Petroleum and Geothermal Energy Act 2000

The Petroleum and Geothermal Energy Act 2000 (opens in new window) and associated Regulations were proclaimed on 1 October 2009. The P&GE Act supersedes the Petroleum Act 2000.

The Petroleum and Geothermal Energy Regulations 2013 have been further updated.

2009 AMENDMENTS

Amendments made in 2009 address both administrative matters identified since 2000 and and emerging issues in the petroleum and geothermal industry sectors. Key amendments made include:

  • Change of title from Petroleum Act to Petroleum and Geothermal Energy Act.
  • Introduction of compatible gas storage tenements that explicitly authorise exploration for gas storage resources and subsequent storage of greenhouse gases, as well as the temporary storage of regulated gases for production and use at a later date (to foster security of gas supplies). No royalty is payable on gas storage under the Amendment Act. Transitional provisions ensure that gas storage rights for licences granted under the Petroleum Act 1940 (amended by the Petroleum Act 2000) are preserved. 
  • Following submission of a valid ‘over-the-counter’ Petroleum Exploration Licence application, either the grant or a process leading to grant will be offered to the applicant. Once grant or a process leading to grant has been offered for an application, that application will have primacy and further applications will be held in abeyance pending determination of the application given primacy.
  •  Introduction of Special Facilities Licence allowing third parties who are not primary licence holders under the Act to construct and operate facilities for the purpose of processing regulated substances. 
  • Expanded ‘owner of land’ definition covering all persons who may be directly affected by regulated activities, entitling them to notices of entry and compensation.
  • Enhancement of royalty payment forecasts to provide certainty and improve the process for royalty collection.
  • Specific inclusion of the Environment Protection Authority and Safe Work SA as agencies that must be consulted under the relevant approval provisions of the Act.
  •  Incorporation of “coal constituting a product of coal gasification for the purposes of the production of synthetic petroleum” within the definition of petroleum, thereby introducing regulation of the Coal to Liquids and Coal to Gas processes under the Act.
  • Modification to a number of data and report submission requirements to streamline the submission process.

The second reading speech for the Petroleum (Miscellaneous) Amendment Bill (extract from the House of Assembly Hansard) includes a full explanation of clauses. This is useful as a guide to all amendments that have been made.

list of amendments made to the Regulations is also available.

PRINCIPLES

The P&GE Act embraces six key principles of certainty, openness, transparency, flexibility, practicality and efficiency:

Certainty
The rights conferred by licences are certain and will not be subject to unreasonable change or challenge. Also the regulatory objectives and obligations under the regulatory regime are uniform, clear and predictable to all licensees.

Openness 
Decision-making processes are not exclusive and the legal rights of all stakeholders are not unfairly compromised. This entails the need for fair and equitable processes for the:

  • allocation of title rights;
  • managing of rights of other land owners with overlapping land rights;
  • managing of rights of title holders to access land for the exploration and development of regulated resources;
  • provision of access to natural resources governed by this legislation where surface access within the licence area may be restricted by the sensitivity of the natural environment or other previously established rights;
  • stakeholder consultation on the establishment of the environmental protection objectives; and
  • appeal rights to those affected by decisions made under the legislation.

Transparency
The objects and intent of the regulatory regime are clearly communicated and understood by all stakeholders. Also, stakeholders are provided with the opportunity to input into the development of these objects and intent.

The decision-making processes are visible and comprehensible to all stakeholders and that industry performance in terms of compliance with the regulatory objectives is apparent to all stakeholders.

Flexibility
There is sufficient flexibility in the types of licences that can be granted so as to more adequately reflect the purpose of the activities to be undertaken and the stage of development of the resource under the licence.

The level of intervention (including enforcement) needed to ensure compliance is determined on the basis of the individual company being regulated and the outcomes needed to be achieved.

Practicality
The regulatory objectives are achievable and measurable.

Efficiency
The compliance costs imposed on both government and the company by the regulatory requirements are minimised and justified. Distributional effects across society of company negative externalities is minimised and companies remain liable for the costs of such externalities. An appropriate rent is paid to the community of South Australia from the value realised from the exploitation of its natural resources.

In applying the above principles the Act achieves:

  • A more effective means for allocating and managing the rights to explore for and develop petroleum and other natural resources so as to facilitate competition.
  • Greater security of title of petroleum rights through improved registration procedures and greater flexibility in the types of licences that can be granted.
  • A regulatory regime designed to more effectively and efficiently set and achieve environment and public safety protection objectives.
  • Effective public consultation processes for the establishment of environmental objectives.
  • A more effective means for ensuring that security of production and supply of natural gas is maintained at a prudent level.
  • Effective public reporting to provide all stakeholders with sufficient information on industry performance and government decision-making.
  • A flexible regulatory approach which allows the selection of the most appropriate level of regulatory intervention and enforcement in order to ensure compliance with the regulatory objectives.