On 17 July 2018, the Northern Territory Government released its implementation plan in response to the Final Report of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory.
The Final Report, which was released on 27 March 2018, found that the risks involved in unconventional gas and hydraulic fracturing could be managed, provided the Inquiry’s recommendations were implemented in full. The Government has accepted all 135 of the Inquiry’s recommendations and lifted the moratorium on unconventional shale gas developments in the Northern Territory.
Key take-aways from the Implementation Plan
- The Government’s goal is to implement the recommendations that need to be completed for any exploration involving drilling or hydraulic fracturing and stimulation of unconventional wells by the end of 2018
- Production approvals for unconventional gas will not be granted until the balance of the recommendations are complete, which will be some years away
- Fraccing in the Territory will be subject to strict public scrutiny and control. The Government intends for ongoing community engagement and consultation as part of implementing the Inquiry’s recommendations. Whether or not that is a problem for the sector, from a commercial perspective, remains to be seen.
Implementation Plan Stages
The Implementation Plan outlines three phases to implement the recommendations:
Stage one: Planning
Timeframe: Current
This stage centres on the governance arrangements for the implementation. The Government has released the Implementation Plan, appointed an Independent Officer to oversee this and established an Onshore Shale Gas Community and Business Reference Group.
Other planning activities include:
- Commencing the development of enforceable Codes of Practice, including well integrity and decommissioning
- Defining areas, processes and mechanisms for “No-Go zones”
- Commencing baseline monitoring, including design of the Strategic Regional and Environmental Baseline Assessment (SREBA) model
Stage two: Preparation for Exploration
Timeframe: Anticipated completion end 2018
This stage of the implementation focuses on addressing the recommendations needed before any exploration drilling or hydraulic fracturing and stimulation of unconventional wells. This stage includes:
- Completion of the enforceable Codes of Practice
- Transfer of environmental decisions regarding petroleum from the Minister for Primary Industry and Resources to the Minister for Environment and Natural Resources
- Baseline mapping and ongoing monitoring regimes for weeds, methane emissions and water quality near proposed drilling sites
- Amendments to the Water Act, including the requirement for water extraction licences for petroleum activities
- Commencement of SREBA
- Develop an online public portal to support transparency
Stage three: Exploration and Preparation for Production
Stage three will take a number of years to complete
Stage three covers the balance of the Inquiry’s recommendations, and must be completed before any production approvals are granted for unconventional gas.
This stage will include many of the amendments required to the legislation, including a new Environmental Protection Act to strengthen regulation.
Highlights of the Inquiry’s Recommendations
The Implementation Plan groups the Inquiry’s recommendations into six major reform areas:
| Strength and Regulation | The government will transfer power to approve Environmental Management Plans (EMPs) to the Minister for Environment and Natural Resources. There will be the ability for public comment on EMPs. Regulatory changes will be made to allow standing to challenge both administrative decisions and allow for merits review of decisions relating to the Petroleum Act and the Petroleum (Environment) Regulations, including approvals of EMPs and petroleum exploration permits. |
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| Ensuring Accountable Industry and Practice | The Government will develop transparent and enforceable Codes of Practice relating to methane monitoring, well integrity, well decommissioning, treatment of solid wastes, seismic activity and human health. Gas companies will have additional disclosure obligations. They will also be required to develop well integrity management systems and plans and wastewater management and spill plans, plus adopt international standards to reduce risk of methane emission. To ensure compliance with the law, the Government will:
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| Safeguarding Water and the Environment | Before further exploration approvals are granted, baseline monitoring of methane concentrations is required for six months. Before any production approvals are granted, SREBA will be commissioned to map and identify ground water dependent ecosystems, threatened species and habitats and record other baseline data. The Water Act will be amended to cover mining and petroleum activities, including the requirement for water extraction licences for petroleum activities. This will result in further amendments to mining and petroleum legislation. Gas companies will need to ensure that:
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| Respecting Community and Culture | The Government will conduct regional Social Impact Assessments (SIA) before production approvals are granted in the Beetaloo Sub-basin. This includes cultural impact assessments design with the land councils and Aboriginal Area Protection Authority (AAPA). |
| Maximising Regional Benefits and Local Opportunities | Gas companies will be required to develop a plan in conjunction with the NT Governments framework that highlights strategies and commitments companies have to deliver training and employment outcomes. |
| Planning for Industry | Application permits will not be approved in areas that are regarded as ‘no-go’ areas, being national parks, towns, areas of cultural and ecological significance. These will be declared Reserved Blocks under the Petroleum Act. A fair land access regime will be legislated before gas companies can access pastoral leases, with further legislative processes for compensating pastoral lessees. |
For more information or discussion, please contact HopgoodGanim Lawyers’ Resources and energy team.