Seventh Hydraulic Fracturing Implementation Progress Update

The SREBA is a set of studies to address knowledge gaps and establish appropriate baselines against which the potential impacts of proposed onshore gas activities may be assessed. The baselines can also assist in the design and planning of future development, particularly at a regional scale, in order to minimise impacts.

The SREBA consists of six study domains: water quality and quantity; aquatic ecosystems; terrestrial ecosystems; methane and greenhouse gas; environmental health; and social, cultural and economic. To guide these studies, the Framework for Strategic Regional and Environmental Baseline Assessment: A guide to undertaking a SREBA in the Northern Territory (the Framework) was released in July 2020 following public consultation, briefings and seeking further feedback to inform the final Framework.

The Department of Environment, Parks, and Water Security (DEPWS) is responsible for the coordination of all six SREBA studies and the delivery of the five studies relating to the biophysical environment and environmental health. The Department of the Chief Minister and Cabinet (CM&C) is responsible for delivering the sixth study, which relates to the social, cultural and economic domain.

All six studies have commenced and are at different stages of development.

• The Scope of Work for the water component of the SREBA for the Beetaloo Sub-basin has been drafted, ready for peer review. The Scope of Work for the aquatic ecosystems components of the SREBA is currently under development, and this will include consideration of subterranean ecosystems, which will also be informed by baseline studies in the Water domain.
• The Scope of Work for the terrestrial ecosystems component of the SREBA for the Beetaloo Sub-basin is near completion.
• Some baseline studies that will contribute to the water and ecology components of the Beetaloo SREBA have already commenced through the Commonwealth Geological and Bioregional Assessment (Program).  These biophysical studies, and the collection of data for the Beetaloo SREBA as a whole aims to be undertaken by December 2021.  
• The Scope of Work for the environmental health component and the methane and greenhouse gas studies are both currently out for procurement, with studies expected to commence in 2021.
• Following a successful procurement process, the contract for the Social, Cultural and Economic study has been awarded to Circle Advisory. Circle Advisory are currently developing stage one, the Scope of Work for these studies and have been consulting in Darwin and the broader Beetaloo Sub-Basin since September 2020. It is anticipated that the social, cultural and economic Scope of Works will be ready for the Minister for Environment to approve in early 2021.

Agencies continue to regulate the onshore petroleum activities while progressing recommendations of the Final Report. A total of 15 Environment Management Plans (EMPs) have been approved under the Petroleum (Environment) Regulations 2016 since the responsibility for environmental regulation was transferred to the Minister for Environment.

DEPWS compliance activities are ongoing and include the review and publication of monitoring reports and periodic inspection of well sites. In the interest of transparency, interest holders are required to submit Annual Environment Performance Reports detailing compliance with environmental obligations made in the EMP. Eight reports have been published on the website in 2020. DEPWS is also implementing recommendations from an informal review that sought feedback from other agencies and industry, with a view to improving the efficiency and effectiveness of environmental regulation.

The Department of Industry, Tourism and Trade (DITT), now holding the regulatory functions of the former Department of Primary Industry and Resources, continues its regulatory responsibilities related to well integrity, hydraulic fracturing and well operations, having approved a Well Operation Management Plan for drilling activities undertaken in the McArthur Basin by Empire Energy. The Department has conducted monitoring and compliance site inspections at Origin Energy’s Kyalla 117 well in the Beetaloo Sub-basin and Empire Energy’s drilling activities. Regulation of tenure responsibilities including company work programs, title administration and revocation or reserve blocks also remains a key function and responsibility.

Offsets (recommendation 8.9) and Emissions (recommendation 9.8)

The Northern Territory Government released its ‘Northern Territory Offsets Framework’ and ‘Northern Territory Offsets Principles’ in July 2020. The principles will support the development of offset policies to guide consistent offsetting arrangements and requirements for projects with significant residual environmental impacts in the Northern Territory.

Under the Framework, individual and targeted biodiversity and greenhouse gas offset policies will be developed. Work on these policies is underway.

The Northern Territory Government is currently working with the Commonwealth Government on negotiating a Bilateral Agreement which focusses on a number of priorities with respect to energy and emissions, including efforts to assist in meeting recommendation 9.8: That the NT and Australian governments seek to ensure that there is no net increase in the life cycle GHG emissions emitted in Australia from any onshore shale gas produced in the NT.

Petroleum Act amendments

The Petroleum Legislation Miscellaneous Amendments Bill 2019 was passed in the Legislative Assembly on 24 March 2020 and was assented to on 30 March 2020. The amendments to the Act commenced in June 2020 and allow for regulations to be made in relation to land access.

The government consulted with affected stakeholders on draft Petroleum Regulations that detailed the requirements of statutory land access agreements in June 2020. These draft regulations are being further amended and are expected to commence on 1 January 2021.  Petroleum companies will then require a land access agreement with the minimum 24 protections before being able to undertake petroleum exploration activities on a pastoral lease.

EBPC Act amendments

On 29 October 2019, the Federal Minister for the Environment formally announced a review of the Environment Protection and Biodiversity Conservation Act 1999 (Cth)(EPBC Act).

The Northern Territory Government provided a submission to the Review reiterating its expectation that the Commonwealth review will include a response to recommendation 7.3: that the Australian Government amends the EPBC Act to apply the ‘water trigger’ to onshore shale gas development.

The Interim Report of the Review was released in June 2020. The Interim Report does not support changes to matters of national environmental significance (MNES) as proposed by recommendation 7.3.

The Final Report of the Review was submitted to the Federal Minister for the Environment at the end of October 2020. The Territory Government will continue to liaise with the Commonwealth regarding this matter.

The NT Government has made significant progress in a short amount of time by implementing 61 of the Inquiry’s recommendations, Government must complete an additional 74 Inquiry recommendations (of which 24 relate to the SREBA) before it can consider industry applications for production activities of shale (unconventional) reservoirs. This requires a significant amount of research, policy development, regulatory development and changes to legislation over the next three years, supported by significant stakeholder and community engagement.

In addition to the status of priorities already covered in this submission under the specific sections of 1. SREBA, 2. Regulation and Assessment and 4. Information Management and Community Engagement, a number of other implementation priorities are the focus for 2021.

Further amendments to the Petroleum Act

The Petroleum Act will require further amendments in 2021 to complete numerous outstanding Inquiry recommendations, which includes, but is not limited to:

• Merits review for decisions under the petroleum legislation with third party standing;
• a non-refundable levy for the long term-monitoring, management and remediation of abandoned wells;
• development of a financial assurance framework for petroleum operators; and
• a broader range of powers to sanction under the legislation.

Seismicity Framework

DITT will develop and implement a framework for mitigating induced seismicity occurrences, as a result of petroleum industry activities and continues the work with CSIRO and regulators to formulate an appropriate system for measuring seismic intensity in the Northern Territory.

Financial Assurance Framework

The Petroleum Act 1984 was amended to enable regulations to be made to require an environmental security for onshore petroleum activities including the calculation of security. DITT and DEPWS will develop and implement a financial assurance framework in consultation with the community and key stakeholders. 

The Northern Territory’s Gas Service and Supply Plan

HFI recommendations 13.2 to 13.10 require the NT Government to work with stakeholders and gas companies to maximise local employment and develop local procurement targets.

These recommendations are being advanced through the NT Gas Service and Supply Plan that was launched on 5 March 2020 to increase local participation to at least 50 per cent by 2025 through strengthening the commitment of gas operators to local content, growing local workforce and business capability and strategically developing the service and supply ecosystem.  It includes actions to work with gas companies, land councils, local governments, local suppliers and businesses to strengthen gas industry procurement targets.  

The Plan is supported by the establishment of the Onshore Gas Supply Chain Working Group which held its inaugural meeting on 16 July 2020 with membership including NTG, Santos, Origin Energy, Armour Energy, Empire Energy, Pangaea and Central Petroleum; and the more recent meeting of the Gas Industry Reference Group of peak bodies on 27 October 2020.

Online portal

An online portal for public access to information and data on onshore petroleum activities, including approvals and compliance reports, has been established. The online portal is expected to go live by December 2020. The portal contributes to government’s commitment of ensuring transparency in the development and regulation of the onshore petroleum industry.

Community engagement and Social Responsibility

Recommendations 12.16, 12.17 and 12.19 Inquiry require the NT Government and the onshore petroleum industry to undertake actions which facilitate community cohesion, build trust, and maintain transparent communication with the public and stakeholders. These activities are characteristics necessary to develop and maintain a Social Licence to Operate (SLO).

The preferred term is ‘social responsibility’ which is required to build ‘social value’ to better represent the desire to build public understanding and trust of both the onshore petroleum industry and government’s ability to regulate.

A Social Responsibility Framework to guide the delivery of this work, is being progressed, with an independent science-based community engagement program to commence in 2021. The objective of this work program is to have an independent, scientific and credible team/institution deliver information to all interested parties, through ongoing and regular face-to-face engagement with the community about onshore unconventional gas in the NT.

Aboriginal Information Program

An Aboriginal Information Program (AIP) working group was formed in late 2019, with members from the NT Government, the AAPA, Northern and Central Land Councils, industry representatives and the Australian Petroleum Production and Exploration Association (APPEA). The working group agreed to coordinate the development of an Aboriginal information package in two stages.

As part of Stage 1, a Scope of Works was developed by CSIRO and approved by the group in March 2020. This work consists of CSIRO delivering a package of information that is:

clear, factual and relevant content for communication material to distribute to communities potentially affected by shale gas development and hydraulic fracturing in the Northern Territory, particularly for translation into languages of local Aboriginal communities.

To ensure content of the package delivers on the intended purpose of the program, Land Councils are now working directly with CSIRO to finalise the draft package that will be presented to the working group for their endorsement and decision on next steps.

Whilst delivery of this project has been delayed, AIP working group members are engaged and supportive of the approach being taken to ensure delivery of the project achieves the desired intent.