Australia’s oil & gas industry calls for fix of offshore regulatory approval ‘chaos’ as wait times increase

Australian Energy Producers, representing Australia’s upstream oil and gas exploration and production industry, has urged the Commonwealth to fix – what it deems as – the broken offshore regulatory system after the logjam of energy supply and carbon capture projects awaiting approval was exposed.

The average wait times were generally around 180 days, depending on the plan, before the offshore regulatory approval “chaos,” according to Australian Energy Producers. However, plans have been tangled up in the approvals process for 562 days on average for exploration and 400 days on average for development as a result of regulatory uncertainty, following a Federal Court ruling last year.

Samantha McCulloch, Australian Energy Producers’ Chief Executive, commented: “The Commonwealth’s review of offshore environmental regulations must be fast-tracked now. The regulator has revealed the uncertainty and ambiguity of the regulations that are risking the energy security of Australia and its international trade partners. Projects that will provide reliable and affordable energy to Australian households and businesses have been held up 562 days on average in a huge blowout.

“A number of plans have been in the approval process for more than two years. Even if projects are approved, uncertainty remains. An approval no longer means an approval and companies are watching approvals granted by the national regulator be overturned in court.”

Furthermore, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) confirmed there were 42 environmental plans linked to energy and carbon capture projects worth billions of dollars before it while only five have been approved since the court’s decision. Based on officials’ statements, “complexities” arising out of the regulations and the court’s interpretation are to blame.

“Governments must ensure robust and timely approvals or risk shortages and upward pressure on energy prices. Regulations that provide clarity and certainty for industry while maintaining comprehensive and meaningful consultation with stakeholders are urgently needed,” underlined McCulloch.

Australia, just like many other countries around the world, sees gas as a solution to the double whammy of energy security and sustainability. In lieu of this, the Australian government’s Future Gas Strategy consultation paper emphasized the urgent need for investment in new gas supply to avoid future shortfalls and underpin the net-zero transition in Australia and the region.

The paper also revealed a new analysis, which showed that future gas demand would outstrip supply in the East and West Coast gas markets in 2034 and 2032, respectively. Australian Energy Producers’ Chief Executive noted that the paper recognized the growing role of gas not only as a partner to renewables in electricity but also as a feedstock to Australian manufacturing and industry.

In addition, it acknowledged the need for carbon capture, utilization, and storage (CCUS) technology, and the importance of gas exports to Australia and the region.