The Government has recently introduced a package of legislation for the purpose of supporting the development of an offshore electricity sector, comprised of:
The Bills will establish a regulatory framework to enable the construction, installation, commissioning, operation, maintenance, and decommissioning of offshore electricity infrastructure in the Commonwealth offshore area.
This Flagpost focuses on the provisions of the Consequential Amendments Bill, noting that the Library has previously prepared a Bills Digest on the OEI Bill and the Regulatory Levies Bill. Broadly, the Consequential Amendments Bill clarifies how the new framework regulating offshore electricity infrastructure activities is intended to operate alongside the existing regime for regulating offshore petroleum and greenhouse gas (GHG) activities.
The OPGGS Act
The Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) currently outlines the legal framework for exploration and recovery of petroleum and GHG storage activities in Commonwealth waters.
The OPGGS Act also establishes the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). NOPSEMA is an independent regulator and has functions relating to occupational health and safety (OHS) of offshore petroleum facilities and GHG storage activities, as well as structural integrity of facilities, wells and well-related equipment and environmental management.
Expansion of the role and functions of NOPSEMA
Part 2 of Chapter 5 of the OIE Bill expands the functions and powers of NOPSEMA by appointing it as the Offshore Infrastructure Regulator, with responsibilities for overseeing the offshore electricity infrastructure industry.
In its submission to the Senate Environment and Communications Legislation Committee’s inquiry into the OEI Bill and Regulatory Levies Bill (Committee inquiry), NOPSEMA stated that this expansion:
…leverages the Authority's existing expertise and experience in the regulation of large scale, technically complex offshore energy infrastructure activities. This is consistent with the approach adopted in leading international jurisdictions where analogous regulators have had their functions extended to the emerging offshore electricity sector (p. 3).
Part 1 of the Consequential Amendments Bill amends the OPGGS Act to clarify NOPSEMA’s new dual role in regulating petroleum and gas activities under the OPGGS Act and in regulating offshore electricity infrastructure activities.
Specifically, the proposed amendments:
- clarify that a reference to the powers and functions of NOPSEMA with respect to regulating petroleum and gas activities does not include a reference to any powers and functions of NOPSEMA in its role as the Offshore Infrastructure Regulator (without limiting NOPSEMA’s ability in its role as Offshore Infrastructure Regulator to undertake its ordinary powers such as entering into contracts or leasing arrangements)
- ensure that the Minister for Industry, Energy and Emissions Reduction may determine that the Chief Executive Officer of NOPSEMA has a material personal interest that could conflict with their duties in NOPSEMA’s capacity as the Offshore Infrastructure Regulator and take appropriate action
- provide that NOPSEMA’s corporate plan and annual report deal with the activities of NOPSEMA in its role as the Offshore Infrastructure Regulator separately from other activities of NOPSEMA under the OPGGS Act and
- ensure that money provided to NOPSEMA by the Commonwealth for the purposes of its functions in regulating petroleum and gas activities under the OPGGS Act is only used for those purposes and not used for regulating offshore electricity infrastructures activities and vice-versa.
Interaction with the operation of the Environment Protection and Biodiversity Conservation Act 1999
Part 2 of the Consequential Amendments Bill amends a number of Commonwealth Acts to clarify how the new offshore electricity infrastructure framework is intended to interact with existing frameworks.
Item 23 of the Consequential Amendments Bill clarifies that a decision of the Commonwealth to grant a governmental authorisation (for example, grant a licence) under the OEI Act is not an action for the purposes of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). An action, as defined by section 523 of the EPBC Act, includes a project, development, undertaking, activity or series of activities, and an alteration of any of the aforementioned things.
However, project proponents seeking to carry out offshore infrastructure activities in the Commonwealth marine area may still need to gain an approval under the current assessment and approvals process set out in the EPBC Act.
In its submission to the Committee inquiry, DISER stated:
Commonwealth marine areas are matters of national environmental significance under the EPBC Act. This means any offshore electricity infrastructure projects that will have, or are likely to have a significant impact on the environment, must be referred to the Minister for the Environment and undergo environmental assessment and approval (p. 7).
The OEI Bill also requires licence holders to prepare a management plan with respect to any activities to be carried out under the licence and to have the plan approved by the Offshore Infrastructure Regulator (clause 114). The management plan must address environmental management, including how the licence holder is to comply with conditions of approval and environmental obligations under the EPBC Act (clause 115).
In February 2014, following a strategic assessment of NOPSEMA’s environmental management authorisation process for offshore petroleum and GHG storage activities, the Minister for the Environment endorsed NOPSEMA’s process as a Program that meets the requirements of Part 10 of the EPBC Act.
This essentially means that certain petroleum and GHG activities (being an approved class of actions) undertaken in Commonwealth offshore waters and regulated by NOPSEMA under the environmental management authorisation process (the Program) do not require a separate approval from the Minister for the Environment.
The Government has not publicly stated an intention to revisit the strategic assessment of the Program so that offshore infrastructure activities could be included within the approved class of actions and therefore not require a separate approval under the EPBC Act.