Offshore Oil Rig Licensing

24 Jun 2010 questionsarchive

I seek leave to make an explanation before asking the Minister for Mineral Resources Development a question about offshore oil rig licensing.

The Hon. J.M.A. LENSINK: There has been some consternation in the community about the vulnerability of Australian shores following the devastating oil spill from an offshore oil operation in the Gulf of Mexico. This environmental catastrophe should be a wake-up call to governments everywhere in terms of licensing of offshore mining operations. The minister stated in a media release on 17 May that he was inviting applications for two offshore developments within the Bight Basin, off the South Australian coast, which he believes could lead to multimillion dollar investment in offshore exploration. My questions are:

1. Is the government satisfied that its current licensing requirements of offshore operations adequately deal with risk management procedures? If so, how is the licensing different from the licensing that operated in the Gulf of Mexico?

2. In light of that catastrophe, does the minister feel that there is any need to review the licensing systems?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Industrial Relations, Minister Assisting the Premier in Public Sector Management) (14:26): One should always review any licensing system if there is some event, wherever it may be in the world. Of course, we have had a similar issue in relation to the North West Shelf, where there was a blowout. That is being reviewed by the National Offshore Petroleum Safety Authority (NOPSA) and other relevant bodies that regulate petroleum development and exploration in those activities. So, one always learns from any event.

In relation to offshore waters, they are beyond the three mile territorial mark, and they are the responsibility of the federal government, but the state government does have an arrangement for managing aspects of petroleum activity on behalf of the commonwealth.

Certainly, the early advice I have received is that, within this country and within this state in particular, we do have very stringent controls over petroleum exploration. As I understand it, the situation in the Gulf of Mexico was due to the failure of the blowout prevention mechanism that is required on these wells. I understand that, within our country, that blowout prevention technology has to be tested before it is put in place. It appears that may not have happened in the Gulf of Mexico, but I do not want to pre-empt any findings. In relation to what happened in the Gulf of Mexico, we have only press reports to go on.

I do understand that, certainly with operations within our state, that blowout prevention would have to be checked and proved to be safe before operations would continue. Certainly, the preliminary advice I have is that in this state we are required to have a number of regulatory measures in place, which may not apply in the Gulf of Mexico or other jurisdictions.

Of course, whenever there are events such as this, be they in the Gulf of Mexico or the North West Shelf, we should always look at those events and learn from them. Obviously, Australian regulatory authorities, be they commonwealth or state, will be looking at those events to see whether there are any lessons to be learnt, and our regulations would be upgraded accordingly