Amendments to the Petroleum and Geothermal Energy Act

Consultation has concluded

Have your say on the proposed amendments to the Petroleum and Geothermal Energy Act 2000.

What's being decided?

To maintain leading practice regulation of South Australia's petroleum, gas storage, pipeline transmission and geothermal energy industries, in February 2021 we began a review of the current Petroleum and Geothermal Energy Act 2000 (PGE Act) and associated Regulations.

The review focussed primarily on enhancing existing provisions in the PGE Act to more effectively and efficiently deliver its objectives and intent.

Background

South Australia's Climate Action Plan commitment to embrace future fuels requires appropriate regulatory frameworks to ensure safe operation of the essential infrastructure for such fuels. Accordingly, the proposed amendments will expand the scope of the PGE Act to cover production and pipeline transportation of hydrogen.

In keeping with this extended scope, and to better reflect the PGE Act's existing petroleum, gas storage and geothermal resources scope, the review proposes that the PGE Act's title be changed to the Energy Resources Act.

The process was launched with the release of an issues paper detailing the proposed amendments and inviting public comment.

In response to public submissions, a draft Bill to amend the PGE Act has been prepared and is now available for public comment. Public submissions are now closed.

The draft Bill is based on comments received during public consultation on the PGE Act issues paper between 11 February and 26 March 2021. Given the predominately administrative nature of the proposed amendments, no major concerns were received. However, the submissions indicated strong support for extending the scope of the current provisions under the PGE Act to also licence and regulate the generation of renewable hydrogen.

Interest in renewable hydrogen projects in South Australia calls for these amendments to be implemented as a matter of pressing urgency to provide regulatory certainty to underpin investment in this evolving industry.

Some of the key amendments proposed in the Bill include:

  1. Revising the title of the PGE Act to the 'Energy Resources Act' to reflect the broader scope of the Act to include future fuels - e.g. hydrogen (Clause 5).

  2. In response to submissions from the hydrogen industry, the current scope of provisions under the PGE Act will be expended to also include the generation of any hydrogen from means not already permissible under the existing Act, such as electrolysis of water using electricity. This amendment will afford all hydrogen generation sectors the same leading proactive regulatory and one-window to government regime as is currently afforded to the oil and gas industries under the existing PGE Act. This will be achieved through introducing a specific Hydrogen Energy Licence. (Clause 26).

  3. Improved stakeholder participation requirements by:
    1. more explicitly requiring stakeholder engagement by the licensee when preparing Statements of Environmental Objectives (SEOs) (Clauses 44 and 46) and;
    2. introducing a mandatory 30-day public consultation period for all Environmental Impact Reports (EIRs) and SEOs as part of DEM's assessment and approvals process (Clause 50).

  4. Introduce a Statutory Security so that the Crown has first priority over a licensee's property in the event of bankruptcy (Clause 60).

  5. Benchmarking penalties under the PGE Act to be consistent with the Mining Act 1971.

  6. Introducing the concept of Ministerial determinations, as provided for under the Mining Act 1971, to allow for greater flexibility and effectiveness in clarifying and guiding regulatory requirements, particularly for reporting.

  7. To achieve greater clarity and consistency of the Act's purpose and key intentions, the objects of the PGE Act will be modified to incorporate sustainable ecological development, public benefit and compensation (Clause 6).

  8. A number of definitions will be revised and introduced in the Act (Clause 7), including:
    1. revising the definition for 'environment' to better capture social and economic aspects and to ensure that the definition includes the public who may be affected by regulated activities.
    2. consolidating all definitions that concern 'regulated activities' into the Act, in particular modifying the definition of facility so that it covers all drilling and well intervention equipment.
    3. revising the definition of 'geothermal energy' to prevent restricting the means of extraction of geothermal energy.
    4. amending the definition of 'regulated substance' in light of the recent amendment to Regulation 3, namely the addition of 'hydrogen' and a 'hydrogen compound' or other substance that is a by-product of the production of hydrogen.
    5. modify the definition of transmission pipeline to allow for imported substances (e.g. liquefied natural gas (LNG) and manufactured hydrogen).
    6. modify the definition of 'Serious Incident' to 'Immediately Reportable Incident' (Clause 34).

  9. Various improvements relating to greater flexibility in relation to licence terms, maximum licence areas and tendering processes.

  10. Introducing the concept of 'leading performance indicators' into the reporting requirements under the Act (Clauses 7 and 47).

Get involved

Submissions on the proposed amendments are now closed.

What are the next steps?

The Minister for Energy and Mining intends to table the Bill during July 2021.

This discussion paper details the regulatory changes that are proposed to follow once the Bill is approved.

Have your say on the proposed amendments to the Petroleum and Geothermal Energy Act 2000.

What's being decided?

To maintain leading practice regulation of South Australia's petroleum, gas storage, pipeline transmission and geothermal energy industries, in February 2021 we began a review of the current Petroleum and Geothermal Energy Act 2000 (PGE Act) and associated Regulations.

The review focussed primarily on enhancing existing provisions in the PGE Act to more effectively and efficiently deliver its objectives and intent.

Background

South Australia's Climate Action Plan commitment to embrace future fuels requires appropriate regulatory frameworks to ensure safe operation of the essential infrastructure for such fuels. Accordingly, the proposed amendments will expand the scope of the PGE Act to cover production and pipeline transportation of hydrogen.

In keeping with this extended scope, and to better reflect the PGE Act's existing petroleum, gas storage and geothermal resources scope, the review proposes that the PGE Act's title be changed to the Energy Resources Act.

The process was launched with the release of an issues paper detailing the proposed amendments and inviting public comment.

In response to public submissions, a draft Bill to amend the PGE Act has been prepared and is now available for public comment. Public submissions are now closed.

The draft Bill is based on comments received during public consultation on the PGE Act issues paper between 11 February and 26 March 2021. Given the predominately administrative nature of the proposed amendments, no major concerns were received. However, the submissions indicated strong support for extending the scope of the current provisions under the PGE Act to also licence and regulate the generation of renewable hydrogen.

Interest in renewable hydrogen projects in South Australia calls for these amendments to be implemented as a matter of pressing urgency to provide regulatory certainty to underpin investment in this evolving industry.

Some of the key amendments proposed in the Bill include:

  1. Revising the title of the PGE Act to the 'Energy Resources Act' to reflect the broader scope of the Act to include future fuels - e.g. hydrogen (Clause 5).

  2. In response to submissions from the hydrogen industry, the current scope of provisions under the PGE Act will be expended to also include the generation of any hydrogen from means not already permissible under the existing Act, such as electrolysis of water using electricity. This amendment will afford all hydrogen generation sectors the same leading proactive regulatory and one-window to government regime as is currently afforded to the oil and gas industries under the existing PGE Act. This will be achieved through introducing a specific Hydrogen Energy Licence. (Clause 26).

  3. Improved stakeholder participation requirements by:
    1. more explicitly requiring stakeholder engagement by the licensee when preparing Statements of Environmental Objectives (SEOs) (Clauses 44 and 46) and;
    2. introducing a mandatory 30-day public consultation period for all Environmental Impact Reports (EIRs) and SEOs as part of DEM's assessment and approvals process (Clause 50).

  4. Introduce a Statutory Security so that the Crown has first priority over a licensee's property in the event of bankruptcy (Clause 60).

  5. Benchmarking penalties under the PGE Act to be consistent with the Mining Act 1971.

  6. Introducing the concept of Ministerial determinations, as provided for under the Mining Act 1971, to allow for greater flexibility and effectiveness in clarifying and guiding regulatory requirements, particularly for reporting.

  7. To achieve greater clarity and consistency of the Act's purpose and key intentions, the objects of the PGE Act will be modified to incorporate sustainable ecological development, public benefit and compensation (Clause 6).

  8. A number of definitions will be revised and introduced in the Act (Clause 7), including:
    1. revising the definition for 'environment' to better capture social and economic aspects and to ensure that the definition includes the public who may be affected by regulated activities.
    2. consolidating all definitions that concern 'regulated activities' into the Act, in particular modifying the definition of facility so that it covers all drilling and well intervention equipment.
    3. revising the definition of 'geothermal energy' to prevent restricting the means of extraction of geothermal energy.
    4. amending the definition of 'regulated substance' in light of the recent amendment to Regulation 3, namely the addition of 'hydrogen' and a 'hydrogen compound' or other substance that is a by-product of the production of hydrogen.
    5. modify the definition of transmission pipeline to allow for imported substances (e.g. liquefied natural gas (LNG) and manufactured hydrogen).
    6. modify the definition of 'Serious Incident' to 'Immediately Reportable Incident' (Clause 34).

  9. Various improvements relating to greater flexibility in relation to licence terms, maximum licence areas and tendering processes.

  10. Introducing the concept of 'leading performance indicators' into the reporting requirements under the Act (Clauses 7 and 47).

Get involved

Submissions on the proposed amendments are now closed.

What are the next steps?

The Minister for Energy and Mining intends to table the Bill during July 2021.

This discussion paper details the regulatory changes that are proposed to follow once the Bill is approved.