Recent amendments to the Petroleum and Gas (Production and Safety) Regulation (2004) have made important changes to the petroleum and gas safety and health fee (Fee). This Fee covers the costs of the activities carried out by the Department of Natural Resources and Mines for the purposes of safety and health relating to operating plant.
Under the new amendments:
- Reporting requirements of “liable persons” are reduced from quarterly to annually.
- Fee capping provisions are introduced, to ensure users are not paying more than necessary to fund petroleum and gas safety and health regulatory activities.
- Operators of facilities producing or processing biogas or gas derived from waste disposal or sewerage treatment are exempt from paying the Fee where Innovation Australia has made a positive advance finding that these are core R&D or supporting R&D activities.
Persons liable to pay the Fee include holders of exploration and production tenements (but only those that are actually producing petroleum) and operators of certain operating plant and petroleum facilities.
The New Fee Process
By 1 March each year, the Department must publish on its website a costs estimate of the safety and health operating costs for each relevant category of liable person for the following financial year.
Liable persons need to submit a safety and health fee return for each financial year by 31 July. The Department then calculates the Fee payable by each liable person by reference to a specified formula for each category.
Under the new capping mechanism, where the total Fees payable that the Department calculates for a category (eg exploration) exceed the costs estimate for that category, the Department will instead issue an invoice to each liable person based on their pro rata percentage of the costs estimate for the category.
The Department must issue this invoice to each liable person by 10 November each year. The Fee must be paid on or before 10 December.
The Government’s intention in introducing this capping mechanism is to ensure that the revenue collected from the Fee covers but does not exceed the full cost recovery for petroleum and gas safety regulatory activities.
The costs estimates for the 2013-2014 financial year are available from the Department’s website, with the fee table made available below.
Click here to view table.
This fee capping mechanism applies to all categories of liable person who are required to pay the Fee, except for the operators of certain petroleum facilities and LPG delivery networks where the Regulations prescribe a fixed Fee.