Review of Regulatory Burden on the Upstream Petroleum (Oil and Gas) Sector

Background

In its report on 'Annual Review of Regulatory Burdens of Business: Primary Sector', the Productivity Commission recommended a broad review of the whole Australian onshore and offshore petroleum regulation framework.

Most of Australia's petroleum resources are in Commonwealth waters and are brought onshore for processing in State or Territory jurisdictions.  As such, many petroleum projects cross numerous jurisdictions.  Every step in the exploration, development and production of petroleum is regulated by various governments and regulatory agencies.  For many petroleum projects, there are often duplicated requirements for a given activity for each of the jurisdictions involved.

This study will consider Australia's framework for upstream petroleum regulation and consider opportunities for streamlining regulatory approvals, providing clear timeframes and removing duplication between jurisdictions.

Scope of the review

The Productivity Commission is requested to undertake a research study on the regulation of crude oil and natural gas projects that involve more than one jurisdiction (but not the regulation of subsequent refining, distribution and wholesaling/retailing activities, coal seam methane or any other mineral resource).  In undertaking the study, the Commission is to:

• assess the impact of the current regulatory framework on the international competitiveness and economic performance of Australia's petroleum sector and on the performance of the economy as a whole;
• report on regulatory impediments to improved performance, including inconsistencies and duplication across jurisdictions, and ways in which governments in Australia could address them; and
• consider options for a national regulatory authority (for example, along the lines of the National Offshore Petroleum Safety Authority model) to manage all regulatory approvals for the upstream petroleum industry as a means of addressing issues of regulatory duplication and inconsistencies.

In conducting the study and providing information to reduce unnecessary regulatory burdens on the upstream petroleum sector, the Commission is to:

• seek public submissions and consult with business, government agencies and other interested parties;
• have regard to any other current or recent reviews commissioned by Australian governments affecting the regulatory burden faced by businesses in the upstream petroleum sector; and
• have regard to the underlying policy intent of government regulation on the upstream petroleum sector.

The Commission is to report within 12 months of commencing the study and the Commission's report will be published and submitted to all Australian governments for consideration.

CHRIS BOWEN