Labor welcomes the Morrison Government’s acknowledgement of serious and costly shortcomings in the regulatory system that cover the critical issue of how to ensure the proper and timely decommissioning of oil & gas infrastructure in Australian waters.
The long and short of it is that companies which operate oil & gas infrastructure must be held to their obligations to decommission and remove that infrastructure in a safe and timely way.
That has not occurred and clearly the regulatory framework has gaping holes. It’s a shame it took the Northern Endeavour fiasco to trigger government action on this issue, especially when you consider this profound regulatory failure will cost the Australian taxpayer an estimated $200 million. Without effective action to address this problem it is likely there will be further instances of this completely unacceptable outcome.
We simply cannot have a situation where companies sell ageing oil & gas infrastructure and in so doing escape their decommissioning obligations, leaving the Australian taxpayer to bear the cost, and placing our marine environment at risk. There needs to be much greater transparency and rigour around the plans, provisions, requirements, and compliance mechanisms to guarantee without question that companies who profit from oil & gas developments meet their obligations to safely decommission and remove infrastructure from our marine environment.
There is no doubt Australia needs a regulatory system that delivers the planning, monitoring, oversight, and enforcement of high-standard decommissioning outcomes for offshore oil and gas infrastructure.
Labor will be constructive in its consideration and engagement with the Government’s proposed reform process, but will hold the Government to account in this critical area of regulation, especially when you consider analysis from the 2020 Advisian Report which expects 10 years decommissioning costs with respect to oil & gas infrastructure will run to $26 billion.