The introduced bills call for two new authorities: a National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) and a National Offshore Petroleum Titles Administrator (NOPTA).

Background

In 2008, the Council of Australian Governments asked the Productivity Commission to examine Australia’s regulatory framework for upstream petroleum projects involving more than one jurisdiction, and to identify ways to reduce unnecessary regulatory burdens on the sector.

The existing framework for the upstream petroleum industry has been shaped by Australia’s federal system of government, with both states and the Commonwealth seeking to exercise regulatory control over Australia’s coastal waters.

In 2009, the Productivity Commission released its report Review of Regulatory Burden on the Upstream Petroleum (Oil & Gas) Sector, which found that the existing regulatory regime imposed significant unnecessary costs from delays and uncertainties in obtaining approvals, duplication of compliance requirements, and inconsistent administration of regulatory processes.

“Currently, duplication and overlap, and inconsistent administration of the 22 petroleum and pipeline laws and more than 150 statutes governing upstream petroleum activities impose significant unnecessary burdens on the sector,” the report stated.

The need for change

The Productivity Commission recommended, among other changes, the establishment of a new national offshore petroleum regulator to undertake resource management, pipeline and environmental regulation in all Commonwealth, State and Territory waters (including islands) to “cut through regulatory duplication and overlap”.

The implementation of a single national regulator has been vigorously supported by Mr Ferguson. In a recent interview conducted with Gas Today, Mr Ferguson said “One of the big issues I am working on at the moment is a single national regulator in the offshore oil and gas sector. “Effectively three independent reports have strongly recommended a single national regulator, as do the reports out of the Macondo incident in the Gulf of Mexico.

“The community’s expectation of the industry following the Montara and Macondo incidents is higher. They expect the Commonwealth to deliver a stronger single national regulator, and I think that is a very important down payment on the right of this industry to continue operating in Australian waters,” said Mr Ferguson.

The move is also supported by the Maritime Union of Australia (MUA). MUA Deputy National Secretary Mick Doleman said “Dual jurisdictional involvement in safety in the one industry is never ideal.

A single national regulator covering the entire jurisdiction is the most efficient outcome, and provides for better resourcing and better regulation of offshore workplace safety. “Uncertainty will exist as long as there are multiple regulatory regimes – for both operators and the workforce. We believe the proposed new regulator, NOPSEMA, should be able to regulate Occupational Health and Safety for all offshore workers.

The new system

The Department of Resources and Energy has said that the revised reform model involves a single, independent regulator of safety, environment plans and day-to-day operations of petroleum, mining and greenhouse gas storage activities in Commonwealth waters and a National Offshore Petroleum Titles Administrator (NOPTA) within the Commonwealth Department of Resources, Energy and Tourism.

Under the new framework NOPTA will take over the administration of titles while preserving the role of each state and the Northern Territory in decision making on key petroleum projects that could impact the individual state or territory.

The proposed NOPSEMA will assume the functions currently carried out by the existing National Offshore Petroleum Safety Authority’s (NOPSA) and its functions will be increased to oversee operations from exploration through to decommissioning.