Progress

This is the fourth status update and is a summary of the progress of implementing the recommendations from the Final Report from the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory (the Inquiry) since the release of the Implementation Plan in July 2018. The Implementation Plan outlined Government’s intention for how each of the recommendations will be put in place.

Quarterly progress updates have been provided throughout the year and this summary consolidates progress of implementation as at end of July 2019. At this time 54 recommendations have been completed, 73 commenced and 11 yet to commence. Details are also provided on the next steps for implementing the recommendations over coming months. Progress information on each recommendation is displayed on the project-specific website – hydraulicfracturing.nt.gov.au.

When developing the Implementation Plan each recommendation was allocated to three delivery timeframes: Stage One – Planning, which is complete; Stage Two – Preparing for exploration and Stage Three – Exploration and Preparing for Production. Stage 2 and 3 recommendations are in the process of implementation.

In the Inquiry final report Table 16.1 identified 31 recommendations that the Inquiry panel considered ‘must be implemented prior to any further exploration approvals being granted’. The 31 recommendations requiring implementation before exploration drilling and hydraulic fracturing could occur have now been implemented.

In addition to allocating each recommendation to three delivery timeframes, each recommendation was also grouped into six reform areas. The information below provides an implementation progress update under each of the six reform areas and actions along with what is happening next.

Strengthening Regulation

Action – Implementing a separate environmental approval

The Northern Territory Government committed to clearly separating the agency responsible for regulating the environmental impacts and the risks associated with onshore gas, from the agency responsible for promoting the industry. Changes to the Administrative Arrangement Orders in February 2019 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.

The Northern Territory Environment Protection Authority Act 2012 was amended in November 2018 to enable the Minister for Environment and Natural Resources to seek comprehensive independent expert advice from the NT Environment Protection Authority (NT EPA) to ensure appropriately informed decision-making.

These legislative changes also provide the NT EPA with two additional members with specialist skills and experience in the assessment and management of the environmental impacts of onshore gas development.

What’s next?

Once there is greater clarity around whether industry will progress to production, and the scale and nature of production activities, the Northern Territory Government will consider whether or not the establishment of a “one-stop-shop” independent regulator is appropriate for regulating the onshore gas industry in the Northern Territory over the long term.

Action – Ensuring decisions are made transparently

Changes have been made to the Petroleum (Environment) Regulations 2016 and all notices and reports of reportable and recordable environmental incidents are published within two working days of notification. These changes came into effect 19 December 2018.

The Petroleum Act 1984 was amended to require an applicant to pass an ‘appropriate person’ test to hold a permit or licence under the Act. This will be determined by considering a company’s history of compliance with various petroleum, environmental, work health and safety and corporation laws. The 2018 amendments came into force on 15 May 2019.

What’s next?

The Petroleum Act 1984 will be amended further to allow for a transparent land release process. The Act will be amended before releasing any further land for exploration in the Northern Territory.

Action – Holding decision makers accountable

Changes to the Petroleum Act 1984 allow for challenges to administrative decisions under the Act and the Petroleum (Environment) Regulations 2016. The amendmentmakes provisions for open standing, allowing any person to apply to the Northern Territory Supreme Court for judicial review of certain decisions or determination made under the Act or the Petroleum (Environment) Regulations 2016.

Amendments to the Petroleum (Environment) Regulations 2016 in December 2018 included the requirement for the Minister to consider the cumulative impacts of other proposed developments when making a determination about whether an onshore gas activity should be approved.

What’s next?

The Northern Territory Government will amend the Petroleum Act 1984 to ensure decision makers take the principle of ecologically sustainable development into account when deciding whether or not an activity should proceed. Government will review the existing arrangements around the allocation of legal costs of unsuccessful legal action by litigants who have genuinely pursued action in the public interest.

Action – Giving the community a say

Petroleum (Environment) Regulations 2016 were amended on 19 December 2018 to meet the requirements of recommendation 14.15. All draft Environment Management Plans seeking Minister's consideration for drilling of petroleum wells and/or hydraulic fracturing activities must be advertised for a 28 day public comment period. Comments received must be published online and the Minister must take into account all comments received before making a decision on the draft Environment Management Plan.

What’s next?

The Northern Territory 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. The Minister will have to take into account and publish online objections received in decision making.

Ensuring Accountable Industry Practice

Action – Developing transparent and enforceable codes of practice

The Northern Territory Government developed a Code of Practice: Onshore Petroleum Activities in the Northern Territory, which was finalised and made enforceable through amendments to the Petroleum (Environment) Regulations 2016 in June 2019. The Code was developed by a technical working group involving CSIRO and government regulators. The Code was peer-reviewed prior to being released for public comment in April 2019 for four weeks.

The Code of Practice clearly defines 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.

The Code incorporates a number of recommendations made by the Inquiry including offset and set back distances, installation of water monitoring bores, and pressure testing of petroleum wells.

What’s next?

The Department of Primary Industry and Resources will continue work with independent scientific experts to formulate an appropriate system for measuring seismic intensity in the Northern Territory.

Action – Managing wastewater and chemical safety

It is now a requirement to disclose and publish detailed information about chemicals used in hydraulic fracturing fluids and report and publish the composition of flowback and produced water through amendments to the Petroleum (Environment) Regulations 2016, completed December 2018.

The requirement to reduce the risk of contamination of surface aquifers from on-site spills of wastewater is being implemented via the mandatory requirements for Wastewater Management Plans in the Code of Practice finalised in June 2019 such as lining of well pads and storage of hydraulic fracturing wastewater in enclosed tanks.

The release of petroleum wastewater to surface water and aquifers has been prohibited through amendments to the Water Act 1992 that commenced on 19 June 2019.

What’s next?

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.

Action – Monitoring gas companies and their operations

The departments of Primary Industry and Resources and Environment and Natural Resources have developed a Monitoring and Compliance Strategy, which is publicly available on the Department of Environment and Natural Resources website.

Part of this strategy includes the Code of Practice (COP), which sets the framework for industry operational requirements and how they will be regulated. Ongoing monitoring and publication of methane monitoring results have been developed as part of the COP, which will include the requirement for publicly available data.

What’s next?

The Strategy is applied by relevant agencies as gas companies begin to recommence exploration. The Strategy was released in July 2019 and the community can make comments on it at any time. The Strategy will be reviewed in 12 months.

Action – Ensuring gas companies comply with our laws

A 24-hour toll free service Onshore Gas Non-compliance Hotline was established November 2018. The non-compliance hotline is an avenue for the public to report suspected non-compliance by the onshore gas industry.

What’s next?

Further work will be done to address road use arrangements, industry compliance, and industry governance arrangements prior to production occurring. This also includes the establishment of protections for whistleblowers.

Action – Developing cost recovery arrangements

Policy development is underway for a full cost recovery system for the regulation of any onshore gas industry.

What’s next?

Work on a cost recovery system will continue, and government will prepare a discussion paper for consultation on the proposed system.

Safeguarding Water and the Environment

Action – Collecting baseline data and informing regional management

Strategic Regional Environmental and Baseline Assessment

The Inquiry recommended that government undertake pre-development baseline studies which the Inquiry described as a Strategic Regional Environmental and Baseline Assessment (SREBA). These studies will be an important mechanism to establish baseline characteristics of prospective areas and assess the potential impacts of future development.

There are 35 recommendations that rely upon or are related to a SREBA to support the development of the onshore oil and gas industry in the Northern Territory. Progress has been made in documenting the framework to apply to these baseline studies (including minimum standards, requirements and scope) and methodologies for undertaking a SREBA in various circumstances and locations.

SREBA data collection and assessment will provide a significant body of public knowledge of the broader biophysical, economic and social environment in the Territory which will inform future decisions by Government, industry regulators, and communities and landholders living in regions that may be developed in the future. These studies may identify circumstances or locations where potential impacts could be unacceptable, or constraints may arise, so that these effects can be mitigated or avoided. The studies will establish clear reference points for assessing future development opportunities.

The SREBA framework will consist of a number of technical guidance notes currently being developed by expert working groups. The guidance notes will address baseline studies of 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 Inquiry recommended SREBAs must be completed prior to the grant of any production approvals, and should be completed within five years from the first grant of exploration approvals. The SREBA for the Beetaloo Sub-basin will be completed before any production approvals in the Beetaloo will be granted. The majority of planning for the baseline work will commence from late 2019, but some baseline activities have already commenced in the field, including:

  • Ongoing monitoring, assessment and publication of background methane emissions in the Beetaloo Sub-basin has been carried out by CSIRO Gas Industry Social and Environmental Research Alliance (GISERA), the interim reports can be found here.
  • Baseline weed assessment work has now been completed for areas to be accessed in 2019. Further assessments will be ongoing for areas of proposed new activities prior to commencement in these areas, with mandatory requirements now stipulated in the Code of Practice.
  • 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. Water monitoring bores have now been constructed and baseline data is being collected. This information will be published on the DENR website prior to hydraulic fracturing activities commencing.

What’s next?

Three reports on the background methane emissions in the Beetaloo Sub-basin have been published by CSIRO/GISERA and are available online. CSIRO/GISERA are currently developing a final report that consolidates the results of all these studies for this study of the Beetaloo Sub-basin.

The SREBA framework will be reviewed by independent experts prior to being released for public consultation in 2019. The Onshore Gas Community and Business Reference Group will be asked to provide feedback on the consultation draft of the framework before it is finalised.

Action – Assessing, protecting and monitoring water resources

The Northern Territory Government has amended the Water Act 1992 to require the petroleum industry to obtain water extraction licences to obtain water. The amendment commenced on 31 December 2018 and also updated offences and penalties.

Further amendments were made to the Water Act 1992 in June 2019 to impose restrictions on licences for extraction of water for hydraulic fracturing activities within 1km of existing water bores (recommendation 7.8(a), prohibit the use of surface water for petroleum activities (recommendation 7.6) and prohibit the release of hydraulic fracturing wastewater to surface waters and groundwater aquifers.

What’s next?

The Northern Territory Government will continue work to develop Water Allocation Plans for the North and South Beetaloo Sub-basin and develop options for a water pricing model applying to water extraction by the onshore gas industry.

Action – Maintaining and monitoring ecosystem health

A dedicated onshore gas weeds officer has been established within the Department of Environment and Natural Resources and a requirement for companies to have their own dedicated weeds officer built into mandatory for developing a weed management plans.

What’s next?

The SREBA framework will provide the mechanism for studies of ecosystems and assessment of biodiversity. The SREBA framework will be reviewed by independent experts and the Onshore Gas Community and Business Reference Group prior to being released for public consultation later in 2019.

Respecting Community and Culture

Action – Building a comprehensive framework for social and cultural baselines

Action – Conducting regional social and cultural impact assessments

Action – Managing social and cultural impacts

Work has commenced to determine the methodologies for undertaking SREBA. This work includes approval of a methodology for undertaking social, cultural and economic baselines and impact assessments at regional scale. The target completion date for approval of these methodologies is late 2019 including public consultation.

What’s next?

The SREBA framework will be reviewed by independent experts prior to being released for public consultation in 2019. The Onshore Gas Community and Business Reference Group will be asked to provide feedback on the consultation draft of the framework before it is finalised.

As part of the governance arrangements for a SREBA Government will consider establishing a local community reference group to provide advice and feedback on the process for undertaking the social, cultural and economic baseline studies and associated assessment of potential impacts.

Action – Ensuring respectful consultation, information and negotiation

Changes have been made to so that the Minister cannot approve a draft Environment Management Plan (EMP) unless an Authority Certificate from Aboriginal Areas Protection Authority (AAPA) (under the Northern Territory Aboriginal Sacred Sites Act 1989) has been provided.

As part of the EMP assessment process APAA will be provided all draft EMPs early in the process and have an adequate opportunity to communicate and consult custodians on the application.

The Board of the AAPA has advice and 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.

What’s next?

The Northern Territory Government is collaborating with stakeholders, including Land Councils and AAPA to develop and commission independent information programs to inform affected Aboriginal people about the onshore gas industry. This project is a 2019-20 priority and further work will begin later this year.

Maximising regional benefits and local opportunities

Following public consultation in 2018, the Northern Territory Government released the Territory Benefit Policy. The policy aims to increase local benefits from Territory-based projects by strengthening proponents’ efforts to build the capacity and increase participation of the Territory’s workforce and businesses.

Government has also engaged the Industry Capability Network NT (ICN NT) to conduct Industry Capability Mapping and Gap Analysis studies. These studies will provide insight to the extent the Northern Territory’s business sector is supporting the existing offshore (LNG) industry, the opportunity to grow this, and the opportunities to support the emerging onshore gas industry. These studies are due for completion in Q4 and will lead to the development of a NT Gas Industry Service and Supply Strategy.

Action – Creating local training programs, skills assessment and employment

Government has commenced initial policy development aimed at maximising the contribution of private sector projects to the Northern Territory. Companies will be required to develop a plan that clearly articulates their commitments and strategies to deliver training and employment outcomes for local and regional stakeholders.

What’s next?

The Northern Territory Government will work with the gas industry, contractors, 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. Government will also work with industry to establish skilling, local, and, aboriginal employment targets. Creating local training programs, skills assessment and employment targets has been set as a 2019-20 priority.

Action – Maximising opportunities for Territory businesses

A key objective of the Territory Benefit Policy (released on 9 July 2019) is to maximise opportunities for all Territory-based projects for Territory businesses, and the ICN NT Industry Capability Mapping and Gap Analysis studies will deliver a better understanding of the Northern Territory’s gas industry service and supply industry capabilities, and the opportunities to expand this.

In February 2019, the Chamber of Commerce NT led a business delegation to Texas USA to gain an understanding of the onshore gas industry and how regional communities have managed the benefit and impacts associated with rapid industry development. The delegation was accompanied by a Department of Trade, Business and Innovation officer and consisted of representatives from Northern Territory peak industry bodies.

What’s next?

On completion of the ICN industry capability studies, Government will develop the NT Gas Industry Service and Supply Strategy and action plan to maximise opportunities for Territory businesses from gas industry development.

Action – Ensuring Territorians benefit from royalties

The Northern Territory Government can expect to receive increased royalty and tax revenue from an onshore gas industry if it progresses to production. The Northern Territory Government is investigating options for allocating royalties that facilitate economic, business and social development in the regions and the Northern Territory more broadly.

What’s next?

Preliminary work has begun to investigate options for allocating royalties. The Northern Territory Government will investigate options that facilitate economic, business and social development in the local region and the Northern Territory more broadly. The Northern Territory Government will work with the pastoral industry and the onshore gas industry to determine compensation for pastoralists.

Planning for Industry

In November 2018, a Memorandum of Understanding (MoU) was signed by the Northern Territory and Commonwealth governments to strengthen a collaborative effort to develop the Northern Territory’s offshore reserves and help unlock the potential of the Beetaloo Sub-basin as a new world-class gas province. 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; and
  • managing social and environmental impacts for a Northern Gas Industry.

The MoU has led to a jointly funded study to determine the planning, infrastructure, logistics, workforce and service requirements required to support the development of the onshore oil and gas industry. This study commenced in July and is due for completion in Q4 2019.

A host of further studies to guide industry development have been identified, with some underway and others in the process of being scoped in preparation for procurement. These studies will enable government to work with industry to support industry development, understand the potential impacts on the Northern Territory’s regional towns, transport networks, infrastructure and pastoral land, establishing a plan for development by Q1 2020.

Action – Defining areas, processes and mechanism for no-go areas

A consultation paper was released for public comment on 24 May 2019. The consultation period ended 21 June 2019. The Northern Territory Government has considered the submissions and finalised its policy on reserved blocks in July 2019, in accordance with the Inquiry’s recommendations. The process for declaring reserved blocks under s9 of the Petroleum Act 1984 will commence immediately.   The government’s policy and areas for declaration is available here.

What’s next?

The declaration of reserved blocks will be a staged process commencing immediately, with government negotiating with petroleum companies the relinquishment of petroleum tenure where reserved blocks (as defined by the Inquiry’s recommendation 14.4) intersect with granted exploration permits.

Action – Improving roads and facilities

The Northern Territory Government is working with all levels of government, community and industry to identify and manage infrastructure risks, opportunities, and funding options to support project associated infrastructure. The Northern Territory Government is maintaining its role overseeing the transport network, with the onus on industry to develop management plans that address any adverse impacts to the Northern Territory transport system.

What’s next?

Preliminary work has begun and initial policy development is underway. This action is scheduled for Stage 3 and is to be completed December 2021.

Action – Planning for infrastructure, services, and industry impact

As part of the regional impact assessment the Northern Territory Government will undertake studies to identify the infrastructure industry requires and potential risks to other users. Local communities and industry will be consulted and there will also be a period of public consultation.

What’s next?

The Northern Territory Government will work with industry and stakeholders to identify opportunities to maximise and capture regional benefits, and manage risks of negative economic impacts.

The Department of Infrastructure, Planning and Logistics will assess risks throughout the planning process, and will include those risks in its usual consultation with industry and local communities. The Northern Territory Government's 10 Year Infrastructure Plan will include requirements for new or upgraded infrastructure.

Action – Addressing arrangements to access pastoral land

The Northern Territory Government has recognised that in some cases, the development of the petroleum industry in Australia has caused tension between pastoralists and gas companies. The Northern Territory Government will work with pastoral and onshore gas industries to legislate a land access regime that will require petroleum companies to reach an agreement with pastoralists before they access pastoral leases, with minimum mandatory provisions. This will include a process for how pastoral lessees should be compensated for the impact that petroleum  production operations have on their pastoral operations.

What’s next?

The Department of Primary Industry and Resources will review current processes in the Northern Territory and other jurisdictions, and will consult to develop a revised process for how gas companies and pastoral lessees will negotiate access agreements and the requirement for and content of a statutory land access agreement. The requirements will be made enforceable via legislation. Addressing pastoral land access arrangements has been set as a 2019-20 priority and further work will commence shortly.

Want to find out more?

To find out about opportunities to engage in consultation or to keep up to date with status of implementation of each recommendations, sign up for regular updates on the website: hydraulicfracturing.nt.gov.au, by email: hydraulic.fracturing@nt.gov.au

Past progress updates


Last Updated:
02 Apr 2019