Public liability for petroleum, gas and CSG infrastructure

At the end of the resource authority's term, the holder must apply to surrender both the resource authority and environmental authority (EA). The resource authority cannot be surrendered until the State is satisfied that the conditions of the EA have been met, including rehabilitation (see Obligations under the EP Act below). Until the resource authority and EA have been surrendered, the resource authority holder remains responsible for decommissioning obligations under the resource authority and rehabilitation obligations under the EA.

The resource authority holder has an obligation to decommission any petroleum well, water injection bore, water observation bore or water supply bore drilled by, or for the holder before the tenure ends or the land on which they are located ceases to be in the area of the authority (i.e. in circumstances where the tenure is partially relinquished or cancelled).

A petroleum well is only decommissioned if it is done in the manner prescribed under a regulation. The well decommissioning standards are set out in the Code of Practice for the construction and abandonment of petroleum wells and associated bores in Queensland (PDF, 923KB).

Well integrity is fundamental to ensuring risk can be managed to an acceptable level and protecting aquifers during the well life cycle. The code addresses safety and environmental issues during the construction, operation and decommissioning of petroleum wells and associated bores.

The code has been developed based on good industry practice – these are recommended practices, methods and techniques used to assist resource authority holders satisfy the means of compliance and achieve the required standards of decommissioning.

The well decommissioning objectives include:

• isolating aquifers from each other and from permeable hydrocarbon zones
• recovering and removing surface equipment so as to not adversely interfere with the normal activities of the owner or occupier of the land on which the well or bore is located
• ensuring the site is left safe and free from contaminants.

Despite being decommissioned, the holder has responsibility for any well or bore until such time when the petroleum tenure ends or the land ceases to be part of the authority.

The decommissioning of a pipeline must be done in a way that complies with Australian Standard 2885.

The resource authority holder must decommission any pipeline in the areas of a resource authority before the authority ends, or the land on which they are located ceases to be in the area of the authority.

The pipeline generally remains the personal property of the holder even if the authority ends, or the land on which it is located ceases to be part of the authority.

In the event that the holder no longer exists (i.e. there has been a disclaimer or it has been deregistered), the pipeline can be remediated under the State's abandoned operating plant framework contained in the P&G Act.

Equipment includes machinery and plant associated with the authorised activities of the tenure. Improvements include works constructed in connection with a well or bore (e.g. a well pad and/or access track). Improvements do not include a pipeline, petroleum well, water injection bore, water observation bore or water supply bore.

The resource authority holder must remove any equipment or improvements from the land on or before the day the authority ends, or the day the land ceases to be in the area of the authority (whichever is earlier) unless the landholder otherwise agrees.

If the holder of the resource authority fails to remove equipment or improvements, the State may authorise a person to enter land to remove it. At this point it becomes the property of the State.

The State has a range of powers to authorise persons (including the former resource authority holder) to enter land under the P&G Act to remove equipment, decommission petroleum wells, remediate legacy boreholes, and comply with end of authority or area reduction obligations.

Environmental authorities granted under the EP Act may impose conditions on resource authority holders about the decommissioning of infrastructure and rehabilitation of any land disturbance.

The environmental authority includes rehabilitation requirements that must be achieved before it can be approved for surrender and the relevant petroleum and gas authority can be returned to the State. These requirements vary depending on the condition of the land and its use prior to the start of the authorised activities. The requirements may include measures such as:

• ensuring that disturbed land is reinstated to a condition that enables the land to be rehabilitated to the pre-disturbance state
• reinstating the top layer of the soil profile
• promoting the establishment of vegetation of the same species and density of cover to that of the surrounding undisturbed areas.

Generally, rehabilitation requires any disturbance caused by the authorised activity to be rehabilitated, leaving a site that will not cause environmental harm and that is suitable for a future use.

The surrender of an EA may be approved where site features remain on the site. The site features include both legacy infrastructure (e.g. pipelines and wells) as well as infrastructure that the landholder has agreed to use and take responsibility for (e.g. water bores and dams).

The surrender process includes an assessment of compliance with the EA conditions in relation to rehabilitation. The State can approve surrender subject to some residual risks being transferred to the State, and a residual risk payment being made. However, if the landholder has agreed to take responsibility for any legacy infrastructure, that infrastructure would not be considered in the evaluation of residual risk calculations.

Once the surrender of an EA is approved, the resource company is generally no longer responsible for the monitoring, maintenance and rectification of the site. However, following surrender there may be ongoing requirements for the State to monitor and manage aspects of the site.

The State may also need to rectify any failures of rehabilitation that occur after the surrender has been approved. Therefore, the State needs to secure sufficient funds from the resource authority holder to undertake this work, should it be necessary or desirable to do so. The EP Act provides authority for the State to secure such funds through a residual risk payment.

Residual risks are those risks to the environment that remain at a rehabilitated resource site after the EA is surrendered. Residual risks are only relevant once all rehabilitation requirements have been met (i.e. after disturbance and/or infrastructure associated with authorised activities has been decommissioned and/or rehabilitated to the required standards).

Where residual risks are identified before surrender, the management of those risks and the assumptions regarding the rehabilitation undertaken will be described in a risk management plan which must be included as part of the post-surrender management plan.

When surrendering an EA, the resource company must carry out a risk assessment of the land. If the risk assessment identifies relevant residual risks, the administering authority must estimate the residual risk payment. The payment estimate considers all potential associated costs and expenses of remediating a potential future failure. These costs could include any ongoing management activities to monitor the residual risks. These details are captured in a residual risk post-surrender management plan.

The residual risk payments are held in a residual risk fund and managed by the State to ensure sufficient funds will be available for the State to undertake future remediation activities to protect the environment, should it be necessary or desirable to do so.

The residual risk payments and fund are only designed to cover the management of residual risks of the land where the State may need to undertake activities. Therefore, if the landholder has agreed to take over ownership of rehabilitated or decommissioned resource infrastructure, the fund does not cover the risk presented by its failure.

Under the residual risk framework, there are no obligations placed on the landholder to monitor or manage residual risks on their property.

The existence of a residual risk post-surrender management plan does not require the landholder to undertake any work or legally restrict them from undertaking any activities on their land.

There is flexibility for the State to use residual risk funds to engage third parties to manage residual risks where it is appropriate, cost-effective and efficient. This could in fact be the landholder where their capabilities suit the work to be undertaken. However, where this is the case, it will be subject to contractual arrangements by agreement.

There may be circumstances where the State or authorised person needs to access a landholder’s property to undertake the monitoring, management, or remedy of an issue. In these circumstances, the applicable land access provisions (in the relevant resources legislation) will be used to provide an entry notice prior to access, advising the landholder when access will occur and the work that needs to be done.