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Focus: Carbon capture and storage – environmental considerations

9 June 2009

In brief: Last month, the Environment Protection and Heritage Council released the Environmental Guidelines for Carbon Dioxide Capture and Geological Storage – 2009. This followed the Federal Government's release of acreage and guidance notes for carbon capture and storage assessment under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) in March 2009. Partner Chris Schulz (view CV), Senior Associate Emily Gerrard and Lawyer Sarah Dynon explore the environmental and planning issues relevant to applications for assessment permits under the Offshore Petroleum and Greenhouse Gas Storage Act.

How does it affect you?

  • Applicants for assessment permits under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) (the Act) will need to take into account environment protection obligations relevant to the potential permit areas.
  • In particular, approvals may be needed under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act).
  • Persons intending to apply for assessment permits should factor into work programs timeframes for these approvals and permit processes, including early engagement with regulatory authorities and key stakeholders.
  • Other permits and approvals should be considered, both with respect to assessment permits and activities beyond exploration, including state and territory planning and environment approvals for on-shore infrastructure; and agreement or approval from Indigenous groups in relation to access, use and development of infrastructure corridors and/or coastal water access.
  • As the Environment Protection and Heritage Council (EPHC) members include Climate Change and/or Environment Ministers from each Australian jurisdiction, the Environmental Guidelines for Carbon Dioxide Capture and Geological Storage – 20091 (the EPHC Guidelines) are relevant to consideration of environmental issues associated with carbon capture and storage (CCS).

Background

The Act, which came into force on 21 November 2008, provides for the grant of assessment permits. Assessment permits give the title holder the right to explore for eligible greenhouse gas (GHG) storage formations. Following the discovery of an eligible storage formation, the title holder can apply to the Federal Minister for declaration of the storage formation as an identified storage formation. Once the storage formation is declared, the permittee can apply for a GHG holding lease or injection licence.

Anna Collyer reported in our 8 April Focus on the Federal Government's release of acreage for carbon capture and storage assessment under the Act. The release of acreage was accompanied by acreage and guidance notes for carbon capture and storage assessment (the Guidance Notes) for applicants. The Guidance Notes set out information that should be provided in bid applications for assessment permits and the criteria against which they will be assessed. The Guidance Notes also include notices, which identify general issues and matters of relevance to all release areas (including environment protection, heritage values, shipwrecks, navigation, fishing interests and defence requirements). Also, the Guidance Notes set out special notices for release areas, which set out recommendations in relation to particular ecological values and/or the rights and interests of others in specific release areas. Applicants should be mindful both of the notices and special notices in putting together work plans and supporting information for an assessment permit. Environmental approvals relevant to exploration activities are discussed further below.

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EPBC Act approvals

Approval under the EPBC Act will be needed where activities and works have, or are likely to have, a significant impact on a matter of National Environmental Significance (NES).

Areas of NES in Commonwealth offshore areas are the Commonwealth marine areas, World Heritage areas, National Heritage areas, wetlands of international importance, threatened species and migratory species.

As emphasised by the Government's Guidance Notes and the EPHC Guidelines, proponents applying for an assessment permit need to consider whether their activities will have, or are likely to have, a significant impact on a matter of NES. If an activity impacts on a matter of NES, it must be approved by the Federal Environment Minister.

These considerations will be particularly relevant where a release area:

  • is located near wetlands of international importance (Ramsar sites such as Corner Inlet, Western Port, Coorong, Lakes Alexandrina, and Becher Point Wetlands Ramsar sites);
  • is inhabited or populated by listed threatened species or cetaceans (whales, dolphins or porpoises). A permit must be obtained for any activity impacting upon cetaceans, incidentally or otherwise, in Commonwealth waters; or
  • is in a recognised whale migration corridor and important aggregation area. Proposed surveys and associated mitigation measures will need to be considered carefully in light of requirements and offences under the EPBC Act. The EPBC Act Policy Statement 2.1 – Interaction between offshore seismic exploration and whales provides guidance on the application of the EPBC Act to seismic surveying.

Also, a number of the release areas are in the vicinity of protected or sensitive marine regions, and are likely to be subject to environmental scrutiny. Release areas in the Vlaming Sub-basin in Western Australia include features that have been identified by the Department of Environment, Water, Heritage and the Arts as key ecological features of the south-west marine region. Applications for permits in these areas will need to provide detailed information about the potential impacts of proposed activities on the area, including on species found in the area.

Other approvals and considerations

In addition to EPBC approvals, a permit may be required in order to undertake carbon stream injection in the marine environment (under the Environment Protection (Sea Dumping) Act 1981 (Cth)). An environment plan may also be required under the Act.

Indigenous groups may have interests in some of the release areas; in particular, in those that are closer to the shore or where inland or coastal waters are needed for infrastructure/works. Successful assessment permit applicants should liaise closely with registered native title claimants and their representatives in relation to their proposed exploration activities. Notices and special notices in the Guidance Notes outline registered native title claims that overlap with release areas.

In the longer term, following the identification of eligible GHG storage formations, GHG will need to be transported (ie by pipeline) from its source to the storage site. The overall project design will trigger a number of environment and planning considerations at a state and territory level.

Where assessment under the EPBC Act is required in addition to state or territory assessment, it may be possible to combine the two assessments. Bilateral agreements and accredited processes create streamlined methods for assessment of projects by both levels of government.

In addition, in respect of areas off the Northern Territory, Indigenous people have rights in relation to coastlines and tidal waters along Aboriginal land under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). These rights and related negotiations may need to be factored into project development and/or new access infrastructure for exploration activities.

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The way forward

As reported in our April Focus, applications for assessment permits will not be due until at least two months after the promulgation of regulations and guidelines supporting the Act. These regulatory instruments are expected in the third quarter of 2009.

Those intending to apply for assessment permits should consider the environment protection obligations relevant to the potential permit areas. Further, applicants should consider early engagement with regulatory authorities and key stakeholders, to ensure that ample time for relevant approvals to be obtained is built into work programs.

Published 9 June 2009

Footnotes
  1. These guidelines discuss broad environmental considerations across all components of carbon capture and storage projects.

For further information, please contact:

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