EHP Greentape and CSG: ‘Am I crazy or is it these licence conditions?
Got approval from EHP for my CSG development, whew! Hang on, what on Earth am I going to do with these oddball conditions? This was the conundrum that Katestone’s Principal Consultant Air Quality, Natalie Shaw, explored with gas industry participants at the firm’s seminar, ‘CSG and the Air Environment – from Approval to Compliance’ held July 31, 2013. Nat shared what she had learned from meeting with Environment and Heritage Protection (EHP) department representatives in preparing her talk. “Under the new Greentape Reduction regime, if a company indicates that it can meet a draft condition, EHP will accept a company’s word and will not challenge the company’s ability to meet the condition,” Natalie said. The rapid growth of the gas industry hasn’t made it easy for the regulations to keep up. The onus rests with proponents to negotiate viable and reasonable conditions. “What’s more, there are no standard conditions yet for activities that release emissions to air for the petroleum industry under Greentape Reduction”, Natalie said. Some of the vexing requirements that Nat dug up in her research included: Monitoring stack emissions apparently for the sake of monitoring, with no release limits for comparison Having to redo modelling if monitoring shows that original modelling under-predicted actual concentrations, even by a negligible amount Annual monitoring of an auxiliary generator, that is not intended to be used Unclear actions like applying “pro-active and reactive” mitigation and management measures “Not only are some conditions nonsensical, but the number and complexity of recent conditions is inconsistent among similar facilities,” Natalie said. Nat’s research found that three similar, recently approved CSG plants received 13, 23 and 36 air conditions respectively. “We’ve estimated that the cost for these facilities to comply with their air conditions would range from $6000 a year for one facility, to as much as $455,000 up front and $80,000 per year for another,” Natalie said. The research suggests that companies can de-risk projects and remove recurrent costs if they have the nous to attend to the detail of environmental conditions and, in some cases, partly renegotiate them.
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EHP Greentape and CSG: ‘Am I crazy or is it these licence conditions?
- 1. Approvals to Operation Seminar @ Katestone July 31, 2013
- 2. Why are we here? Condition: Water truck must be located on site at all times Compliance with condition? Check!
- 3. Changes to Regulations Environmental Protection (Greentape Reduction) and Other Legislation Amendment Act 2012 (the Greentape Reduction Act) Aim: Introduce an integrated approval process for ERAs that is proportional to environmental risk
- 4. Regulatory Strategy • Improved application process by developing eligibility criteria and standard conditions for: – Petroleum exploration – Petroleum pipeline – Petroleum survey • Streamlined approvals process • Focus is on – Outcomes, not process – Compliance and enforcement
- 5. “We will take you at your word” Greentape Reduction Training by EHP “We will no longer hold your hand” “EHP will no longer be challenging ability to comply with a particular condition” Rachel Burgess-Dean Director Energy Regulation and Implementation Energy Resources and Enforcement Branch Environmental Services and Regulation
- 6. Applications Source: Department of Environment and Heritage Protection’s Regulatory Strategy
- 7. Applications Pre-lodgement meeting Do not rely on, At discretion of EHP Write application Lodge application with Department “Good” application Approved Conditions “Poor” application Refused “Nearly there” application Request for information Approved OR
- 8. Conditions Set based on: Approach based on risk Outcome focused • Application type (standard application = standard conditions) • Information supplied in the application Responsibility EA holder to work out how to meet condition (if management of risk not demonstrated conditions may be onerous)
- 9. Conditions may be influenced by the person setting them Reasonable conditions Onerous conditions Random
- 10. Why not just accept conditions? • • • • • • Thirty party audits Plan of operations EHP’s compliance strategy Enforcement tools Non-compliance register Effort
- 12. Let’s look at some conditions
- 13. Case studies Facility 1 Facility 2 Facility 3 Petroleum lease Petroleum lease Petroleum lease Pipeline licence Pipeline licence Petroleum facility licence ERA 9 ERA 15 ERA 14 ERA 15 ERA 10 ERA 14 ERA 15 Authority took effect May 2013 Authority took effect June 2013 Authority took effect April 2013
- 14. Facility 1
- 16. Facility 2
- 32. Facility 3
- 33. What is the monitoring being compared to? If no outcome, why monitor?
- 35. Summary of conditions Facility 1 Facility 2 ERA 9 ERA 15 ERA 14 ERA 15 13 conditions 36 conditions Facility 3 ERA 10 ERA 14 ERA 15 23 conditions Cost = $12,000 (every 2 years) Cost = Every year $80,000 One off $400,000 Verification $55,000 Additional stacks $600 Cost = Every year $18,000 Verification $55,000 Additional stacks $600 Effort = Low Effort = high Effort = medium to high