from the
incident, whether within or outside the title area. Currently, these directions
can only require a titleholder to take an action, or not to take an action, in
an offshore area (that is, in Commonwealth waters).[75]
Items 17 and 18 of Schedule 4 amend section 576B to
enable the extended geographical application of significant incident directions
to land and waters of a state, the Northern Territory or a designated external
Territory during declared oil pollution emergencies.
Item 17 amends subsection 576B(5) to clarify that,
in the absence of a declared oil pollution emergency,[76]
the current geographical limitation to Commonwealth waters will continue.
Item 18 repeals and replaces subsection 576B(6) to
provide that, if there is a declared oil pollution emergency that relates to
the title,[77]
the direction may require the titleholder to take an action (or not take an
action) anywhere within or outside the title area, including anywhere on or in
land or waters of a state, the Northern Territory or a designated external territory.
This item also inserts proposed subsections 576B(6A) and (6B), which
apply if a direction requires the titleholder to take action in an area held by
another Commonwealth, state or territory petroleum titleholder. In this case, NOPSEMA
is required to give a copy of the direction to the other titleholder as soon as
practicable after the direction is given to the titleholder that is subject to
the direction.
Proposed subsection 576C(2A), inserted by item 20
of Schedule 4, clarifies the relationship between directions made under section
576B and environment plans made under Offshore Environment Regulations. Under proposed
subsection 576C(2A), if the oil pollution emergency provisions of an
environment plan are inconsistent with the direction, then the environment plan
will have no effect to the extent of the inconsistency.
Item 22 of Schedule 4 inserts proposed section
576E to clarify that the provisions relating to directions for significant
offshore petroleum incidents in Division 2A of Part 6.2 of the OPGGS Act
are not intended to exclude or limit the operation of any state or territory law,
where that law is capable of operating concurrently. As the Explanatory
Memorandum notes:
States and Territories will therefore have the ability to
exercise any relevant powers in their own legislation, utilising their own
spill response capacity in their jurisdiction.[78]
[1]. Geoscience
Australia, ‘Offshore
legislation’, Geoscience Australia website; Attorney-General’s Department,
‘Offshore
constitutional settlement’, Attorney-General’s Department website.
[2]. Department
of Industry, Innovation and Science (DIIS), ‘Regulating
offshore oil and gas in Australian waters’, DIIS website, last updated 18
December 2019; see also Geoscience Australia, ‘Maritime
boundary definitions’, Geoscience Australia website; Offshore Petroleum
and Greenhouse Gas Storage Act 2006 (OPGGS Act), sections 3–8.
[3]. Relevant
Regulations include, for example, the Offshore Petroleum and
Greenhouse Gas Storage (Greenhouse Gas Injection and Storage) Regulations 2011;
the Offshore Petroleum and Greenhouse Gas Storage (Environment)
Regulations 2009 (Offshore Environment Regulations) and Offshore Petroleum and
Greenhouse Gas Storage (Resource Management and Administration) Regulations
2011 (the Wells Regulations).
[4]. DIIS,
‘Regulating
offshore oil and gas in Australian waters’, op. cit.
[5]. Ibid.
[6]. National
Offshore Petroleum Titles Administrator (NOPTA), ‘Joint authorities’,
NOPTA website.
[7]. NOPTA,
‘About NOPTA’, NOPTA website. NOPTA
was established in 2012 by the Offshore Petroleum and
Greenhouse Gas Storage Amendment (National Regulator) Act 2011, which
also expanded the former National Offshore Petroleum Safety Authority to become
the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).
[8]. OPGGS
Act, Part 6.9; NOPSEMA, ‘About’,
NOPSEMA website. The expansion of NOPSEMA was in response to the Report
of the Montara Commission of Inquiry as well as a 2009
Productivity Commission Report.
[9]. For
further information see, for example, Commonwealth Scientific and Industrial
Research Organisation (CSIRO), Carbon
capture and storage (CCS) – frequently asked questions, CSIRO,
Australia, n.d.; Global CCS Institute (GCCSI), ‘Understanding CCS’,
GCCSI website; CO2CRC, ‘What is
CCS?’, CO2CRC website.
[10]. F
Jotzo, F Beck, and T Longden, ‘For
hydrogen to be truly “clean” it must be made with renewables, not coal’, The
Conversation, 2 December 2019.
[11]. International
Energy Agency (IEA), Exploring clean
energy pathways: the role of CO2 storage, IEA, Paris,
22 July 2019.
[12]. See,
for example, Intergovernmental Panel on Climate Change (IPCC), Climate
change 2014: mitigation of climate change: IPCC Working Group III contribution
to AR5, ‘Summary
for policymakers’, IPCC Working Group III, Germany, 2014, p. 15.
[13]. See
especially Chapters 3 and 5. The regime was created by the Offshore Petroleum
Amendment (Greenhouse Gas Storage) Act 2008. For a history and detailed
explanation, see: J Styles, M Coombs, S Scully and K Post, Offshore
Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, Bills digest,
26, 2008–09, Parliamentary Library, Canberra, 24 September 2008.
[14]. OPGGS
Act, Chapter 3 (see section 287 for a simplified outline of Chapter 3).
[15]. NOPTA,
‘About NOPTA’, op. cit.
[16]. OPGGS
Act, sections 318–354.
[17]. These
are issued under Chapter 3 of the OPGGS Act: see further, for example,
the simplified outline in section 287.
[18]. NOPTA,
‘Greenhouse
gas’, NOPTA website.
[19]. Ibid;
Department of Jobs, Precincts and Regions (Victoria) (DJPR), ‘The
CarbonNet Project assessment permits’, DJPR website, last updated 22
October 2019.
[20]. DJPR,
‘The
CarbonNet Project’, DJPR website, last updated 22 November 2019.
[21]. Ibid.
[22]. DPJR,
‘Offshore
appraisal well’, DPJR website, last updated 3 February 2020; see also DIIS
and DJPR, CarbonNet
Project – Offshore Appraisal Well Information sheet, DJPR, Melbourne,
November 2019; NOPSEMA has accepted an environment plan relating
to the appraisal well: see NOPSEMA, ‘CarbonNet
Offshore Appraisal Well’, NOPSEMA website.
[23]. N
Marino, ‘Second
reading speech: Offshore Petroleum and Greenhouse Gas Storage Amendment
(Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019’, House
of Representatives, Debates, 4 December 2019, p. 6922.
[24]. Ibid.
Hydrogen Energy Australia, ‘About HESC’,
Hydrogen Energy Supply Chain Project website.
[25]. Hydrogen
Energy Australia, ‘The hydrogen
story’, Hydrogen Energy Supply Chain Project website.
[26]. See
further COAG Energy Council, Australia’s
National Hydrogen Strategy, Commonwealth of Australia, Canberra, 2019;
IEA, The future
of hydrogen, June 2019
[27]. Hydrogen
Strategy Group, Hydrogen
for Australia’s future: a briefing paper for the COAG Energy Council,
Commonwealth of Australia, Canberra, 2018.
[28]. COAG
Energy Council, Australia’s
National Hydrogen Strategy, op. cit.; see also Marino, ‘Second
reading speech: Offshore Petroleum and Greenhouse Gas Storage Amendment
(Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019’, op.
cit., p. 6922.
[29]. Marino,
‘Second
reading speech: Offshore Petroleum and Greenhouse Gas Storage Amendment
(Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019’, op.
cit., p. 6922.
[30]. Ibid.
[31]. Senate
Standing Committee for Selection of Bills, Report,
10, 2019, The Senate, Canberra, 2019.
[32]. Senate
Economics Legislation Committee, Offshore
Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas
Titles and Other Measures) Bill 2019 [Provisions] and Offshore Petroleum and
Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous Measures)
Bill 2019 [Provisions], The Senate, Canberra, February 2020,
p. 11.
[33]. Ibid.,
p. 15.
[34]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 1, 2020, The Senate, 5 February 2020, p. 41.
[35]. APPEA,
Submission
to the Senate Economics Legislation Committee, Inquiry into the Offshore
Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas
Titles and Other Measures) Bill 2019 [Provisions] and Offshore Petroleum and
Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous Measures)
Bill 2019 [Provisions], [Submission no. 4], 17 January 2020.
[36]. M
Kaitsu, T Swann and A Quicke, Hytrojan:
Is hydrogen the next ‘clean coal’?, Discussion paper, The Australia
Institute, October 2019, p. 34.
[37]. Explanatory
Memorandum, Offshore Petroleum and Greenhouse Gas Storage Amendment
(Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019 [and] Offshore
Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment
(Miscellaneous Measures) Bill 2019, p. 5.
[38]. Ibid.
[39]. The
Statement of Compatibility with Human Rights can be found at pages 7–12 of the
Explanatory Memorandum to the Bills.
[40]. Parliamentary
Joint Committee on Human Rights, Human
rights scrutiny report, 1, 2020, 5 February 2020, p. 96.
[41]. Proposed
section 76A.
[42]. Explanatory
Memorandum, op. cit., p. 21.
[43]. Proposed
subsections 76D(3) and (4); see also Explanatory Memorandum, op. cit., p.
22.
[44]. Explanatory
Memorandum, op. cit., p. 23.
[45]. See
especially items 24–46, 49, 56–61 of Schedule 1 of the Offshore
Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas
Titles and Other Measures) Bill 2019 (the Main Bill).
[46]. See
generally items 62–108 of Schedule 1 of the Main Bill.
[47]. See
generally items 109–151 of Schedule 1 of the Main Bill.
[48]. Marino,
‘Second
reading speech: Offshore Petroleum and Greenhouse Gas Storage Amendment
(Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019’, op.
cit., p. 6922.
[49]. Explanatory
Memorandum, op. cit., p. 31.
[50]. Proposed
section 323B is inserted by item 85 of Schedule 1. Proposed
section 360A is inserted by item 117 in Schedule 1.
[51]. Proposed
section 292A is inserted by item 31 of Schedule 1. Key
greenhouse gas operations are defined in section 7 of the OPGGS Act
and include, for example: making a well; seismic surveys; injecting greenhouse
gases, air, petroleum, or water into a geological formation; or an operation
specified in the regulations.
[52]. See
proposed subsections 292A(4)–(12).
[53]. Explanatory
Memorandum, op. cit., p. 27.
[54]. Ibid.,
p. 79.
[55]. NOPSEMA,
Submission
to the Senate Economics Legislation Committee, Inquiry into the Offshore
Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas
Titles and Other Measures) Bill 2019 [Provisions] and Offshore Petroleum and
Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous Measures)
Bill 2019 [Provisions], [Submission no. 1], 7 January 2020.
[56]. As
inserted by item 28 of Schedule 4 of the Main Bill.
[57]. Item
2 of Schedule 4 of the Main Bill inserts a proposed section 33A
which defines ‘designated public official’ as the person who holds or performs
the duties of head of the department of the state or Northern Territory that is
specified in a written notice given to NOPSEMA by the responsible state or
Northern Territory Minister. The relevant notice must be published on the
NOPSEMA website (see proposed subsection 33A(9)).
[58]. That
is, Norfolk Island, the Territory of Christmas Island, the Territory of Cocos
(Keeling) Islands, or the Territory of Heard Island and McDonald Islands: Item
1 of Schedule 4 inserts a definition of designated external Territory into
section 7 of the OPGGS Act.
[59]. APPEA,
Submission,
op. cit., p. 1.
[60]. Ibid.
[61]. Inserted
by item 29 of Schedule 4 of the Main Bill.
[62]. Proposed
subclauses 3(2D) and 3(2E). See also Explanatory Memorandum, op.
cit., p. 96.
[63]. Explanatory
Memorandum, op. cit., p. 97.
[64]. Explanatory
Memorandum, op. cit., p. 95.
[65]. Ibid.
[66]. APPEA,
Submission,
op. c.it. pp. 2–3.
[67]. Explanatory
Memorandum, op. cit., p. 95.
[68]. ‘Regulated
business premises’ are currently defined in clause 2 of Schedule 2A as
premises, other than offshore petroleum premises, that are occupied by the
registered holder of a petroleum title and used, or proposed to be used, wholly
or principally in connection with operations in relation to one or more
petroleum titles, including that petroleum title.
[69]. Noting
that clause 5 is to be amended by the Offshore Petroleum
and Greenhouse Gas Storage Amendment (Miscellaneous Amendments) Act 2019
(see especially, Schedule 1, item 178).
[70]. Explanatory
Memorandum, op. cit., p. 99.
[71]. OPGGS
Act, section 8 defines ‘offshore area’.
[72]. That
is, Norfolk Island, the Territory of Christmas Island, the Territory of Cocos
(Keeling) Islands, or the Territory of Heard Island and McDonald Islands: see item
1 of Schedule 4 which inserts a definition of designated external Territory
into section 7 of the OPGGS Act; Explanatory Memorandum, op. cit.,
p. 84.
[73]. APPEA,
Submission,
op. cit., p. 2.
[74]. Explanatory
Memorandum, op. cit., p. 88. Item 14 also inserts proposed sections
572H and 572J which set out the Commonwealth constitutional powers which
provide support for Part 6.1A.
[75]. OPGGS
Act, subsection 576B(5); see also Explanatory Memorandum, op. cit., p. 89.
[76]. As
discussed earlier, and as defined by proposed clause 2A of Schedule 2A,
inserted by item 28 of Schedule 4.
[77]. Proposed
subsection 576B(8) and (9), inserted by item 19 of Schedule 4,
clarify when a declared oil pollution emergency ‘relates to a title’: that is,
if it is attributable to one or more petroleum activities of the titleholder.
[78]. Explanatory
Memorandum, op. cit., p. 92. Item 22 also inserts proposed sections
576F and 576G which set out the Commonwealth constitutional powers which
provide support for Division 2A of Part 6.2.
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