This is the third status update on progress of implementing the recommendations from the Scientific Inquiry into Hydraulic Fracturing (the Inquiry) since the Northern Territory Government’s Implementation Plan was release in July 2018. The Implementation Plan outlines government’s intention for how each of the recommendations from the Inquiry will be put in place.
The Implementation Plan divided all the recommendations into six key reform areas with three delivery timeframes: Stage One – Planning, which is now complete; Stage Two – Preparing for exploration, which is nearing completion; and Stage Three – Exploration and Preparing for Production, which is underway.
At 31 March 2019, 21 recommendations were complete. It is anticipated by end of June 2019
50 recommendations will have been implemented.
This document summarises progress of implementation as at end of March 2019. Details are also provided on the next steps for continuing the implementation of the recommendations over coming months. Progress information on each recommendation is displayed on the hydraulic fracturing inquiry implementation hydraulicfracturing.nt.gov.au and is updated as each recommendation is completed.
In the January to March 2019 quarter, extensive progress was achieved implementing changes to legislation that significantly strengthen the regulation of the onshore petroleum industry and increase the transparency around decision making. Changes to laws ultimately ensure that the Territory has a robust and trusted regulatory framework which enables the onshore petroleum industry to develop in a manner that protects the environment and provides certainty to industry and the community.
The passing of the Petroleum Legislation Amendment Bill 2018 addressed:
- Introduction of open standing for judicial review of particular decisions or determinations under the Petroleum Act 1984 and the Petroleum (Environment) Regulations 2016.
- The requirement for the Minister for Primary Industry and Resources to be satisfied that a proposed operator is an ‘appropriate person’ (meaning individual, corporation or associated entity) to hold a permit or licence under the Petroleum Act 1984, having regard to past compliance history and performance.
- Requiring adherence to a mandatory Code of Practice under the Petroleum (Environment) Regulations 2016.
Ministerial governance arrangements were amended in February 2019 via a change to the Administrative Arrangements Order. The transferring of responsibility for the environmental regulation of the onshore petroleum industry to the Minister for Environment and Natural Resources from the Minister for Primary Industry and Resources effects a separation of the responsibilities for regulating the environmental impacts from the responsibility for promoting the industry.
The below information provides an implementation progress update under six reform areas;
During the first quarter of 2019, a raft of changes were made to strengthen regulation and increase transparency, building solid foundations for robust decision making.
Action - Implementing a separate environmental approval
A significant recommendation from the Inquiry was to have a clear separation between the responsibility for regulating the environmental impacts and risks associated with an onshore petroleum industry and the responsibility for promoting that industry.
This was achieved through changes to the Administrative Arrangement Orders in February 2019 which transferred the responsibility for environmental regulation of the onshore petroleum industry to the Minister for Environment and Natural Resources. This new responsibility includes making decisions about Environment Management Plans for regulated activities. The Minister for Primary Industry and Resources continues to hold responsibility for all other matters under the Petroleum Act 1984, which include tenure, petroleum resource management, and operational approvals including well operations.
Approval of the regulatory model addresses Recommendation 14.34 and 14.35.
Action – Ensuring decisions are made transparently
The Economic Policy Scrutiny Committee completed its proceedings and the Petroleum (Environment) Regulations Amendment Bill 2018 passed the Legislative Assembly on 19 March 2019. The Bill amended the Petroleum Act 1984 to provide for consideration of whether an applicant is an ‘appropriate person’ to hold a permit or licence under the Act (recommendations 14.12 and 14.20). This will be determined by considering a company’s history of compliance with various petroleum, environmental, work health and safety and corporation laws, which will be listed in the amended Act.
The changes to Petroleum Act 1984 will be enforceable and gazetted following confirmation by the NT Administrator in May 2019. Further changes will be made to the Petroleum Act 1984 regarding the transparency of the land release process before releasing any further land for exploration in the Northern Territory (recommendation 14.2).
Action – Holding decision makers accountable
The changes to the Petroleum Act 1984 allows for challenges to administrative decisions under the Petroleum Act 1984 and the Petroleum (Environment) Regulations 2016 as listed in the Schedule of each piece of legislation. The amendment makes provisions for open standing, allowing any person to apply to the Northern Territory Supreme Court for judicial review of a decision or determination made under the Act or the Petroleum (Environment) Regulations 2016. This change fully implements recommendation 14.23 from the Inquiry.
The Government will further amend environmental and petroleum legislation in the future to ensure decision makers take the principle of ecologically sustainable development into account; when deciding whether or not an activity should proceed (recommendation 14.11).
Action – Giving the community a say
The Minister for Environment and Natural Resources is now required to publish any Environment Management Plans (EMP) regarding drilling of a petroleum well and hydraulic fracturing for comment prior to Ministerial consideration of the activity. The Minister must also consider these comments when making a determination as to whether the EMP should be approved. Implementation of recommendation 14.15 is now complete.
The Government will seek to further amend the Petroleum Act 1984 to enable any person to lodge an objection to the proposed grant of an exploration permit within a prescribed time limit. (Recommendation 14.10).
Ensuring Accountable Industry Practice
Action – Developing a transparent and enforceable Codes of Practice
The Northern Territory Government has developed a draft Code of Practice for Onshore Petroleum Activities in the Northern Territory and is now seeking public feedback on the document. The draft Code of Practice was developed by a technical working group involving the CSIRO and government regulators. The draft Code of Practice was also peer reviewed prior to being released for public comment.
The Code of Practice has been drafted to clearly define the standards and requirements that petroleum companies operating in the Northern Territory will need to abide by for activities such as well operations, surface activities, methane monitoring and waste water management
This Code will incorporate a number of recommendation made by the Inquiry into Hydraulic Fracturing in the Northern Territory; including offset and set back distances, multilevel water monitoring bores to be installed, and pressure testing of petroleum wells.
The draft Code was released for a four week public consultation period.
The mechanism for the Code of Practice to be enforceable has been enabled following the passing of the Petroleum Legislation Amendment Bill 2018.
(Recommendations 5.1, 5.3, 5.4, 5.5a, 5.6, 7.11, 7.15, 8.15, 9.1, 9.2, 9.6, 10.2, 14.18)
Government will consider feedback on the draft Code of Practice from the community, environmental groups, local business, the petroleum industry, and local government to incorporate amendments where appropriate before finalising the Code of Practice. The Petroleum (Environment) Regulations 2016 will need to be amended once the Code of Practice is finalised, to require enforceability of the Code.
Action – Managing wastewater and chemical safety
The requirement to reduce the risk of contamination of surface aquifers from on-site spills of wastewater is being implemented via the requirements for wastewater management in the Code of Practice (Recommendation 17.12).
The release of petroleum wastewater to surface water (recommendation 7.17) has been prohibited through a decision making policy under the Water Act 1992 for this regulated activity under the Petroleum (Environment) Regulations 2016.
Government will review transport options for chemicals and wastewater associated with the onshore petroleum industry to determine whether additional practices or arrangements need to be considered to avoid the risk of spills and contamination (recommendation 7.14).
Action – Monitoring gas companies and their operations
A compliance and monitoring strategy has been jointly developed by the Department of Primary Industry and Resources the Department of Environment and Natural Resources (Recommendation 14.26).
Part of this strategy includes the Code of Practice, which sets the framework for industry operational requirements and how they will be regulated. Ongoing monitoring and publication of methane monitoring results (recommendation 9.5) has been developed as part of the code, which will include the requirement for publicly available data.
The community and industry will have an opportunity to comment on the strategy, it is expected that this will be completed by June 2019.
Action – Ensuring gas companies comply with our laws
Recommendation 14.27 has been split into part a and b as the Inquiry recommended the establishment of a hotline to report any potential onshore gas industry non-compliance prior to exploration involving drilling of petroleum wells or hydraulic fracturing. The 24 hour toll free service Onshore Gas Non-compliance Hotline has commenced completing recommendation 14.27a. Recommendation 14.27b regarding the establishment of whistle blower protections will continue as part of Stage 3.
Guidance documentation has been prepared for industry to navigate the new regulatory processes. Communication materials have been prepared to inform the community through a booklet - Preparing for Exploration – Changes to the Regulation of the Northern Territory’s Onshore Petroleum Industry
Safeguarding Water and the Environment
Action – Assessing, protecting and monitoring water resources
The Northern Territory Government has proposed amendments to the Water Act 1992 with the Water Amendment Bill 2019 currently with the Economic Policy Scrutiny Committee, public submissions for this closed in Mid-March 2019.
The Water Amendment Bill 2019 addresses four key recommendations (7.6, 7.8[a], 7.9 and 7.17) by increasing protections for all water (surface and groundwater). The amendments proposed include restrictions on licenses within 1km to existing water bores, prohibits the use of surface water for petroleum activities, regulates the use of flow back fluids and prohibits the release of wastewater to surface waters and groundwater features.
The amendments to the Water Act 1992 have been tabled in Parliament and passed in May 2019.
Action - Collecting baseline data and informing regional management
Strategic Regional Environmental and Baseline Assessment (SREBA)
A Strategic Regional Environmental and Baseline Assessment (SREBA) was recommended in the Final Report as an important mechanism to establish baseline characteristics of prospective areas against which potential impacts can be measured.
There are 35 recommendations that rely upon or are related to a SREBA to support the development of the onshore petroleum industry in the Northern Territory. Working groups from within the Northern Territory Government have produced the first draft of policies and the overarching framework which will be required to deliver a SREBA. Currently this work is focussed on clarifying the documenting responsibilities, detailed technical specifications for guidance notes, and the process of triggering a SREBA and the subsequent methods involved in delivering one.
SREBA data collection and assessment will provide a significant body of knowledge of the broader biophysical, economic and social environment in the Territory to support decision making. This includes where potential impacts could be unacceptable, or constraints may arise, so that these effects can be mitigated or avoided. It will also establish a clear, unambiguous reference point.
The technical SREBA framework is underpinned by a number of guidance notes being developed by working groups of experts. These cover water quality and quantity; surface aquatic and groundwater dependent ecosystems; terrestrial ecosystems and greenhouse gases. Guidance notes will also cover socioeconomic and cultural aspects, as well as public health.
The SREBA framework will be reviewed by independent experts and the Onshore Shale Gas Community and Business Reference Group prior to being released for public consultation in 2019.
Action - Collecting Baseline data in the Beetaloo Sub-basin
The Inquiry recommended SREBAs should be completed within five years from the first grant of exploration approvals; and must be completed prior to the grant of any production approvals. As well as recommending the Beetaloo Sub-basin should be the location of the first SREBA and that elements of the SREBA commence prior to the grant of any further exploration approvals.
Ongoing monitoring and publication of methane monitoring results (recommendation 9.3) is being carried out by the CSIRO, with its second interim report released in February 2019, using data collected during November 2018. Results were similar to those collected from the first survey. Additional surveys were conducted during the wet season in early 2019, with findings to be presented in a third interim report due in May 2019.
Baseline weed assessment work is ongoing with holders of existing Exploration Permits in the Beetaloo Sub-basin required to accurately identify locations of exploration and undertake weed surveys in those areas (recommendation 8.2).
Water monitoring and groundwater research has commenced to establish baseline measurements and indicators. A guideline for groundwater monitoring bores for exploration petroleum wells in the Beetaloo Sub-basin has been published. EMPs have now been approved for the construction of water bores for monitoring.
A six-month baseline report of CSIRO methane monitoring is to be published in May 2019.
Respecting Community and Culture
Action – Ensuring respectful consultation, information and negotiation
The Board of the Aboriginal Areas Protection Authority is now consulting with relevant Land Councils on the extent of protection to sub-surface sites provided by the Northern Territory Aboriginal Sacred Sites Act 1989(Recommendation 11.3).
Operators must produce an Authority Certificate from the Aboriginal Areas Protection Authority (under the Northern Territory Aboriginal Sacred Sites Act 1989) when submitting an Environment Management Plan for approval (Recommendation 11.1). An interim practice has been agreed between the NTG and industry that EMP’s can be submitted and assessed without a Certificate, however they will not be approved until one is granted. Recommendation 11.1 will be enforceable under changes to the Petroleum (Environment) Regulations 2016. These changes also give all relevant stakeholders the ability to comment on draft EMP’s before approval.
To improve communications with Aboriginal stakeholders in remote areas, the Onshore Shale Gas Community and Business Reference Group has accepted the recommendation for meeting communiques and related information to be read out on community radios in regionals areas to give impacted residents a better opportunity to receive and understand the outcomes of their quarterly meetings.
The Government is collaborating with stakeholders, including Land Councils and the Aboriginal Areas Protection Authority to develop and commission independent information programs to inform affected Aboriginal people about the onshore gas industry. This project is scheduled for development by mid-2019 (Recommendation 11.6).
Maximising regional benefits and local opportunities
Whilst the recommendations in this reform group are scheduled for Stage 3 implementation, early work has commenced.
Action - Maximising opportunities for Territory businesses
Following a period of public consultation in August 2018, the Government is finalising the development of a new Territory Benefit Policy to capture local benefits for Territorians from private sector projects. A commitment to maximising local employment, including employment for Aboriginal people, is expected from companies working under this policy.
Work is being undertaken with the Northern Territory Industry Capability Network to map service and supply industry capabilities to understand the opportunities that will stem from industry growth.
In February 2019, members of the NT Chamber of Commerce travelled to Texas in the USA to better understand how regional communities have managed the benefit and impacts associated with the onshore gas industry. This group consisted of members from key regional stakeholders around the NT and with representatives from a number of important NT industries.
The Government is further refining and developing the Territory Benefit Policy and developing a forward plan to identify business requirements related to the development of the Beetaloo Sub-basin (Recommendation 13.5).
Action- Creating local training programs, skills assessment and employment
The NT Chamber of Commerce delegation included representatives from NT training providers with an aim to better understand the opportunities and training requirements of the onshore gas industry.
Engagement has commenced with universities to understand research and skills training opportunities for drilling.
Government will work with the gas industry, contractors and training and research bodies to identify and address gaps in the availability of specialised training. Appropriately skilled training providers will be encouraged to partner with specialist support industries (Recommendation 13.4).
Planning for Industry
Meetings have been held between the Commonwealth and Northern Territory governments to progress work agreed to through the Memorandum of Understanding (MoU) that was signed between the Northern Territory and Australian governments further develop the Northern Territory’s gas industry, both offshore and onshore.
Major objectives of the MoU include:
- Contributing to national energy security
- Establishing the Northern Territory as a world class gas production, manufacturing and services hub
- Driving industry collaboration in the priority areas of infrastructure investment, Aboriginal economic development, common industry practices and research, innovation and training
- Managing social and environmental impacts for a Northern Gas Industry
Action – Defining areas, processes and mechanism for no-go areas
Work has commenced on developing a policy to facilitate discussions with community on areas that can be declared reserved blocks or "no-go zones" under the Petroleum Act 1984 before any declaration of Reserved Blocks by the Minister (Recommendation 14.4).
Consultation with the community on proposed reserved blocks under Section 9 of the Petroleum Act 1984 will occur in May 2019, which will detail what areas can be protected from any petroleum exploration or production activities. Following consultation with the community, government will consider the feedback and commence declaring reserved blocks mid 2019.
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