THE Federal government has agreed the powers of the National Offshore Petroleum Safety Authority need to be expanded significantly to avert any repeat of major incidents such as the Montara oil spill or Varanus Island gas explosion.
The government will not unveil its response to the Montara commission of inquiry until the end of the year, but revealed its determination to beef up NOPSA when it released its detailed response to three prior inquiries into offshore oil regulation last week.
Responding to the three reports, the Department of Resources Energy and Tourism noted that it was already working towards creating a single national regulator for the offshore oil and gas industry, and that its legislative response would also be shaped by the Montara inquiry.
However, it agreed that NOPSA’s jurisdiction should be extended to cover offshore pipelines and wells that are currently the responsibility of individual states and territories, as well as offshore production facilities as they are currently defined.
Offshore pipelines are now included in the definition of facilities, and covered by the Offshore Petroleum (Safety) Regulations 2009, which replaces three existing items of legislation.
Pipeline operators will now be required to submit a detailed “safety case” rather than a general safety management plan to secure an operating licence.
NOPSA will also be granted oversight of facilities related to carbon sequestration, such as at the Gorgon gas project on Barrow Island, when the Gillard government puts proposed amendments to greenhouse gas storage legislation before the current parliament.
The amendments were first put before government in February but lapsed with the calling of the election, and will now be reintroduced “as a priority”.
Critically, the department accepted that NOPSA was “under resourced” which had reduced its ability to enforce its responsibilities effectively, though it declared resourcing to be a matter for the regulator to address.
However, NOPSA’s chief executive would be required to report to government by the end of 2011 on the steps taken to addressing the issue, including the recruitment of “appropriately skilled staff” in a highly competitive labour market.
Interestingly, the government did not accept recommendations that NOPSA should be granted a wider range of tools to police compliance with safety regulations, including the power to impose fines for every day of non-compliance.
The government said such a move would require further consideration, particularly regarding the likely trigger points and quantum of fines, who would be responsible for collecting and managing penalty revenues, and whether publishing enforcement orders would “mitigate against industry openness and the sharing of lessons learnt”.