Petroleum and Geothermal

Proposed amendments to the Petroleum and Geothermal Energy Act

Proposed amendments to the Petroleum and Geothermal Energy Act

The South Australian government has recently released the Petroleum and Geothermal Energy (Energy Resources) Amendment Bill 2022 (PGE Bill), as an Act to amend the Petroleum and Geothermal Energy Act 2000 (PGE Act), for consultation.

A draft bill was introduced to Parliament on 25 August 2021, but did not progress until the change in government in March 2022. The PGE Bill includes most of the amendments proposed in the earlier draft except the provisions dealing with hydrogen generation. The South Australian government proposes to regulate hydrogen development under a separate scheme.

The amended act is proposed to be called the ‘Energy Resources Act’ to reflect the broader scope of the energy sources regulated by the Act. The PGE Bill also alters the definition of ‘transmission pipeline’ to include the transport of manufactured hydrogen and imported substances. Provision has also been made for a regulated substance licence to more appropriately licence exploration and production of regulated substances other than petroleum.

The PGE Bill seeks to capitalise on an emerging intensification of the use of carbon capture and storage systems for carbon dioxide and hydrogen as a result of the growing call for action to reduce carbon emissions. A royalty payment system for commercial geological storage of regulated substances will be implemented with exemptions for carbon dioxide which has been produced from a natural reservoir and processed in South Australia.

The PGE Bill also seeks to improve stakeholder participation with licensee statements of environmental objectives and as part of the assessment and approval processes. The Crown will also now have first priority over licensee properties in the event of bankruptcy, and monetary penalties for non-compliance with the scheme have been made consistent with those under the current Mining Act 1971.

The Minister will now have the power to make ‘determinations’ to provide guidance on the regulatory requirements under the new Act. The Minister will also be able to designate areas of South Australia as competitive tender regions to manage exploration licences outside of the Cooper and Otway basins.

Some of the other significant changes proposed to the PGE Act include:

  • The provision of clear criteria for the purpose of assessing the environmental impact of regulated activities. Licensees will be required to address these criteria in their environmental impact reports. Licensees will also have to undertake a consultation process on their environmental impact report.
  • The Minister will no longer classify the level of environmental impact of regulated activities on the basis of environmental impact reports as licensees will be required to undertake an environmental impact assessment. The environmental impact classification system will be repealed.
  • The addition of the requirement for licensees to undertake stakeholder consultation in the preparation of environmental objectives before submission to the Minister.
  • The addition of a requirement that a statement of environmental objectives must address the leading performance criteria, immediately reportable and reportable incidents, and any other information prescribed by the regulations.
  • The implementation of the current medium impact assessment process for approvals for all environmental impact reports and statements of environmental objectives, regardless of classification. The Minister will now need to undertake a 30 business day public consultation on all of these reports and statements.
  • The public consultation to be undertaken by the Minister as part of the approval process will need to remain open for 30 business days and the Minister will have discretion to not publish public submissions which are irrelevant or offensive.
  • The classifications of regulated activities made by the Minister will no longer be published on the environmental register. Instead the register will become a platform for the publication of all prescribed reports provided by a licensee in relation to a statement of environmental objectives.
  • The Minister will now have explicit powers to issue directions to existing or former licensees in relation to preventing or minimising breaches with the relevant statement of environmental objectives and rehabilitating land as required.

Consultation on the proposed amendments is open until 14 November 2022. You can have your say on these amendments here.

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