Regulatory nirvana for hydraulic fracture stimulation

Abstract

Government are challenged to deploy trustworthy regulation to enable profitable and environmentally sustainable unconventional petroleum projects. A key activity under scrutiny during the development of these projects is hydraulic fracture stimulation. Regulatory 'Nirvana' for unconventional projects and conventional projects alike entails: • Pragmatic licence tenure; • Regulatory certainty and efficiency without taint of capture; • Regulators and licensees with trustworthy competence and capacity; • Effective stakeholder consultation well-ahead of land access; • Public access to details of significant risks and reliable research to backup risk management strategies so the basis for regulation is contestable anytime, everywhere; • Timely notice of entry with sufficient operational details to effectively inform stakeholders; • Potentially affected people and organisations can object to land access - without support for vexatious objections; • Fair and expeditious dispute resolution processes; • Fair compensation to affected land-users; • Risks are reduced to low or as low as reasonably practicable (ALARP) while also meeting community expectations for net outcomes; • Licensees monitor and report on the efficacy of their risk management, and the regulator probes same; • Regulator can prevent and stop operations, require restitution, levy fines and cancel licences; and • Industry compliance records are public, so the efficacy of regulation is transparent. These principles are deployed in South Australia where: • 24 unconventional gas plays are being explored, each with giant gas potential; • Hundreds of wells have been safely hydraulically fracture stimulated; Since implementing South Australia's Petroleum and Geothermal Energy Act 2000 [1] (PGE Act), more than 11,000 notices of entry for petroleum operations led to just one court action, and that was to establish a legal precedent that geophysical surveys can extend outside a licence to enable a complete understanding of the potential resources within a licence. The introduction of new energy development technologies is inevitable, so regulatory Nirvana requires adaptive learning so that the previously mentioned principles are maintained. Expeditious, welcomed access to land for compatible, multiple uses is the metric for performance, and leading practice is based on the principle that trust is the most valuable lead factor and lag outcome in sustaining land access for resource exploration, development and production.