Oil and geothermal energy (energy resources) Amendment of Bill 2021 (sa) Summary

On August 25, 2021, the Petroleum and Geothermal Energy (Energy Resources) Amendment Bill 2021 (SA) (Bill) was introduced to the South Australia House of Assembly.

The bill is part of reforms to the Petroleum and Geothermal Energy (SA) Act, 2000 (Act) and associated regulations, which include amendments such as:

  • broaden the scope of the existing provisions to include a specific license for the production of hydrogen;
  • modify the environmental declaration process to include more public consultation
  • expand the powers of the Minister with respect to the reclamation of lands that are or have been licensed under the Act.

Under the proposed bill, the title of the legislation will change from the Geothermal and Petroleum (SA) Act 2000 to the Energy Resources Act 2000 (SA).

The reform process began in February 2021 with the publication of a concept paper and a public consultation was undertaken between February 11 and March 26, 2021. The bill was drafted on the basis of these public consultations and , once drafted, further public consultations were conducted from June 3 to June 25, 2021.

The Ministry of Energy and Mines said, at least with respect to the first round of public consultations, that no major concerns had been received and that there was strong support for the changes to extend the scope of the law to include renewable hydrogen.

Main amendments

The main amendments introduced in the bill can be summarized as follows:

Hydrogen

Expansion of the definition of a controlled substance to include hydrogen, including compounds of hydrogen or other substances that are a by-product of the production or generation of hydrogen.

Introduction of the term “hydrogen generation” to ensure that any form of hydrogen production is captured regardless of the source from which the hydrogen is derived.

Introduction of hydrogen production licenses to cover the production of hydrogen that is not covered by existing law, such as hydrogen resulting from the electrolysis of water or imported liquefied natural gas.

Environmental declarations and reports

Introduction of the ministerial determination of environmental impact assessment criteria, so that the Minister can determine, then modify or revoke, the environmental impact assessment criteria by notice in the Gazette .

Introduced a requirement for licensees to undertake consultations on proposed environmental objective statements, in accordance with regulations.

Introduction of an obligation for the Minister to undertake a public consultation, in accordance with the regulations, on environmental impact reports and statements of environmental objectives.

Geological surveys

Power introduced for the Minister or authorized officers to enter the lands, conduct surveys on the lands and take or take specimens from the lands for the purpose of geological surveys.

Rehabilitation of land powers

Introduction of a Minister’s power to extend or reinstate a permit when the permit holder has not complied with the Act and the permit has been extended or reinstated so that the holder can take action to rehabilitate the land.

Introduction of a power of the Minister to issue a rehabilitation instruction even after a license has expired or has been canceled or returned to the holder of that license, but provided that such an instruction can only be issued to the person permit holder immediately before its expiration, cancellation or postponement.

Incident reports

The definition of “serious incident” should be replaced by “immediately reportable incident” and instead of prescribing the types of incidents that will be immediately reportable in the Act, “immediately reportable incidents” should be prescribed in the Act. relevant statement of environmental objectives.

The definition of “reportable incident” should also be amended to refer to incidents prescribed in the relevant statement of environmental objectives.

A licensee will be required to provide the Minister with an initial report of a reportable incident immediately within 24 hours of the licensee becoming aware of the incident and a full report must be provided within 3 months.

Gas storage permit

Modification of the provisions relating to gas storage authorizations to allow the withdrawal of stored controlled substances.

Transport pipelines

Revision of the definition of “transport pipeline” to no longer be limited to pipelines for the transport of a controlled substance from the place of its production or to a place to be stored in a natural reservoir, in order to allow, among other things, the transport of imported substances by pipelines.

Management system

Introduction of a requirement for licensees to establish and maintain a management system that meets all the requirements prescribed by the regulations regarding regulated activities.

Priority costs

Introduction of a charge on the property, if the owner of the property is required to pay a debt to the Crown under the law, which takes precedence over any other interest or charge on the property.

Penalties

Amendments have been made to a number of penalty provisions to significantly increase the penalties for contravening the Act, in a number of cases from $ 120,000 to $ 250,000.

Conclusion

The series of amendments will update the law and set the stage to facilitate the innovations expected in South Australia’s energy landscape, including, importantly, the production of hydrogen.


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