Australia: Petroleum and Geothermal Energy Legislation Amendment Bill 2013 up for debate in Western Australia

Resources and Energy Alert: 25 November 2013

The Petroleum and Geothermal Energy Legislation Amendment Bill 2013 (Bill) is to amend the Petroleum and Geothermal Energy Resources Act 1967 (PGER Act) and the Petroleum Pipelines Act 1969 (PP Act) to:

  • facilitate the geological storage of greenhouse gas (GHG) substances; and
  • provide for the transport of GHG substances via pipelines.

The Bill does not cover the capture of greenhouse gases as this occurs at industrial plant and power station sites.

If passed, the Bill will substantially follow the existing petroleum legislative regime, including work program–based acreage releases and tenure types, and will also allow for existing petroleum safety case and environment plan regulations to be amended to include greenhouse gas operations.

This Alert provides an overview of the Bill which is listed for debate, and in particular clause 11 and 12 which provides for entry onto private land and compensation rights.

Purpose of the Bill

The capture of CO2 and its geological storage (geosequestration), also known as carbon capture and storage, or CCS, is the process of capturing CO2 from emission sources such as fossil fuel-fired power stations, oil and natural gas processing, cement manufacture, iron and steel manufacture and the petrochemical industry, transporting it and storing it so that it is prevented from entering the atmosphere.

Currently these processes are unregulated in Western Australia other than for the Gorgon Gas Project, which is regulated via the Barrow Island Act 2003 State Agreement. This Bill will provide a legal framework which allows for greenhouse gas capture and storage projects, such as the South West Hub, to proceed.

The Bill would also make other minor and related amendments to extend various existing provisions to include GHG operations.

If the Bill is passed, PGER Act will complement the existing regime for the injection and geological storage of greenhouse gases as regulated by the Commonwealth's Offshore Petroleum and Greenhouse Gas Storage Act 2006 in the Commonwealth offshore jurisdiction.

Greenhouse gas titles

The Bill will establish a number of greenhouse gas titles and licensing, including a GHG exploration permit and a GHG injection licence. A GHG exploration permit will authorise the holder to explore for potential GHG storage formation or GHG injection sites. A GHG injection licence will then permit the holder to carry out operations for the injection and permanent storage of greenhouse gas in the licence area.
In addition, the following gas titles would also be introduced by the Bill:

  • "GHG access authority" to allow the holder of a GHG exploration permit, GHG drilling reservation, GHG lease area or a GHG injection license to conduct greenhouse gas exploration activities outside of their areas.
  • "GHG exploration operation" for an operation to explore for potential GHG storage formations or potential GHG injection sites, and the carrying on of such operations and the execution of such works as are necessary for that purpose.
  • "GHG retention lease" as a retention or a holding lease for GHG purposes.
  • "GHG special prospecting authority" which allows limited exploration for a potential GHG storage formation or GHG injection site but does not authorise the drilling of a well.

Transport of GHG substances

The Bill provides for the transport of greenhouse gas substances via pipelines by amending the PP Act to:

  • extend provisions relating to pipeline licence applications to include pipelines used for the conveyance of greenhouse gas substances; and
  • insert new clauses allowing a person to apply to the relevant Minister for a direction if agreement has not been reached with a pipeline licensee for the conveyance of petroleum through the pipeline specified in the licensee's licence within a period of three months.

Legislative Committee Report - entry onto private land and compensation rights

On 17 September 2013, the Legislative Council referred clauses 11 and 12 of the Bill to the Standing Committee on Legislation for consideration and report. The Committee tabled its report on 19 November 2013, finding no substantive issues with the proposed clauses.

Clause 11 of the Bill proposes to insert s 11(2A) into the PGER Act and to amend s 11(2). These amendments provide the Minister for Mines and Petroleum (Minister) with the power to enter private land and provide compensation rights to affected landowners and people with an interest in the land impacted by GHG exploration and operations. Such power and rights mirror those applied to searching for and conducting petroleum or geothermal energy resource operations.

Clause 11 of the Bill will provide:

  • a right to access land - the Minister will be provided with the power to enter onto and occupy any land in Western Australia, temporarily or permanently, to carry on 'GHG operations' (as defined in the Bill);
  • compensation will be payable to occupiers or persons with an estate or interest in the land entered onto by the Minister; other provisions in the PGER Act also set out compensation payable; and
  • a compensation framework – compensation claims must be made, dealt with and determined under Part 10 of the Lands Administration Act 1997.

Clause 12 will amend s 15 of the PGER Act to correct a minor drafting error (inserting "area" after the reference to "drilling reservation"). Clause 15 does not directly relate to GHG operations or compensation; however, it does specify the rights of GHG licensees and permit holders in regard to GHG exploration and storage activities. The Committee ensured that the minor amendment would not cause an unintended impact on other matters.

Bill progressing through Parliament

The Bill is listed in the Legislative Council item of orders. We will keep you updated on any amendments introduced and when the Bill is passed.

© HopgoodGanim Lawyers

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