Friday, October 13, 2017

Global Shale Law Compendium – Shale Law Governance in Australia (Western Australia, South Australia, and Queensland)

Written by Chloe Marie – Research Fellow

The Global Shale Law Compendium series addresses legal developments and other issues related to the governance of shale oil and gas activities in various countries and regions of the world. In this article, we will highlight governance actions taken by some of the states in Australia to develop policies specific to shale gas development. In a previous article, we addressed shale gas development in the states of New South Wales, Victoria, and Tasmania, as well as the Federal Northern Territory.

Western Australia

The Government of Western Australia (WA) estimates that there are around 280 Tcf of potential shale gas resources located in the Canning and Perth Basins. It also identifies potential resources in the Carnarvon and Officer Basins, but those remain “still underexplored.” The Government declared that 17 exploration wells were drilled in Western Australia from 2005 to 2012, of which 13 were hydraulically fractured.

Recognizing this great potential, the WA Department of Mines and Petroleum released new draft regulations on May 30, 2014, with the purpose of strengthening its existing regulatory framework for onshore oil and gas activities in Western Australia as well as addressing issues specific to shale gas development. Those regulations were adopted on July 1, 2015.

In the meantime, on August 7, 2013, the WA Standing Committee on Environment and Public Affairs proposed to investigate the implications for Western Australia of hydraulic fracturing for unconventional gas in order to answer multiple concerns raised among the WA community. The WA Standing Committee released said report in November 2015 and stated that “the purpose of this inquiry has been to provide a comprehensive body of factual information and findings to assist the Parliament of Western Australia, future decision makers and the public in their contemplation of this industry.”

As part of its findings and recommendations on several key areas, the Committee found that “many of the concerns expressed by the community in relation to the impact of hydraulic fracturing for unconventional gas can be addressed through robust regulation and ongoing monitoring.” The Commission also recommended that the “Government establish a working group, including land owner representatives and community leaders, to draft legislation for a statutory framework for land access agreements between land owners and resource companies.”

In its response to the inquiry, the Western Australian State Government supported most of the recommendations expressed by the Committee and agreed to further work on the current regulations. It did not agree, however, on establishing a statutory body to act as an independent arbiter for land owners and resource companies in land access negotiations involving shale gas development. The Government stated that “mechanisms for negotiating access agreements with landholders have developed significantly since the Committee report.”

The discussion relating to shale gas development in Western Australia, however, took a new turn with the appointment of a new Premier in March 2017. Indeed, during the state election campaigns, Premier Mark McGowan clearly stated his intention to stand against the use of hydraulic fracturing in Western Australia. Subsequently, on September 6, 2017, a ban on hydraulic fracturing was implemented for unconventional gas covering all existing and future petroleum titles in the South-West, Peel and Perth metropolitan regions in Western Australia until further review has been performed on the potential impacts of hydraulic fracturing.

South Australia

The South Australia State Government has indicated that “early indications show that the Cooper Basin could potentially produce more than 200 Tcf [of shale gas resources]” and that “several unconventional reservoir plays are being actively explore for gas/oil by more than 20 companies in South Australia.” Originally, shale gas exploration in South Australia started in October 2012, but the developmental phase has not yet begun.

The South Australian State Government was the first state to publish a comprehensive plan for the development of its shale gas resources.  This plan, published in December 2012 and entitled Roadmap for Unconventional Gas Projects in South Australia, contains a great number of recommendations to maximize the developmental potential while minimizing impacts.

As in Western Australia, the South Australian Parliament’s Natural Resources Committee initiated in November 2014 an investigation relating to the impacts of hydraulic fracturing activities in the South East of South Australia. The Committee released a Final Report on November 29, 2016, and made a total of 5 recommendations and 10 findings. The Committee found that “the natural gas industry does not currently have social licence to operate in the South East, and in the committee’s opinion unconventional gas exploration and development should not proceed without it.” The South Australian State Government provided responses to the recommendations on March 30, 2017, and confirmed that those recommendations would be taken into consideration in any future review of the State Petroleum and Geothermal Energy Act of 2000.

Queensland

According to the Queensland State Government, shale gas exploration and development is still at a very early stage in Queensland despite having some promising potential in the Isa Superbasin, Maryborough, Georgina, Cooper and Eromanga basins. Until now, just over 20 exploration wells have been drilled in Queensland to evaluate the shale gas reserves.


Interestingly, on August 24, 2008, the Government of Queensland introduced a 20-year moratorium on developing the McFarlane oil shale deposit located in the Whitsunday Region of Queensland pending review of the potential risks associated with shale oil development on the environment. On February 13, 2013, the Government continued the 2008 moratorium, which is scheduled to end in 2028.

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