Risky deepwater drilling for oil in the Great Australian Bight is being assessed under a weak and secretive regulatory regime, the Senate has heard. Senators were also told the project would have a much smaller economic benefit than the industry had suggested.
BP, the company responsible for the world’s biggest oil spill in the Gulf of Mexico, is seeking approval to drill for oil in the bight after its initial application was knocked back last year.
The bight is a haven for whales, sea lions and other marine life. It supports a large fishing industry and much of it is covered by nature reserves.
The Senate inquiry was told the assessment of BP’s application to drill in the bight lacked transparency and was subject to weaker environmental requirements since the federal government devolved its approval process to an agency that dealt specifically with offshore oil and gas applications.
The inquiry also heard the industry’s estimate of the project’s economic benefits were being exaggerated. According to a submission by BP, estimating the jobs and tax revenue the project might bring is difficult but offshore oil and gas projects in the Bass Strait “sustained tens of thousands of jobs as well as billions of dollars in tax revenue”.
The Australian Petroleum Production and Exploration Association (Appea) also cited the Bass Strait ventures, saying they “contributed $200bn to Australian gross domestic product (GDP) and 50,000 permanent jobs over four decades”.
Economist Rod Campbell from the Australia Institute said the industry figures were vastly exaggerated. “Claims that there are seriously large economic benefits or employment impacts to be had from such developments just aren’t backed up by the statistics,” he told the inquiry, which was instigated by independent Senator Nick Xenophon and Greens Senator Robert Simms.
In a submission, Campbell said the oil and gas industry only directly employed 19,000 people around the country and the royalties the minerals, oil and gas industries had paid to South Australia were minimal – only $242m in 2014-15. Campbell pointed out that was less than the state received from car registration, which amounted to $388m that year.
Campbell estimated a project in the bight could employ between 1,000 and 1,500 people.
The chief executive of Appea, Malcolm Roberts, told the inquiry the Australia Institute’s report was “flimsy” and the claims were based on “misleading comparisons”.
Roberts said the employment figure cited by the Australian Institute was based on a “very narrow” definition of industry employment used by the Australian Bureau of Statistics (ABS).
Campbell responded that “blaming the ABS for somehow mismeasuring the impacts of the oil and gas industry just doesn’t cut it from an economist’s perspective”. Campbell also noted that 6,800 people were employed by the tourism industry in the region and their jobs would be put at risk if an oil spill were to occur.
Lawyers from the Environmental Defenders Offices of Australia (EDOA) told the inquiry the approval process was unduly secretive and had weaker environmental standards than required by the Environment Protection and Biodiversity Conservation (EPBC) Act, under which many other large projects are assessed.
Under the federal government’s “one-stop-shop” policy aimed at cutting “green tape”, approval of the project was devolved from the federal Department of the Environment to the National Offshore Petroleum Safety and Environmental Management Authority (Nopsema).
But as a result, key parts of BP’s application were not available to the public and when the EDOA asked Nopsema to provide them, it mounted a legal challenge, Rachel Walmsley, the policy and law reform director of EDOA, told the inquiry.
Documents including any modelling of potential oil spills and plans for how to clean them up were not publicly available, as they would be for projects assessed under the EPBC.
Independent modelling of an oil spill commissioned by the Wilderness Society showed a spill could affect most of Australia’s southern coastline, shutting down fisheries and threatening wildlife, including whales, seabirds and sea lions.
“BP must release all its documents about its plans to drill for oil in the pristine waters of the Great Australian Bight,” said the Wilderness Society’s South Australia director, Peter Owen, in a statement. “The public can have no trust in BP after the Gulf of Mexico disaster or in Australia’s offshore oil and gas authority, Nopsema, which conducts its assessment in secret.”
BP and the Wilderness Society were set to appear before the inquiry later on Thursday.
