Australian regulatory framework
6.1
In Australia, legislation, regulations and associated policies and guidelines provide for the offshore exploration for, and recovery of, oil and gas (petroleum) resources.
6.2
The Department of Industry, Science, Energy and Resources (DISER) submitted that this 'rigorous' and 'transparent' framework 'strike[s] a balance to develop the oil and gas industry in an environmentally responsible and sustainable way and to co-exist with other industries, including fisheries'.
6.3
A number of submitters and witnesses endorsed the framework, which they considered leading practice and appropriate for the offshore petroleum industry. Mr Andrew McConville, Chief Executive of the Australian Petroleum Production and Exploration Association (APPEA), said, for example: 'the Australian regulatory regime is efficient and sufficient and is designed to ensure that global best standards are met or exceeded'.
6.4
DISER noted however that 'there is no standard definition of a leading-practice regulatory regime'.
6.5
This chapter compares Australia's regulatory approach with those of other countries, as well as highlighting some key international research collaborations.
Goals-based regulation
6.6
A key feature of the Australian regulatory framework is its objectives, performance or goals-based approach, which requires an activity proponent to identify, evaluate and manage all environmental risks to 'as low as reasonably practicable' and an acceptable level for a proposed activity (see Chapter 5).
6.7
This approach contrasts with a prescriptive or rules-based regulatory approach—as is used in the United States—where those undertaking activities are required to consider only the matters specifically identified by regulations and meet the minimum standards of prescribed protections (Figure 6.1).
6.8
The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) submitted that Australia's approach is supported internationally by regulatory authorities, risk management professionals and academics, as being the most appropriate regulatory approach for major hazard industries.
6.9
Canada, for example, has identified multiple benefits of the goals-based approach for its offshore oil and gas sector—namely, it:
provides the offshore industry with the opportunity to select, develop, and adopt safety and environmental management practices and technologies best suited to specific locations, activities, and individual company circumstances;
requires the regulator to evaluate and approve how regulatory goals will be achieved through the proposed safety and environmental practices and measures, if those practices and measures reflect good/best practice based on acceptable technologies and methods. The regulator then conducts inspections and audits to verify the offshore industry's compliance with the proposed measures and processes to ensure that regulatory goals are achieved;
creates an expectation that the offshore industry will adapt newer technologies and practices as these approaches evolve to enable safer and more efficient operations;
[is] more suitable when regulated entities are diverse, and the risks and operations are variable.
6.10
The committee notes that Canada is now moving toward a hybrid model of goals-based and rules-based regulatory requirements under its Frontier Offshore Regulatory Renewal Initiative. Ostensibly, this is to take advantage of the benefits offered by both styles of regulation.
6.11
The committee further notes that a few submitters argued that the goals-based approach essentially allows the offshore petroleum industry to self-regulate. Dr John Mackenzie, Councillor for the City of Newcastle, submitted, for example:
NOPSEMA administers an objective-based regulatory regime for seismic testing assessments … In practice, this approach is tantamount to self‑regulation … The mining companies identify their own environmental and safety risks, set their own objectives and risk management measures, decide their own standard of performance and evaluate their own compliance. It is hard to imagine any other industry that poses such serious environmental and safety risks with so much control over their own regulatory framework. It is recommended that the inquiry consider the implementation of a 'rules-based' regulatory approach, where best available science on the impacts of seismic testing and other techniques of offshore exploration are used to set strict environmental standards.
6.12
Ms Pauline Nolle, a rock lobster fisher, submitted that there should be a review of the offshore petroleum regulatory framework:
The Senate should review the Regulatory framework that allows explorers with a high risk appetite (the very nature of speculative frontier exploration) to set the risk tolerance levels of their own activity. Surely it is the Government (or its designated regulators), on behalf of the community, who should express what is tolerable and what is not? In the absence of this expression of risk appetite, any claims to use of 'best practice' risk management practice is, quite frankly, a joke.
6.13
DISER submitted that the outcome of a goals-based regime is that costs and implications are considered as part of a proponent's investment decisions:
In this regard, objectives-based regulation encourages continuous improvement to achieve appropriate health and safety and environmental outcomes. It ensures flexibility in operational matters to meet the unique nature of different activities, and avoids a 'one size fits all' approach to regulation, allowing industry to determine the most effective and efficient way to operate.
6.14
As previously indicated by Seafood Industry Australia (see Chapter 5), NOPSEMA noted that there are a number of key regulatory differences between the offshore petroleum and commercial fishing industries.
Table 6.1: Petroleum versus fisheries industries regulatory roles
|
|
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Consultation with stakeholders
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Titleholder
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Regulator
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Establish an environmental baseline
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Titleholder
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Regulator
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Propose acceptable level of impact
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Titleholder
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Regulator
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Monitor compliance
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Regulator
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Regulator
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Enforcement
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Regulator
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Regulator
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|
|
|
|
Source: NOPSEMA, Submission 66, p. 80.
6.15
As shown in Table 6.1, the commercial fishing industry operates under a rules-based regime, which NOPSEMA suggested might contribute to tensions between it and the offshore petroleum industry: 'the root cause [of the conflict] likely stems from the way in which rights are separately managed and issued for fisheries and for petroleum resources'.
Committee view
6.16
The committee accepts that there are contrasting views on whether Australia's regulatory framework for offshore petroleum activities enables the oil and gas industry to operate in an environmentally responsible and sustainable way.
6.17
The committee notes that these views subsist notwithstanding the existing legislated environmental protections in the Offshore Petroleum and Greenhouse Gas Storage Act 2006, the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009 (OPGGS Regulations) and the Environment Protection and Biodiversity Conservation Act 1999.
6.18
The committee heard that Australia's goals-based approach to the regulation of offshore petroleum activities is well supported internationally and acknowledges that this approach might have certain benefits. However, as discussed throughout this report, there are considerable concerns that these 'benefits' come at the expense of environmental considerations. The committee is not necessarily persuaded that the best balance between resources exploration and environmental outcomes has yet been achieved.
6.19
The committee's recommendations aim to better balance this equation however it remains arguable whether a goals-based approach is the most appropriate option for the regulation of offshore seismic activities. In particular, the committee notes that Canada has elected to retain a hybrid of both goals- and rules-based regulation, strongly suggesting that each approach has its benefits.
Marine seismic surveying internationally
6.20
Marine seismic surveys are conducted across the globe and, while using similar techniques, proponents are subject to various legislation, regulation, government policy, codes of conduct and environmental sensitivities.
6.21
According to NOPSEMA:
More than 50 countries worldwide allow marine seismic surveys to be conducted, and Australia is one of only a small number countries that has baseline legislated controls in place for the conduct of seismic [surveys].
6.22
In addition, the International Fund for Animal Welfare submitted that some countries have specifically prohibited seismic surveying in their territorial waters or in sensitive marine environments under their jurisdiction (such as Australian Marine Parks, see Chapter 4).
6.23
In 2018, New Zealand amended its Crown Minerals Act 1991 to provide that new petroleum prospecting, exploration, and mining permits will be available only in the onshore Taranaki region. The amendment was described by Prime Minister Jacinta Ardern as 'an important step to address climate change and create a clean, green and sustainable future for New Zealand'.
6.24
Mr Adrian Meder from the Australian Marine Conservation Society noted that New Zealand's position was driven by its international commitment toward the reduction of carbon emissions. He suggested that this option is also open to the Australian Government:
Australia and New Zealand both have very similar international commitments to the reduction of carbon emissions, and the science is absolutely clear that meeting those commitments requires that we not develop any new fossil fuel deposits. That's quite simple. Following that science and those commitments, in good faith the logical extension of that was to say to New Zealand's oil and gas industry, 'That's enough' … and it is a decision that will increasingly be made by nations around the world that choose to honour their commitments towards reducing carbon emissions.
6.25
The committee notes that, in late 2017, France was the first nation to enact a legislative ban on the issue of new oil exploration licenses with immediate effect and on all oil extraction by 2040.
Committee view
6.26
The committee acknowledges that, globally, there are various approaches to the regulation of marine seismic surveying in offshore jurisdictions, and that Australia is one of the few countries to have legislated controls to mitigate the impacts of seismic signal exposure.
6.27
The committee heard that some countries—such as New Zealand—have gone even further by prohibiting the issue of new approvals for petroleum exploration and production.
6.28
As highlighted by Mr Meder, Australia has an international commitment under the 2015 Paris Agreement to reduce carbon emissions by 26 to 28 per cent below 2005 levels by 2030. The committee considers that the Australian Government should be proactively seeking ways to honour this commitment, and to fully reflect this and possible future commitments when assessing the issuance of new offshore petroleum titles.
International conventions
6.29
Agreements for the management of marine noise pollution have been developed at the international level due to the ability of low frequency sound to travel large distances across marine jurisdictions. In this regard, submitters noted several relevant international conventions.
6.30
For example, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) commented on measures identified under the Convention on Biological Diversity to avoid, minimize and mitigate the potentially significant adverse impacts of anthropogenic underwater noise on marine and coastal biodiversity:
These included better defining and mapping noise generated through anthropogenic activities including standardisation of measurements, improving technologies and supporting technology and capacity transfer, improving assessments of risk and management of activities contributing to that risk, including co‐development of guidelines with stakeholders and enhancing collaboration to better identify synergies and address knowledge gaps.
6.31
Mr Geoff Prideaux focussed on the Convention on the Conservation of Migratory Species of Wild Animals (CMS), which aims to conserve terrestrial, aquatic and avian migratory species throughout their range. The CMS Family Guidelines on Environmental Impact Assessments for Marine Noise-generating Activities (CMS Guidelines), authored by Mr Prideaux, have been developed under the auspices of that treaty.
6.32
The CMS Guidelines aim to provide regulators globally with advice for application in domestic jurisdictions, as appropriate, to create environmental impact assessment (EIA) standards between jurisdictions seeking to manage marine noise‑generating activities.
6.33
Mr Prideaux submitted that NOPSEMA has not incorporated the CMS Guidelines into mainstream regulatory processes:
While claiming their decisions are 'evidence based' … NOPSEMA has been slow to apply [the CMS Guidelines] and is avoiding specific elements—specifically independent, scientific modelling—that will reveal significant shortcomings within the information supplied to them by proponents.
6.34
Greenpeace Australia Pacific supported inclusion of the CMS Guidelines in EIA processes, submitting that 'any project approvals process require the proponent to show how they have addressed the [CMS Guidelines]'.
6.35
NOPSEMA considered that 'the CMS Guidelines represent contemporary good practice guidance for environmental impact assessment'. The regulator advised that it has regard to these guidelines, the relevant aspects of which are implemented in Australia under the OPGGS Regulations and NOPSEMA's assessment and decision-making processes.
6.36
NOPSEMA also informed the committee that its publications do not present a whole picture of what the regulator requires from activity proponents:
The focus of NOPSEMA written guidance is on topics where industry needs to improve its performance—there is little value in writing guidance about topics that industry are well practiced and competent. During the assessment process, NOPSEMA uses formal mechanisms to provide feedback about the environment plan (and associated noise modelling where relevant) and to request improvements where necessary. These formal requests are not made public during the assessment and therefore not visible to the general public.
Committee view
6.37
The committee heard that the relevant parts of the CMS Guidelines are contained in the OPGGS Regulations and are therefore taken into consideration by NOPSEMA during the environmental approvals process. However, the committee also heard from the guidelines' lead author that this consideration is not readily apparent. The committee suggests that the confusion could be dispelled by requiring activity proponents to clearly show (or certify) their compliance with the CMS Guidelines.
6.38
The committee recommends that the National Offshore Petroleum Safety and Environmental Management Authority adapt its environmental approvals process to ensure all proponents meet the Family Guidelines on Environmental Impact Assessments for Marine Noise‑generating Activities under the Convention on the Conservation of Migratory Species of Wild Animals.
EIA and control measures
6.39
NOPSEMA expressed a view that all EIA should include operational procedures (also called controls) to mitigate impacts to marine animals during a seismic survey. Its submission advised that, globally, licensing arrangements often require the application of control measures, primarily:
the implementation of operational procedures;
detection of animals close to airguns and implementation of real-time mitigation measures; and
time/area planning of surveys to avoid marine mammals.
6.40
NOPSEMA submitted that, while the control measures appear broadly similar, there are in fact parameter variations that might be appropriate to allow for local species, environment, policy and cultural context of the country in which the measures are applied (see, for example, Figure 6.2).
6.41
NOPSEMA added that legislated controls apply generally to marine mammals only, with most countries having no legislated or prescribed controls in place for seals, polar bears, seabirds, fish or invertebrates. Therefore:
Consideration and management of seismic impacts to these receptors generally [takes place] during the [EIA] process and compliance with individual jurisdictional requirements … In the absence of a standard approach to this for species other than marine mammals, a bespoke approach is necessary for each seismic survey, providing a high level of environmental protection.
6.42
NOPSEMA particularly noted that Norway expressly aims to facilitate the coexistence of the seismic and commercial fishing industries, with control measures that manage potential impacts on fisheries. This focus is supported in the legislated provision for fisheries compensation:
The Norwegian Petroleum Act...has special rules regarding compensation for Norwegian fishermen for financial loss resulting from seismic activities in occupied fishing grounds. For compensation to be paid, the fishing activity must be impossible or significantly impeded due to the seismic activity, not just inconvenient. Claims for compensation made by fishermen are reviewed by a commission and if successful are paid by the State.
Committee view
6.43
The committee understands that Australia and a number of other countries apply similar control measures in EIA to mitigate the potential impacts of seismic signal exposure during the conduct of a survey. The committee accepts NOPSEMA's view that 'parameter variations' among these measures might be appropriate for the reasons identified.
6.44
The committee notes, however, that the control measures focus primarily on marine mammals, notwithstanding that there is some recognition of the need to adapt those measures to other marine animals (also see Chapter 4 in relation to EPBC Act Policy Statement 2.1—Interaction between offshore seismic exploration and whales: Industry Guidelines).
6.45
The committee reiterates its concern that the current evidence base is insufficient to provide for informed EIA and decision‑making on the impacts of seismic signal exposure.
International research collaborations
6.46
Several submitters and witnesses noted that the offshore petroleum industry collaborates on national and international research projects aimed at improving the evidence base in relation to the impacts of seismic signal exposure on marine animals and the marine environment.
6.47
The International Association of Oil & Gas Producers (IOGP) is a global forum in which member companies identify and share knowledge and good practices to achieve improvements in health, safety, the environment, security and social responsibility.
6.48
In 2006, the IOGP established its Sound and Marine Life Joint Industry Programme (JIP), a partnership of 12 oil and gas companies and the International Association of Geophysical Contractors. To date, over US$60 million has been invested in the JIP.
6.49
A key objective of the JIP is to inform the development of policy and regulation. Accordingly, its projects are subject to independent academic scrutiny, with research reports shared in peer-reviewed scientific journals:
… all research is shared in public reports and/or publications submitted to peer-reviewed scientific journals to ensure maximum transparency and value … The JIP also promotes effective academic and NGO partnerships to build a common scientific understanding of the impacts and consequences. Reliable and independent science is therefore of key importance. A panel of independent scientists has provided the JIP with external views and advice on proposed scientific projects. Over the previous 13 years the JIP has built a credible reputation in the regulatory, academic and NGO community and provides an excellent platform for conducting science.
6.50
The JIP conducts research spanning five different categories, including: understanding how sound travels under water, the possible effects of sound on marine animals' physical and behavioural well-being and how sound can be mitigated.
BRAHSS project
6.51
A few submitters referred to JIP's Behavioural Responses of Australian Humpback whales to Seismic Surveys (BRAHSS) project. This 2010–2015 project involved researchers from several Australian organisations and aimed:
to examine the behavioural reactions of Australian Humpback whales to seismic air guns; and
to determine whether ramp-up of air guns at the start of a survey is effective as a mitigation measure.
6.52
The BRAHSS project found that seismic surveying produced short-term changes in the humpback whales' behaviour:
Short-term changes in behaviour of migrating humpback whales exposed to seismic air guns were found. These were changes in dive behaviour, movement behaviour (making less progress southwards) and social behaviour (less likely to socialise), though no abnormal behaviours were observed.
For simulated surveys carried out in an area where groups were not migrating (e.g. resting area), the whales were more likely to respond to the seismic array as well as experience a longer migratory delay. This was deemed to have the potential for population-level consequences [such as survival or reproduction], though this needs to be tested in a realistic scenario.
Future international collaborations
6.53
As discussed earlier in this report, multiple submitters and witnesses supported a collaborative and multidisciplinary approach toward future research on the impacts of seismic signal exposure.
6.54
Associate Professor Robert McCauley from the Centre for Marine Science and Technology at Curtin University commented on Australia's 'strong track record' in conducting experiments but went on to submit:
It is abundantly clear that no single person or group has the expertise to cover all aspects of the work required. We will only get the required answers when groups with previous and required experience act collaboratively.
6.55
DISER submitted that its portfolio science agencies have a role in developing the body of science and research into the impacts of offshore petroleum activities. Geoscience Australia noted its role across government, as well as in domestic and international fora:
… such as the 19th meeting of the United Nations Open-ended Informal Consultative Process on Oceans and the Law of the Sea on anthropogenic underwater noise (United Nations Headquarters, 2018), and … with the Scientific Committee on Antarctic Research in [its] efforts to review underwater noise impacts on Antarctic wildlife. Key outcomes and recommendations from these meetings have informed the domestic discussion around the science required to advance this issue.
6.56
Similarly, CSIRO noted its scientific support nationally and to the international scientific community in relation to:
… understanding of baseline conditions of the marine environment, spatiotemporal understanding of habitats and species biodiversity in regions of oil and gas exploration (e.g. research conducted as part of the Great Australian Bight Research Program, invited reviews of exploration survey notifications), reviews of current international understanding of the potential impacts of anthropogenic noise on marine animals (e.g. through peer review publications, participation in expert elicitation workshops and involvement in the United Nations Informal Consultative Process) and the spatial distribution of pressures associated with oil and gas exploration (e.g. research conducted as part of the National Environment Science Program Marine Biodiversity Hub, assessments conducted as part of the 2016 State of the Environment Report).
6.57
NOPSEMA submitted that its international presence helps to maintain awareness of the latest science and also approaches to offshore environmental regulation (for example, through international regulatory counterparts such as the International Offshore Petroleum Environment Regulators' Group).
Committee view
6.58
As expressed in Chapter 3, the committee supports research collaborations among multiple stakeholders, including the offshore petroleum industry. The committee agrees with Professor McCauley that it is best to proceed with the benefit of all available knowledge and expertise, whether this is to be found at the national and/or international levels.
6.59
The committee therefore supports the work of the JIP, noting especially that its projects are independently scrutinised and its research is published in peer-reviewed journals. This accords with the committee's view of improved and more transparent data sharing (see Chapter 2), as well as contributing to a more substantial and credible evidence base (see Chapters 2 to 5).
6.60
The committee would welcome more JIP projects directed to understanding the impacts of seismic signal exposure and better informing policy and regulation.
Concluding comments
6.61
The committee acknowledges the Australian Government's policy framework for offshore petroleum activities in Commonwealth waters, and recognises that these activities contribute significantly to federal, state and local economies.
6.62
The committee also heard that offshore petroleum activities are an important part of Australia's energy production and the nation's energy security.
6.63
The committee recognises that there are multiple users in Commonwealth waters released for petroleum exploration and production, and considers that these interests are equally important as, and must be fairly balanced with, those of the offshore petroleum industry. However, the committee heard that these interests are not well recognised to the detriment of the commercial fishery and tourism sectors as well as marine animals and the marine environment.
6.64
With these considerations in mind, the committee commends its report to the Senate.
Senator Peter Whish-Wilson
Chair