Will WA's new shale, tight gas regulations stand the test?

Empire Oil and Gas workers installing a compressor at teh Red Gully onshore gas processing facility in the Perth Basin, Western Australia

Empire Oil and Gas workers installing a compressor at teh Red Gully onshore gas processing facility in the Perth Basin, Western Australia

Western Australia now has some of the most stringent well integrity and resource management conditions in Australia for its gas industry, following the introduction of new regulations on 1 July 2015.

With production of natural gas from shale and tight gas rocks in Western Australia (WA) still in the early stages of development, new regulations have been introduced by the government in a bid to provide certainty around the emerging industry.

The overhaul follows a review from 2011 by Bond University petroleum specialist Dr Tina Hunter – the inaugural Director of the Centre for International Minerals and Energy Law, and an Honorary Research Fellow at the University of Aberdeen, which recommended the strengthening of legislation through a number of enhancements to regulations.

WA Department of Mines and Petroleum (DMP) Executive Director Petroleum Jeff Haworth talks about how the overhaul came about and what impact it will have on the industry.

WHY DID THE WA DMP FEEL THE NEED TO OVERHAUL ITS REGULATORY FRAMEWORK FOR THE PETROLEUM AND GEOTHERMAL INDUSTRIES?
The overhaul of Western Australia’s regulatory framework for the shale and tight gas industries is part of a national initiative to move towards an objectivebased regulatory regime.

An independent review in 2011 was conducted by internationally recognised minerals and energy law expert Dr Tina Hunter to track the department’s progress.

Earlier this year Dr Hunter said WA’s DMP was one of only three regulators worldwide – the other two being South Australia and the UK’s Department of Energy and Climate Change (DECC) – that she recognised as a comprehensive and competent regulator.

HOW WILL THE NEW REGULATIONS IMPACT INVESTMENT IN THE STATE?
The new regulations will ensure that WA has the most stringent environmental conditions in the country regarding the emerging shale and tight gas industry providing clarity to industry and certainty
to investors about the state government’s expectations of how they operate.

The government’s clear message to industry investors and operators is to engage early and thoroughly with the communities as projects are developed.

Demonstrated trustworthiness, Respect, transparency, engagement and a preparedness to negotiate will assist in building public acceptance of shale and Tight gas projects in WA.

WHAT CONSULTATION DID THE GOVERNMENT CONDUCT WITH INDUSTRY WHILE DEVELOPING THESE REGULATIONS?
The changes to the Petroleum and Geothermal Energy Resources (Resource Management and Administration) Regulations 2014 followed extensive consultation by the DMP with industry stakeholders and the public.

The DMP received significant comments on the consultation draft of the regulations and supporting guideline documents, and many of these have been incorporated into the regulations.

Earlier this year a meeting was held by DMP with the Shale and Tight Gas Inter-Agency Working Group, comprising representatives from the Departments of Water, Health, Environment Regulation, Agriculture and Food, Parks and Wildlife and State Development to discuss the changes.

DID THE GOVERNMENT MODEL ITS NEW REGULATORY FRAMEWORK ON OTHER STATES AND COUNTRIES?
The regulations adopt the objective-based regulatory framework agreed to nationally in Australia.

The state is well-positioned to learn fro, experiences in other jurisdictions and to adopt international best practice standards and strengthen its robust regulatory system to ensure environment and communities are protected as this new industry is developed.

A range of resource management and administration matters are covered by the regulations, including well management plans for the approval of all drilling activities (including fracking), notification and reporting of discovery of petroleum, and field management plans for approval of petroleum recovery.

The regulations ensure that adequate information will be provided about all aspects of exploration, discovery, development and production operations in relation to petroleum and geothermal energy resources.

When will the multi-agency regulatory framework for shale and tight gas be in place, and what will it entail?

The multi-agency regulatory framework is in its final stages and is expected to be in place within months.

The document is a collaborative effort across agencies to create a single and complete statutory framework to manage risk inherent to the industry.

The Statutory Framework for Shale and Tight Gas Projects in Western Australia has several purposes:
1. To provide the WA public with a single, clear point of reference for the state’s assessment and regulation of shale and tight gas projects;
2. To provide clarity and certainty to investors, proponents and permit holders about the state’s expectations of the industry, and the mechanisms through which those expectations are enforced; and,
3. To make clear to industry and the public the extent of WA’s legislation and regulations governing shale and tight gas projects.

DO YOU BELIEVE THE NEW REGULATIONS WILL ASSIST IN DRIVING SAFE DEVELOPMENT OF WA’S TIGHT AND SHALE GAS INDUSTRIES?
The new regulations ensure that adequate information will be provided about all aspects of exploration, discovery, development and production operations in relation to petroleum and geothermal energy resources.

Before drilling programs are approved the DMP assesses applications to ensure the program complies with the Petroleum and Geothermal Energy Resources Act 1967 in accordance with state legislation relating to protecting public health, the environment and water resources.

DMP will ensure any future projects are assessed on a site-by-site, project-by-project basis with safety and environment auditors conducting inspections to check compliance with safety and environmental standards.

As part of the approvals process, companies are legally required to formulate an environment plan that assesses the potential impacts on groundwater, as well as flora and fauna.

All companies are required to submit a list of all chemicals to be used in hydraulic fracturing activity, which are published on the DMP website.

WA’s shale and tight gas reservoirs are typically 2 – 5 km underground, while the state’s potable aquifers are 500 – 1,000 m belowground. This means the gas and potable aquifers are separated by hundreds or several thousand of metres of dense rock.

The establishment of baseline groundwater quality is integral to demonstrating that water resources are being protected. The DMP, in conjunction with the Department of Water, is in the final stages of preparing guidelines for baseline groundwater monitoring of petroleum activities.

DMP is confident it can strictly regulate a shale and tight gas industry without compromising the environment or safety to successfully maximise possible future economic opportunities for all Western Australians

“The new regulations will ensure that WA has the most stringent environmental conditions in the country regarding the emerging shale and tight gas industry.”- Jeff Haworth, WA DMP Executive Director

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