Onshore petroleum exploration and operations subject to rigorous regulatory process

Today’s onshore oil and gas explorers and producers find their activities subject to more rigorous approvals than ever before in order to ensure protection of, and reflect today’s values around, communities, public health, the environment, and land use.

The Government of Western Australia has been regulating the oil and gas industry since the first onshore and offshore drilling activities in the early 1900s. Back then, mining, and then oil and gas activities, were regulated by The Department of Mines’ Petroleum Division.

Today, responsibility for the oil and gas industry’s onshore regulation lies with the WA Government’s Department of Mines, Industry Regulation and Safety (DMIRS). It regularly updates legislation, regulations and guidelines that the industry must adhere to and abide by.

Overall, DMIRS is charged with ensuring the highest levels of safely, health and environmental standards, and community priorities in accordance with State and Federal legislation, regulations and policies.

Under WA regulations, public access to key information on petroleum projects is made available, particularly in relation to the environment.

Meeting strict international and national engineering and operational standards

DMIRS’ role is to ensure the State’s resources are developed in a safe, sustainable and responsible manner for the WA community, industry and resources sector.

The Department’s regulatory operations fall under six groups, including:

  1. Resource and Environmental Regulation
  2. Industry Regulation and Consumer Protection
  3. Safety Regulation Group
  4. Service Delivery Group
  5. Corporate Services Group
  6. Executive Structure

Through these groups, DMIRS’ regulates the petroleum industry across the whole life cycle of project development. This includes

BEFORE:

  • Permits: Release of land for oil and gas exploration through permits.
  • Leases/Licences: If a discovery is made, DMIRS can approve licences ensuring safety and environmental, and production requirements are met and managed responsibly.
  • Assessment/Approvals: Coordinating the assessment and approvals processes of other State Government agencies.
  • Community/Stakeholders: Providing information to people that may be interested in or impacted by petroleum activities.

DURING:

  • Inspections: Regular field/facility inspections, testing, reporting, compliance and auditing.
  • Company drill reporting:  When petroleum companies are drilling a well, they must submit daily drilling reports, monthly production reports and reports upon completion of the well.

AFTER:

  • Abandonment requirements: Oversees the assessment and approval of decommissioning programs.
  • Rehabilitation: Removal of the petroleum facilities and environmental rehabilitation.
Shale and Tight Gas Developments

The regulatory measures exist for both conventional and unconventional petroleum development.

If a well requires hydraulic fracturing further approvals must be granted at a state and, in certain circumstances, at a Commonwealth level too.

Hydraulic fracturing is used to test whether there is petroleum present in a shale of tight gas formation, and if the well can produce at commercial flow rates. It involves pumping fluid down a well at high pressure to open tiny cracks in the target rock reservoir, allowing gas trapped deep underground to flow. This practice is not required for every well.

In 2015, the former Department of Mines and Petroleum (DMP) published a ‘Guide to the Regulatory Framework for Shale and Tight Gas in Western Australia – A Whole-of-Government Approach’.

It was published in consultation and collaboration with key stakeholders and public sector agencies to ensure an integrated response to the development, and future development of WA’s shale and tight gas resources.

Those agencies included:

These agencies still regulate and approve areas of shale and tight gas developments under legislative powers relevant to each.

Some of the work undertaken includes:

  • Detailed environmental impact assessments, and additional assessments if deemed necessary
  • Providing licences to extract water
  • Protection of drinking water
  • Protecting Aboriginal and cultural heritage

Commonwealth legislation also regulates the development of shale and tight gas projects. The Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) applies where a proposed exploration or development action is likely to have a significant impact on a matter of national environmental significance.

Impacts on, and protection of the environment, falls to the EPA, which makes recommendations to the relevant WA Minister for Environment, who makes the final decision on whether to approve a proposal. If the matter is of national relevance, it is referred to the Australian Government’s Department of Agriculture, Water and the Environment for assessment under the EPBC Act.

Hydraulic fracturing safely into the future

Hydraulic fracturing commenced in Western Australia more than 60 years ago, with over 600 wells undergoing hydraulic fracture stimulation since 1958.

In 2019, the WA Government lifted a two-year moratorium on hydraulic fracture stimulation on petroleum titles in existence as at 26 November 2018 after considering the findings of the Independent Scientific Panel Inquiry into Hydraulic Fracture Stimulation in Western Australia.

The Inquiry outlined 44 recommendations on how to mitigate risks associated with extracting petroleum products using hydraulic fracture stimulation and to protect the State’s environment. All recommendations have been all been accepted in-principle by the WA Government. Importantly, the Inquiry found that with appropriate regulation that hydraulic fracturing is of low risk to people and the environment.

An Implementation Plan has been released detailing required changes and actions, and a steering committee is charged with implementing it. The Plan’s recommendations are expected to be in place by the end of 2020 and will ensure a rigorous suite of regulatory requirements that apply specifically to the hydraulic fracturing activity itself.

Key actions include:

  • Banning hydraulic fracturing within 2000 m of gazetted Public Drinking Water Source Areas, in national parks, the Dampier Peninsula and iconic natural heritage places
  • Traditional Owner and private landowner consent prior to hydraulic fracture production
  • An enforceable Code of Practice to which companies will have to adhere when they are undertaking hydraulic fracturing activities
  • Strengthening current regulations to ensure high health, safety and environmental protection standards, including all applications for onshore hydraulic fracture stimulation exploration and production proposals to be referred to the EPA for assessment under the Environmental Protection Act 1986.

Public consultation periods have taken place on proposed iconic natural heritage places, and stakeholder engagement requirements in relation to hydraulic fracturing.

Overall responsibility belongs to the WA Minister for Mines and Petroleum and the WA Minister for Environment.

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