Approvals and regulation
Inefficient and costly approvals processes and regulation form a major hurdle to the growth of the Australian oil and gas industry and its ability to contribute to national prosperity.
Regulatory reform could improve efficiency and reduce project risk without compromising standards of safety, environmental protection and resource management. Intelligent reform would yield significant cost savings for both government and industry.
Conversely, increasing regulatory duplication, inefficiency and uncertainty are a major deterrent to investment.
The Global Petroleum Survey captures the view of 623 petroleum industry managers in 529 companies that account for more than half of global oil and gas exploration and production expenditure. This study shows that Australia’s regulatory performance is declining in absolute terms and in comparison to other jurisdictions around the world (Fraser Institute 2012).
With more countries discovering more conventional and unconventional oil and gas resources than ever before, this trend must be reversed if Australia is to continue to attract the investment needed to maintain and expand its petroleum industry.
A good start to regulatory reform has been made in some parts of the industry, particularly the regulation of activities in offshore waters and in some onshore jurisdictions such as Western Australia and South Australia.
But regulatory complexity, duplication and uncertainty in other parts of the industry – particularly in relation to the CSG industry in Queensland and NSW – have increased markedly.
The industry and governments need to identify and implement reforms that will enable the industry to grow, while still addressing safety and environmental concerns and meet the performance standards required by governments and the community.
APPEA’s Cutting Green Tape: streamlining major oil and gas project environmental approvals processes in Australia report outlines how inappropriate and inefficient regulation is increasing costs to industry and threatening future investment without delivering additional environmental benefits. The report offers recommendations for alleviating this problem.