Background

Over the course of 2013, the Australian Government undertook a review of Commonwealth offshore petroleum laws, including the Offshore Petroleum and Greenhouse Gas Storage Act 2006. Several amendments were made to the offshore petroleum regulatory regime as part of this process. See our earlier Alerts in February and July.

The Australian Government is now focusing its attention on Part 5 of the Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations 2011 (Part 5). Part 5 is concerned with the regulation of wells and well operations by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). The government wishes to ensure that the regulation of well operations in Australian waters reflects leading practice and objective based regulation of the structural integrity of wells and well activities.

In addition to the activity at the federal level, Western Australia’s Department of Mines and Petroleum (DMP) has:

  • announced its intention to undertake a review of the State’s petroleum safety legislation. This review is aimed at incorporating petroleum safety provisions into the proposed harmonised work health and safety legislative regime; and
  • now released the draft Petroleum and Geothermal Energy Resources (Resource Management and Administration) Regulations 2014 (RMA Regulations), which apply to the WA onshore petroleum sector. The draft regulations form part of a broader initiative to reform the State’s petroleum legislative framework.

Federal well integrity management

Part 5 requires changes to clarify that its objectives and application are focused on structural integrity issues and not resource management factors.

Some of the key issues being considered include:

  • appropriate objectives and standards for the regulation of well operations;
  • duties and requirements for titleholders in relation to management of well operations;
  • scope of well operations management plans (WOMPs) and appropriate WOMP acceptance, submission, assessment, revision and termination requirements;
  • appropriate ways to manage abandoned or inactive wells; and
  • control measures in relation to well activity and management of well accidents.

The Issues Paper can be found here.

As part of the review process, public consultation and information sessions have been organised on 24 and 25 February 2014 at the Perth Convention and Exhibition Centre. Representatives from the Department of Industry will present information about the review and the Issues Paper and will be available to answer questions.

Broadening harmonisation of state safety laws

The review of the resources safety legislation in Western Australia by the DMP Resources Safety Division (RSD) was sparked by WA’s plans to adopt the nationally harmonised work health and safety laws for mining. The RSD is now considering incorporating safety provisions in current petroleum legislation into the Work Health and Safety (Resources) Bill (WA) (Bill). This would mean removing the OSH laws from the following pieces of state legislation:

  • Petroleum and Geothermal Energy Resources Act 1967;
  • Petroleum Pipelines Act 1969; and
  • Petroleum (Submerged Lands) Act 1982.

The result would be a streamlined petroleum safety legislative regime aligned with the national OHS harmonisation program. The DMP says that this will reduce confusion and duplication between the three acts, and simplify safety-related proceedings. In turn, this will provide opportunities to streamline educational and enforcement activities and regimes, therefore allowing much more efficient use of resources.

Improving state resources management

The RMA Regulations are designed to provide a management scheme for the exploration for, and production of, petroleum and geothermal energy resources. They will transition WA’s petroleum industry regulation from a prescriptive regime to a risk-based approach which will align onshore activities with offshore Commonwealth regulated activities.

The RMA Regulations cover a range of resource management and administration matters, such as well management plans for approval of all drilling activities (including shale and tight gas), field development plans, approvals of petroleum recovery, and notification and reporting requirements for petroleum discovery.

The RMA Regulations will give the DMP greater enforcement powers and companies will face harsher penalties for breaches, such as water pollution and well abandonment.

The RMA Regulations are part of the broader initiative to reform the State’s petroleum legislative framework, following new environment and safety regulations released in 2012 and 2010 respectively. The second part of this third and final set of changes, the Petroleum (Submerged Lands) Resource Management and Administration) Regulations 2014, will cover submerged lands adjacent to the coast of WA and will be drafted after the RMA Regulations are finalised.

Click to view the draft RMA Regulations, explanatory notes and guidelines.

Opportunities for having your say

At the federal level, the Department of Industry will draw upon submissions from interested parties to prepare a report for Australian Government consideration. Submissions close on 28 March 2014.

In relation to the proposed State changes:

  • the DMP says it will identify the impacts of the proposed safety-related legislative changes through a regulation impact statement (RIS). This will involve liaising with industry and union stakeholders via the new Ministerial Advisory Panel on Safety Legislation Reform, consulting with the Mining Industry Advisory Committee and other stakeholder groups, and producing explanatory material to assist the industry; and

  • the draft RMA Regulations are open for comments for a three month period with submissions closing on 30 May 2014.