Impact case study database

The extraction of oil and gas (whether offshore or onshore, from conventional or unconventional reservoirs) has implications for the environment, including, as appropriate, the risk of well failure, impact on land and marine habitats, impacts on water availability, and surface water quality degradation from waste fluid disposal. Regulation of environmental factors associated with extraction processes is therefore paramount to minimise the potential damage to ecosystems and the access rights of other users. In Australia, Professor Tina Hunter has provided expertise to regulators in order to strengthen environmental protection in the context of both onshore and offshore hydrocarbon activities.

Hunter, a specialist in Energy and Petroleum Law, was between 2015 and 2020 Director of the Centre for Energy Law (AUCEL) at the University of Aberdeen, one of the largest teams of energy faculty in Europe. Hunter specialises in the areas of upstream offshore petroleum law, extractive industries law and shale gas law. Her expertise has been sought worldwide by regulatory authorities, industry groups and non-governmental organisations to provide analysis of petroleum laws and draft legislation, and to advise on technical, policy and governance issues. Hunter is co-lead of the Scientific Regulation of Energy Installations in the Arctic (SciBAR) network, a programme led by Nottingham Trent University.

Onshore gas extraction: Western Australia (WA)

Onshore unconventional gas exploration and extraction operations create economic opportunities and regulatory challenges. While they contribute to domestic energy security, economic growth and the balance of payments, they threaten agricultural livelihoods and future food security through the risk of contamination of soils and water sources [3]. In Australia, while legislation exists for the exploration for and production of petroleum at Commonwealth and State/territory level, this is premised on conventional reservoirs and includes no specific provision for shale gas, despite the fact that the latter involves different techniques and a much greater intensity of infrastructure [5]. This omission, therefore, has implications both for activities conducted under state-awarded shale gas licenses and for titleholders and landholders when negotiating for compensation and land access rights [4].

The WA regulatory framework is an integrated system, under the auspices of the WA Department of Mines and Petroleum (WADMP), which is designed to provide operators with certainty and predictability, and assurance to the community. In addition to legally enforceable acts and regulations, it is constituted by a number of guidelines, including assessment criteria for the award of petroleum exploration and drilling permits. The aim is to ensure that the conduct of petroleum activity is consistent with the principles of ecologically sustainable development and with an environmental plan that demonstrates that environmental impacts and risks associated with the activity will be reduced to a level that is as low as reasonably practicable. Such impact and risk reduction requires plans to contain appropriate environmental performance objectives, standards and measurement criteria.

Unlike other Australian jurisdictions, there is no separate environmental protection legislation in the Northern Territory (NT), which is a source of concern for many in the community. Provisions within the Petroleum Act 1984 regulate protection of the environment during onshore petroleum activities. Environmental assessments and the preparation of an environmental management plan are undertaken pursuant to the Environmental Assessment Act (EAA). Where a petroleum activity could have significant effects on the environment (as stipulated in a memorandum of agreement between the Northern Territory Department of Mines and Energy and the Northern Territory Department of Environment Protection), the EAA sets out the procedures to be followed. The Department of Mines and Energy refers the proposed activity via a notice of intent to the Department of Environment Protection, which subsequently assesses the proposal and issues a public environment report and environmental impact assessment if requested by Department of Mines and Energy.

In her 2016 analysis, Hunter demonstrated that the environmental plans for NT were legally unenforceable insofar as the current legislation, the Environmental Protection and Biodiversity Conservation Act 1994, contained no criminal sanction for breach [1]. This meant that the Environmental Protections Authority (EPA) was unable to prosecute breaches of the statute in the NT; rather it was only enforceable as a recommendation that could then be over-ridden by the responsible Environment Minister. The NT government, conscious of the continued weak environmental protection accorded under existing legislation, was prompted by Hunter’s findings to draft environmental regulations in accordance with the guidelines used by WADMP. In early 2016, the Government of Australia commissioned Hunter to conduct an independent assessment of shale gas regulatory practice in Australian states and territories to ensure they complied with the principles of best practice regulation. Hunter’s assessment was published in the Houston Journal of International Law in May 2016, ‘The Development of Shale Gas and Coal Bed Methane in Australia: Best Practice for International Jurisdictions?’[1]

Hunter’s research [2] identified a number of additional regulatory gaps and lapses including:

• property rights of landholders in Western Australia were not upheld or were compromised, and the use of negotiation to protect such rights was not always adequate

• there remained inadequate regulation of hydraulic fracturing for shale gas extraction

Following these findings, the WADMP established the Western Australian Land Access Working Group to make recommendations on land access matters. Hunter was a member of this group. Her role was to review existing provisions in Western Australian mining and petroleum legislation in relation to land access arrangements for private land, and to compare these arrangements with other jurisdictions including all Australian states and territories, New Zealand, the UK and Canada. Hunter’s report was published in 2017 [2] and included template compensation agreements for land access.

Offshore gas extraction: The Great Australian Bight

In Australia, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has, since 2012, regulated all offshore petroleum facilities. In 2016, Norway’s Statoil ASA (now known as Equinor) committed to continuing with a deep-water offshore exploration program for the Stromolo-1 prospect in the Great Australian Bight (GAB) after it was vacated by BP. The plans had been protested by thirteen local councils, the commercial fishing industry, environmental activists and the tourism industry.

In late 2018, Greenpeace obtained a leaked internal draft report from Equinor suggesting the worst-case scenario for an oil spill in the Bight could be catastrophic and dwarf the 2010 Macondo oil spill in the Gulf of Mexico. The draft report showed that (depending on weather and tides) a spill could stretch as far around the coastline as Esperance in Western Australia, and reach South Australia, Tasmania and New South Wales. Given her expertise, Greenpeace approached Hunter and requested that she prepare an assessment of the plans [6].

Equinor’s original environmental plan (EP), which was rejected by NOPSEMA due to ‘gaps’, was released for public consultation in early 2019. Hunter’s report on the EP, published in 2019, described the company’s lack of response measures as ‘exceptional in terms of the risk of drilling accident occurring’ and outlined major shortcomings within the company’s environmental plan. This included the identification of environmental risks, which necessitated analysis of the identification and evaluation of platform safety (both worker safety and process safety) as well as an analysis of the Well Operations Management Plan. Hunter clarified that a critical question facing NOPSEMA in its assessment of Equinor’s EP would be the important elements of the environment, including remoteness, inaccessibility, underdeveloped infrastructure, oceanic conditions and the limited supply within the area of alternative drilling facilities in the event of critical failure, which presented a heightened risk profile in the context of offshore petroleum drilling in the GAB.