NT Government delivers implementation plan for the fracking inquiry recommendations

By Nicole Besgrove, Margaret Michaels

19 Jul 2018

To recommence fracking activities in the Northern Territory, the NT Government will tackle six major areas for reform in three main stages, with the first stage already underway.

In April this year the NT Government accepted all of the recommendations of the final report for the independent Scientific Inquiry into Hydraulic Fracturing of onshore unconventional reservoirs in the Northern Territory, allowing fracking within 51% of the Territory.

The Northern Territory Government has now delivered its three stage Implementation Plan.

Six main areas in the Implementation Plan

The Implementation Plan groups the recommendations into six major reform areas summarised as follows:

  1. Strengthening Regulation: implementing a separate environment approval; ensuring decisions are made transparently; holding decision-makers accountable; and giving the community a say.
  2. Ensuring Accountable Industry Practice: developing transparent and enforceable codes of practice; managing wastewater and chemical safety; monitoring gas companies and their operations; ensuring gas companies comply with laws; and developing cost recovery arrangements.
  3. Safeguarding Water and the Environment: collecting baseline data and informing regional management; assessing, protecting and monitoring water resources; and maintaining and monitoring ecosystem health.
  4. Respecting Community and Culture: building a comprehensive framework for social and cultural baselines; conducting regional, social and cultural impact assessments; managing social and cultural impacts; and ensuring respectful consultation, information, and negotiation.
  5. Maximising Regional Benefits and Local Opportunities: creating local training programs, skills assessment and employment; maximising opportunities for Territory businesses; and ensuring Territorians benefit from royalties.
  6. Planning for Industry: defining areas, processes and mechanisms for no-go areas; improving roads and facilities; planning for infrastructure, services, and industry impact; and addressing arrangements to access pastoral land.

The recommendations are to be delivered in three stages:

Stage One – Planning

Stage One involves setting up the governance arrangements for implementation, establishing the Onshore Shale Gas Community and Business Reference Group and starting work on some of the major reform areas. The delivery of the Implementation Plan is part of this stage.

In April this year, the NT Government appointed Dr David Ritchie as the independent officer to oversee the implementation of the Inquiry's recommendations and in June the Onshore Shale Gas Industry Community and Business Reference Group was established to provide feedback on the development of an implementation framework, and its subsequent execution.

Stage Two – Preparing for exploration

Stage Two is to be completed by the end of 2018 and will involve implementing the recommendations that need to be done early including those that the Inquiry determined must be complete before any exploration involving drilling or hydraulic fracturing and stimulation of unconventional wells. For example:

  • Codes of Practice for industry;
  • the transfer of environmental decisions regarding petroleum from the Minister for Primary Industry and Resources to the Minister for Environment and Natural Resources;
  • baseline mapping and ongoing monitoring regimes for weeds, methane emissions and water quality near proposed drilling sites; and
  • commencement of a broader Strategic Regional Environmental and Baseline Assessment (see Table 16.1 in the Final Report).

Stage Three – Exploration and preparing for production

Stage Three involves the implementation of the balance of the Inquiry recommendations, for example:

  • further consideration to whether or not the establishment of a “one-stop-shop” independent regulator would be appropriate for regulating the gas industry in the NT in the long term;
  • amendment of environmental and petroleum legislation to require the publication of reasons why decisions were made, including, for example, why the Minister believes a gas company is a “fit and proper person” to hold a petroleum tenure for both exploration and production tenures;
  • amendment of the Petroleum Act and Petroleum (Environment) Regulations to allow merits review and allow standing to relevant third parties;
  • develop guidelines for how solid wastes will be managed;
  • review transport options for chemicals and wastewater associated with the onshore gas industry to determine whether additional practices or arrangements need to be considered to avoid the risk of spills and contamination;
  • develop a financial assurance framework that ensures that the gas industry will be financially liable for any environmental damage;
  • commission a Strategic Regional Environment and Baseline Assessment (SREBA) for all regions where gas development will occur, starting immediately in the Beetaloo Sub-basin;
  • develop options for a water pricing model;
  • ask the Australian Government to consider the merits of amending the Commonwealth Environment Protection and Biodiversity Conservation Act 1999 so that the use of water in NT onshore gas triggers assessment under the Act;
  • establish regional social, health and cultural baseline data; and
  • commission a regional level strategic Social Impact Assessment.

It is expected that Stage Three will take a number of years before completion. The Implementation Plan specifies that Stage Three can commence before Stage Two is completed and must be completed before any production approvals are granted for unconventional gas.

It is understood from the Implementation Plan that the planning for Stage Three is still being undertaken and more details will be published online by way of updates to the Implementation Plan.

If you have any queries with respect to the Implementation Plan, the Inquiry recommendations or hydraulic fracturing in the Northern Territory more generally please contact us.

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