THE Western Australian government has vowed to fight a proposed federal takeover of offshore oil and gas regulation that could significantly affect one of the state’s most vital industries.
THE Western Australian government has vowed to fight a proposed federal takeover of offshore oil and gas regulation that could significantly affect one of the state’s most vital industries.
In August, Resources Minister Martin Ferguson outlined plans for a national regulator to oversee the entire offshore industry by the start of 2012.
The plan, formulated before the Montara oil spill, highlighted the shortcomings of the national offshore safety authority, NOPSA, followed a major study by the Productivity Commission in April.
The commission’s report found that hundreds of millions of dollars could be saved annually by reducing duplication across state and federal jurisdictions and speeding up approvals. A national offshore petroleum regulator was one of the report’s key recommendations.
A working group of senior federal bureaucrats is now preparing a detailed submission to be put to the next Council of Australian Government’s meeting early next year.
However, the WA and Northern Territory governments have vowed to fight a proposal they say will significantly diminish their influence over development within their own domain.
The remaining states, in which there is limited offshore development planned or under way, generally back the federal proposal.
Currently, activity in waters three nautical miles from the low tide mark comes under the umbrella of the Commonwealth, but hands-on responsibility is effectively delegated to the state government.
Mines and Petroleum Minister Norman Moore said it was “ludicrous” to scrap the current shared arrangements because the Commonwealth simply lacked the expertise to take over that hands-on role effectively.
“Most of that work is done by the state department of mines and petroleum, and there isn’t an equivalent bureaucracy in Canberra that has the expertise that our department has,” Mr Moore told WA Business News. “So for practical reasons, it would be ... a ludicrous situation.
“The other reason is that most offshore activity has an onshore component, and under the joint authority, we work with the Commonwealth on what happens offshore.
“But if we have a separate Commonwealth authority doing all the offshore work, and we are not involved, then this coordinated approach we currently have to look at a project in its entirety will be lost. And to me, that seems to be quite ridiculous too.
“It would exclude the state from being involved in a significant part of the economic activity that happens in Western Australia.”
Mr Moore said regardless of the approach taken by Canberra, WA could not be forced to relinquish its responsibility over related activities within state waters or onshore.
But as a compromise, the WA and NT governments had proposed an alternate model to streamline existing arrangements by removing duplication wherever possible and ensure consistency between state and federal regulatory arrangements.
“We believe there are things that can be done to make the process more efficient, but it is imperative that both levels of government are involved,” Mr Moore said.
A spokesman for Mr Ferguson said the federal government was optimistic that consensus could be reached by the time the plan is put to CoAG early next year.
“We are still hopeful that agreement can be reached in the national interest to provide a high quality, consistent national regulator that at the same time, reduces red tape and time delays for the industry,” he said.
The plan has also split the industry and the Australian Petroleum Production and Exploration Association along largely regional lines.
APPEA’s Canberra-based deputy chief, Mark McCallum, said the organisation’s primary concern was capturing the billions in potential annual gains identified by the productivity commission.
“We’re considering two models – a model being proposed by everyone but WA and the NT, and the model being proposed by WA and the NT,” he said.
But in a veiled nod to the conflict within APPEA, Mr McCallum said the lobby group believed the matter was one “best dealt with by governments themselves”.
APPEA’s Perth-based chairman, Buru Energy chief Eric Streitberg, gave an even clearer indication of the differing views of APPEA members.
“We have members with interests on both sides of the country, and some will be well served by a national regulator,” he said.
“On a personal level, with my Buru hat on, I don’t think it’s a very good idea.”
