Oil and gas legislative update – NOPSEMA's powers strengthened

Amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) were passed this month aimed at strengthening the enforcement and investigative powers of NOPSEMA in response to pollution emergencies and improving the administration of greenhouse gas (GHG) titles. More specifically, the amendments:

• strengthen the inspection and enforcement powers of the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) inspectors within State/Territory jurisdictions during an oil pollution emergency that originated in Commonwealth waters; and
• include measures designed to improve GHG title administration by allowing for:
  • administration and regulation of GHG storage formations that are located partly in State/Territory waters and partly in Commonwealth waters; and
  • adjacent Commonwealth GHG titles to be joined.

Increased powers for NOPSEMA

The Federal Government has voiced concern that the current inspection and enforcement powers of NOPSEMA were not sufficient to ensure compliance by a titleholder with its statutory environmental obligations in the event of an oil pollution emergency originating from Commonwealth waters.

In particular, in the Explanatory Memorandum behind the amendments, the Government noted that NOPSEMA's were limited in the sense that:

• incident response operations could not access certain premises on a timely basis on account of requirements for warrants or the consent of the titleholder or other persons (such as a vessel conducting clean-up operations); and
• NOPSEMA did not have power to inspect for or enforce compliance by the titleholder in areas of State/Territory jurisdiction, such as in coastal waters or onshore.

In the event of an oil pollution emergency arising from operations in Commonwealth waters, NOPSEMA inspectors can now enter premises (including aircraft and vessels) used for the implementation of response obligations without a warrant, even if these premises are located in a State/Territory jurisdiction.

The amendments also extend the operation of the polluter pay obligations, and the power for NOPSEMA to make significant incident directions, under the OPGGS Act in areas of State/Territory jurisdiction with respect to such oil pollution emergencies.

Improving GHG title administration

Single GHG titles may now be granted and administrated for sites that are partly located in Commonwealth waters and partly located in State/Territory waters.

Grant of title will result in the title area being treated as Commonwealth waters for the purposes of the OPGGS Act, and such cross-boundary titles will be regulated under the OPGGS Act in the same manner as GHG titles located exclusively in Commonwealth waters. Decisions will be made by a newly established Cross-boundary Authority, consisting of the responsible Commonwealth Minister and the relevant State or Territory Resources Minister (this is similar to current Joint Authority arrangements for petroleum titles in Commonwealth waters).

Holders of two adjacent Commonwealth GHG titles are now also entitled to apply for a single title across both areas where the title holders have reasonable grounds to suspect that a geological formation straddles both titles. This is designed to address the requirement under the OPGGS Act that GHG injection and storage activities only be conducted wholly within a single title area, which the Government considered would not provide for injection and storage of GHG in such formations straddling adjacent titles.