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Battlelines drawn in Bight search probe

A GROUP of oil and gas veterans have mobilised to counteract what they call deliberately deceptiv...

Battlelines drawn in Bight search probe

Despite the high profile of BP's biggest blunder and a resurgent green movement desperate to convince the Australian government to put a stop to wildcat drilling offshore South Australia, the Senate Inquiry into Oil or Gas Production in the Great Australian Bight received just a few dozen submissions.

One of the most strident was from said group of ex-industry consultants, the little-known South Australian-based Norwood Resource Incorporated.

It was formed by a group of retired, semi-retired and independent consultants predominantly from the oil and gas exploration and production industry to counter what it says are "accusations that denigrate the industry for its environmental management performance".

NRI says the oil and gas sector has a strong track record of environmental responsibility, and to suggest otherwise is "wrong and sensationalist".

The three-year-old Adelaide-based group says it is an environmental awareness group that is concerned that other green groups use misinformation, and it argues that the Senate's inquiry was driven by "fear-mongering misinformation spread by a relatively small number of ideological environmental groups supported by a few equally ideological politicians".

It says green groups make "groundless and perhaps even deliberately deceptive" claims, and argues the Senate committee's terms of reference assume that a spill is likely, which is not the case.

A dozen wells have been drilled in the Bight without issue, and that similar operational environments can be found to the West of the Shetlands in the UK and along the Norwegian coast where the sector has operated safely for decades, with no adverse impacts on cetacean populations or the marine environment.

NRI claimed the Wilderness Society's theoretical spill modelling, which warned a spill could potentially cross the Tasman Sea and wash up on New Zealand's shores, was "baseless, scary and sensationalist fear mongering", using a theoretical spill area in excess of two million square kilometres, when the Montara spill was only 6000sq.km and the Deepwater Horizon covered 180,000sq.km.

BP's own modelling said a spill could potentially reach Albany in Western Australia or the Victorian coastline.

NRI said the effects of the Montara oil spill in the Timor Sea were ultimately not as bad as feared and that, in any case, the rules had been tightened since 2010 and it was unfair of the inquiry to compare the industry of five years ago with that of today.

Prize

Wood Mackenzie estimates there are some 1.9 billion barrels of oil equivalent in the Bight, more than twenty times the entire Australian production in 2014, while BP says the area has a potential to rival the Mississippi and Niger deltas, with the former peaking at 1.5MMbopd in the 1970s.

Bight Petroleum, which did not provide a submission to the senate, estimates up to 9Bbbl of oil in place could be within its two permits near Kangaroo Island.

BP, Chevron and Statoil could be chasing more than $100 billion worth of potential oil resources in the Bight which they believe could match those delivered by the Bass Strait oil and gas fields over the past four decades.

Also chiming in were the National Offshore Petroleum Safety and Environmental Management Authority, which will make a ruling on BP's drilling plans; Australian Maritime Safety Authority; Australian Marine Oil Spill Centre; and local authorities from Ceduna, Victor Harbor Whyalla and Eyre Peninsula.

There were and a number of green groups including Householder's Options to Protect the Environment and the Stop Invasive Mining Group, as well as better known bodies such as the Conservation Council of SA and the SA Environmental Defenders Office.

Regime

NOPSEMA, which will make a decision on approving drilling in the Bight, did not tip its hand, but outlined the objectives based regulatory regime that would-be operator BP and Statoil would operate under, identifying their own risks, ensure they are as low as possible and decide if they are acceptable.

That contrasts with the former "prescriptive" regulation environment, in which the government took responsibility for setting minimum standards.

BP admitted its role in the Deepwater Horizon incident, but said times had changed and that the crisis was caused by multiple, complex causes.

It said it had learned its lessons and implemented all 26 recommendations from the Bly Report it commissioned into the Macondo-1 disaster.

It says it now requires its rigs to have two blind shear rams and a casing shear ram to cut through drilling pipe and seal the well, and they must be capable of being operated subsea via a remotely operated vehicle.

It said it was prepared to act on any loss of well control incident in the Great Australian Bight, and its immediate plans assume it can close the BOP with equipment that can be deployed within 48 hours to activate the multiple sealing mechanisms available.

It also has a capping stack in Singapore and other international locations and access to the Subsea First Response Toolkit in Australia.

Other technologies have also been developed to respond to an oil spill, including subsea dispersant application, in-situ burn capabilities, and skimming equipment to be located in South Australia for the drilling.

It says it can have its specialist equipment to anywhere in a spill zone within three days, whereas it would take 2-3 weeks for a spill to hit the shore.

The oilers

Chevron Corporation pointed to the similarities in metocean conditions between the North Sea and Bight, and said it had drilled more than 80 wells offshore WA since entering deepwater exploration in 1987 without a single well control event.

Chevron owns 100% of two blocks (EPP44 and EPP45) to the east of BP and is looking to spend $400 million drilling four wells in 2017/18, although it recently asked for a delay given struggles to define a target.

Santos said the entire Australian southern continental slope has almost 50 well penetrations, all drilled since the 1970s, and that it has a mature drilling and completions management system and risk management and assurance processes that have been successfully used on all recent Australian and international exploration and development drilling projects.

It pointed to Crown-1 and Lasseter-1 on the North West Shelf, high pressure/high temperature wells that are the most challenging well types due to the extreme forces that are experienced downhole while drilling towards the target, and said the success of its Browse Basin drilling showed it had well-developed engineering and subsurface teams and mature assurance and governance processes.

Santos owns EPP43 with Murphy Oil, and hopes to take a decision to drill before the end of 2018 and it has 50% of WA‐517‐P in the adjacent Eyre Sub‐basin with JX Nippon which is still in the first permit year.

The South Australian government says it shares community concerns about offshore oil and gas exploration, but has every confidence in NOPSEMA to regulate offshore drilling, and that it is well equipped to help respond to potential oil spill events.

Marine life

Green group Sea Shepard argued that the Bight was rich in biodiversity containing numerous whales, seals, dolphins, sharks and other fish species, and the particular series of ocean currents means the region has high densities of zooplankton that support the highest densities of small fishes in Australian waters, and southern bluefin tuna migrate into the GAB annually to feed on these rich pelagic resources.

It says the Bight would be "catastrophically affected" if BP struck issues.

"If the Australian government is not going to protect Australia's whales in the Australian Antarctic whale sanctuary and not uphold federal and international laws, and not do what the overwhelming majority of Australians want them to do and what they promised to do, then the very least they can do is protect Australia's whales in the waters right off our coast and not allow BP to drill for oil in the Great Australian Bight, risking what BP has done to the whales in the Gulf of Mexico," the group said.

Independent community legal centre, the Environmental Defenders Office, said regulations under the Environment, Protection and Biodiversity Conservation Act should be changed to identify where matters of national environmental significance impact with exploration.

It says titleholders are not required to provide sufficient information in environment plans, disclose previous proceedings or a full environmental history, and it does not specify uncertainties.

The group wants the process to be more transparent to be public, which should be allowed to comment on particular proposals, and not allow oil companies to decide who is a relevant party able to comment.

Concerns

The Eyre Peninsula-based Stop Invasive Mining Group, is, obviously, against any drilling plans. It says its representatives attended the Offshore Oil and Gas Open Day in Port Lincoln last December and was concerned by an apparent lack of knowledge from NOPSEMA, and the inability or organise random spot inspections "several times a year".

It said the Bight, which supports fishing and tourism worth more than $1 billion a year to the region and employs over 10,000 full time jobs, is too great a risk.

The city of Victor Harbor was also against the drilling, saying it risks the Fleurieu Peninsula's commercial fishing and tourism businesses, and while it said a chance of a spill was a low risk, "such an event would represent a potentially catastrophic consequence risk" to the pristine ocean environment.

However, the Regional Development Australia Whyalla and Eyre Peninsula and Eyre Peninsula Local Government Association filed a joint submission backing the drilling potential economic windfall.

Overstated

The Australia Institute said the economic upside has been over-stated, as any discovery's economic impact would be marginal to the national economy, would employ relatively few people, and the state may not see any benefits for years.

"At a time when the world is working to address the damage that fossil fuels are causing the global climate, and when the memory of the disastrous Deepwater Horizon oil spill is still fresh, it seems an incongruous time to be considering expanding oil and gas production into environmentally sensitive areas," it said.

Greenpeace says BP isn't a fit company to be trusted with the health of the Bight, as it used 10 different techniques to try to stem the gushing oil from Macondo-1.

It says oil companies are working at the edge of their knowledge, particularly in 1km-deep waters.

It said the UK Energy and Climate Select Committee's inquiry into deep water drilling in that country raised concerns that the offshore oil and gas industry was responding to disasters, rather than anticipating worst-case scenarios and planning for high-consequence, low-probability events.

It also said the drilling was incompatible with Australia's carbon budget and commitment to limit the impacts of global warming.

The International Energy Agency has pointed out that no more than one third of currently proven fossil fuel reserves globally can be exploited by 2050 in order to keep within the two degree target.

The Senate committee, chaired by Tasmanian Senator Anne Urquhart, is expected to provide its recommendations on May 12.

Bidding on an area covering some 17,649sq.km between Chevron's EPP 45 and Bight Petroleum's EPP 41 closed last week.

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