Western Australia lifts fracing ban on existing leases

Dec. 4, 2018
The Western Australian government has reported a lifting of the moratorium on hydraulic fracturing on existing petroleum exploration and production licenses in the state following the findings of an independent scientific inquiry.

The Western Australian government has reported a lifting of the moratorium on hydraulic fracturing on existing petroleum exploration and production licenses in the state following the findings of an independent scientific inquiry.

Most permits are in the Kimberley, Pilbara, and midwestern regions. This however, represents only 2% of Western Australia. The moratorium will remain in place everywhere else, including the southwest and Perth metropolitan region. National parks, the Dampier Peninsula, and public water source areas also will remain off limits to fracing.

The government controls will be strict.

Premier Mark McGowan noted that even in petroleum title areas, farmers, landowners and traditional owners will—for the first time—have the right to say yes or no to gas production on their land. In addition, the industry will not enjoy a royalty discount. In fact, the royalty rate for unconventional oil and gas will increase to 10%, the same rate as that applied to conventional petroleum production.

McGowan added that any government royalties from unconventional oil and gas will be used to support new renewable energy projects via a special Clean Energy Future Fund with $9 million (Aus.) seed allocation.

The premier’s announcement followed a 12-month independent inquiry by Environmental Protection Authority (EPA) Chairman Tom Hatton that made 44 recommendations. The Western Australian government will implement all of these recommendations before any fracing production approvals are granted.

The major changes to the existing regulatory regime include:

• No fracing allowed within 2 km of gazette public drinking source areas.

• All fracing projects, including exploration and production wells, will require EPA assessment.

• The development of an enforceable code of practice to ensure high standards of health, safety, and environmental protection.

• No fracing allowed within 2 km of towns, settlements, or residents.

McGowan declared this to be a “fair and reasonable approach.” He said it is a balanced and responsible policy that supports economic opportunity, new jobs, environmental protection, and landholder rights. He said to impose a blanket ban would undermine the state’s reputation as a safe place to invest and that he could not turn his back on industry.