This is the second status update on progress of implementing the recommendations from the Scientific Inquiry into Hydraulic Fracturing (the Inquiry). The first update provided a summary of implementation progress as at end of September 2018 for Stage 1 and Stage 2. The Implementation Plan outlines Government’s intention for how each of these recommendations will be put in place.
In developing the Implementation Plan each recommendation was grouped into one of six reform areas and divided into 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. This document summarises progress of implementation as at end of December 2018. Details are also provided on the next steps for implementing the recommendations over coming months. Progress information on each recommendation is displayed on the hydraulic fracturing inquiry implementation tracking of progress of implementation.
Strengthening regulation to ensure industry is accountable for its practice was the focus of implementation activities in the October to December 2018 quarter.
The below information provides an implementation progress update under each of the six reform areas;
During the last quarter of 2018 a number of legislative changes were made to strengthen regulation and increase transparency, building solid foundations for robust decision making.
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 and the agency responsible for promoting the industry.
This means the separate functions and responsibilities of the Department of Primary Industry and Resources and the Department of Environment and Natural Resources in relation to onshore gas development are clear. The Northern Territory Environment Protection Authority Act was amended in November 2018 to enable the NT Environment Protection Authority to deliver comprehensive independent expert advice to the Minister for Environment to inform decision making (Recommendation 14.34).
The 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.
The two new appropriately skilled EPA members are Dr Vaughan Beck AM and Dr Rod Lukatelich. Dr Beck has a PhD in risk engineering and has provided advice on the regulation of onshore shale gas, both to the Northern Territory and at the national level. Dr Lukatelich is a former member of the Western Australian Environment Protection Authority and has regulatory experience coupled with an extensive technical background in petroleum exploration and development.
Implementing the remainder of Recommendation 14.34 will include the transfer of the administrative responsibility for the Petroleum (Environment) Regulations and the Environmental Offences provisions of the Petroleum Act from the Minister for Primary Industry and Resources to the Minister for Environment and Natural Resources. This will occur in the first quarter of 2019.
Action – Ensuring decisions are made transparently
Changes have been made to the Petroleum (Environment) Regulations to give effect to recommendation 14.16 which requires that all notices and reports of environmental incidents are published immediately upon notification. These changes are effective from 19 December 2018 and the recommendation is complete.
On 29 November 2018 the Minister for Primary Industry and Resources introduced the Petroleum Legislation Amendment Bill into the Northern Territory Legislative Assembly. Both conventional and unconventional onshore gas development will be subject to the legislative amendments proposed in this Bill.
The Bill will amend the Petroleum Act to provide for consideration of whether an applicant is an ‘appropriate person’ to hold a permit or licence under the Act as per recommendations 14.12 and 14.20 of the Inquiry. 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 economic policy scrutiny committee is expected to report to Parliament on the bill by March 2019.
Action – Holding decision makers accountable
The Petroleum Legislation Amendment Bill will allow challenges to all administrative decisions under the Petroleum Act. The Bill will make provisions for open standing for 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. This amendment is as a result of implementing recommendation 14.23 of the Final Report from the Inquiry.
Amendments to the Petroleum (Environment) Regulations 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 (recommendation 14.19).
The Government will amend environmental and petroleum legislation 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
Petroleum (Environment) Regulations amendments completed in December 2018 now require an Environment Management Plan (EMP) for drilling of a petroleum wells and hydraulic fracturing to be published online and available for public 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 (recommendation 14.15).
The Government will seek to further amend the Petroleum Act at a later date to develop a broader review framework incorporating a merits review process of decisions and determinations under the Petroleum Act and Petroleum (Environment) Regulations as per recommendation 14.24 of the Inquiry. The Northern Territory Civil and Administrative Tribunal will administer this merits review process. The implementation of merits review is due to be completed by December 2021.
Guidance documentation has been prepared for industry to navigate the new regulatory processes. Communication materials have been prepared to inform the community on the regulatory regime.
Ensuring Accountable Industry Practice
Action – 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.
The Code has been drafted to clearly define the standards and requirements that petroleum companies operating in the Northern Territory will need to abide by.
This code will incorporate a number 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 is out for public consultation for four weeks. The public can provide comment via the Have Your Say website until Thursday 2 May 2019.
Government will consider feedback on the Code of Practice from the community, environmental groups, local business, the petroleum industry, and local government and incorporate amendments where appropriate.
Action – Managing wastewater and chemical safety
The requirement for disclosing and publishing detailed information about chemicals used in hydraulic fracturing fluids, as well as the reporting and publishing of composition of flowback and produced water (recommendation 7.10) has been implemented through amendments to the Petroleum (Environment) Regulations 2016. These amendments were completed in December 2018.
The requirement to reduce the risk of contamination of surface aquifers from on-site spills of wastewater (recommendation 17.12) is being implemented via the Code of Practice for Wastewater Management.
The release of petroleum wastewater to surface water (recommendation 7.17) has been prohibited through a decision making policy for this regulated activity under the Petroleum (Environment) Regulations.
The Government has started drafting amendments to the Water Act to explicitly prohibit release of wastewater to surface water in law. These amendments are likely to be tabled in Parliament in February 2019 and likely to be passed and become part of the legislation in May 2019.
Action – Monitoring gas companies and their operations
A draft compliance and monitoring strategy has been developed which is being reviewed by departments.
Ongoing monitoring and publication of methane monitoring results (recommendation 9.5) is being developed through the Methane emissions COP which will include the requirement for publicly available data.
The community and industry will have an opportunity to comment on the draft compliance and monitoring strategy (Recommendation 14.26.) in early 2019. The strategy is expected to be completed and in place by March 2019.
The draft Code of Practice for methane monitoring and reporting of emissions is undergoing third party peer review in January 2019 and will be released for public comment from February 2019.
Action – Ensuring gas companies comply with our laws
Part of recommendation 14.27 of the Inquiry recommended the establishment of a hotline to report any potential onshore gas industry non-compliance. The Onshore Gas Non-compliance Hotline commenced on 28 November 2018 as a 24 hour toll free service where callers can also remain anonymous. All call reports are referred to the responsible government department for case management and investigation.
Work on implementing the remainder of recommendation 14.27 will continue.
Safeguarding Water and the Environment
Action – Assessing, protecting and monitoring water resources
The Northern Territory Government has amended the Water Act to remove the exemption for the petroleum industry. The Water Legislation Amendment Bill passed through Parliament in November 2018 and changes came into effect on 31 December 2018 that require companies seeking to extract water for petroleum activities to obtain water extraction licenses under the Act (recommendation 7.1). The amendment ensures that the requirement for water licensing and permits to access water resources applies to mining and petroleum activities; along with updating offences and penalties.
Work is also being undertaken to implement the recommendation regarding prohibiting the discharge of any onshore shale gas hydraulic fracturing wastewater (treated or untreated) to drainage lines, waterways, temporary stream systems or waterholes be prohibited (recommendation 7.9). This activity is a regulated activity which currently requires an authorisation under the Petroleum (Environment) Regulations and the Water Act (where the waste leaves a petroleum site). These authorisations will not be granted if they relate to the release of petroleum wastewater into aquifers (i.e. are prohibited).
While this recommendation can and is being enforced immediately, to remove discretion of decision makers or potential legal challenges, amendments are being drafted to the Water Act to stipulate that authorisation cannot be given for this activity. These amendments will also include enforcing minimum distances for hydraulic fracturing water extraction from existing water bores where there is no landholder agreement or groundwater study.
A decision making policy stipulates that wastewater injection into aquifers will not be approved under the Petroleum (Environment) Regulations or the Water Act. Amendment of the Water Act will provide for a blanket prohibition.
The amendments to the Water Act are likely to be tabled in Parliament in February 2019 and likely to pass 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 oil and gas industry in the NT. Work has commenced on a document to articulate the SREBA framework (including minimum standards, requirements and scope) and methodologies to be applied for undertaking a SREBA in various circumstances and locations.
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 SREBA framework is underpinned by technical 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 Gas Community and Business Reference Group prior to being released for public consultation in 2019.
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.
Monitoring of methane concentrations has continued. The report on first tranche of monitoring has been published and the second tranche of on ground methane monitoring by CSIRO commenced in early November 2018 (recommendation 9.3).
Baseline weed assessment work is ongoing with holders of existing Exploration Permits in the Beetaloo Sub-basin 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.
The second interim report from the CSIRO on methane monitoring conducted in November 2018 will be published in early 2019. A six-month baseline report will be completed in March and published soon after.
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 guidelines for developing a weed management plans (recommendation 8.3, 8.4).
Drafts of the guidance notes and the SREBA framework will be peer reviewed in early 2019 followed by public consultation in April 2019.
Respecting Community and Culture
Action – Ensuring respectful consultation, information and negotiation
The Board of the Aboriginal Areas Protection Authority has considered legal advice on the extent of protection to sub-surface sites provided by the Northern Territory Sacred Sites Act. The Authority will consult with relevant Land Councils to ensure they have an opportunity to comment.
Operators must produce an Authority Certificate from the Aboriginal Areas Protection Authority (under the Northern Territory Sacred Sites Act) when submitting an Environment Management Plan for approval (Recommendation 11.1).
This recommendation will be made enforceable under changes to the Petroleum (Environment) Regulations.
The Aboriginal Interpreter Service has commenced interpretation of the Communiques from the first two meetings of the Onshore Shale Gas Community and Business Reference Group held in 2018 to be translated into the nine languages used for communications throughout the Inquiry.
The Government will collaborate with stakeholders, including Land Councils and the Aboriginal Areas Protection Authority (AAPA) 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- Creating local training programs, skills assessment and employment
Engagement has commenced with universities for 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).
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.
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).
Planning for Industry
In November 2018 a Memorandum of Understanding was signed between the Northern Territory and Australian governments that will help realise existing offshore gas reserves and the potential of the Beetaloo Sub-Basin as a new world-class gas province. Under the MOU the Commonwealth and Northern Territory governments agreed to work together to 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 the Aboriginal Land Councils and the community on areas that can be declared reserved blocks or "no-go zones" under the Petroleum Act before any declaration of Reserved Blocks by the Minister (Recommendation 14.4)
Targeted consultation on proposed “no-go zones” will occur in early 2019 with Traditional Owners and gas companies. Land Councils and the community will also be consulted. It is intended consultation will occur from February 2019.
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