Summary

The Northern Territory Government is inviting the gas industry into the Territory to perform the important task of exploring for and extracting a publicly owned resource. While gas companies are here we require them to obey our laws.

First, we need to be very clear about how we require gas companies to operate and the standards we expect them to reach. The Inquiry told us that having transparent and enforceable Codes of Practice is one way to make these requirements clear. We will develop Codes of Practice and other guidance materials to underpin every one of these requirements, such as how methane emissions will be minimised, how well integrity will be maintained, how solid wastes must be managed, how induced seismic activity can be minimised and how human health will be protected at all times.

We will require the gas companies to tell us what chemicals are used in hydraulic fracturing (and why), and what chemicals come out of the wells. We will mandate the public disclosure of this information. The government will keep track of the types of chemicals, their quantities, what they will be used for, how they will be transported, and how spills will be prevented and managed and how the chemicals are removed or treated after their use. Gas companies will be prohibited from releasing any chemicals or wastewater into the environment. Wastewater will be required to be stored in enclosed tanks to ensure there is no leakage or overflow during the wet season, and well pads will be treated to ensure that spills cannot leak down into underlying aquifers.

The government will implement various tools to ensure gas companies comply with our laws. For example, we will enact a broader range of powers to sanction gas companies if they do not comply with our laws. We will review and increase penalties for environmental offences so that they are in line with best practice. We will look at implementing “chain of responsibility” laws similar to the kind introduced in Queensland to ensure that gas companies do not avoid complying with their environmental obligations. We will reverse the onus of proof so that gas companies – not landholders or the state – will need to prove in court that they did not cause environmental harm. We will also empower the community by establishing whistleblower protections and a whistleblower hotline that can be used if someone sees a problem. All these tools will work together to require gas companies to comply with our laws.

The gas industry will be accountable for the costs associated with regulating it. We will work with the community and industry to develop a framework that will ensure that, in the event of any environmental harm such as a leaky well or groundwater contamination, the industry – not Territorians – pays the clean-up costs in full. A non-refundable levy will be imposed on the industry before any gas production commences to ensure that money paid by the gas industry will be available for the long-term monitoring of wells.

Ensuring Accountable Industry Practice Action Points

Developing Transparent and Enforceable Codes of Practice

ActionRec#Stage

The Northern Territory Government will develop Codes of Practice and guidance for methane monitoring, well integrity, well decommissioning, treatment of solid wastes, seismic activity and human health. These codes will incorporate the Inquiry’s recommendations, including, offset and set back distances, multilevel monitoring bores be installed, and that wells be pressure tested. The codes will be made enforceable via legislation, before any further hydraulic fracturing environmental management plan approvals are granted.

Gas companies will be required to develop and implement well integrity management systems and plans, adopt international standards that reduce the risk of upstream methane emissions during exploration and production, and consult with government, landholders, land councils, local government and local communities around setback distances from community infrastructure.

The government will develop a wastewater management framework so everyone knows where the wastewater from hydraulic fracturing goes and how it is treated.

5.1
5.3
5.4
5.5a
7.11
9.1
9.2
9.6
10.2
14.18
2

The government will work with industry, local businesses and independent scientific experts to develop guidelines for how solid wastes will be managed.

The government will work with other jurisdictions, industry and independent scientific experts to develop a system to measure and minimise the impact of induced seismic events during hydraulic fracturing.

The government will develop specific guidelines for human health and environmental risk assessments that are consistent with national frameworks and standards.

The government will require that gas companies publicly disclose details of all faults that could compromise well integrity.

The government will require gas companies to demonstrate that they have minimised the surface footprint of development and reduced the visibility from major public roads.

Gas companies will be required to implement standards that manage the risk of methane emissions during exploration and production.

The government will replace the Schedule under the Petroleum Act with Codes of Practice.

5.6
5.7
7.4
7.15
8.15
9.7
14.17
3

Managing Wastewater and Chemical Safety

ActionRec#Stage

The government will amend the law to require disclosure of all chemicals used in hydraulic fracturing and all chemicals and naturally occurring radioactive minerals that come out of the well during exploration and production.

The government will require industry to keep track of waste from the moment it leaves the site until it is ultimately treated.

The government will not let gas companies release chemicals or wastewater into the environment. Gas companies will be required to have wastewater management and spill plans in place, will be prevented from discharging wastewater to drainage lines, waterways, temporary stream systems or waterholes, will have to enclose all wastewater in tanks to ensure waste does not leak out during the wet season, and design well pads to ensure that surface spills cannot leak down into underlying aquifers.

7.10
7.12
7.17
2

The government will review transport options for chemicals and wastewater associated with the onshore gas industry to determine whether additional practices or arrangements need to be considered to avoid the risk of spills and contamination.

7.14 3

Monitoring Gas Companies and Their Operations

ActionRec#Stage

The government will have monitoring programs in place for methane emissions so existing ambient emissions can be distinguished from emissions generated from industry activity. All the monitoring programs will include the collection of baseline data. The government will make sure the results of the monitoring are made publicly available. The government will ensure that industry funds pre and post-production monitoring programs.

The government will work with other similar jurisdictions, industry and scientific experts to develop a monitoring and compliance strategy that will be reviewed by an independent expert, and made available to the community and industry to comment upon.

9.5
14.26
2

The government will ensure decommissioned and orphan wells continue to be monitored after they stop producing to ensure gas and chemicals do not leak into the environment.

The government will consider the use of a tiered regulatory model for monitoring to apply only when the industry is well established.

5.2
14.28
3

Ensuring Gas Companies Comply with Our Laws

ActionRec#Stage
The government will establish whistleblower protections and a hotline to allow industry participants and the community to report instances where they may be concerned about the industry’s compliance with the law. 14.27 2

The government will require gas companies to develop road use agreements to ensure they clearly state and monitor expectations around transport safety and road use.

The government will enact a broader range of powers to sanction gas companies for non-compliance.

The government will review penalties for environmental offences to bring them into line with world leading practice.

The government will introduce a chain of responsibility laws similar to the kind introduced in Queensland to ensure that gas companies do not avoid complying with their environmental obligations.

The government will reverse the onus of proof so that gas companies will need to prove in court that they did not cause instances of environmental harm.

12.10
14.29
14.30
14.31
14.32
14.33
3

Developing Cost Recovery Arrangements

ActionRec#Stage

Greenhouse gas emission baseline data and ongoing monitoring will be the responsibility of the regulator and funded by the gas industry.

The government will prepare a discussion paper on proposed cost recovery arrangements. To ensure the Northern Territory remains a competitive location for the industry, the arrangements will be informed by a comparative analysis of regulatory fees in other jurisdictions, as well as consultation with industry and other stakeholders.

The government will work with the community and industry to develop a financial assurance framework that ensures that the gas industry – not Territorians – will be financially liable for any environmental damage.

The government expects the industry to bear the costs of monitoring of gas wells, long after the wells have stopped producing gas. A long-term non-refundable levy on gas companies will be introduced to cover the costs of long-term monitoring of wells.

9.4
14.1
14.13
14.14
3