Environmental Management

  • The Australian oil and gas industry has a strong commitment to high environmental standards and minimising environmental impacts.
  • The oil and gas industry is heavily regulated, and companies exploring for and producing oil and gas are committed to minimising their environmental impacts.
  • The processes and technology used in the drilling stage are designed to protect the aquifers, groundwater and external environment from interference.
  • Agriculture, tourism and oil and gas exploration and development can successfully co-exist and do in many of the world’s largest producing countries including Australia, Norway, the United States, Canada and Brazil, among others.
  • Once an oil or gas well has reached the end of its productive life a thorough rehabilitation of the site is undertaken.

In addition to the mandatory regulatory requirements for offshore operations and across onshore all states and territories in Australia, many oil and gas companies commit themselves to voluntary codes of practice to reinforce the industry’s commitment to the safe and environmentally responsible extraction of oil and gas resources.

Before beginning a project, companies undertake research to establish environmental baseline data. This helps define potential impacts and develop environmental impact statements and management plans. Environmental risks are identified and strategies for minimising those risks are evaluated.

The amount of research required will vary depending on the nature, size and potential environmental impact of an activity. In cases where the environment is sensitive, or the activity is complex, more detailed research may be commissioned.

Land access - onshore
Well structure and design
Water management – onshore
Rehabilitation – onshore
Decommissioning
Operating offshore
Drilling – the offshore experience
Land access - onshore
  • Landholders are fairly compensated for allowing access to their properties.
  • While each jurisdiction is slightly different, in Queensland, for example, the industry must comply with the Land Access Code.
  • Depending on the stage of the development, landholders can be expected to be compensated for disturbance to their property, loss of useable land and any reductions in the value of the property.
  • Compensation is managed on a case-by-case basis between the landholder and the relevant operating company.
Well structure and design
  • To access the potential resource, a well is created by drilling a hole to the required depth.
  • A steel casing of a slightly smaller diameter than the hole is installed and cement is then injected in the space between the casing and the borehole wall.
  • The cement provides structural integrity and isolates natural formations in the earth from each other and from the surface.
  • The casing and the cement form a non-porous barrier that prevents cross-contamination between the petroleum-bearing rock formation and any overlying aquifers.
  • The casing and cement are pressure-tested to ensure that they can tolerate higher pressures than those expected over the life of the well.
Water management – onshore

Water is a very important resource in Australia and the oil and gas industry is very conscious of its obligations to ensure that it is protected and well managed. Water resources are protected through regulatory processes that ensure companies to adhere to strict operational standards and restrictions.

Below are some of the measures taken to protect water resources.

Protecting onshore aquifers during drilling operations

  • Aquifers are protected by engineering features and natural environmental barriers during drilling operations.
  • The structure of a well bore is designed so that multiple layers of steel casing and cement form a barrier between the internal well and the outside geological structures – including aquifers.
  • The casing and cement are pressure-tested to ensure that they can tolerate higher pressures than those expected over the life of the well.
  • Furthermore, surface aquifers are naturally separated from areas of targeted drilling by layers of rock formations which create a natural, impermeable barrier for gas migration (known as aquitards).

Regulatory protection of water resources

The Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), was amended in June 2013 to ensure that water resources are considered a matter of national environmental significance, in relation to coal seam gas and large coal mining development.

This ‘water trigger’ is designed to ensure that the impacts on water by proposed coal seam gas and large coal mining developments are comprehensively assessed at a national level.

Under the amendment, there was no change to the environmental standards under the EPBC Act, however, projects must go through two separate approval processes.

Any coal seam gas projects that have a significant impact on matters of national environmental significance, e.g. nationally threatened plants and animals, are already referred under the EPBC Act.

Since 2012 these projects have been referred to the Independent Expert Scientific Committee for advice. The Minister has taken this advice into consideration when making a final decision. However, the Minister did not previously have the power to consider and impose conditions directly relating to impacts on a water resource itself.

As a result of the water trigger, the Minister can now set conditions as part of the project approval to ensure that any significant impacts on a water resource are acceptable.

Produced water

  • Natural gas in coal seams is held in place by the pressure of groundwater. The water is pumped to the surface by wells, relieving this pressure and allowing gas to flow and be collected.
  • CSG produced water is distinct from water found in other non-coal seam aquifers and has different properties to normal artesian water. CSG production water tends to be relatively saline (usually it is brackish, like estuarine water).
  • With the ability to extract groundwater comes the obligation to treat the water for beneficial use and to “make good” any impact on existing water users.
    • Gas producers are usually required to treat CSG associated water and make it available for beneficial use.
    • The quality of associated water can vary greatly in different areas and different types of treatment can be required.
  • Some companies are already treating their associated water by reverse osmosis and other methods so that it can be used for beneficial uses, such as:
    • Stock watering
    • Crop irrigation
    • Tree plantations
    • Augmenting town water supplies
    • Aquaculture
    • Industrial and manufacturing operations
    • Dust suppression for construction activities.
  • Untreated associated water also has beneficial uses, including coal washing and cooling of power stations. Water from some coal seams is – even without treatment – suitable for stock watering, irrigation or reinjection into aquifers.
Rehabilitation – onshore
  • When a natural gas well is no longer actively producing, it must be decommissioned and the site fully rehabilitated. The project infrastructure will be progressively decommissioned and the land rehabilitated throughout the project life.
  • Final decommissioning and rehabilitation will be undertaken at individual infrastructure sites once production is complete in that area – or an exploration site was proven to be uncommercial in nature and didn’t reach production.
  • Decommissioning and rehabilitation activities are undertaken in accordance with the relevant approvals and regulatory requirements.
  • Rehabilitation standards are set well before any activities commence on site – so the operator, the landholder and the regulator have a clear understanding of an operator’s intentions and commitments.
  • Rehabilitation is a formal arrangement and overseen by a regulator.
Decommissioning

Once a well has reached the end of its useful life, it must be remediated (the industry term is ‘plugged and abandoned’). Steps taken to remediate a well are usually well-defined by the relevant regulator.

Well remediation typically requires using a drilling rig to remove any equipment in the wells, such as subsurface pumps and pipe tubing. Cement is then pumped into the well to create long-term barriers to fluid flow and isolate rock zones.

Once this is done, the well-head is removed. In onshore wells, the well-head is cut off below ground level so that agriculture or other practices can resume over the well site.

In all jurisdictions in Australia, for example, companies are required to:

  • Isolate groundwater aquifers within the well from each other and hydrocarbon zones;
  • Isolate hydrocarbon zones from groundwater aquifers and zones with different pressure;
  • Isolate surface casing or production casing from the open hole;
  • Place a surface cement plug in the top of the casing; and
  • Remove the wellhead.
Operating offshore

Much the same as for onshore, before any offshore petroleum activity can begin in Commonwealth waters a number of government approvals must be gained.

Firstly, the company proposing the activity must obtain an offshore petroleum title which secures rights to undertake petroleum activities in the title area. Relevant state and federal ministers (called the Joint Authority) and the National Offshore Petroleum Titles Administrator (NOPTA) grant titles. NOPTA also manages the day-to-day administration of titles.

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has no role in the granting or administration of offshore petroleum titles.

While the granting of a title provides a company with rights to undertake petroleum activities in the title area, NOPSEMA’s role is to ensure the activity does not begin until the company proposing it can demonstrate that it will be undertaken in accordance with the law and in a manner that protects the offshore workforce and environment.

Approval to begin an offshore petroleum activity is only granted after NOPSEMA has conducted a thorough and rigorous technical assessment of the relevant risk management plans and has determined the plans meet all the requirements of the law. Risk management plans may include a safety case, well operations management plan, offshore project proposal and environment plan.

Drilling – the offshore experience

Advances in technology have enabled operators to produce offshore oil and gas deposits in water depths that were previously unattainable. Today, drilling rigs have been designed that enables companies to reach targets in water depths of over 1.5 kilometers.

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