Dissenting Report by Coalition senators
Introduction
The Coalition is particularly concerned about the
introduction of a National Offshore Petroleum Regulator (NOPR), and does not
believe a reasonable case of change from the existing joint system has been
made.
National Offshore Petroleum Regulator
The Coalition is concerned that Western Australia has a
better understanding of its own territorial waters, particularly as a large
proportion of current and potential offshore gas fields are off the West Australian
coast.[1]
It was made clear in the submission for the Western
Australian Department of Mines and Petroleum that there is no support in
Western Australia for the removal of its role as a regulator of offshore
petroleum.
CHAIR – In other words, you can achieve the goal of a more
simple and efficient operation but still have the joint authority.
Mr Sellers – That is certainly our belief.[2]
Additionally, the Western Australian Government felt there
was no need to change the system. It was felt that the current joint system
works perfectly well.
We do not see the merit in shifting the system that we
already have.[3]
While the Department of
Resources, Energy and Tourism points out that Western Australia remains the
only recalcitrant state,[4]
it was accepted that WA has a unique interest because...
...the bulk of Australia’s resources of petroleum are found in
the Commonwealth offshore area adjacent to Western Australia. I think that,
generally, over 75 per cent of the petroleum resources are in those areas.[5]
WA does not support the establishment of a NOPR and has made
it clear that it will not roll in its state waters (comprising the internal and
coastal waters) under NOPR’s administration. This is significant because over
two thirds of offshore petroleum exploration and development occurs off the
coast of WA.[6]
It has been suggested that the Environment and
Biodiversity Act (1999) Cth could be an option for the basis of any
regulatory system run by Western Australia. Under the Act, the Commonwealth
authorises the State to carry out environmental assessment and only holds its
own if there is some disagreement.
A further concern supporting the current joint system of
regulation is that any offshore development in Commonwealth waters implicitly
involves the State Government as there is a requirement for onshore
infrastructure such as towns, ports, railways and airports. A national offshore
regulator would not address such onshore requirements for any oil and gas
developments regarding land tenure or Native Title Act issues which are
critical in ensuring the development of offshore gas projects.
The Coalition Senators concur with the view of the Western
Australian Department of Mines and Petroleum that...
WA does not believe that to unilaterally impose this
amendment is in the spirit of co-operative federalism publicly declared by the
current Federal Government.[7]
Schedule 1 – Part 3 – Multiple titleholders
The issue of multiple titleholders does not appear to have
been resolved and the Coalition Senators are concerned about this, particularly
given the evidence from the Western Australian Department of Mines and
Petroleum.[8]
It was additionally submitted that...
WA
has consistently stressed to the Commonwealth that while the proposed
amendments would make title administration easier, WA is concerned that this
could be viewed as taking away the property rights of an individual member of a
joint venture. Preserving property rights for individual joint venturers is an
issue is petroleum commercial joint venture agreements.[9]
Sole Risk Issue
The amendments proposed could impact on the sole risk
provisions of a joint venture agreement.[10]
The Western Australian Department of Mines and Petroleum expressed concern as
to the impact on sole risk.[11]
Under
the proposed amendments, it is not clear to WA how a joint venturer partner
that is not the nominated operator could make an application to drill a well
except through the nominated operator. This may not be a feasible approach and
WA has suggested that consultation with the legal/commercial areas of the
petroleum industry is required on this issue.[12]
Schedule 1 – Part 1 – Registration Fees
The Bill requires that the Commonwealth retain registration
fees to help fund the establishment of the National Offshore Petroleum Regulator
(NOPR). While it has already been established that the Coalition Senators are
extremely concerned about the introduction of a NOPR, there is additional
concern about the fact that the form and function of the NOPR in regard to its
operation in the Western Australian offshore area is currently the subject of
intense negotiations between the Commonwealth and Western Australia.[13]
Therefore WA cannot agree to the proposed legislative
amendment for the Commonwealth to retain registration fees.[14]
Conclusion
The Coalition believes that the case for changing the
existing joint system has not been made and in fact the convincing evidence for
the usefulness of preserving the status quo was presented. The introduction of
NOPR, without due understanding of the intricacies of the Western Australian
petroleum resources industry, would not bode well for the market as a whole.
The Coalition Senators are of the view that as has been the
case with so much Rudd Government legislation, this Bill has been put together
in haste without sufficient discussion and consultation with stakeholders.
The Coalition will not be supporting the introduction of the
National Offshore Petroleum Regulator.
Senator Alan Eggleston Senator
David Bushby
Deputy Chair
Navigation: Previous Page | Contents | Next Page