Country
Assessment
Generally, laws and regulations governing GHG emissions also apply to midstream and downstream activities. For example, Part 9.11 of Volume II of the OPGGS Act provides regulations for preventing petroleum’s wastage or its escape from pipelines conveying it to be flared or vented (see section 3 of this case study for other examples). As discussed in section 15 of this case study, the NGER (Measurement) Determination, 2008, establishes calculation methods and prescribes specific methods for various sources of GHG emissions, including those associated with flaring and venting, and fugitive emissions across the oil and gas midstream and downstream activities. Some states have separate laws and regulations for pipelines, storage facilities, processing plants, refining facilities, and distribution networks, but the requirements appear to be mostly consistent with national GHG emission restrictions.
No evidence of negotiated agreements between the public and private sectors was found in the documents consulted.
The Carbon Credits (Carbon Farming Initiative) Act, 2011, made GHG emissions reduction possible for crediting companies across the economy. The Carbon Farming Initiative Amendment Act, 2014, established the Emissions Reduction Fund, which is administered by CER and is now known as the Australian Carbon Credit Unit (ACCU) Scheme. Companies can earn ACCUs for reducing fugitive leak and venting emissions at oil and gas extraction, production, transport, and processing facilities by installing and operating equipment to capture these gases and combusting them in a flare device. The Carbon Credits (Carbon Farming Initiative—Oil and Gas Fugitives) Methodology Determination, 2015, establishes “procedures for estimating abatement (emissions reduction and sequestration) from eligible projects, and rules for monitoring, record keeping and reporting.”
According to Section 10 of the Offshore Petroleum (Royalty) Act, 2006, royalty is not payable if the Western Australia state minister “is satisfied that the petroleum has been flared or vented in connection with operations for the recovery of petroleum” and flaring and venting did not contravene the OPGGS Act, 2006 , and associated regulations. In Queensland, according to the Petroleum and Gas (Production and Safety) Act, 2004 , an operator is exempt from paying petroleum royalty if the revenue commissioner is satisfied that the volumes flared or vented were part of exploration drilling (Section 591). The exemption applies to gas flared or vented during the production testing period but only up to 3 million cubic meters (Section 591A). As per Section 926, petroleum royalty is not payable for volumes flared or vented if approval was given under the Petroleum Act, 1923, before December 31, 2004. In Western Australia, according to the Petroleum and Geothermal Energy Resources Act, 1967, and the Petroleum (Submerged Lands) Act, 1982 , operators may apply to the DMIRS for exemption from royalty payment for petroleum that—with the minister’s approval—is flared or vented in connection with petroleum recovery operations. Under New South Wales’ Petroleum (Onshore) Act, 1991 , royalty is not payable if the minister approves gas flaring or venting (including of gas or other forms) for operations connected with petroleum recovery (Section 87). In South Australia, according to the Petroleum and Geothermal Energy Act, 2000 , royalty is not payable if petroleum or any associated substance is “destroyed or dissipated in accordance with sound production practice” (Part 7). In Tasmania, security deposits are required and must be high enough to cover environmental liability.
No evidence of specific performance requirements for flaring, venting, and methane emissions was found in the sources consulted. Most regulators, including NOPSEMA, the Northern Territory’s DEPWS, Victoria’s DEECA, and Western Australia’s DMIRS, require an environment plan for each proposed petroleum activity, the plan necessarily demonstrating reduction of emissions or environmental impacts and risks to levels that are ALARP or acceptable.
No evidence of nonmonetary penalties for violating flaring-, venting-, or methane-emission-related requirements were found in the sources consulted. However, many Australian regulators pursue a gradual compliance enforcement program, which includes prosecution for severe offenses. For examples, see the links for New South Wales’ and South Australia’s regulatory approaches in section 8 of this case study.
As per the OPGGS Act , NOPSEMA undertakes inspections and investigations and can enforce injunctions and civil penalties. In particular, NOPSEMA conducts compliance-monitoring activities to assess whether an operator is fulfilling the commitments under an accepted environment plan. The environment plan may include various control measures in relation to flaring, venting, and fugitive emissions. Such measures may include, for example, leak detection and repair (LDAR) programs and procedures in case of safety or emergency incidents. The focus of NOPSEMA’s inspections is to ensure the implementation of these measures and their improvement over time. In Queensland, the Petroleum & Gas Inspectorate conducts inspections, audits, and investigations at facilities across the natural gas supply chain. These activities are conducted as per the Petroleum and Gas (Safety) Regulation, 2018 , and cover all facilities across this supply chain, from production sites to distribution networks. In Western Australia, DMIRS inspectors can inspect petroleum facilities, interview people, and gather evidence to ensure compliance with regulations and submitted environment and safety plans. In New South Wales, coal seam gas and petroleum operators seeking to obtain the environment protection license mandated by the Environment Protection Authority must demonstrate that they have taken measures to minimize fugitive emissions through continuous monitoring, LDAR programs, and various assessments. Schedule 2A of the POEO Act enables the Environment Protection Authority to enforce compliance with environmental laws and license conditions and issue formal warnings, clean-up and prevention notices, penalty notices, and legally binding pollution reduction programs in case of noncompliance. For serious matters, the Environment Protection Authority can also pursue prosecution. In South Australia, the regulatory approach is similar to that of New South Wales. The Energy Resources Division pursues a monitoring and compliance policy based on the enforcement pyramid, which correlates the severity of enforcement actions with offenses. According to the Petroleum and Geothermal Energy Act, 2000 , the regulated entity, not the regulator, has the primary responsibility for detecting and rectifying noncompliance. The Environment Protection Authority follows a similar approach to monitoring and compliance. The approach ties compliance actions to the seriousness of impacts and the significance of risks. For exploration activity to commence, Mineral Resources Tasmania must approve work programs after a site inspection.
At the national level, flaring and venting are regulated as part of GHG emission regulations. The Clean Energy Regulator (CER) is responsible for carbon abatement in Australia and administers the relevant laws, regulations, and programs (see section 7 of this case study). The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) regulates offshore oil and gas operations in the Commonwealth waters. The Northern Territory’s Department of Environment, Parks and Water Security (DEPWS) administers the Code of Practice: Onshore Petroleum Activities in the Northern Territory, 2019 . In Queensland, the Department of Resources administers the Petroleum and Gas (Production and Safety) Act, 2004 , which restricts flaring and venting. The Petroleum and Gas Inspectorate—part of the Resources Safety and Health Queensland (RSHQ), a statutory body established by the Resources Safety and Health Queensland Act, 2020—is the key regulator. In Victoria, the Department of Energy, Environment and Climate Action (DEECA) regulates the oil and gas industry. Earth Resources, the former regulator, is now part of this department. The Department of Mines, Industry Regulation and Safety (DMIRS) regulates the oil and gas industry in Western Australia. Companies must submit their environment and safety plans to DMIRS before oil and gas production can begin. In New South Wales, several agencies are responsible for regulating the gas industry. In 2015, the Environment Protection Authority, which issues environment protection licenses, was appointed as the lead regulator for all gas activities. In South Australia, the Department of Energy and Mining, the Energy Resources Division, and the Environment Protection Authority coordinate responsibilities for regulating the oil and gas industry. Mineral Resources Tasmania regulates activities in the minerals and petroleum industries, including environmental management. The Environment Protection Authority regulates the mining industry and underground oil storage but not the upstream exploration.
At the national level, the CER administers the Safeguard Mechanism , which caps total emissions from large oil and gas facilities (see section 2 of this case study), and the NGER framework, which covers the measurement and accounting of various emission sources, including flared or vented volumes, and fugitive emissions. The CER also administers renewable energy targets and the Emissions Reduction Fund. NOPSEMA regulates the environmental as well as health, safety, and structural integrity provisions of the OPGGS Act . Each offshore oil and gas activity must have a NOPSEMA-approved environment plan, which must demonstrate that environmental impacts, including those associated with flaring, venting, and fugitive emissions, are reduced to an ALARP level and are acceptable. NOPSEMA accepts environment plans only if it determines that they meet the requirements of the OPGGS (Environment) Regulations, 2009 . The National Offshore Petroleum Titles Administrator (NOPTA) is responsible for “assisting and advising the Joint Authority and the responsible Commonwealth Minister” and managing data and title registers. The Northern Territory’s DEPWS, established in September 2020, assumed the functions of the previous Department of Environment and Natural Resources, including regulating petroleum operations and their environmental impacts. In Queensland, the Department of Resources administers the Petroleum and Gas (Production and Safety) Act, 2004 . Meanwhile, the Department of Environment and Science issues the Environmental Authority after evaluating the environmental impact statement, which is either mandatory or voluntary, as outlined in the Environmental Protection Act, 1994 . In New South Wales, the Environment Protection Authority is the lead regulator for all onshore petroleum exploration and production activities and is responsible for all compliance and enforcement activities under the Petroleum (Onshore) Act, 1991 , except for work health and safety, which is regulated by the Resources Regulator (formerly the Division of Resources and Energy within the Department of Industry). The Resources Regulator and the Environment Protection Authority collaborate when engineering standards designed for human safety contribute to environmental performance. The Department of Planning and Environment issues development consents. A memorandum of understanding outlines how different agencies collaborate to regulate the gas industry while avoiding duplication. In South Australia, the Department of Energy and Mining’s Energy Resources Division has an administrative arrangement with the Environment Protection Authority to coordinate responsibilities for regulating the oil and gas industry.
“The Australian Government and state and territory governments own Australia’s mineral and petroleum resources on behalf of the community.” The ownership of subsurface minerals is vested in the state under the mineral and petroleum legislation of states and territories, for example, Section 26(2) of Queensland’s Petroleum and Gas (Production and Safety) Act, 2004 , and Section 6(1) of New South Wales’ Petroleum (Onshore) Act, 1991 . The Australian government administers taxes and royalties for projects in the Commonwealth waters and some legacy onshore production (pre-1979 leases) in Western Australia.