Comments sought on new environmental offences and prohibitions on water licences for NT petroleum activities

The impact of mining and petroleum activities  on the Territory's water resources – and the suitability of the legal framework – have been under scrutiny recently, and the need to implement the recommendations of the Final Report of the Independent Scientific Inquiry into Hydraulic Fracturing has only added to that scrutiny, with the need to ensure environmental protection in the Territory is fit for purpose.

The latest step in that review process is the introduction on 13 February 2019 of the Water Amendment Bill 2019 to enshrine in law several of the Inquiry's recommendations to better protect the Territory's water resources from the impact of petroleum activities, including those which involve hydraulic fracturing:

• impose new environmental offences with respect to conduct resulting in hydraulic fracturing waste coming into contact with water; and
• prohibit the granting of certain water licences for petroleum activities.

The amendments are needed because currently, decisions of the Controller of Water Resources under the Water Act and decisions of the Minister for Environment and Natural Resources with respect to environment management plans for petroleum activities under the Petroleum (Environment) Regulations are to be consistent with the Inquiry's recommendations for the protection of water resources.

The aim of the Bill is to remove any scope for the Controller or the Minister to make a relevant decision  which is not consistent with those recommendations and avoid future legal challenges of those decisions on such as basis. It will now be the subject of inquiry and report by the Economic Policy Scrutiny Committee. Submissions can be made until 11 March 2019.

Inquiry recommendations being implemented by the Water Amendment Bill 2019

The recommendations in the Inquiry's Final Report which are being addressed by the amendments proposed in the Bill include:

• Recommendation 7.6 – prohibition on surface water take for petroleum activities;
• Recommendation 7.8(a) – prohibition on water extraction for hydraulic fracturing within 1km of landowners bore without agreement or hydrogeological information;
• Recommendation 7.9 – prohibition on reinjection of hydraulic fracturing wastewater into aquifers; and
• Recommendation 7.17 – prohibition on release of hydraulic fracturing wastewater to surface waters.

New environmental offences for waste meeting water

The Bill imposes new environmental offences with respect to conduct resulting in hydraulic fracturing waste (treated or untreated) coming into contact with water, which includes water flowing or contained in a waterway, groundwater or tidal water.

The offence provisions do not however apply if:

• hydraulic fracturing waste is produced water (ie. naturally occurring water that is extracted from a geological formation following hydraulic fracturing) or flowback fluid (ie. fluid that is a mixture of hydraulic fracturing fluid and formation fluid that is allowed to flow from the well following hydraulic fracturing); and
• the hydraulic fracturing waste comes into contact with ground water during the process of hydraulic fracturing.

  It is intended that water-extraction related impacts on water resources and any environmental impacts associated with reuse of hydraulic fracturing fluids would be managed through an Environment Management Plan under the Petroleum (Environment) Regulations.

It is intended that water-extraction related impacts on water resources and any environmental impacts associated with reuse of hydraulic fracturing fluids would be managed through an Environment Management Plan under the Petroleum (Environment) Regulations.

The severity of the new environmental offences  are scaled based upon the level of environmental harm caused (ie. serious or material environmental harm), intention and recklessness and cannot be authorised through other legislation or waste discharge licences.

Proof of any of the following things being in existence on the land where the hydraulic fracturing has occurred or is occurring, will be evidence in any offence proceedings that hydraulic fracturing waste came into contact with water at the time these things existed:

• a drain;
• a pond;
• a dump; or
• any other means (including mechanical means) by which hydraulic fracturing waste is capable of being conveyed, retained or deposited so that it may, directly or indirectly, come into contact with water.

Prohibitions on water licences

The Bill prohibits the Controller of Water Resources from granting:

• a licence to take surface water (ie. water flowing or contained in a waterway) if the proposed beneficial use of water under the licence is petroleum activity; and
• a recharge licence that permits the increase of water contained in an aquifer with water that is, or contains, hydraulic fracturing waste.

It is also proposed that the Controller be prohibited from granting a licence to take water from a bore if the proposed beneficial use of water under the licence is petroleum activity that includes hydraulic fracturing and one or more designated bores are located within 1 km of the bore, unless:

• the owner of each designated bore consents to the grant of the licence; or
• hydrogeological investigations and ground water monitoring indicate that the activities under the licence will not have any adverse effect on the supply of water to any designated bore.

Based upon the drafting of this prohibition, we understand that a petroleum activity that involves hydraulic fracturing can be granted a water licence to take groundwater from a bore where:

• there is no designated bores located within 1 km of that bore; or
• if one or more designated bore is located within 1km of the bore - the landholder of the designated bore has agreed or the hydrogeological investigation and groundwater monitoring has been undertaken demonstrating that there will not be an adverse impact.

This prohibition will extend to apply in relation to an application that was made but not decided by the Controller before the commencement of the new provision.

A "designated bore" is defined for this new provision to include any of the following:

• a bore used for rural stock and domestic beneficial use;
• a bore in relation to which a water extraction licence has been granted;
• a proposed bore in relation to which the Controller has received but not yet decided an application for a bore work permit or where a bore work permit is in force where that bore is proposed to be used for:
• rural stock and domestic beneficial use; or
• a use that requires the grant of a water extraction licence.

Committee inquiry and report – have your say

The Terms of Reference for the inquiry and report require the Committee to consider:

• whether the Assembly should pass the Bill;
• whether the Assembly should amend the Bill;
• whether the Bill has sufficient regard to the rights and liberties of individuals; and
• whether the Bill has sufficient regard to the institution of Parliament.

A report is to be provided by the Committee by Tuesday 7 May 2019.

The Committee is now inviting all interested parties to provide comment and feedback on the Bill. Submissions are to be provided to the Secretary, Economic Policy Scrutiny Committee by Monday 11 March 2019. 

If you would like any assistance with your submission please contact us. 

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