2008 Environmental Update by Sue Slater, RLMS, 7 Aug 2010

This paper provides a brief update on some of the key environmental issues that arose during 2008.

The key Commonwealth environmental legislation is the Environment Protection and Biodiversity Conversa tion Act 1999 (EPBC); activities under this act are summarised here, including the mandatory review of the act, the referrals for the 2008 calendar year, the status of bilateral agreements with the states and territories and the strategic assessment under the act of a common-user LNG hub. EPBC referrals were overwhelmingly related to LNG, and environmental aspects of these projects for 2008 are summarised.

The environmental status of selected projects is re viewed. All information has been sourced from publicly available information, including various government department websites and company websites.

Environmental debate in the wider community has been focused on climate change; new federal government policies and legislation reinforce that focus. The impact on environmental assessments for our industry is likely to be significant, including expanded reporting obligations. The framework of the government's climate change policy is discussed, and relevant carbon capture and storage projects summarised.

A brief summary of policy development in other envi ronmental areas is covered. Streamlining of regulation is a key issue, with acknowledgement by government that the cost of meeting unnecessary regulatory burdens is particularly challenging in the present economic climate.

Environment Protection and Biodiversity Conservation Act

Review of legislation

On 31 October 2008 the Minister for the Environment, Heritage and the Arts commissioned an independent review of the EPBC. Section 522A of the act requires that it be reviewed every 10 years from commencement. This is the first review since its commencement. The period for making written submissions closed on 19 December 2008, with more than 200 written submissions received. The second stage of the public input process will involve further consultation with stakeholders, due to occur in February to May 2009. Following consultation, an interim report will be released in June 2009. The review should be completed by October 2009.

EPBC Referrals

A total of 84 referrals under the EPBC Act were made during the 2008 calendar year for petroleum and gas related projects. These are shown in Table 1. These figures represent a significant increase for seismic, development and pipeline referrals compared to 2007, but a decrease in drilling referrals (Baird & Lorkin, 2008).

Table 1. EPBC Referrals for 2008.
 SeismicDrillingDevelopmentPipelines
No of referrals submitted4942110
No of controlled actions10162
No of not controlled actions0045
No of not controlled - particular manner36401
Withdrawn11002
Outcome not determined1010

The number of these referrals that were directly related to proposed LNG developments numbers 20 (development and pipelines). Of these all but three were concerned with various Queensland LNG projects (note that multiple re ferrals were made for some projects).

Bilateral agreements

On 2 July 2008, South Australia signed a bilateral agree ment under section 45 of the EPBC Act for a period of 30 years, with five yearly review periods. South Australia joins Queensland (2004), Western Australia (amended 2007), Tasmania (2005), New South Wales (2007) and the Northern Territory (2007) in having a bilateral agreement in place. A key function of bilateral agreements is to reduce duplication of environmental assessment and regulation between the Commonwealth and the states and territories. A draft agreement between Victoria and the Commonwealth was open for public comment, with a deadline of 10 November 2008, and a draft agreement between the Australian Capi tal Territory and the Commonwealth was open for public comment with a deadline of 26 June 2008.

Strategic assessments

On 5 February 2008, the Commonwealth Environment Minister announced a strategic assessment of the West Kimberley region, under section 146 of the EPBC Act, to identify a site for a single common-user LNG hub for the Browse Basin and to assess the cultural and environmental values of the Kimberley and formally identify its national and international heritage values. Draft terms of reference for the strategic assessment and site selection criteria for an LNG hub were released for public comment between 23 February and 25 March 2008. The Final Site Evaluation Report was released by the Northern Development Taskforce in December 2008. This report recommended the James Price Point coastal area as the preferred location for a Kimberley LNG processing precinct, with North Head as an alternative site for limited LNG processing development in the event that there are unforeseen technical limitations at James Price Point. Further Aboriginal heritage and geotechnical studies were recommended. An environmental management and monitoring plan developed as a key part of the Strategic Assessment Agreement will be assessed in accordance with the EPBC Act and the WA Environmental Protection Act 1986 (WA). In December 2008, the WA Environmental Protection Authority (EPA) said that Gourdon Bay, south of Broome, and James Price Point were the two sites where the environmental risks and impacts were most likely to be manageable.

Project Milestones for 2008 - Queensland LNG Projects

A number of LNG projects based on coal seam gas (CSG) have been announced in the last two years. There are seven projects at various stages of planning, although the status of two of the projects is uncertain following company takeovers. The general locations of these projects are shown in Fig. 1.

Sun LNG

Sun LNG was a collaborative project between Sun shine Gas Ltd and Japan's Sojitz Corporation to build a mid-scale LNG plant comprising an initial 500,000 t/pa with a further 500,000 t/pa in stage 2. The project included a 3.5 km pipeline from the Gladstone City Gas Gate. Final terms of reference were issued on 28 May 2008.

A voluntary Environmental Impact Statement (EIS) was lodged with the Queensland Environmental Protection Agency (now Department of Environment and Re source Management) in October 2008, to be assessed under the provisions of the Environmental Protection Act 1994 (Qld). Following the takeover of Sunshine Gas, initiated by Queensland Gas Company on 20 August 2008 and finalised on 8 December 2008, the project has been put on hold. The EIS was not released for public comment.

Gladstone LNG - Fisherman's Landing

Gladstone LNG Project - Fisherman's Landing proposes to develop a mid-scale LNG plant at Fisherman's Landing, producing up to 1.5 MMt/pa in stage 1. This project will use CSG from Arrow Energy Ltd, and the proponents include LNG Ltd and Shell.

Final terms of reference were agreed on 28 May 2008. The voluntary EIS was released for public comment and submissions were due by 7 November 2008. The assessment report under the Environmental Protection Act 1994 (Qld) was released on 14 April 2009, which completes the EIS process. Environmental approvals can progress subject to conditions in the assessment report and commitments made by the proponent.

Both of these projects were undergoing the EIS process for the plant separately from any upstream activities, including the sourcing of the CSG, the delivery pipeline, and modification of wharf-loading facilities.

GLNG

Santos announced its plans to develop a worldfirst major CSG to LNG operation in Gladstone in July 2007. On 16 July 2007, the project was declared a significant project for which an EIS under the State Development and Public Works Organisation Act 1971 (Qld) is required.

On 31 March 2008 and 14 April 2008, the five referrals made under the EPBC Act were determined to be a controlled action. The EIS process will be undertaken under a bilateral agreement.

Petronas took a 40% interest in GLNG in May 2008. The draft EIS was submitted 30 March 2009, and represents about 18 months of environmental investigations and reports covering an area from Roma to Curtis Island. This represents the first major integrated CSG to LNG project to submit its EIS.

The Queensland Government will examine the EIS against the terms of reference agreed for the project prior to the EIS becoming available for public comment. Unlike Sun LNG and Gladstone LNG, this EIS assesses the impacts of the following major components of the project:

  • CSG fields near Roma in central Queensland;
  • A transmission gas pipeline approximately 435 km connecting the Roma fields to Curtis Island;
  • The LNG liquefaction and export facility on Curtis Island;
  • Bridges, roads and service corridors to Curtis Island; and
  • Dredging in Gladstone Harbour.

Queensland Curtis LNG

Queensland Curtis LNG (QCLNG) was declared a significant project for which an EIS is required under the State Development and Public Works Organisation Act 1971 (Qld) on 4 July 2008. The proponents were BG International Ltd and Queensland Gas Company Ltd, now a whollyowned subsidiary of BG International Ltd.

On 15 September 2008, the referrals under the EPBC Act were determined to be a controlled action. The EIS process is continuing under a bilateral agreement. Comments on the draft terms of reference for the EIS closed on 12 December 2008. As with the GLNG project, the EIS is addressing the three principal components of the project including:

  • Expansion of CSG operations in the Surat Basin;
  • Development of a gas and water pipeline network of approximately 800 km; and
  • Development of the LNG processing and export facility on Curtis Island, incorporating a marine jetty with specialised LNG loading facilities and berths.

Australia Pacific LNG

In September 2008, Origin Energy Ltd announced that ConocoPhillips would invest in the joint development of a CSG to LNG project, using CSG from Origin's extensive reserves and resources, and the proven LNG technology of ConocoPhillips.

An initial advice statement was issued 27 March 2009. Australia Pacific LNG was declared a significant project for which an EIS is required under the State Development and Public Works Organisation Act 1971 (Qld) on 7 April 2009. The Commonwealth will determine whether the project is a controlled action pursuant to the EPBC Act.

The proponent is Australia Pacific LNG Ltd (owned equally by Origin Energy Ltd and ConocoPhillips), and the project comprises three key components:

  • Development of the CSG resources of the Walloon gas field development areas from Wallumbilla to Chinchilla and southeast to Millmerran;
  • Construction of a 400 km underground gas pipeline to the LNG plant at Gladstone; and
  • Development of the LNG processing and export facility on Curtis Island, including an export terminal containing specialised LNG loading facilities and berths.

Southern Cross LNG

Southern Cross LNG (LNG Impel) announced on May 14 2008 that it proposed to develop an open access LNG terminal at Gladstone, incorporating an open access gas pipeline of approximately 400 km. A site was allocated on Curtis Island in January 2008 following a 12-month review for a preferred site. In March 2009 the company re-scheduled its proposed start-up from 2013 to 2014, stating that it is biding its time until the local acquisitions and mergers settle.

Energy World LNG Abbot Point

Also during 2008, Energy World Corporation Ltd announced its plan to establish a mid-scale LNG plant at Abbot Point (north of Bowen), which includes the construction of a pipeline linking fields near Eromanga with Abbot Point.

Project Milestone for 2008 - Western LNG Projects

The general locations of these projects are shown in Fig. 1.

Gorgon

The Gorgon Joint Venture partners (Chevron, Exxon Mobil and Shell) announced an expanded scope consisting of three 5 MMt/y LNG trains. The environ mental assessment process for the expanded scope started in February 2008 following submission of a revision to the existing approval for two 5 MMt/y LNG trains to the WA EPA. The level of assessment was set at Public Environmental Review (PER), with an eight-week review period between 15 September and 10 November 2008.

The revised proposal was separately referred under the EPBC Act. It was determined that the assessment of Commonwealth matters associated with the revised pro posal will be undertaken by the WA Government under the terms of the bilateral agreement, and at the conclusion of the assessment both the Commonwealth and the WA Government would determine whether or not to approve the revised proposal and any conditions.

Ichthys

Inpex Browse Ltd lodged a referral under the EPBC Act in May 2008 encompassing the development of the offshore LNG and LPG processing facilities in the vicinity of the Ichthys gas field, a subsea pipeline from Ichthys to Darwin Harbour, an 8 km onshore pipeline, and onshore processing facilities at Blaydin Point in Darwin Harbour.

A decision that the proposal is a controlled action was made on 10 June 2008, and on 16 July 2008 the assessment decision was made for an EIS.

The previous proposal to locate production on the Maret Islands off the Kimberley coast had been undergoing an environmental approval process since 2006, but following a project facilitation agreement between the NT Government and Inpex in February 2008, Inpex announced in September 2008 that the Blaydin Point location would proceed as the preferred option.

Wheatstone

In March 2008 Chevron announced that it planned to develop its wholly-owned Wheatstone natural gas discovery as a new LNG project onshore. Appraisal drilling has been continuing. Phase 1 of the project will be the construc tion of two 5MMt/y trains and a 250 MMscf/d domestic gas plant.

A preferred site was announced in December 2008 after a screening and public consultation process considering a broad range of environmental, social and engineering factors. The WA Government has committed to reserving land at Ashburton North for Chevron to further investigate the feasibility of development.

Pluto

The Pluto LNG project received state and Commonwealth environmental approval in 2007, and began site prepara tion and construction of storage tanks in 2007. A number of required documents were submitted and/or approved during 2008, including:

  • A Greenhouse Gas Abatement Programme was submitted by Woodside in September 2007 to the WA Department of Environment and Conservation (DEC) as part of the conditions and commitments. This document was approved by DEC on 12 October 2008;
  • A preliminary de-commissioning plan was submitted in April 2008, with comments from DEC received in October 2008;
  • The Pluto LNG project annual audit programme submitted for DEC comment on 28 May 2008 was approved in June 2008;
  • The final dredge and spoil disposal management plan was approved by DEC on 20 March 2008;
  • The scope of baseline marine habitat survey was updated and re-submitted to DEC on 29 February 2008;
  • The marine treated wastewater discharge management plan was developed and submitted to DEC on 13 June 2008, resubmitted 17 July 2008, and is being finalised in consultation with DEC;
  • Revision nine of the sea turtle management plan was ap proved on 7 November 2008; and
  • The front-end engineering report was submitted to DEC on 31 April 2008.

Browse LNG

The Browse LNG development by Woodside consists of three gas fields located about 425 km off the coast of Broome. Development options have been under evaluation, and these have included consideration of environment, social, technical and economic studies, and consultation with traditional owners, conservation groups, business and industry organisations, community groups and government.

Two options are under consideration, the proposed state government LNG precinct in the James Price Point coastal area, or existing Woodside operated facilities near Karratha.

Woodside has started baseline studies for the proposed LNG precinct, undertaking a comprehensive environmental, social and health assessment of its proposed component of the precinct to be integrated with the government process to support a broader strategic assessment.

The Karratha option would involve the construction of a pipeline from the Browse gas fields to the existing Woodside operated facilities at Karratha in the Pilbara region, where the North West Shelf has been in production since 1984 and the Pluto LNG development is now under construction.

The Browse joint venture is undertaking environmental, cultural and social studies to evaluate this option, building on the extensive work already undertaken by Woodside.

Greater Sunrise

The Sunrise gas development lies in the Timor Sea north of Australia and includes the Sunrise and Troubadour fields. Woodside is the operator for the joint venture. Exploration, appraisal, marketing, technical and commercial feasibility studies have been undertaken since the fields were discov ered in the mid-1970s. Development of the Greater Sunrise fields, which straddle the boundary of the Joint Petroleum Development Area of the Timor Sea, was frozen in 2004.

Key agreements were ratified between Australia and Timor-Leste in February 2007, allowing the even spilt of royalties from Greater Sunrise. Development options in cluded a brownfields expansion of the Wickham Point Bayu Undan LNG plant at Darwin, a floating LNG plant, or development of an onshore plant in Timor-Leste.

In April 2009, Woodside announced that the Sunrise joint venture would not conduct further work on the Timor-Leste option, which, although closer to the field than Darwin, entailed the 184 km pipeline crossing a 3.3 km deep trench that would have technical and seismic risks.

Development is contingent on the project receiving legal, regulatory and fiscal certainty from the Timor-Leste and Australian governments.

Kimberley LNG Precinct

The WA EPA released a review of potential sites for multi-user LNG processing facilities in the Kimberley region in December 2008. The purpose of the report was to provide early environmental advice in relation to the state government's site evaluation for a multi-user LNG processing precinct, provided under section 16e of the Environmental Protection Act 1986 (WA).

This report concluded that North Head and the Anjo Peninsula were unsuitable locations for large-scale industrial development. The report considered that based on available data the Gourdon Bay site was the least environmentally constrained of the four options shortlisted. James Price Point was considered the least environ mentally constrained of the two Dampier Peninsula sites.

Once the preferred site has been selected, the EPA will undertake a formal site specific environmental assess ment of a strategic proposal under the Environmental Protection Act 1986. Such a strategic assessment would recommend conditions to be applied to specific future LNG proposals; if a future LNG proposal is declared a 'derived proposal' it would require no further environ mental assessment by the EPA.

On 16 April 2009, Woodside verbally agreed to the terms of a Heads of Agreement between the WA Government and the Kimberley Land Council on behalf of the traditional owners to establish an LNG precinct in the James Price Point area. The other Browse joint venturers are not parties to the Heads of Agreement.

Environmental groups such as the Wilderness Society are still questioning the environmental suitability of James Price Point for a major LNG development.

Project Milestones for 2008 - Other Projects

Reindeer

The Reindeer gas field is a joint venture between Santos and Apache Energy and is located in the Carnarvon Basin, offshore Western Australia. The gas will be produced by an unmanned facility, with a processing plant located onshore at Devil Creek to supply the domestic market through the Dampier-Bunbury Natural Gas Pipeline. A referral under the EPBC Act was lodged in December 2007. The referral decision that it was not a controlled action provided it was undertaken in a particular manner was made in April 2008. The conditions were:

  • A marine fauna observer(s) must be employed during 1 November to 31 March within 1.5 km of Forty Mile Beach to identify turtle nesting behaviour, and if turtles were nesting then external lighting of vessels must be minimised to that required by maritime navigation, and safety of deck operations and external lighting of onshore construction equipment must be minimised to that required by safety of operations; and
  • Part A Standard Management Procedures of the EPBC Act Policy Statement 2.1 using the 1km low power zone must be implemented during vertical seismic profiling operations between 20 July and 1 October.

Project Milestones for 2008 - Pipelines

This section is intended to highlight only those pipe line projects for which environmental decisions or reports were made during 2008; it is not intended to represent a complete discussion of pipeline activity during 2008. A summary of such activity is in Mizzi & Mewett (2008). The general locations of these projects are shown in Fig. 2.

QSN underground gas pipeline

Epic Energy Queensland proposed in 2007 to construct and operate an underground gas pipeline from Ballera in southwest Queensland to Moomba in northeast South Australia, enabling CSG to be supplied to southern states. A referral under the EPBC Act was lodged on 22 February 2008, and the decision on 27 March 2008 was that it was not a controlled action provided it was undertaken in a particular manner. The conditions were related to the potential impact on wetlands of international importance. This pipeline has now been commissioned and commercial gas flows commenced on 13 January 2009.

Stage 3 Expansion southwest Queensland pipeline

In July 2008 Epic Energy announced that a front-end engineering and design (FEED) study would begin on the stage three expansion of the South West Queensland Pipeline. FEED was expected to be completed by the end of 2008. In conjunction with the FEED study, Epic planned to start the process of obtaining the necessary approvals. At the time of writing, stage 3 FEED was completed, and expansion is dependent upon finalisation of gas transportation contracts.

Queensland-Hunter gas pipeline

A high pressure underground gas pipeline is proposed to be constructed from the Wallumbilla gas hub in southern central Queensland to Newcastle, New South Wales.

A referral under the EPBC Act was lodged on 1 De cember 2008, and on 23 December 2008 the decision was made that the action was not controlled and required no further assessment or approval under Commonwealth legislation. Approval for the New South Wales portion of the pipeline was given under the Environmental Planning and Assessment Act 1979 (NSW) on 11 February 2009. Approval for the Queensland portion of the pipeline was received in 2007.

Pipelines to Gladstone

A number of pipelines from south Queensland to Glad stone are proposed as part of the large CSG to LNG projects already discussed. The Queensland Curtis LNG Project Pipeline Network was assessed as being a controlled action on 15 September 2008, likely to have an impact on world heritage properties, national heritage places, listed threatened species and communities, and listed migratory species.

Similarly, the pipeline from the Roma area to Curtis Island, proposed by Santos as part of GLNG project, was referred on 13 March 2008 and designated a controlled action on 14 April 2008 for the same reasons.

Southern Cross LNG is proposing an open access pipeline of about 400 km from the CSG fields in central and southern Queensland to the LNG facility.

The Australian Pacific LNG Project incorporates an approximately 400 km gas pipeline from the northern Surat Basin, including an option to deliver gas from the existing Spring Gully and Fairview fields in the Bowen Basin, and is included in the initial advice statement dated March 2009.

Arrow has proposed the Surat Gladstone Pipeline (SGP), and as of late 2008 this pipeline was under in vestigation, with a Petroleum Survey Licence under application.

In November 2008 the Queensland Government awarded the tender for the Surat Basin to Gladstone Multi-user Linear Infrastructure and Services Corridor Investigation, due for completion in December 2008.

It is unlikely that four or five separate pipelines will progress to construction, especially in discrete corridors. Some rationalisation is considered likely, and in fact may be required by a government that is besieged by landowner/land access issues.

Berwyndale to Wallumbilla gas pipeline (BWP)

A referral under the EPBC Act was made on 29 July 2008 by AGL Energy to construct and operate a 115 km transmission line from the Berwyndale CSG fields, operated by Queensland Gas Company, to the gas hub at Wallumbilla.

The action was deemed to be not a controlled action on 20 August 2008. Construction began in September 2008, following a route selection process that involved mini mising the environmental impact by avoiding stands of remnant brigalow.

During construction more than 900 animals were re moved from the trench for their protection, including listed species under the Nature Conservation Act 1992 (Qld) and regionally significant species. Information collected from the fauna programme will be fed back into future projects. Commissioning was completed in February 2009.

Narrabri CSG utilisation project

Eastern Star Gas has proposed the Narrabri project, which comprises the construction and operation of gas-gathering systems at the Bibblewindi and Bohena CSG pilots, the construction and operation of gas compression facilities at those pilots, the construction of an approximately 32 km buried gas-flow line between the Bibblewindi and Bohena pilots, and the Wilga Park Power Sta tion, and the staged expansion and operation of the Wilga Park baseload gasfired power station from the present 4 MW to 40 MW.

The project was declared a major project under the Environmental Planning and Assessment Act 1979 (NSW) in April 2007, following an application and preliminary assessment report in February 2007.

Requirements of the Director-General for the environmental assessment were issued in June 2007 and the environmental assessment was lodged in February 2008. Following public exhibition, the project received approval under the Environmental Planning and Assessment Act 1979 (NSW) on 2 December 2008 with a number of conditions. At the time of writing, the pipeline construction had been completed and commissioning was underway.

Moonie to Brisbane oil pipeline

Santos announced on 24 April 2008 that the Moonie-Brisbane oil pipeline, closed since July 2007, would not be re-opened. Incidents at Cecil Plains on the Darling Downs in 2007 and in the Brisbane suburbs of Algester in 2007, and Carindale in 2008, follow the spill at Lytton in 2003.

Decommissioning of the line has commenced with oil removal which is still underway at time of writing. Three locations affected by oil leaks are undergoing re mediation, consisting of removal of contaminated soil and replacement with clean fill followed by restoration and planting.

Details of decommissioning are not yet finalised with the Queensland Government.

This will represent the first significant decommissioning of a major pipeline in Queensland. It is an opportunity to set a benchmark for decommissioning in Queensland.

Beyond the Kyoto Protocol

On 3 December 2007, Prime Minister Kevin Rudd signed the Kyoto Protocol and it came into effect on 11 March 2008. This committed Australia to targets for reducing greenhouse gas emissions, with the first five-year commitment period ending in 2012. Under the protocol, Australia's target is 108% of its 1990 emissions. The targets cover emissions from the six main greenhouse gases: carbon di oxide, methane, nitrous oxide, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride. Australia has set a target to reduce greenhouse gas emissions by 60% on 2000 levels by 2050.

The federal government's climate change policy is based on three fundamentals: reducing carbon pollution emis sions, adapting to climate change that cannot be avoided, and helping to shape a global solution. The Carbon Pollution Reduction Scheme (CPRS) is the primary mechanism through which emissions reduction objectives will be made.

The other major elements of the government's mitiga tion strategy are the expanded renewable energy target; carbon capture and storage, and energy efficiency. The first three of these strategies are briefly discussed below.

Carbon Pollution Reduction Scheme

The National Greenhouse and Energy Reporting Act 2007 was passed on 29 September 2007, establishing a mandatory reporting system for corporate greenhouse gas emissions and energy production and consumption. The first reporting period began on 1 July 2008; data reports are due by 31 October 2009.

Supporting subordinate legislation, including the National Greenhouse and Energy Reporting Regulations 2008 and the National Greenhouse and Energy Report ing (Measurement) Determination 2008, was finalised in 2008. Further subordinate legislation on external audits is under development.

The Green Paper on the CPRS was released in July 2008. The mechanism by which the objective of carbon pollution reduction will be achieved is emissions trading. Consultation was on the design of the scheme, rather than on the carbon pollu tion target. The White Paper Carbon Pollution Reduction Scheme: Australia's Low Pollution Future was released on 15 December 2008. An exposure draft of the CPRS legislation was released on 10 March 2009.

Renewable Energy Target (RET)

The federal government plans to establish an expanded renewable energy target that will increase the existing Mandatory Renewable Energy Target (9,500 GWh) by more than four times to 45,000 GWh in 2020. Exposure draft leg islation on the expanded renewable energy target scheme has been released for public comment, and submissions closed on 20 February 2009.

Gas has been widely lauded as the transitional fuel, as electricity providers move from coal-fired, baseload generation to alternative renewable generation, or until CCS becomes a commercial reality thereby making low emission coal-fired power generation a reality.

An increase in the demand for gas has been postulated as a back-up fuel, at least in the intermediate term, owing to the intermittent nature of renewable energy generation. Gas provides an opportunity to reduce emissions at the lowest cost until such time as renewable energy becomes more efficient and affordable. However, the expanded renewable target in conjunction with the CPRS could push electricity generators away from gas, and reduce the expected demand for natural gas as generators delay the move away from coal.

The Queensland Government's gas incentives under the Cleaner Energy Strategy (Queensland Government, 2000) and the ClimateSmart 2050 Strategy (Queensland Government, 2007), which mandated 13% of grid-connected power generation by 2005 be gas-fired, increased to 15% by 2010 and 18% by 2020, have been significant contributors to the increase in booked CSG re serves in Queensland and the development of gas-fired electricity generation capacity.

A report by Environment Victoria also concluded that the increased use of gas as early as possible is an effec tive short-term means to deliver significant reductions in greenhouse gas emissions, recommending that Victoria increase its gas use by 30%.

The inclusion of a natural gas target in the RET, in a similar way to the Queensland strategy, would facilitate the reduction of emissions at a lower cost than can be achieved through renewable energy alone.

Carbon Capture and Storage

In September 2008 the Prime Minister announced that the federal government would launch a global CCS initiative designed to take advan tage of Australia's unique opportunities for large-scale sequestration and its potential to demonstrate the techni cal and commercial feasibility of CCS. A $100 MM global institute will be established to work cooperatively to speed up the development of CCS technology. Australia is offering to host the institute.

Development of CCS legislation

In 2005 the Ministerial Council on Mineral and Pe troleum Resources (MCMPR) endorsed the Regulatory Guiding Principles for Carbon Capture and Geological Storage. The aim of these principles is to achieve national consistency with respect to CCS activities in each Australian jurisdiction. Six key issues were identified as being fundamental to a regulatory framework for CCS:

  • Assessment and approvals processes;
  • Access and property rights;
  • Transport issues;
  • Monitoring and verification;
  • Liability and post-closure responsibilities; and
  • Financial issues.

Amendments to the Commonwealth Offshore Petroleum Act 2006 have been made to provide access and property rights for CCS in Commonwealth waters, and aims to provide project developers with certainty to commit to major low emission energy projects for which CCS is a key component. The regulatory framework to ensure that projects meet health, safety and environmental requirements is under development.

The legislation incorporates a licensing framework anal ogous to the existing regime for petroleum activities. The bill was introduced to the House of Representatives on 18 June 2008. Following amendments, it was passed through the Lower House on 18 September 2008. The bill was then introduced to the Senate on 24 September 2008; it com menced on 21 November 2008, as the Offshore Petroleum Amendment (Greenhouse Gas Storage) Act 2009.

The first offshore acreage release was announced on 27 March 2009 for 10 areas in the Gippsland Basin, Torquay Sub-basin, Otway Basin, Vlaming Sub-basin and Petrel Sub-basin. These areas are shown in Fig. 3.

In Victoria, the Greenhouse Gas and Geological Se questration Act 2008 (Vic) was passed on 5 November 2008. The main provisions of the act are yet to come into effect, but will do so no later than 1 January 2010. The system of greenhouse gas titles is based on the present Victorian onshore petroleum titles. While the act states that the Minister must not allow certain greenhouse gas operations where those operations present a significant risk of contaminating or sterilising other resources in the permit area, the act includes an exception that allows for priority to be given to greenhouse gas storage operations over petroleum operations where this is in the public interest. There is some uncertainty in relation to where long-term liability will fall.

In Queensland, the Greenhouse Gas Storage Act 2009 (Qld) was assented to on 23 February 2009 following development and public comment during 2008. This provides for overlapping tenure in a similar manner to that developed for overlapping coal mining and petroleum tenure. Regulations are still being developed. A payment for residual risks may be required under environmental legislation on surrender of any greenhouse gas lease to allow for the continuation of monitoring and verification that the greenhouse gas storage is taking place as predicted, for repairs to the infrastructure for any greenhouse gas well, and operation of pumping equipment.

A discussion on Australia's CCS projects follows. Generalised locations of these projects are shown on Fig. 4.

Moomba Carbon Storage Project, South Australia

The Moomba Carbon Storage Project aims to establish a large-scale carbon storage hub at Moomba by injecting CO2 into depleted and/or depleting oil and gas reservoirs in the Cooper Basin. Phase 1 is intended to demonstrate the technical and economic feasibility of storing CO2 in depleted oil and gas fields in the Cooper Basin, and will involve the capture of all CO2 separated as part of the gas processing operations at Moomba, transportation and injection. This project was suspended in March 2009, with the proponent citing low prices for permits to release CO2 as making the project unviable.

Otway Project, Victoria

The CO2CRC is undertaking the Otway Project in southwest Victoria to demonstrate that CCS is both techni cally feasible and an environmentally safe way to reduce Australia's greenhouse gas emissions. The CO2 storage conditions were approved by the Victorian Environment Protection Authority under a provision for research de velopment and demonstration.

Conditions of approval were related to key perfor mance indicators within each phase of development (pre-injection, injection, post-injection, post-closure and long-term). The project is now in the injection phase (scheduled March 2008 to June 2009). The CO2 is being injected into the Waarre C depleted gas field. Comprehensive monitoring aims to confirm the effectiveness and safety of the site for CO2 storage (assurance monitoring), and to understand the behaviour of the injected CO2 with the depleted gas field (integrity monitoring).

The Otway Project has also been recognised by the Carbon Sequestration Leadership Forum (CSLF) since 2007.

Monash Energy Project, Victoria

Shell and Anglo American have combined to form the Monash Energy Project, which at its core involves a large scale commercial plant in the La Trobe Valley in Victoria that will dry and gasify the brown coal for conversion into transport fuels. CO2 will be captured and geologically stored.

The Monash Energy Project plans to use pre-combustion capture and has identified the deep saline aquifers in the offshore Gippsland Basin as a probable storage site pending legislation and regulatory regimes.

Callide oxyfuel project, Queensland

This project by CS Energy, funded through the Low Emissions Technology Demonstration Fund, aims to prove how oxyfuel combustion and CO2 capture and geosequestration can be combined to achieve near zero greenhouse gas emissions from coal-fired electricity generation. The Callide Oxyfuel Project is assessing potential geoseques tration sites to the west of Biloela, and plans to select a location in 2009.

ZeroGen project, Queensland

ZeroGen Pty Ltd is a wholly Queensland Government-owned company proposing to build and operate a demonstration plant integrating a coal gasification power plant with the capture and storage of CO2 emissions to generate low-emissions baseload electricity.

The ZeroGen Clean Coal Power Demonstration Project was declared a significant project for which an EIS was required in accordance with the State Development and Public Works Organisation Act 1971 on 24 July 2006. It was determined to be a controlled action under the EPBC Act in September 2006. Final terms of reference were released on 22 December 2006.

On 20 March 2008, ZeroGen announced the re-configu ration of the project into two stages. Stage 1 will involve an 80 MW net coal gasification plant located at Stanwell in central Queensland. CO2 emissions will be captured at the site and transported about 220 km for injection and storage in the northern Denison Trough. The plant will capture up to 75% of CO2 emissions which will be trans ported by truck for sequestration.

Stage 2 will be developed concurrently with stage 1, and will involve the deployment of a large-scale 300 MW net coal gasification plant with CCS facilities. The location for stage 2 will be investigated in a pre-feasibility study. The EIS for stage 1 is still being completed.

Gorgon

An integral part of the Gorgon project discussed earlier is the planned CO2 sequestration, which when implemented will be potentially one of the largest sequestration projects in the world.

CO2 will be captured from the gas stream, compressed, dehydrated and transported to the injection site. It is planned to inject CO2 into the Dupuy Formation, a deep saline aquifer beneath Barrow Island.

This project has funding under the Low Emissions Technology Demonstration Fund. The injection system originally comprised an above-ground pipeline of about 5 km, and an estimated seven injection wells directionally drilled from two to three surface locations. The revised proposal to increase the number of LNG trains to three increases the CO2 injection system to an approximately 10 km pipeline and about 8-9 injection wells directionally drilled from 3-4 surface locations.

Other Legislation and Policy Developments

Queensland

In response to the planned increase in CSG production, and by default an increase in the production of associated water, the Queensland Coal Seam Gas Water Management Policy was introduced in October 2008. Key features of this policy include:

  • Discontinuing the use of evaporation ponds as a primary means of disposal of CSG water, and remediation of existing evaporation ponds within three years; and
  • CSG producers will be responsible for treating and disposing of CSG water. Unless there is an acceptable direct use of the untreated water, or the direct injection of the water, the CSG water must be treated to an appropriate standard before disposal or supply to other users.

The policy also incorporates the following changes:

  • Ponds necessary for water aggregation and the storage of brine from treatment facilities must be fully lined to an appropriate standard;
  • An Associated Coal Seam Gas Water Management Plan is to be incorporated into the Environmental Manage ment Plan (EMP); and
  • Water which is in excess to that which can be directly injected or beneficially used is to be aggregated for disposal.

There is more work required to determine policy related to disposal and aggregation of CSG water and a discussion paper is in preparation.

A review of the Environmental Protection Regulation resulted in new regulations commencing on 1 January 2009 (Environmental Protection Regulation 2008 [Qld]). These regulations have significantly changed the way petroleum activities are administered under the Environmental Protection Act 1994 (Qld), with significantly increased fees and changes to environmentally relevant activities.

The Queensland Government Environmental Offsets Policy (QGEOP) came into effect in July 2008. This policy provides a framework for the consistent use of environ mental offsets in Queensland. The Queensland Government has developed a draft policy on biodiversity offsets, for which consultation was undertaken from late-2008. This proposed policy on biodiversity offsets will be a specific-issue offsets policy under the framework of the QGEOP.

The Land Access Working Group was established in Queensland to foster improved relationships between explorers, rural landholders and the government. During October and November 2008 this group held a number of public forums around the state.

Additionally, the Queensland Department of Mines and Energy (now the Department of Employment, Economic Development and Innovation) appointed a community liaison officer to work with stakeholders in the Surat Basin, where the activity level has rapidly increased as a consequence of CSG exploration and production and underground coal gasification activities.

Western Australia

Following a review of processes in 2008, WA announced key reforms to its environmental assessment process in March 2009. The review identified op portunities to deliver better environmental protection and to improve the efficiency, transparency and consistency of the Environmental Impact Assessment (EIA) process. Identifying and understanding environmental risks and impacts, including cumulative impacts on important ecosystems and community health, was becoming increasingly challenging. Key reforms recommended by the EPA include:

  • A new risk-based approach to EIA that will focus on the environmental risks and impacts that matter, and deliver greater consistency and certainty in decision making;
  • Approvals that are focused on environmental outcomes rather than project design details, with conditions that are clear, relevant, reasonable and auditable;
  • Timelines for key steps in the EIA process, with transparent reporting against timelines, analysis of any delays, and recommendations for improvement;
  • Increased parallel processing with other assessment and approval processes;
  • Increased use of strategic environmental assessment to deliver better environmental outcomes and expedited assessment for subsequent development proposals;
  • Improved project management with clear accountability; and
  • A shared government-industry environmental data system to allow for more informed project planning by industry, better decision-making by government and reduced duplication of effort and expenditure.

New South Wales

The Department of Environment and Climate Change and the Department of Primary Industries have released a discussion paper for public comment: A new Biodiversity Strategy for NSW. The document was on public exhibition between 10 November 2008 and 13 February 2009. The discussion paper covers a wide range of issues associated with terrestrial, aquatic, and marine biodiversity.

The new strategy will promote the integration of bio diversity conservation into decision-making at all government levels and across the whole landscape. A series of regional conservation initiatives is proposed to integrate and align the programmes run by the state government, local governments, and the non-government sector.

The NSW Biodiversity Banking and Offsets Scheme (BioBanking) started on 1 July 2008. This market-based scheme aims to reduce cumulative biodiversity losses caused by population growth and development pressures around urban areas, along the coast, and at major inland development sites. It provides a framework for offsetting the impact on biodiversity from development at one site through management at another site, provided that overall the biodiversity values are improved or at least maintained. This is a voluntary programme.

South Australia

Amendments to the Petroleum and Geothermal Energy Act 2000 are targeted for mid-2009 introduction, following the preparation of the Petroleum (Miscellaneous) Amendment Bill 2008 and its release for public consultation in July 2008. Environmental amendments include a change to the definition of 'regulated activity', such that any activity that could reasonably be conducted by a member of the public on any area of public land is excluded; for example, visual reconnaissance and non-destructive measurements from public access tracks. Additional amendments to regulations include assessments of cumulative effects on relevant land and the inclusion of the EPA as a separate government agency for consultations during the approval process for Statements of Environmental Objectives (SEO).

Tasmania

Legislation to establish an EPA for Tasmania was passed in November 2007 and commenced on 1 July 2008 (Environmental Man agement and Pollution Control Amendment (Environment Protection Authority) Act 2007).

Northern Territory

The NT Government released a discussion paper on climate change issues on 5 June 2008. Submissions closed on 4 July 2008.

APPEA Code of Environmental Practice

In October 2008 APPEA released its updated Code of Environmental Practice. The code reflects a trend away from prescriptive legislation to objective-based legislation. The code includes four basic recommendations:

  • To assess the risks to, and impacts on, the environment as an integral part of the planning process;
  • To reduce the impact of operations on the environment to as low as reasonably practicable and to an acceptable level by using the best available technology and management;
  • To consult with stakeholders; and
  • To develop and maintain a corporate culture of environmental awareness and commitment that supports the necessary management practices and their continuous improvement.

Reviewing the Regulatory Framework

The draft report, Review of Regulatory Burden on the Upstream Petroleum (Oil and Gas) Sector, was released on 4 December 2008. The review concluded that the existing regulatory framework and its administration imposed significant unnecessary burdens on the upstream petroleum sector and resulted in significant delay in project approvals. With particular reference to environment and heritage six draft recommendations were made:

  • The operation of the EPBC Act could be improved by ensuring that information from previous assessments and relevant scientific studies on significant environmental risks be made available to report with new acreage releases and to proponents seeking approval for new projects. Bilateral assessment and approval agreements between the Commonwealth and designated authorities would assist in avoiding duplication in environmental submissions and streamline approvals for routine activities. Strategic assessments should be conducted early and according to clear timeframes, and should not prevent proponents from pursuing approvals for existing projects;
  • The Ministerial Council on Mineral and Petroleum Resources (MCMPR) should explore enhancing the effectiveness and transparency of the Environmental Assessors Forum to further improve the consistency of offshore environmental approvals. Consolidated and consistent environmental guidelines for cross-jurisdictional activities such as offshore pipelines should be developed;
  • The MCMPR should, through the Environmental Assessors Forum, review the range of onshore environmental regulations with a view to identifying scope for streamlining;
  • Governments should actively manage and release information obtained by proponents as a condition of environmental approvals to enhance the stock of information and streamline future approvals;
  • A requirement for determination under indigenous heritage acts to consider decisions made previously by other jurisdictions for that site; and
  • Transparent policy principles for environmental offsets should be introduced by all governments - especially the principle that offsets where practicable should be related to the damage being offset. Where this is not possible, other transparent mechanisms should be explored, which may include the use of an offset fund that could target high priority projects in the relevant jurisdiction.

Projects that seek to commercialise offshore resources and process those resources onshore often cross three or more jurisdictional boundaries. These projects are also some of the most expensive and technically complex to bring to completion. Because historically most regula tions are established for single jurisdictions, there can be repetitive regulatory requirements in each jurisdiction which result in additional costs and additional delays in gaining approval but do not result in a better environmental outcome.

The goals of environmental regulation should be, in their simplest form:

  • To ensure that environmental harm arising from the authorised activities is minimised to all practical purposes;
  • To ensure that the environmental harm that occurs as a result of the activities is properly managed, monitored and reported; and
  • To ensure that rehabilitation of areas subject to environmental harm is undertaken within practical timeframes and monitored accordingly.

Above all else, regulation should be outcomebased, not process driven. Environmental regulators need to focus on major project development where the risks to the environment are potentially more significant, rather than over-manage and regulate routine activities that should be able to conform to codes or other standards. Environmental conditions should be clear, relevant, reasonable and auditable.

References

AUSTRALIA PACIFIC LNG, 2009 - Initial Advice Statement Australia Pacific LNG Project. Origin Energy and ConocoPhillips, March.

AUSTRALIAN PETROLEUM PRODUCTION AND EXPLORATION ASSOCIATION, 2008 - Code of Environmental Practice, APPEA Canberra.

ENVIRONMENT VICTORIA, 2008 - Turning it around: climate solutions for Victoria. The Nous Group, November.

GAS TODAY, 2009 - Berwyndale to Wallumbilla Pipeline leaves positive environmental legacy. Gas Today Australia, Issue 7, February.

BAIRD, G AND LORKIN, M, 2008 - Environmental Update for 2007. APPEA Journal, pp413-21

MIZZI. S AND MEWETT, L, 2008 and 2008 - The year in review. The Australian Pipeliner No. 136, October, pp194-202.

NEW SOUTH WALES GOVERNMENT, 2008 - A new biodiversity Strategy for New South Wales: discussion paper. Department of Environment and Climate Change, Department of Primary Industries. October.

NORTHERN TERRITORY GOVERNMENT, 2008 - Discussion Paper on NT Climate Change Issues. Department of the Chief Minister, June.

QUEENSLAND GOVERNMENT, 2000 - Queensland Energy Policy - A cleaner energy strategy. Department of Premier and Cabinet.

QUEENSLAND GOVERNMENT, 2007 - ClimateSmart 2050. Queensland climate change strategy 2007: a low carbon future. Department of Premier and Cabinet.

PRODUCTIVITY COMMISSION, 2008 - Review of Regulatory Burden on the Upstream Petroleum (Oil and Gas) Sector, Draft Research Report, Melbourne, Commonwealth of Australia.

 

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