Petroleum Legislation Amendment Bill 2022

The Petroleum Legislation Amendment Bill 2022 was introduced to the Legislative Assembly last week during the October 2022 parliamentary sittings. The Bill’s amendments to the Petroleum Act 1984 (the Act) will implement 13 recommendations from the Final Report of the Hydraulic Fracturing Inquiry (the Inquiry).

The changes introduced in the Bill will significantly improve the regulatory framework for the onshore petroleum industry and the ability to manage environmental impacts and risks to acceptable levels in a manner contemplated by the Inquiry.

The Bill contains the following amendments relative to the Inquiry recommendation:

• introduces the requirement to comply with nationally consistent guidelines for human health and environmental risk assessment (Rec 7.4 and 10.1);
• provides for the implementation of new charges to recover the cost of undertaking the Strategic Regional Environmental Baseline Assessment (SREBA) studies, including the Strategic Social Impact Assessment (Rec 12.2);
• introduces a framework for new charges for industry, that will recover the costs associated with regulating the onshore gas industry (Rec 14.1);
• establishes a comprehensive financial assurance framework to improve securities and insurance requirements for onshore petroleum operations (Rec 14.13);
• introduces an orphan well levy and fund to enable the government to monitor orphan wells as well as take action, as required, to secure the integrity of any orphan wells (Rec 14.14);
• enables the repeal of the Schedule of Onshore Petroleum Exploration and Production by establishing a legal framework for activity permissioning plans, assessment timeframes, approval criteria and reporting obligations in the Act and introducing new regulation-making powers to support them (Rec 14.17);
• empowers the community through key decision making processes. This includes introducing third party merits review for key decisions made under the Petroleum legislation (Rec 14.24);
• strengthens community confidence in the regulatory framework by amending cost rules so that litigation genuinely brought in public interest may not be subject to a costs order, introducing new civil enforcement proceedings and reversing the onus of proof for pollution and environmental harm offences; (Rec 14.25; 14.31 and 14.32);
• enables a more rigorous legislative framework that will provide a strong deterrent for non-compliance. Inspectors appointed under the Act, and relevant CEOs will have broader powers and more ways to ensure that gas companies are compliant with the law (Rec 14.29); and
• increases penalties and offences in the Act so that they will be comparable with or exceed equivalent penalties across all Australian jurisdictions (Rec 14.33).

Other amendments within the Bill include:

• enabling exploration for and production of naturally occurring hydrogen by amending the definition of petroleum; and
• enabling industry applications for Government to consider the use and sale of appraisal petroleum in preference to flaring or venting to reduce greenhouse gas emissions at the source. These applications will not be considered until the commencement of the Act and all Inquiry recommendations have been implemented, as determined by Government in 2023.

The Bill is available on the Government’s Legislation database website and will be debated in the November 2022 parliamentary sittings. This Bill is the third amendment to the Act since implementation of Inquiry recommendations commenced in 2018.

Government will not consider any production approvals for shale gas activities until all Inquiry recommendations are implemented.