Managing Australia's Offshore and Onshore Resources: A Legal Challenge for Competing Objectives

1. Managing Australia’s Offshore and Onshore Resources: A Legal Challenge for Achieving a Range of Competing Objectives Professor D. E. Fisher

2. One Meaning of the Rule of Law Government in all its action is bound by rules fixed and announced beforehand – rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances, and to plan one’s individual affairs on the basis of this knowledge. F. A. Hayek, The Road to Serfdom

3. The Structural Elements of Environmental Resources Governance • grant access - proactive • regulation of impact - predictive • recognition of standards - responsive • enforcement of rules adjudicative

4. The Instruments of Environmental Resources Governance • Rules of competence – - Rights of sovereignty - Rights of property • Rules of limitation – - Obligations inter partes - Obligations ergaomnes

5. Three Critical Issues for Environmental Resources Governance • achieving sustainable development • resolving competing objectives • responding to climate change

6. Competing Objectives in the Carbon and Hydrological Cycles • extraction of oil, gas and coal • extraction of geothermal energy • extraction of water • conversion into usable energy • use of land • return of carbon by geosequestration and biosequestration • environmental impacts of extraction, conversion, land use, geosequestration and biosequestration

7. The Legal Contexts for Addressing these Competing Objectives • a range of differently focussed purposive provisions • a complex matrix of factors for consideration • a set of procedural arrangements

8. The Bering Sea Fur Seals Arbitration 1893 Our work is a first attempt at a sharing of the products of the ocean, which has hitherto been undivided, and at applying a rule to things which escaped every other law but that of the first occupant. If this attempt succeeds, it will doubtless be followed by numerous limitations, until the entire planet – until the waters as well as the continents – will have become the subject of a careful partition. Then, perhaps the conception of property may change amongst men.

9. The Case of Mines 1568 • “the excellency of the thing” • “the necessity of the thing” • “the convenience of the subjects in the way of mutual commerce and traffic” • “the law of England...observes a due proportion and symmetry in the members of the public weal, and therefore it makes the King possessor of all mines of gold and silver in whatever lands they are found within the realm”.

10. The Case of Mines 1568 And the common law, which is founded upon reason, appropriates every thing to the persons whom it best suits, as common and trivial things to the common people, things of more worth to persons in a higher and superior class, and things most excellent to those persons who excel all other; and because gold and silver are the most excellent things which the soil contains, the law has appointed them (as in reason it ought) to the person who is most excellent, and that is the King. And so does it likewise in regard to the water as well as the earth.

11. The Clyde Navigation Trustees Case 1891 “I hold on the authorities that the right of the Crown in Loch Long and its solum is a right of property, and that the Crown is entitled to stop any intruder from coming to Loch Long, and there throwing large quantities of solid matter into the loch. Having that right, I further hold that it is not a relevant defence on the part of those admittedly so casting solid matter into the loch to aver that they are doing no harm. They are doing that which they have no right by statutory or customary law or by contract to do, and I am unable to see how the Crown can be prevented from interdicting the trespass.”

12. The Clyde Navigation Trustees Case 1891 “The Crown must use the property in the public interest. But that is not a matter for us. If the department of Government which is charged with the administration of the Crown’s duties in this matter uses this property in a manner detrimental to the public interest, or fails to use it in the interest of the public, there is a remedy, but it is not to be found here. The Government must be called to account and it can be most sharply and effectually called to account elsewhere.”

13. The Canadian Pacific Railway Case 1953 “For the purpose of their decision their Lordships are prepared to assume that the gas whilst in situ is the property of the appellant even though it has not been reduced into possession, but the question is not whose property the gas is, but what means the respondents may use to recover their petroleum.”

14. The Canadian Pacific Railway Case 1953 “In such circumstances their Lordships are not prepared to hold that the respondents are under an obligation to conserve the appellant’s gas with the consequent denial of their right to recover the petroleum in the usual way.”

15. Environmental Planning and Assessment Act 1979 (NSW) • The principles of ecologically sustainable development are to be applied when decisions are being made under any legislative enactment or instrument which adopts the principles. • The EPA Act is one such legislative enactment. It expressly states that one of the objects of the EPA Act is to encourage ecologically sustainable development. • Section 79C(1) of the EPA Act, which sets out the relevant matters which a consent authority must take into consideration, does not expressly refer to ecologically sustainable development. Nevertheless, it does require a consent authority to take into account the “public interest” in s 79C(1)(e). The consideration of the public interest is ample enough, having regard to the subject matter, scope and purpose of the EPA Act, to embrace ecologically sustainable development. Chief Justice Brian Preston of the Land and Environment Court of New South Wales

16. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) Section 3 The object of this Act is to provide an effective regulatory framework for: • petroleum exploration and recovery; and • the injection and storage of greenhouse gas substances; in offshore areas.

17. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) Section 163 (6) and (7) In deciding whether to approve of key petroleum operations where there is a significant risk that any of these operations will have a significant adverse impact on operations for the injection or storage of a greenhouse gas substance – (6) The responsible Commonwealth Minister must have regard to: • whether the registered holder of the greenhouse gas assessment permit, greenhouse gas holding lease or greenhouse gas injection licence covered by paragraph (b) has agreed, in writing, to the applicant carrying on the key petroleum operations in respect of which the responsible Commonwealth Minister is so satisfied; and (e) if so – the terms of that agreement. (7) The responsible Commonwealth Minister must have regard to the public interest.

18. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) Section 362 (2) (c), (3) and (4) In responding to an application for a greenhouse gas injection licence where there is a significant risk that any of the operations under the licence will have a significant adverse impact on authorised petroleum operations and where – (2)(c) The responsible Commonwealth Minister is satisfied that the grant of the greenhouse gas injection licence is in the public interest the applicant must receive an offer document. • For the purposes of paragraphs (1) (c) and (2) (c), in considering whether the grant of the greenhouse gas injection licence is in the public interest, the responsible Commonwealth Minister must have regard to: • whether the registered holder of the existing post-commencement petroleum exploration permit or existing post-commencement petroleum retention lease, as the case may be, has agreed, in writing, to the grant of the greenhouse gas injection licence; and (b) if so – the terms of the agreement. (4) Subsection (3) does not limit the matters to which the responsible Commonwealth Minister may have regard.

19. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) Section 379 (1) (e) • For the purposes of this Act, a serious situation exists in relation to an identified greenhouse gas storage formation specified in a greenhouse gas injection licence if: • a greenhouse gas substance injected into the identified greenhouse gas storage formation: • has behaved; or • is behaving; otherwise than as predicted in Part A of the approved site plan for the identified greenhouse gas storage formation.

20. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) Section 381 (3) and (4) (3) The notice must: • set out details of the direction that is proposed to be given; and • invite a person to whom the notice, or a copy of the notice, has been given to make a written submission to the responsible Commonwealth Minister about the proposal; and • specify a time limit for making that submission. (4) In deciding whether to give the direction, the responsible Commonwealth Minister must take into account any submissions made in accordance with the notice.

21. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) Section 388 (2) and (3) (2) If the responsible Commonwealth Minister is satisfied that there is a significant risk that a greenhouse gas substance injected into the identified greenhouse gas storage formation will have significant adverse impact on : • navigation; or • fishing; or • any activities being lawfully carried on, or that could be lawfully carried on, by way of the construction or operation of a pipeline; or • the enjoyment of native title rights (within the meaning of the Native Title Act 1993); then, in deciding whether to give the applicant a pre-certificate notice, the responsible Commonwealth Minister must have regard to that significant risk. (3) Subsection (2) does not limit the matters to which the responsible Commonwealth Minister may have regard.

22. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) Section 388 (4) and (5) • The responsible Commonwealth Minister may refuse to give the applicant a pre-certificate notice in relation to the identified greenhouse gas storage formation if: • the responsible Commonwealth Minister is not satisfied that the greenhouse gas substance injected into the identified greenhouse gas storage formation is behaving as predicted in Part A of the approved site plan for the identified greenhouse gas storage formation; or • the responsible Commonwealth Minister is satisfied that there is a significant risk that a greenhouse gas substance injected into the identified greenhouse gas storage formation will have a significant adverse impact on: • the conservation or exploitation of natural resources (whether in an offshore area or elsewhere); or • the geotechnical integrity of the whole or a part of a geological formation or geological structure; or • the environment; or • human health or safety. (5) Subsection (4) does not limit the matters to which the responsible Commonwealth Minister may have regard in deciding whether to refuse to give the applicant a pre-certificate notice.

23. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) Section 399 (1) (c) (i) - (ii) • If: • on a day (the decision day) that is at least 15 years after the issue of the site closing certificate, the responsible Commonwealth Minister is satisfied that: • the greenhouse gas substance injected into the formation is behaving as predicted in Part A of the approved site plan for the formation; and • there is no significant risk that a greenhouse gas substance injected into the formation will have a significant adverse impact on the geotechnical integrity of the whole or part of a geological formation or geological structure; and

24. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) Section 399 (1)(c) (iii)-(iv) • there is no significant risk that a greenhouse gas substance injected into the formation will have a significant adverse impact on the environment; and • there is no significant risk that a greenhouse gas substance injected into the formation will have a significant adverse impact on human health or safety. the responsible Commonwealth Minister may, by writing, declare that the period: • beginning at the end of the cessation day; and • ending at the end of the decision day; is the closure assurance period in relation to the formation for the purposes of this Act.

25. Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) Section 592 (2) (c) and (d) • The responsible Commonwealth Minister may, by written notice given to the registered holder of the permit, lease or licence, direct the holder to do any or all of the following things on or before the applicable date: (c) to provide, to the satisfaction of the responsible Commonwealth Minister, for the conservation and protection of the natural resources in the title area; (d) to make good, to the satisfaction of the responsible Commonwealth Minister, any damage to the seabed or subsoil in the title area caused by any person engaged or concerned in those operations.

26. Geothermal Energy Act 2010 (Qld)Section 3 (1) The main purpose of this Act is to encourage and facilitate the safe production of geothermal energy for the benefit of all Queenslanders.

27. Geothermal Energy Act 2010 (Qld)Section 3 (3) Other purposes of this Act are to – • ensure the following for the carrying out of the activities – • minimisation of conflict with other land uses; • constructive consultation with people affected by the activities; • appropriate compensation for owners or occupiers of land adversely affected by the activities; • responsible land and resource management; and • encourage the use of renewable energy in the State.

28. Geothermal Energy Act 2010 (Qld)Section 80 Subject to section 83, the Minister may grant the applicant a geothermal lease only if satisfied the requirements mentioned in section 81 have been complied with.

29. Geothermal Energy Act 2010 (Qld)Section 81 (e) and (f) For section 80, the requirements are the following – • the relevant environmental authority has been issued; • any relevant Water Act authorisation has been issued.

30. Geothermal Energy Act 2010 (Qld)Section 90 (1) and (2) • The proposed development plan must include an assessment of – • water needed for the proposed activities; and • the potential for obtaining any relevant Water Act authorisation; and • the potential structural and other impacts of the carrying out of the proposed activities on aquifers. • The proposed plan must include a plan for the treatment and disposal of any water taken or that may be taken because of the carrying out of the proposed activities.

31. Geothermal Energy Act 2010 (Qld)Section 138 (1) A geothermal tenure holder may make an arrangement with the holder of an overlapping resource authority for the tenure about the carrying out of authorised activities for the tenure.

32. Geothermal Energy Act 2010 (Qld)Section 141 (1) (c) • The Minister may approve the proposed arrangement only if – (c) the arrangement is consistent with the purposes of this Act.

33. Geothermal Energy Act 2010 (Qld)Section 147 (2) (c) to (e) • The geothermal assessment criteria are – • the potential for the parties to make a geothermal coordination arrangement for the proposed geothermal lease; and • the economic and technical viability of the concurrent or coordinated carrying out of authorised activities for the proposed geothermal lease and the overlapping resource authority; and • the public interest.

34. Geothermal Energy Act 2010 (Qld)Section 149 (1) The applicant must, within 10 business days after making the geothermal lease application, give the overlapping resource authority holder a copy of the application, other than any part of the application relating to the capability criteria.

35. Geothermal Energy Act 2010 (Qld)Section 153 In making the resource management decision the Minister must have regard to the following – • the geothermal statement; • the geothermal assessment criteria; • the holder submissions; • the public interest.

36. Geothermal Energy Act 2010 (Qld)Section 154 Overlapping authority priority may be given only if the Minister considers that – • either – • it is unlikely the applicant and the overlapping resource authority holder will enter into a geothermal coordination arrangement; or • a geothermal coordination arrangement for the proposed geothermal lease is not commercially or technically feasible; and (b) the public interest would be best served by not granting a geothermal lease to the applicant first.

37. Geothermal Energy Act 2010 (Qld)Section 172 (1), (3) (a) and (6) • This section applies if, under section 170, a relevant lease holder has objected to the carrying out of a geothermal activity by a geothermal permit holder. • Either of the parties may by a notice in the approved form ask the Minister to decide – • for section 170 – whether the authorised activity may be carried out under that section. (6) The Minister’s decision binds the parties.

38. Petroleum and Gas (Production and Safety) Act 2004 (Qld) Schedule 2 The public interest means a consideration of each of the following – • government policy; • value of commodity production (including time value); • employment creation; • total return to the State and to Australia (including royalty and rent), assessed on both a direct and indirect basis, so that, for example, downstream value adding is included; • social impacts; • the overall economic benefit for the State, or a part of the State, in the short and long term; • impacts on aesthetic, amenity, cultural or environmental values.

39. Mineral Resources Act 1989 (Qld) Section 318AK The public interest is a consideration of each of the following – • government policy; • value of commodity production (including time value); • employment creation; • total return to the State and to Australia (including royalty and rent), assessed on both a direct and indirect basis, so that, for example, downstream value adding is included; • social impacts; • the overall economic benefit for the State, or a part of the State, in the short and long term.

40. Geothermal Energy Act 2010 (Qld)Section 7 This Act is subject to the Nature Conservation Act 1992, sections 27 and 70QA

41. Mineral Resources Act 1989 (Qld)Section 319 (1) (1) Subject to subsections (2) and (3), the Planning Act does not apply to development authorised under this Act.

42. Geothermal Energy Act 2010 (Qld)Section 213 (1) (a) and (c) • The requirement under section 211(1) to give an entry notice does not apply for an entry to land to carry out an authorised activity if any of the following apply – • the geothermal tenure holder owns the land; • if - • there is a conduct and compensation agreement relating to the land; and • each eligible claimant for the land is a party to the agreement; and • the agreement includes a waiver of entry notice.

43. Land Act 1994 (Qld)Section 16 • Before land is allocated under this Act, the chief executive must evaluate the land to assess the most appropriate tenure and use for the land. • The evaluation must take account of State, regional and local planning strategies and policies and the object of this Act.

44. Land Act 1994 (Qld) Section 4 In the administration of this Act, land to which this Act applies must be managed for the benefit of the people of Queensland by having regard to the following principles – Sustainability • sustainable resource use and development to ensure existing needs are met and the State’s resources are conserved for the benefit of future generations Evaluation • land evaluation based on the appraisal of land capability and the consideration and balancing of the different economic, environmental, cultural and social opportunities and values of the land

45. Sustainable Planning Act 2009 (Qld)Section 3 The purpose of this Act is to seek to achieve ecological sustainability by – • managing the process by which development takes place, including ensuring the process is accountable, effective and efficient and delivers sustainable outcomes; and • managing the effects of development on the environment, including managing the use of premises; and • continuing the coordination and integration of planning at the local, regional and State levels.

46. Sustainable Planning Act 2009 (Qld)Section 8 Ecological sustainability is a balance that integrates – • protection of ecological processes and natural systems at local, regional, State and wider levels; and • economic development; and • maintenance of the cultural, economic, physical and social wellbeing of people and communities.

47. Sustainable Planning Act 2009 (Qld)Section 4 (1) (a) • If, under this Act, a function or power is conferred on an entity, the entity must – (a) unless paragraph (b) and (c) applies – perform the function or exercise the power in a way that advances this Act’s purpose.

48. Sustainable Planning Act 2009 (Qld)Section 5 (1) (b) and (3) • Advancing this Act’s purpose includes – • ensuring the sustainable use of renewable natural resources and the prudent use of non-renewable natural resources by, for example, considering alternatives to the use of non-renewable natural resources. • In this section – natural resources includes biological, energy, extractive, land and water resources that are important to economic development because of their contribution to employment generation and wealth creation.

49. Strategic Cropping Land Act 2011 (Qld)Section 3 The purposes of this Act are to – • protect land that is highly suitable for cropping; and • manage the impacts of development on that land; and • preserve the productive capacity of that land for future generations.

50. Strategic Cropping Land Act 2011 (Qld)Section 11 (1) and (2) • The SLC principles are the following principles – • protection • avoidance • minimisation • mitigation • productivity. • The protection principle is to protect SCL and that, except in exceptional circumstances, doing so takes precedence over all development interests.