After spate of legal wins against gas developers, federal government mulls relaxing consultation requirements
A run of legal victories for gas opponents has the federal government considering loosening consultation requirements for big projects.
The Federal Labor government is considering loosening the amount of consultation that gas developers are required to do after a spate of environmental legal victories.
Said legal victories have stoked concern about the impact on domestic supplies and potential damage to the country’s $2.5tr economy.
Woodside and Santos, two of Australia’s largest companies, have seen work on flagship projects hampered in recent months as opponents exploit legal ambiguity around who developers must consult and consider when seeking environmental licences to begin work.
The succession of legal defeats has triggered widespread condemnation from the likes of Woodside chief executive Meg O’Neill and overseas allies which have warned Australia is jeopardising energy security efforts.
In a boost to the industry’s prospects, the federal Labor government has moved to assure the industry it is considering a legislative tweak to potentially remove the requirement that developers consult so widely that it includes people in neighbouring countries, sources have told The Australian.
The prospect of legislative changes comes after an acceptance that the National Offshore Petroleum Safety and Environmental Management Authority could not simply update its guidelines and remove the legal uncertainty facing gas developers.
The Australian understands Resources Minister Madeleine King is leading the push.
A spokeswoman for Ms King confirmed work was underway on a review of guidelines to build “greater administrative efficiency and certainty” into the offshore rules.
“The Review team within the Department of Industry, Science & Resources is developing advice to Government on options to build greater administrative efficiency and certainty into the offshore resources regulatory framework. This work is underway,” the spokeswoman said.
“The Government has said for some time now that it expects the highest possible standard of consultation to apply when it comes to resources sector approvals. It is imperative that the oil and gas sector build respectful relationships with First Nations groups. The Government expects the industry to step up in this regard.”
The prospect of a narrower and more concise update on consultations will be welcomed by the country’s oil and gas industry, which have warned of substantial damage without urgent changes – though it is likely to be vehemently opposed by environmentalists.
“Uncertainty over approvals has the potential to add cost and delays to any offshore activities to be undertaken in Australia. In the case of gas projects, such uncertainty threatens the delivery of much-needed new supplies to the Western Australian domestic market, as well as undermining the confidence of our regional trading partners,” Woodside’s Ms O’Neill said last month.
No changes are expected before 2024, however, by which time several of the projects that find themselves in the crosshairs of opponents will likely have progressed. The changes are also unlikely to narrow and curtail local cultural and heritage requirements faced by developers – an avenue that has been successfully used by opponents.
Work on Santos’ $5.3bn Barossa gas project in the Timor Sea has been suspended since 2022 after the Federal Court found the oil giant failed to consult local Indigenous people adequately on the development.
The company has submitted its environmental plan to NOPSEA, but if it cannot resume drilling by December 3 then Santos could miss its first gas target of early 2025.
To complete its revised environmental plan, Santos was forced to heighten consultation – including a widespread call for submissions across commercial radio stations.
The prospect of delays has heightened in recent days after a Tiwi Islands traditional owner, Simon Munkara sought an injunction from the Federal Court to suspend work on the 262km underwater pipeline.
Santos had hoped that by installing the pipelines, it could mitigate the threat of delays that chief executive Kevin Gallagher said is costing the company millions as it is forced to pay for a drilling vessel that remains idle.
Mr Gallagher said Santos was paying about $US10 million ($15.8m) a month to a US operator of offshore drilling rigs sitting idle off the coast of the NT.
Woodside has also been impacted, though in a minor manner in contrast to Santos.
In September, a federal court said Woodside could not begin seismic work at its $16.5bn Scarborough project – a precursor to the drilling of wells for the project – even after concluding the company had adequately consulted a traditional custodian.
Woodside said the ruling will not impact its target for first LNG cargo in 2026.
Both the Barossa and Scarborough projects are expected to primarily service the offshore LNG market – worth a record $92bn in 2022-23, but it could be used domestically.
Gas is a key source of energy for resource-poor countries such as Japan and Korea, both of whom have interest in Scarborough and the Barossa developments.
Australia’s perceived allowance of delays to LNG projects have stoked criticism from regional allies. Japan’s former ambassador Shingo Yamagami said Australia was “quiet quitting” LNG in March and it had potentially dire consequences for the region.
WA is likely to increase its demand for gas, while Australia’s east coast – which is on course for a supply shortfall from 2025 – could be forced to import gas via a facility being constructed in NSW and proposed in South Australia.
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