Consultation on Protection of the Environment Operations Amendment


Relevant clause Issue raised/suggestion Response and proposed amendments
Schedule 1 POEO Act The Protection of the Environment Operations Amendment (NSW Gas Plan) Regulation 2014 (Amending Regulation) does not explicitly include ‘shale gas’ as an activity that must be licensed. It could arguably be covered under “other forms of unconventional gas, including tight gas and sand bed gas” but for the avoidance of doubt, the regulation should be explicit

The Amending Regulation uses the term ‘petroleum’ rather than ‘conventional gas’ or ‘unconventional gas’. The definition for ‘petroleum’, which is defined in the Petroleum (Onshore) Act 1991, includes ‘any naturally occurring hydrocarbon, whether in a gaseous, liquid or solid state’. It includes shale gas.

No change is proposed.

Schedule 1 POEO Act
Clause 31(2)
The Amending Regulation should include the construction and use of boreholes for stratigraphic definition (excluding petroleum wells and/or fracking). By adding the activity Construction and use of boreholes for stratigraphic definition (excludes petroleum wells and/ or fracturing) under 31(2), it would align with the NSW Trade and Investment Division of Resources and Energy environmental approval processes and also enable red tape reduction.

The drilling of stratigraphic boreholes requires the use of drilling equipment as well as the clearing of a borehole pad, and has the potential to create the same or similar environmental impacts that can result from drilling core holes and pilot wells (e.g. potential ground water, surface water and noise pollution issues).
There is no legislative definition for ‘stratigraphic borehole’ (e.g. under the Petroleum (Onshore) Act 1991 or the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP), and as such the recommendation has the potential to create confusion about the difference between stratigraphic boreholes and holes drilled for other purposes. As a consequence, there is a risk that some petroleum wells may end up not being licensed when they should be regulated via a licence.

No change is proposed.

Schedule 1 POEO Act
Clause 31(2)
The Amending Regulation should not provide any exemption for “very low impact exploration activities”. Such activities are not defined. What constitutes “very low impact” is open to interpretation; parties could claim their activities constitute very low impact but they could result in unintended and long-term negative consequences.

In legislation intended to protect the environment, this exemption appears to be a loophole which invites exploitation by mining companies. The EPA should regulate and license all petroleum activities without exemption.

The low impact activities that are exempt are specifically listed in clause 31(2). These are consistent with the activities listed as exempt development in the Mining SEPP and are likely to have negligible environmental impact.

No change is proposed.

Schedule 1 POEO Act
Clause 31(2)(g) & (h)
Schedule 1, clause [2] of the draft regulation sets out activities that are exempt “other than land in an environmentally sensitive area of State significance”. As drafted, this would mean that low impact activities under clause 31(2) can occur in state forests without the need for an environment protection licence (EPL). Activities listed in clause 31(2)(a)–(f) may have minimal impact; however, it is concerning that (g) and (h) are exempt. Construction, maintenance and use of roads (g) can have significant impacts on areas such as state forests; and recovering, obtaining or removing coal seam gas (CSG) in the course of coal mining (h) should be licensed appropriately.

The exclusion relates to “constructing, maintaining or using roads consistent with best-practice industry standards as outlined in the document entitled ‘Managing urban stormwater: Soils and construction (Volume 2C: Unsealed roads), published by the Department of Environment and Climate Change, dated January 2008’. Where the practices and considerations outlined in that document are addressed, the impacts are minimal and a licensing approach is not warranted.

The Forestry Corporation of NSW manages roads located within state forests, depending on any agreements entered into. The approach of not licensing public roads is consistent across all industries.

The removal of coal mine methane in the course of coal mining is not captured under this activity because it is regulated (where required) by the activity ‘coal mining’ via appropriate licence conditions. Additionally, coal mine methane is extracted at coal mines for safety reasons.

No change is proposed.

Schedule 1 General Regulation The amended licensing requirements will apply to “assessable pollutants for petroleum activities with an annual production capacity of greater than 0.5 petajoules (PJ).” 0.5 PJ remains a significant threshold. Setting such a threshold may therefore make it likely that only production wells will have load-based-licences (LBLs). Significant exploration activities should also have LBLs.

This concern appears to stem from a misunderstanding of the operation of the 0.5 PJ threshold.

The 0.5 PJ threshold determines when activities would be subject to pollutant-load fees only, rather than when a licence is required. All petroleum exploration, assessment and production activities (as defined) will require an EPL.

Activities with a production capacity of 0 to 0.5 PJ will not attract pollutant load-fees; those over 0.5 PJ will attract pollutant-load fees. In practice, this means that exploration activities (which do not extract gas or produce water) are unlikely to be subject to LBL fees, whereas assessment and production activities are likely to be subject to LBL fees.

No change is proposed.

Schedule 1 General Regulation

It is unclear how an ‘operation’ would be defined and therefore whether a particular activity will be captured. For example, the Dewhurst Gas Exploration Pilot Expansion Project SSD 6038 and the Bibblewindi Gas Exploration Pilot Expansion Project SSD 5934 in the Pilliga may have separate EPLs despite being part of the same overall project.

The regulation and supporting guidelines need to clarify whether a collective operation must have one EPL or may be comprised of a collection of EPLs that would not individually trigger the threshold under the amended regulation.

This issue relates to how the premise (‘operation’) is defined, rather than the activities that would require an EPL (the subject of the Amending Regulation). In general, the EPA issues EPLs on a project basis. However, the EPA considers many issues during the licence development process to determine the area of land that will be covered by the licence (the premise). For example, if different stages of a project were being carried out by related but different legal entities, then two licences would be required.

Issue is noted – this is a licence administration issue, no change is required.

Schedule 1 General  Regulation Load-based fees use the lowest threshold currently in use across all categories. This measure is supported. Noted
General Endorse the amendments making all CSG activities subject to EPLs issued by the EPA. These changes should add an extra layer of protection to the process if very strict regulatory standards are applied. Noted
General Amendments have merit if all forms and volumes of petroleum (liquid, gaseous or solid) exploration, assessment and production will be regulated consistently for environmental matters across NSW. Noted
General Three days is not an adequate consultation period for a complex and controversial area of law.


The EPA acknowledges that the short time available for consultation was not ideal; however, it was not possible to extend the consultation period in this instance.

The NSW Government announced the NSW Gas Plan on 13 November 2014. One component of the Gas Plan is that all organisations involved in gas activities (including conventional gas, coal seam gas, tight gas and shale gas) will be required to hold an EPL issued by the EPA. This will give the EPA direct oversight of these activities and ensure that the potential impacts are managed appropriately and consistently.

To ensure the EPA can commence this regulatory oversight as soon as possible, the NSW Government committed to completing the required legislative amendments by the end of the year. This includes changes to the Protection of the Environment Operations Act 1997 and the Protection of the Environment Operations (General) Regulation 2009.

The December 2014 deadline resulted in the EPA having very little time to action these changes; however, the EPA provided key stakeholders with a draft of the proposed Amending Regulation as soon as it was available, and an opportunity to comment on the proposed amendments and inform the process.

The changes are intended to align the environmental regulation of all gas activities (and indeed all petroleum activities) with the amendments that were made in 2013 to better regulate coal seam gas activities. They will enable the EPA oversee these activities through all development phases, from exploration to production.

General Other comments made that were beyond the scope of the proposed amendments included:
  • comments primarily related to reviewing environmental factors and environmental impact statement processes
  • suggestions for the content of licence conditions
  • a statement of opposition to any form of petroleum (or coal) exploration or production in water catchment areas and on agricultural land in NSW
  • a statement that coal seam gas exploration and exploitation cannot be conducted safely anywhere, without adverse consequences over the long term
  • concern that the NSW Gas Plan neglects to spell out areas where coal seam gas activity cannot occur and that at a minimum drinking water catchments and prime agricultural land should be specified at the outset as off limits to the industry
  • suggestions for the content of licence conditions.
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