Hydraulic Fracturing: Importance Of Stakeholder Engagement And Consultation
Community and stakeholder interest in resource projects is increasing, particularly in relation to perceived risks to health and the environmental impacts from hydraulic fracturing in addition to concerns regarding land access and landholder’s legal rights. This is creating greater expectations for more transparency and accountability of regulators during approval and compliance processes, and a need for more effective stakeholder engagement.
The State Government and the petroleum industry have a role in improving community understanding about the process of petroleum acreage releases and activities that may occur as a result of a title being granted, such as whether hydraulic fracturing will be undertaken. It is essential that stakeholder engagement occurs at the earliest opportunity, and continues throughout the project lifecycle.
Effective stakeholder engagement is the key to ensuring ongoing positive relationships between the State Government, the petroleum industry and its stakeholders. All stakeholders should be provided with sufficient information to allow them to make an informed assessment of the potential consequences of hydraulic fracturing on their interests or activities. Information should be presented in a format that is readily understandable to the audience being engaged.
In the course of its regulatory functions, the Government undertakes engagement with stakeholders both informally and formally. For example, the Department of Mines, Industry Regulation and Safety (DMIRS) employs regionally based Liaison Officers whose role is to engage with stakeholders to explain and provide general information on a range of matters relating to both the mining and petroleum industries. Informal engagement undertaken by Liaison Officers is critical in maintaining ongoing relationships by providing local stakeholders with easily accessible information and connecting them with relevant DMIRS staff. More formal consultation on specific proposals or developments may be undertaken following this initial engagement.
When undertaking formal consultation, stakeholders should be provided with an appropriate timeframe to adequately review, consider, and respond to the information provided.
Consideration should also be given to ensuring that any potential language barriers, which may impact on the ability of stakeholders to make an informed assessment of the potential consequences of the activity, are addressed. For example, communication with Aboriginal people should be conducted by trusted informants in a language commonly used and understood by the local people. If English is not commonly used, where appropriate and at the request of the stakeholder group, translators may be available to convey information.
Lifecycle of hydraulic fracturing projects
Hydraulic fracturing projects, like all petroleum resource projects, follow a lifecycle of accessing acreage, undertaking exploration, developing production infrastructure, recovering petroleum/petroleum production, and decommissioning, rehabilitation and closure
Access to acreage
In order to explore for a petroleum resource, a company must apply for, and be granted, a petroleum exploration title over the relevant area of land, generally through a competitive bidding acreage release process.
Although most onshore petroleum exploration is carried out as an outcome of the acreage release process, in some circumstances access can be achieved by way of an interim Special Prospecting Authority with an Acreage Option (SPA/AO).
Under an SPA/AO, once the proposed preliminary six month exploration period is complete, a registered holder may apply for the grant of a subsequent petroleum exploration title covering a proportion of the former SPA/AO.
The State Government’s decision to indefinitely extend the moratorium means that hydraulic fracturing cannot be undertaken under a new petroleum exploration title granted by way of either any future acreage release process or an existing or future SPA/AO. Furthermore, any subsequent petroleum title deriving from either of these processes will be prohibited from utilising hydraulic fracturing for exploration or production.
The continuation of the moratorium has been given effect by way of amendments to the Petroleum and Geothermal Energy Resources (Hydraulic Fracturing) Regulations 2017 (HF Regulations). These amendments took effect in September 2019.The amendments established:
- continuing ban areas where hydraulic fracturing cannot be undertaken; and
- outside those areas, the lifting of the moratorium in 'existing petroleum authority areas'.
An area of the State is an 'existing petroleum authority area' if:
- there was a petroleum authority (i.e. an exploration permit, drilling reservation, retention lease or production licence) in force in respect of the area on 26 November 2018; and
- in the period since that day there has always been a petroleum authority in force in respect of the area; and
- there is currently a petroleum authority in force in respect of the area.
Registered holders of an exploration permit that was in force as at 26 November 2018 can implement an approved work program, underpinned by an exploration rationale, which involves use of hydraulic fracturing.
An exploration rationale and work program is designed to increase the level of knowledge of a petroleum system, with activities building upon each other to delineate potential locations for petroleum wells. Exploration activities include surveying operations such as geophysical (e.g. seismic) and geochemical surveys, the drilling of stratigraphic wells, and ultimately the drilling of exploration wells and potentially the use of hydraulic fracturing.
Appraisal (proof of concept)
During the exploration phase, a resource may be identified and further appraisal work may be undertaken to confirm the extent, resources and likely production rate of a field. This information can then be used to determine the size of the gas field and potential development concepts including the design of any required hydraulic fracturing program.
Appraisal phase work may include further drilling of petroleum wells and the use of hydraulic fracturing. Registered holders of exploration permits or retention leases that were in force as at 26 November 2018 retain the right, subject to any further required approvals and consents, to use hydraulic fracturing.
If a registered holder identifies a petroleum resource during exploration and/or appraisal, a Declaration of Location will occur and is the first step in transitioning to the production phase. The size of the Location will dictate the size of the primary and secondary production licences which can be applied for. If it is then determined that the petroleum resource is commercially viable, the registered holder may apply for a production licence.
Once granted, a production licence provides a registered holder with the right, subject to relevant approvals and consents, to undertake the recovery of petroleum. Registered holders of production licences that were in force as at 26 November 2018 retain the right, subject to any further required approvals and consents, to use hydraulic fracturing. This can include the construction of more permanent production infrastructure, petroleum production wells and associated access tracks, and infield flowlines.
It is expected that exploration activities will also continue within the area of the production licence.
Decommissioning, rehabilitation and closure
Planning for closure should commence as early as the exploration or appraisal phase, with post activity land use identified and agreed before seeking project approval.
It is a requirement of the Petroleum and Geothermal Energy Resources Act 1967 (PGERA) that a registered holder must, among other things, satisfy the Minister for Mines and Petroleum that it has:
- removed or caused to be removed all property brought into the area;
- plugged or closed-off all wells drilled in the area; and,
- made good any damage to the Earth’s crust in that area.
Under the PGERA, the Minister has the powers to prevent a registered holder from surrendering the title until decommissioning and rehabilitation requirements have been met to a standard acceptable for closure. The Minister may also direct a former registered holder to address decommissioning and rehabilitation requirements.
Government’s role in hydraulic fracturing stakeholder engagement and consultation
The State Government recognises that effective and ongoing stakeholder engagement enables better-planned and more informed policies, projects and services, including a greater understanding and management of issues and potential risks.
In the course of undertaking its regulatory role the State Government will engage with stakeholders in relation, but not limited to the following:
- Hydraulic fracturing regulatory requirements.
- Assessing the registered holders compliance with regard to hydraulic fracturing regulatory requirements.
- Identifying matters for consideration, such as prohibited and environmentally sensitive areas.
- Identifying and communicating to registered holders potential constraints on future exploration and production activities.
- Informing the community by:
- providing timely and factual information regarding the petroleum industry in Western Australia;
- explaining technical information regarding hydraulic fracturing and the associated risks; and
- ensuring stakeholders understand the regulatory framework and the regulator’s role.
- Discussing and consulting with registered holders regarding decommissioning, rehabilitation and closure requirements.
- Providing opportunities for comment on projects referred to the EPA for assessment.
To ensure stakeholder engagement and consultation is undertaken in a transparent manner, the State Government has committed to allowing easy access to data, documents and other information relating to administration and regulation in the Western Australian petroleum industry unless there are specific legislative and other legal provisions to restrict access to the information.
The State Government provides stakeholders with a number of platforms to enable access to a range of relevant information, including:
- The Petroleum and Geothermal Register (PGR) — online access to information relating to petroleum and geothermal titles.
- The Environmental Assessment and Regulatory System (EARS) — online access to information on environmental applications being assessed by the Department of Mines, Industry Regulation and Safety.
- Tengraph — online spatial enquiry and mapping system displaying the position of Western Australia’s mining and petroleum titles in relation to other land information.
- The Petroleum and Geothermal Information Management System (WAPIMS) — online Petroleum exploration database containing non-confidential data on wells, geophysical survey titles and other related exploration and production data.
- Environmental Impact Assessment — online portal for accessing information relating to assessments undertaken by the Environmental Protection Authority.
- Chemicals Register - online register of chemicals assessed for use in hydraulic fracturing in Western Australia (developed as per Action 9 of the Implementation Plan for the State Government’s response to the Independent Scientific Panel Inquiry into Hydraulic Fracture Stimulation in Western Australia). The register will be published on the Department of Health’s (DoH) website, listing the chemicals reviewed through the Human Health Risk Assessment process.