Environment policy

Oil and gas is a highly regulated industry that operates under strict guidelines and is answerable to several federal and state government agencies. Exploration and production operations are guided by strong rules on environmental management, water management, land access and other issues.

Research plays an important role. Depending on the nature, size and potential environmental impact of a project or activity, a range of scientific studies determine the baseline conditions for all environmental values, such as fauna, flora, air quality and water.

When developing environmental impact statements and management plans, environmental risks are identified and strategies for minimising those risks are evaluated. In cases where the environment is sensitive or the activity is complex, more detailed research may be commissioned to ensure the environment can be protected if a project proceeds.

When management and regulatory approaches are based on the best available science, better outcomes are achieved.

However, much environmental regulation is based on arbitrary requirements and appears to be motivated more by political concerns that by science or reasonable risk management.

The oil and gas industry faces overlapping state and federal laws with duplicative and inconsistent requirements. This increases paperwork, pushes up costs and delays projects without improving environmental outcomes.

Need for reform

Reforming oil and gas environmental regulations could save taxpayers and industry millions of dollars without weakening safety and environmental outcomes.

In April 2012, COAG Ministers agreed in April 2012 that there is an overwhelming need for regulatory reform particularly to reduce duplication and double-handling of environmental assessment and approvals processes. Yet little progress has been made in this area.

Reform would reduce costs for regulatory agencies (and taxpayers), and increase returns to project developers, suppliers, workers and governments.

Policies that undermine the development of energy projects and curtail energy production impose real costs on Australia through lost jobs, forgone economic growth, and higher energy bills.

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A large burden

Environmental approvals are usually subject to a range of conditions. These often require the development and approval of more specific management plans, the monitoring of performance and impacts, remedial action and investment in further environmental research or environment protection programs.

For major projects these programs add tens of millions of dollars to already high project costs and significantly increase regulatory uncertainty.

For example, it took more than three years and a 13,500 page Environmental Impact Statement for the Gladstone LNG Project to achieve commonwealth and state approval. These approvals included 1200 strict conditions over the project’s operations and requirements for further extensive scientific work to be undertaken as the project proceeds.

Cutting Green Tape

An APPEA report, Cutting Green Tape: streamlining major oil and gas project environmental approvals processes in Australia, outlines the scale of this problem and makes recommendations on how the regulatory burden can be alleviated while still delivering protection of the environment.