02 Apr 2020

Further fracking inquiry recommendations implemented in the Northern Territory

By Nicole Besgrove, Karen Trainor and Margaret Michaels

Amendments have now been passed in the Northern Territory to implement recommendations from the independent Scientific Inquiry into Hydraulic Fracturing in the Northern Territory.

On 28 November 2019, the Petroleum Legislation Miscellaneous Amendments Bill was introduced into the NT Parliament and subsequently referred to the Legislation Scrutiny Committee for inquiry and report by 24 March 2020. The Bill received assent on 30 March 2020 and the Petroleum Legislation Miscellaneous Amendments Act 2020 will commence on the day fixed by the Administrator by Gazette notice.

The Act amends the Petroleum Act 1984 and the Petroleum (Environment) Regulations 2016.

Significant changes which will be introduced by this Act are outlined below.

Land access, compensation and environmental security bonds

The amendments allow for regulations to be made under the Petroleum Act with respect to the following in order to implement Recommendations 14.6, 14.7, 14.8 and 14.13 of the Fracking Inquiry Final Report:

  • land access agreements;
  • environmental security; and
  • compensation to owners / occupiers.

The regulations have not yet been released.

Land release for exploration

To implement Recommendation 14.2 of the Fracking Inquiry Final Report the Act will require new public consultation requirements for inviting applications for the grant of an exploration permit.

Submissions must be considered by the Minister when making a determination about the release of blocks but will be limited to the following issues:

  • if there are other existing or proposed industries for a specified block – whether exploration of the specified block is possible at the same time; and
  • whether the land of a specified block is suitable for exploration (i.e. the land is not suitable for exploration because the land is subject to intensive agriculture or of high ecological value or of high scenic value or culturally significant or of strategic importance to nearby residential areas).

Ecologically sustainable development

The Act requires certain decisions by the Minister to consider and apply the principles of ecologically sustainable development. This includes decisions to grant, refuse or renew an exploration permit or production licence. Therefore it will be important that these applications address and satisfy those principles.

The principles of ecologically sustainable development are defined as the principles set out in sections 18 to 24 of the Environment Protection Act 2019 (which have not yet commenced) which are as follows:

  • Decision-making principle (section 18);
  • Precautionary principle (section 19);
  • Principle of evidence-based decision-making (section 20);
  • Principle of intergenerational and intra-generational equity (section 21);
  • Principle of sustainable use (section 22);
  • Principle of conservation of biological diversity and ecological integrity (section 23); and
  • Principle of improved valuation, pricing and incentive mechanisms (section 24.

Set-back for petroleum infrastructure

The Act requires the following set-backs for petroleum operations unless the permitee or licensee has the written consent of landowners and in some cases, occupiers, native title holders and the Board of Trustees of the cemetery (as the case may be):

  • carrying out operations on land that is used as, or within 50 m of land being used as, a residence, yard, garden, orchard or cultivated field;
  • carrying out operations on land that is used as, or within 200 m of land being used as, a cemetery;
  • carrying out operations on land that is within a distance of 200 m of any artificial accumulation of water or any outlet from which water may be obtained;
  • constructing a well, wellhead, pipeline or petroleum processing facility on land that is used as, or within 2 km of land being used as, a habitable dwelling (ie all buildings or premises where people reside or work, schools and associated playgrounds, permanent sporting facilities and hospitals or other community medical facilities) (note that there is no consent exemption with respect to this prohibited operation); and
  • constructing a well or well pad on land that is within 1 km of a designated bore.

These new set back rules do not apply to works undertaken before the new amendments commence for:

  • construction of a well, wellhead, pipeline or petroleum processing facility on land that is used as, or within 2 km of land being used as, a habitable dwelling; and
  • construction of a well or well pad on land that is within 1 km of a designated bore.

Interference with authorised activities

An amendment was made in Parliament to implement the Committee's recommendation that the Act be amended to provide that it is an offence for a person to interfere with authorised activities being conducted under a petroleum title or with the exercise by the titleholder of a right under the petroleum title.

The purpose of this amendment is to align the Petroleum Act with other resources legislation such as the Minerals Title Act 2010 and was considered important for safety reasons including human, animal and environmental reasons.

If you would like to understand how the amendments will affect your operations upon commence please contact us.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.