02 Dec 2020

Clear, concise safety regulations essential for industry stability

The laws of physics dictate a gas cannot be a solid, but it can have a solid role to play in Australia’s economy. Global demand for Australian gas production is set to increase continuously beyond 2040, but the nation can only truly capitalise on the opportunities this brings by ensuring it maintains its status as an attractive destination for industry investment.

The current setup for environmental regulation of oil and gas projects in Australia requires approvals at both state and federal levels. These approvals often overlap, slowing work and increasing costs.

The Federal Government has acknowledged these issues, expressing its intention to introduce a more streamlined approvals process by amending the Environment Protection and Biodiversity Conservation Act 1999 (EPBC) to enable the states to take the lead where appropriate on environmental responsibilities. This makes sense, given that it is the states and territories that are responsible for the day-to-day management of environmental matters.

The proposed Streamlining Environmental Approvals Bill, will help facilitate good environmental outcomes while streamlining the approvals process by removing duplicative and sometimes conflicting processes.

For example, a one-year delay to a major LNG project can incur anywhere between $500 million and $2 billion in additional costs, according to estimates from the Productivity Commission.

“Overlapping requirements between states and the Commonwealth and widespread duplication of processes between the Commonwealth and states do not help to protect the environment but often causes unnecessary delays increasing the costs for development,” explains APPEA Chief Executive Andrew McConville.

A recent EY report commissioned by APPEA, Australia’s Oil and Gas Industry: Kickstarting Recovery from COVID-19, found that approvals processes should take a more risk- and outcome-based approach, recognising Australia’s historical and contemporary achievements in commercial gas production, particularly for producers able to demonstrate established proof of concept and strong environmental safety records.

“Low cost and speedy project approvals, without compromising standards, will be fundamental to shoring up Australia’s competitive position,” the report states.

APPEA understands the critical importance of effective environmental regulation to ensure project standards are up to scratch and the needs of Australians are met. We believe that the Federal Government’s proposed introduction of bilateral agreements in line with the details of the Amendment Bill will ensure the industry maintains regulatory stability and attracts further investment in a way that is agreeable to businesses, environmental groups and the wider community.

“This is a once-in-a-decade opportunity to get it right,” McConville says. “We are encouraged by the discussions we’ve had with environment groups during the review process and we are committed to continuing to work with these groups and the Government as the process plays out.”