Oil and gas exploration and production



Australia has large reserves of gas and significant reserves of oil, for which there is both a domestic and a global demand. The risks to, and impacts on, the marine environment from the oil and gas industry are assessed and managed by both state governments and the Australian Government, depending on the location of the specific activities being considered (Box 6.6). Issues associated with this industry include the direct impacts of seabed structures such as wellheads, anchors and pipelines; the large amounts of shipping traffic; and the risks from accidents and spills. There is also significant coastal impact from the associated infrastructure, such as industrial sites where ports and processing equipment are located, the residential base for the workforce, onsite engineering maintenance, transport and related industries. These land-based facilities usually require new ports and harbours, land reclamation and major channel dredging. In Western Australia alone, more than 200 million cubic metres—equivalent to nearly half the volume of water in Sydney Harbour—of dredge spoil (sediments and materials removed from the seabed during dredging) from new coastal developments, mainly for the oil and gas industry, has recently been approved for ocean and coastal disposal.

Box 6.6 North West Shelf Flatback Turtle Conservation Program

In Western Australia, the Gorgon gas production project is the largest ever approved. It is building an industrial base on Barrow Island, approximately 30 kilometres off the coast west of Dampier. Barrow Island has been recognised as an outstanding island for nature conservation. A large proportion of Australia’s flatback turtle population uses the beaches of Barrow Island for nesting, and the Gorgon project has been predicted to significantly affect the access and use of nesting beaches by these turtles. Although the Western Australian Environmental Protection Authority initially recommended against the island’s use for this project, the decision was subsequently revised to permit the industry to build on the island, subject to a number of environmental management conditions and commitments to offset impacts by improving protection of turtles elsewhere in the region.

The Gorgon project is funding the North West Shelf Flatback Turtle Conservation Program, contributing around $1 million per year for 60 years to increase protection of flatback and other turtles. It is also funding the monitoring and auditing of marine activities during the project’s dredging and marine construction phase.a

The environmental management and research activities developed and applied as conditions to the development project are not likely to substantively mitigate the impacts of the industry’s activity on the nesting of flatback turtles at Barrow Island itself. The research projects aim to increase survival of flatbacks (and other turtles) at other locations, and to gather more detail about the impacts of the reduction of Barrow Island nesting beaches on the flatback population. The program is supervised and assessed by a Marine Turtle Expert Panel of company and government experts appointed by, and accountable to, the Western Australian Minister for the Environment. This, and similar mining environmental offset arrangements in Western Australia, has been heavily criticised for a lack of transparency and public accountability.b

Exploration in the oil and gas industry involves geophysical surveys (using acoustic arrays and other specialist survey tools), exploratory drilling of seabed cores and test wells. Production involves a range of fixed and moveable facilities, such as fixed production platforms and floating platforms that are used as the base for drilling of wells and, with an appropriate array of seabed pipelines, as collection points for oil and gas. Every stage of development and production of these facilities involves substantial risks. The world’s worst oil and gas industry impacts have arisen from all stages of the industry’s activity: shipping, production and exploration. In Australia, the activities of the oil and gas industry are now concentrated in Bass Strait and in the north and north-west regions (Figure 6.5).

In Australia, as well as complying with national environment law, industry must comply with several national industry laws, including the Offshore Petroleum and Greenhouse Gas Storage Act 2006, which is administered by the Australian Government Department of Resources, Energy and Tourism. Under this legislation, companies must prepare legally binding environmental plans, including oil spill contingency plans (see Box 6.7).

Box 6.7 Montara spill

On Friday 21 August 2009, the West Atlas wellhead platform drilling rig owned by PTT Exploration and Production Australasia suffered a wellhead accident at the Montara Well, resulting in the uncontrolled discharge of oil and gas about 125 kilometres from Cartier Island Marine Reserve and 175 kilometres from Ashmore Reef National Nature Reserve (a declared Ramsar Wetland of International Importance). Other sensitive habitats in the region include the Hibernia Reef and the Jabiru Shoals. For 74 days, oil and gas continued to flow unabated into the Timor Sea. Initial estimates provided by the operator were that 64 tonnes (400 barrels) of crude oil were being lost per day. However, this estimate could not be confirmed at any time during the incident. The initial release of oil could have been as high as 1000–1500 barrels per day.54

This incident is Australia’s worst seabed exploration oil accident, and has exposed a number of governance, science and logistics inadequacies. While a number of sensitive animals were known to have been directly killed by the oil, the early response of authorities to spray the ongoing spill with dispersant means that most short-term and medium-term toxic effects are likely to have been greater than would have occurred if no dispersant had been used. These effects occurred below the sea surface in the water column and seabed. Indicative post-spill monitoring showed that the oil effects may have subsequently spread to reach shallow seabed areas within 70 kilometres of the wellhead, and that the oil and the dispersant–oil mix was concentrated below the ocean surface in biologically sensitive depths of the water column. These subsurface areas are highly biologically productive, and fish and all air-breathing fauna (such as cetaceans, turtles and sea snakes) would have been heavily exposed to this pollution. Nonetheless, the surface expression of biological impacts was limited, and it appears that oil did not reach the sensitive reef areas of Australia’s offshore islands.a, 55 The decision to use dispersants was consistent with information available to the Australian Maritime Safety Authority at the time, and was taken to avoid oil impacting on Ashmore Reef and Cartier Island and the coastline of Western Australia.54

The Montara spill highlighted some of the challenges that industry and governments face in ensuring that the best technologies, processes and practices are in place to prevent these types of incidents, which affect Australia’s oceans and shores, and the many people and industries that rely on them. Since the spill, the environmental assessment process has been revised. For example, every assessment of an offshore oil and gas project now considers a spill scenario of at least 11 weeks duration, although it is not yet clear how useful this will be, since modelling systems are not sufficiently advanced to make accurate predictions at such scales. The plans, technologies and processes that a company now has in place to respond to this type of spill are also the subject of greater scrutiny.

Overall, this accident redefined the risks posed by this industry, highlighting the vast spatial and temporal scales over which impacts may occur, and the need for far greater control and scrutiny of onsite operations by government regulators. The clear message from recent accidents in this industry is that the location of exploration and production activities relative to globally unique ecosystems and highly valued natural features is a critical planning consideration.b Improvements in oil spill monitoring, modelling, forecasting, emergency response and environmental risk assessment would increase confidence in offshore oil and gas development proposals and planning.

The oil and gas industry in north-western Australia is rapidly expanding. Although individual wells or a coastal processing plant may have limited and local impacts, the widespread development of the industry is bringing new challenges to regional planning systems. Among other issues, the cumulative effects of dispersed production water, drilling fluids and wastes, and the increasing risk of ship strike and acoustic impacts on cetaceans are becoming significant management issues for fisheries and wildlife management. At present, there are:

  • no regional strategic environmental assessments to guide planning and impact management systems, and limited baseline studies of existing conditions
  • no systematic or structured interfaces with regional conservation and environmental management; each development is considered on its own merits, with very little consideration of cumulative impacts across a region
  • no regionally integrated transportation management systems that recognise the specific requirements of the sensitive species and habitats of the region; there is no upper limit on vessel size, shipping lane use, frequency of transits or seasonal constraints on oil-industry vessels transiting the north-west in the path of the ‘whale highway’—a feature of north-western Australia (see Section 1.4).56
Ward T (2011). Marine environment: Oil and gas exploration and production . In: Australia state of the environment 2011, Australian Government Department of the Environment and Energy, Canberra, https://soe.environment.gov.au/science/soe/2011-report/6-marine/3-pressures/3-3-oil-gas, DOI 10.4226/94/58b657ea7c296