I note a trend in State Governments where administrative costs
are extracted from the industry sectors they oversee.
I am interested in your views on the changes in the oil and gas industry with the
new fee structure. What are the
implications for your industry?
Will
the proposed changes make environmental compliance simpler? Will fees provide a stable
funding base to deliver critical safety and health functions?
The Petroleum
and Gas Safety and Health Fee was introduced on 1 July 2010.
The fee system was designed to cover the cost of the State
Government’s activities carried out for the purpose of safety and health for
petroleum and gas operations in Qld.
There was a revision of the way the
Petroleum and Gas Inspectorate was funded.
Since then, there has been a restructure the State Government
departments. Depending on
where one is operating and what one is doing, Petroleum and
Gas operators will also be subject to laws for:
·
native title,
A discussion paper was circulated to
stakeholders in early 2012 to allow industry to provide comment on whether
there were any unintended overlaps in the fees, whether the fee system covered
all industry sectors effectively and whether the fees could be more efficiently
applied or administered. As a result of that consultation it is proposed to
further amend the fee system.
The unprecedented growth in the size
and complexity of Qld's onshore petroleum industry required the regulator to
extend its regulatory operation to keep pace.
Now,
Industry is encouraged to provide comment on a discussion paper, ‘Petroleum
and Gas Safety and Health Fee - Post Implementation Review and Regulatory
Impact Statement.’
The consultation
process is being used to assess the impacts of
recommended amendments to regulations for the Petroleum and Gas Safety and
Health Fee. The
adjustments to the Petroleum and Gas Safety and Health Fee were designed to better
reflect the range and level of compliance checks required for various industry
activities.
The Department of Natural Resources and Mines inspectorate carries
out audits, inspections and investigations of petroleum exploration and
production, pipelines, automotive LPG, gas users, and licensing for the
installation and servicing of domestic, commercial and industrial gas devices. The
following permits are governed by the Petroleum and Gas (Production and Safety) Act 2004 and Petroleum and Gas (Production and Safety) Regulation 2004:
·
authority to prospect,
· petroleum lease (this lease is also governed by the Petroleum Act 1923 and Petroleum Regulation 2004),
·
petroleum potential commercial area,
·
petroleum survey licence,
·
petroleum pipeline licence,
·
petroleum facility licence,
·
data acquisition authority,
·
water monitoring authority.
So
why has such new fees been introduced?
In brief: to cover revenue and allocation shortfalls. The downside in this approach is if that
industry sector shrinks, will the scale of the administration also shrink too?
The Petroleum and Gas Safety and Health Fee is expected to raise
about $7.1 million next financial year.
The
Qld Government’s proposed fee restructure aims to recover costs in proportion
to the supervision & intervention required by the inspectorate in areas
such as exploration, production and distribution.
The fee
restructure also aims to assist the industry to cover the full cost of running
the specialist inspectorate as the Qld Government attempts to reduce the
industry’s compliance costs.
The fee goes towards the employment of additional inspectors,
continuous staff training and administration of the compliance services.
Inspectors
conducted almost 3,500 audits and inspections last financial year. Petroleum and gas inspectors investigated
almost 530 accidents and incidents in 2011-12, involving more than 50 injuries
but no fatalities.
Proposed
measures include annual returns instead of quarterly reports and a better
explanation of the 15 fee categories used to determine companies’ fees.
These
changes are based on feedback to the Qld Government through consultation with
industry operators.
For
more information visit the Department of Natural Resources and Mines website
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