WIXLIB

Executive summaryAustralia has a long history of offshore oil and gas exploration and production.In areas where offshore petroleum activities are commonplace, communitiesare familiar with the role of the regulator and the responsibilities of theindustry. However, this is not the case for communities that have littleexperience with offshore exploration, production and regulation.The South Australian coast is dominated by the Great Australian Bight (theBight). Communities from across the Bight have a strong connection to, andvested interest in, the environment of the region. While exploration activitieshave occurred in the Bight for nearly 50 years, only 13 wells have been drilledin Commonwealth waters in this time. No wells have been drilled in the regionsince 2003, before the National Offshore Petroleum Safety and EnvironmentalManagement Authority (NOPSEMA) was established in 2012.The audit team was tasked with providing independent assurance that allenvironmental impacts and risks are considered by NOPSEMA in itsassessment of current proposed exploration drilling activity in the Bight. Wehave done that, and also outlined opportunities for industry, the regulator andgovernments to provide further assurance.To inform the findings of this audit, I sought the assistance of four subjectmatter experts across the fields of community engagement, geoscience,marine science and offshore exploratory drilling and regulatory matters. Theiradvice helped me determine the findings and opportunities outlined in thisreport. The audit team undertook significant research that provided thetechnical background to much of our work. Community consultations acrossthe Bight informed my own and the audit team’s understanding of communityconcerns and the realities of public consultation in relation to NOPSEMA’scurrent considerations.The audit team engaged thoroughly with NOPSEMA to verify ourunderstanding of NOPSEMA’s processes and guidelines, and their practicalimplementation through its assessment and decision-making.This audit finds NOPSEMA to be a highly skilled, professional and competentregulator. NOPSEMA has appropriate processes, guidance material andpractices to ensure environment plans are assessed against relevant, sufficientand complete scientific and technical information referenced by titleholders.Environment plans are regulatory documents to inform approval processesand also provide an opportunity for the public to see the potential impactsand risks of proposed petroleum exploration. Information communicated tothe public concerning worst-case oil-spill modelling must be communicatedclearly, allowing the public to understand the potential impact under a worstcase scenario. During consultations with stakeholders, the audit team noted aIndependent Audit of NOPSEMA’s Consideration of Exploration in the Great Australian Bight11

lack of understanding of oil-spill modelling meant that some stakeholders hadunwarranted fears about the risks from an oil spill. There is a role fortitleholders to better explain their oil-spill modelling to further assure localcommunities.The regulator is held in high regard by those with whom it has engaged.However, the audit finds there are avenues for NOPSEMA to provide a greaterlevel of transparency to the public during its assessment and decision-makingprocess. Additionally, concepts concerned with environmental impact and risk,namely “as low as reasonably practicable” (ALARP) and “acceptable”, are notconcepts well understood by many community stakeholders. NOPSEMA couldprovide clearer guidance to stakeholders in a bid to assist their overallunderstanding of these terms.Whether stakeholders were satisfied with the titleholder’s engagement processoften depended on whether they had been categorised as relevant personsand therefore had continued engagement with the titleholder. Overallstakeholder satisfaction might be improved through NOPSEMA providingclearer public guidance on what it considers when it assesses if titleholdershave appropriately identified and consulted with relevant persons. Titleholderscould also consider ongoing engagement with stakeholders not consideredrelevant persons to better inform them of the safety and environmentalprocesses in place.Governments, too, have an opportunity to provide additional assurance tolocal communities. They could address identified gaps in public understandingof how the regulatory regime works to manage risks to the environment, andhow the industry is regulated and governed throughout the life cycle ofpetroleum activities.The audit team is confident the community should feel assured thatNOPSEMA is a highly skilled regulator well-equipped to give appropriateconsideration to its regulatory obligations in assessing environment planssubmitted to it. Addressing the opportunities identified in this report may helpto further build community assurance.12Independent Audit of NOPSEMA’s Consideration of Exploration in the Great Australian Bight

Findings and opportunitiesThe Minister for Resources and Northern Australia could amend theNational Offshore Petroleum Safety and EnvironmentalManagement Authority’s (NOPSEMA) statement of expectationsto address the relevant opportunities identified in this audit.CHAPTER 3: NOPSEMA processes and practicesFinding 1NOPSEMA is a highly skilled, professional and competentregulator.Finding 2NOPSEMA has appropriate processes and practices to meetregulatory requirements under the Offshore Petroleum andGreenhouse Gas Storage (Environment) Regulations 2009(Environment Regulations) in its consideration ofexploration matters.Finding 3NOPSEMA has appropriate processes and practices to ensureenvironment plans are assessed against relevant, sufficient andcomplete scientific and technical information.Finding 4NOPSEMA has clear guidance material in place to assessenvironmental impacts and risks.Finding 5Stakeholders desire a greater level of transparency fromNOPSEMA during the assessment and decision-making process,prior to a final decision on the environment plan.Opportunity NOPSEMA could enhance transparency during the assessmentand decision-making process by providing additional publicdetail of requests for further written information and noticesgiving titleholders the opportunity to modify and resubmit anenvironment plan.Finding 6“As low as reasonably practicable” (ALARP) and “acceptable”are not concepts well understood by some stakeholders.Opportunity NOPSEMA could provide clearer guidance to the public onwhat it considers when it assesses environmental impact and riskto be ALARP and acceptable.Independent Audit of NOPSEMA’s Consideration of Exploration in the Great Australian Bight13

CHAPTER 4: Stakeholder engagement and consultationFinding 7Parties consulted by the titleholder as relevant persons generallyfeel appropriately included in regulatory processes.Finding 8Parties not consulted as relevant persons by the titleholder didnot always understand why they were not determined to berelevant persons.Finding 9The titleholder has outlined in its environment plan an extensivecommitment to engagement with communities, but somestakeholders remained unsatisfied.Opportunity NOPSEMA could provide further clarification to the public ofwhat it considers when it assesses whether titleholders haveappropriately identified and consulted with relevant persons.Opportunity Titleholders could consider ongoing community engagementopportunities for stakeholders not meeting the regulatorydefinition of relevant persons.CHAPTER 5: Scientific and technical informationFinding 10The titleholder has had access to, and referenced in itsenvironment plan, relevant, sufficient and complete scientificand technical information related to the Great Australian Bight.The audit team has not considered nor made a finding onwhether the information is appropriate for NOPSEMA to acceptthe plan.Finding 11NOPSEMA has well-documented processes to appropriatelytake into account matters protected under the EnvironmentProtection and Biodiversity Conservation Act 1999 (EPBC Act)and Australian Marine Park values as part of the assessmentprocess. Titleholders are aware of the requirement to takeaccount of these matters. However, there is limited publicinformation for stakeholders detailing how NOPSEMA takes intoaccount matters protected under the EPBC Act.14Independent Audit of NOPSEMA’s Consideration of Exploration in the Great Australian Bight

Finding 12A number of documents that NOPSEMA and titleholders arerequired to take into account as part of environment plandrafting and assessment are managed by other governmentagencies external to NOPSEMA. These agencies are responsiblefor updating this information at regular intervals and somedocuments are not up‑to‑date.NOPSEMA has demonstrated it is aware these documentscontain outdated information and the audit team is satisfiedNOPSEMA has appropriate processes and practices in place toensure environment plans reference complete scientific andtechnical information, including additional up-to-dateinformation as required, and that this information is usedappropriately in its assessment and decision‑making process.The audit team is satisfied that outdated plans do not limitNOPSEMA’s process for assessment and decision-makingconsistent with the Environment Regulations.Opportunity NOPSEMA could provide clearer public guidance on how itconsiders matters protected under the EPBC Act and theprinciples of ecologically sustainable development in itsdecision-making.Opportunity The Commonwealth Government could ensure documents andinformation from government organisations on whichNOPSEMA and titleholders rely are maintained and kept up-todate to reflect current and emerging science.CHAPTER 6: Improving the understanding and operation of the regimeFinding 13The stakeholders who had interacted with NOPSEMA held itsengagement approach in high regard.Finding 14The audit team’s consultations found a lack of understanding bysome stakeholders about oil-spill modelling and the potentialimpacts or risks of a credible worst-case oil spill. The maps ofthe worst-case oil-spill models have been incorrectly interpretedby some stakeholders as what might occur from a single spill,rather than being the combination of many scenarios intendedto determine the boundary of the area addressed by theenvironment plan.Independent Audit of NOPSEMA’s Consideration of Exploration in the Great Australian Bight15

Opportunity Titleholders could consider ways to better present oil-spillmodelling, including individual oil-spill scenarios, tocommunicate the risk and likely extent of an oil spill.Finding 15There is a role for governments and their agencies to betterexplain, on a continuous basis, how the regulatory regimemanages risks to the environment. The audit team’s consultationsessions indicated communities wanted more information onthe measures in place to prevent an oil spill and the responseplan if a spill occurs.Opportunity Governments could better explain to the public how theoffshore industry is regulated and governed. This would helpcreate a greater understanding of the low probability of riskseventuating.Opportunity Governments could better promote, and publish, how aresponse will be coordinated in the event of an oil spill,including where a spill crosses jurisdictional boundaries.Opportunity Governments could consider options to improve thetransparency of the measures proposed by a titleholder toreduce the risk of an oil spill.16Independent Audit of NOPSEMA’s Consideration of Exploration in the Great Australian Bight

1. IntroductionOn 23 April 2019, Equinor submitted its environment plan for the Stromlo-1Exploration Drilling Program to the national oil and gas regulator, the NationalOffshore Petroleum Safety and Environmental Management Authority(NOPSEMA), for assessment.Equinor’s draft environment plan was voluntarily released for public commentin February 2019. It has generated significant interest, highlighting communityconcerns regarding offshore oil and gas activities in the Great Australian Bight(the Bight).Recognising those concerns, and with a desire to assure the community theregulator is appropriately considering the impacts and risks under theEnvironment Regulations, the Minister for Resources and Northern Australiaand the Minister for the Environment requested I undertake this audit intoNOPSEMA’s current consideration of exploration in the Bight.The Bight extends from Cape Pasley, Western Australia to Cape Catastrophe,South Australia and forms part of the world’s longest southern-facingcoastline.3 The region has significant environmental value, as well as economicvalue to the fishing, tourism and oil and gas industries.The Bight supports Australia’s largest and most valuable stocks of southernbluefin tuna, Australian sardine, western king prawn, southern rock lobster,abalone, snapper and flathead. The total gross value of production from SouthAustralian fisheries and aquaculture over the past 15 years has been between 400 million and 500 million a year.4Tourism in the region is worth about 270 million a year, with a growing marketfor marine activities that include whale watching, diving, interactions with sealions and dolphins, recreational beach use and ship cruises.5The region has global conservation significance, providing biologically importanthabitats and migration pathways for iconic species and apex predators, includingAustralian sea lions, southern right whales, great white sharks, pygmy blue whalesand common dolphins. Its broad continental shelf also supports areas of highbiodiversity on the ocean floor, with many species unique to their area.The Bight is also considered to be a promising frontier oil and gas region.63 Paul Rogers et al, Physical processes, biodiversity and ecology of the Great Australian Bight region: a literature review, CSIRO, 2013,provides a major review of the physical processes, biodiversity and ecology of the Bight region.4 Econsearch, Economic indicators for the Commercial Fisheries of South Australia Summary Report 2015/216. A Report to PIRSA Fisheriesand Aquaculture, prepared by Econosearch, October 2017, cited in David Smith et al, “A whole of systems approach to improvedunderstanding of the environmental, economic and social values of a frontier marine oil and gas field: Establishment, success factors andlessons learnt”, 2018, Deep-Sea Research Part II, Vol. 157-158, pp. 3-10, p. 4.5 David Smith et al, “A whole of systems approach to improved understanding of the environmental, economic and social values of afrontier marine oil and gas field: Establishment, success factors and lessons learnt”, 2018, Deep-Sea Research Part II, Vol. 157-158, pp. 3-10,p. 4.6 Geoscience Australia, Submission to the Senate Environment and Communications Committee inquiry into oil or gas production in theGreat Australian Bight, accessed 26 August 2019, https://www.aph.gov.au/DocumentStore.ashx?id 8543f70a-1e4b-4569-9e22863cc26d0eac&subId 414799, p. 6.Independent Audit of NOPSEMA’s Consideration of Exploration in the Great Australian Bight17

Petroleum exploration in Australian waters is driven by global oil consumption,estimated to increase from 99 million barrels a day in 2018 to 103 millionbarrels a day in 2021.7Equinor is the sole titleholder of exploration permit EPP39, covering an area inthe Ceduna sub-basin, in Commonwealth waters off South Australia. As part ofEquinor’s proposed work program under the title, it must drill an explorationwell (the Stromlo-1 well) in the area by 30 April 2021 to meet its work programcommitments. Before it can begin, Equinor is required to obtain all thenecessary approvals from NOPSEMA for environmental management, safetyand well integrity.The proposed site of the Stromlo-1 well is 372 km off the coast of South Australiaand 476 km west of Port Lincoln (Figure 1). Past wells in the Bight have beendrilled in shallower depths than Stromlo1. Woodside Energy Ltd’s Gnarlyknots1A well, drilled in 2003, was the deepest, in 1,316 metres of water. The Stromlo-1well is expected to be drilled in about 2,240 metres of water, targeting apotential geological reservoir about 2,700 metres below the seabed.LEGENDEquinor PetroleumTitleQSLANDQUUEEEENNSLAND!Stromlo-1 Petroleum Well (2019)Stratigraphic Wells (GPInfo 2018)#1998Exploration Wells (GPInfo 2018)WWEESS TT ERNERNAAUUSS TT RR ALIAALIA)"EUCLA400 km)"1971 - 1980!1981 - 1990!1991 - 2000!2001 - 2008CEDUNA400 kmWHYALLA ")372 kmNNEEWW SSOO UTHUTHWWAA LL ESES) PORT AUGUSTA"!Apollo 1ODP 1127A, BODP 1132A, B, C##ODP 1129A, B, C, D## ODPODP 1130A, B, C#1131A, B!### ODP 1133A, B, CJerboa 1ODP 1134A, BODP 1126A, B, C, D1960 - 1970!ISSOOUU TT HH AAUUSS TRALIATRALIA!!Potoroo 1Columbia 1Columbia 1/ST1 !Columbia 1/ST2) PORT"PIRIEGemini 1A! Gemini 1!Mercury 1! Gnarlyknots 1AGnarlyknots 1# ODP 1128A, B, C, D!) PORT"476 kmIStromlo-1EPP39LINCOLN)"Troubridge Island 1 !!Frijole 1!Enchilada 1Platypus 1!!Greenly 1Duntroon 1 !!Echidna 1Borda 1 !! Vivonne 1)"KANGAROOISLAND550 kmADELAIDE730 km)MURRAY BRIDGE")VICTOR"HARBORVV II CC TT ORIAORIA! Trumpet 1Crayfish A1 Sophia Jane 1!Troas 1/ST1! ! Neptune 1Troas 1 ! ! Chama 1Morum 1!Chama 1A!Copa 1CEDUNA SUB-BASIN AND SURROUNDING REGION) MOUNT GAMBIER"Argonaut A1!Breaksea Reef 1 Fermat 1Breaksea Reef 1/ST1 !!!Normanby 1Breaksea Reef 1/ST2Discovery Bay 1! ! Voluta 1Breaksea Reef 1/ST31Callister1!Bridgewater Bay 1 ! !CallisterHalladaleDW3DW2Henry 1 !!Martha11 1 DW1PectenEast1!Netherby1APecten!! 1/ST1!HenryPecten 1www.equinorenergy.com.auFigure 1. The Stromlo-1 well location along with previously drilled wells in the Great Australian Bight.8Source: Equinor environment plan for the Stromlo-1 Exploration Drilling Program.97 Department of Industry, Innovation and Science, Resources and Energy Quarterly, June 2019, accessed 23 August 2019, resourcesandenergyquarterlyjune2019/index.html, p. 65.8 This map includes exploration wells drilled in Commonwealth waters and state waters, including side tracked wells at the same site. Themap a

EMBA The Environment that May Be Affected by planned (e.g. drilling, produced water, seismic activities) and unplanned (e.g. oil spills) components of a petroleum activity. EMBA - impact As defined by Equinor for the Stromlo-1 Environment Plan - the impact EMBA is the geographic area that may be affected by planned