Priorities for regulatory reform

A 2009 Productivity Commission report (Review of the Regulatory Burden on the Upstream Petroleum (Oil and Gas) Sector) found that current regulatory arrangements for the industry were overly complex, imposing unnecessary regulatory burdens and increasing costs.

This report made several recommendations to improve the system in Australia, including measures to:

• improve cross-jurisdictional approvals processes
• improve consistency by enhancing the role of the Environment Assessors Forum
• streamline heritage processes
• develop transparent policy principles for environmental offsets
• review legislation to ensure it complies with best practice principles
• clarify the role of government
• develop improved approvals tracking systems
• establish a lead agency in each state and territory
• set up a new national offshore petroleum regulator.

The Commission said a 50 per cent reduction in approval times is achievable and an across-the-board one-year reduction in total approval time for major projects could increase future national income by billions of dollars each year.

In December 2009, jurisdictions agreed to 25 of the 30 recommendations in the Commission’s review. But they could not reach consensus on the remaining five recommendations on setting up a National Offshore Petroleum Regulator for state and Commonwealth waters.In early 2010, the Ministerial Council on Mineral and Petroleum Resources decided to defer its consideration of a national offshore regulator until the Montara Commission of Inquiry’s report had been completed and its recommendations considered.

In November 2010, the Montara Commission found Australia’s offshore oil and gas regulatory regime to be seriously wanting in its oversight of safety and environmental management. This reinforced the findings of the Productivity Commission and made a compelling case for setting up a single integrated offshore regulatory authority for these critical operational areas.

The Australian oil and gas industry has welcomed the Australian Government’s May 2011 responses to the Productivity Commission and Montara Commission of Inquiry reports.

The Government announced it would introduce legislation to establish the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) and the National Offshore Petroleum Titles Administrator (NOPTA).

Australia also needs a more efficient regulatory regime that continues to attract vital investment in the nation’s oil and gas resources without compromising health, safety or environmental outcomes.