August 21 - 27, 2022: Issue 551


PEP-11 Legal Challenge Given extra Air due to revelations of Former Prime Minister's Self-appointment to multiple Portfolios

On June 2nd, 2022 in a statement to the Australian Stock Exchange BPH Energy Limited (ASX:BPH) advised that investee Advent Energy Limited's subsidiary Asset Energy Pty Ltd had applied to the Federal Court pursuant to section 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and section 39B of the Judiciary Act 1903 (Cth) to review the decision of the Commonwealth-New South Wales Offshore Petroleum Joint Authority (Joint Authority), constituted under section 56 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) (Act), to refuse to vary and suspend the conditions of Exploration Permit for Petroleum No.11 (PEP 11 Permit), pursuant to section 264(2) of the Act, and to refuse to extend the term of the PEP 11 Permit, pursuant to section 265 of the Act. 

On December 16th 2021 then Prime Minister Scott Morrison, in a joint press release with the Member for Robertson, Member for Mackellar, Member for North Sydney and Member for Wentworth announced 'The Petroleum Exploration Permit PEP-11 will not go ahead under steps taken by the Morrison Government to reject the project.'

The statement continued:

The Morrison Government has advised NSW Deputy Premier Paul Toole as the joint authority partner, as well as the National Offshore Petroleum Titles Administrator (NOPTA), of the Commonwealth’s intention to refuse the application.

Prime Minister Scott Morrison said the Government was taking steps to protect local communities and the environment by putting a stop to PEP-11.

“This project will not proceed on our watch,” the Prime Minister said.

“Gas is an important part of Australia’s current and future energy mix but this is not the right project for these communities and pristine beaches and waters.

“From Newcastle through to Wollongong my Government has listened to the concerns of local Liberal Members and candidates and their communities and we’re putting our foot down.”

This week amid revelations Mr. Morrison did not disclose to Ministerial colleagues, the Australian Parliament and the Australian public that he had had himself sworn in, between March 2020 and May 2021, to the health, finance, industry, science, energy and resources, home affairs and treasury portfolios, the one time he did exercise his extra ministerial powers, to veto PEP11, has come under renewed scrutiny. As has the June 2022 announcement by BPH Energy.

Then resources minister Keith Pitt, whose statements were suggesting he would approve PEP11, has since indicated he knew of the dual ministerial power some time before and wasn’t happy.

The records indicate that, with the election approaching, Mr. Morrison used his power to veto the permit for the PEP11 gas exploration off the NSW coast. 

Although this was clearly a highly political move to try to save or win votes, the community from Manly to Newcastle didn't care - residents had been battling for years to save fisheries, pointed out planned seismic testing during whale migrations should be delayed, and alternatives in the form of clean energy would negate the need for drills off local coasts. 

In February 2022 the Federal Government announced it had taken “the next step” in formally rejecting the application for renewal of the PEP11 permit, which had expired on February 12th, 2021.

Then Prime Minister Scott Morrison said, following the Government’s proposed decision to not suspend, extend and vary the title conditions of the permit announced on December 16, 2021, the National Offshore Petroleum Titles Administrator (NOPTA) issued the applicant a Notice of Intention to Refuse and granted the applicant 30 days to respond to the notice.

“After considering the applicant’s response, I have made the decision under section 59(3) of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to propose to refuse the application,” Mr. Morrison said.

“As a result, I have written to NSW Deputy Premier Paul Toole, as the Joint Authority partner, advising of the Government’s proposed decision.”

This was a more formal advice than the notification sent to Mr. Toole in December of the Government’s “intention” to refuse the application.

A spokesman for NOPTA confirmed on February 17, 2022, the Federal Government had announced its decision to propose to refuse an application to suspend, extend and vary the title conditions of PEP-11.

“The NSW member of the Joint Authority, Deputy Premier (Paul) Toole, has 30 days to respond, following which a decision will be finalised,” the spokesperson said.

“If Minister Toole agrees with the Commonwealth member of the Joint Authority’s proposed decision to refuse the current suspension, extension and variation application, within the 30-day period, the decision on this application will then be finalised.

“Any action to be taken after a decision is finalised is a matter for the titleholder.”

However, PEP-11 is still listed as 'pending application' on the NOPTA 'Neats' website.

Despite the pre-election announcement being unsuccessful politically, all four backbenchers whose names were on the press release lost their seats to Independents, the move to overrule Mr. Pitt is still backed at a local, state and federal level.

The new Labor Government also stated prior to the last election that they too would not provide an extension.

It is understood Asset Energy is now lobbying Mr Albanese and NSW Premier Dominic Perrottet to overturn the decision.

Incumbent MP for Mackellar, Dr. Sophie Scamps stated this week, ''The community here on the Northern Beaches, as well as communities all along our coast up to Newcastle have rejected the proposed PEP-11 licence.  

''Here in Mackellar our community is not willing to risk a potential environmental catastrophe off our coastline and will never accept offshore drilling for oil and gas.  

''If the PEP-11 proposal is revived, we will fight it every step of the way. 

I strongly urge the Albanese and Perrottet Governments to resist the lobbying efforts of the fossil fuel industry. We should listen to the science, and the wishes of our community and ensure the PEP-11 exploration licence remains dead in the water. 

The reality is we should not be opening up any more oil or gas wells – either offshore or onshore. The science is clear. It’s time we focused on investing in renewables and the clean technology industries of the future and leave fossil fuels in the ground, where it belongs.'' Ms Scamps said 

Dr. Scamps' calls have been echoed throughout the local community. Surfrider Foundation Northern Beaches, who joined in demonstrations and initiated some actions along our coats, including at Mona Vale Beach, stated as the revelations about Mr. Morrisons' veto emerged;

''Whatever the political shenanigans carried out in Canberra corridors, it is still right that the PEP 11 lease was not renewed.  The oil and gas well project in Sydney waters was a dud deal and fiercely opposed on environmental, economic, climate change and social/community grounds. Apart from the lease holders, no one other than National Party Resources Minister Keith Pitt thought it was a good idea, and he has never met a mine he didn't like! 

The risk to Sydney's coast is and always will be unacceptable.

As for the legal challenge, the coastal communities welcome the Federal Court's scrutiny of BPH and it's tangle of related companies  as well as it’s past performance. 

Whatever happens in the courts PEP 11 will never go ahead. We have assurances from the current Albanese government, the NSW government, and there is a current Australian Greens Bill that should put an end to any PEP 11 offshore fossil fuel madness once and for all.

We await the outcome of the Federal Court (hearing).''

In a piece for The Conversation, published August 17, 2022,  Samantha Hepburn, Professor at Deakin Law School, Deakin University, stated, 

''Even before this week’s revelations, Asset Energy was challenging Morrison’s decision in the Federal Court, asking for a judicial review.

Asset Energy’s executive director David Breeze this week said the project could supply 20 years’ worth of gas to NSW, adding:

In light of significantly changed circumstances in the international energy market following the war in Ukraine, and the prospect of sustained higher energy prices and gas shortages in Australia, we are urging Federal and NSW governments to reconsider their position and allow limited, safe, and sustainable exploration activity.

''But many of the company’s claims about the project simply do not stack up.''

Ms Hepburns' analysis continues:

Not an energy solution

Extending PEP 11 will not resolve the domestic gas supply concerns on the east coast, for several reasons.

First, it usually takes many years for gas to be produced commercially from oil and gas fields. This is particularly true in the offshore zone. By the time the field is in production, renewable energy is likely to have progressed extensively and our dependence on gas is likely to have diminished.

Second, the supply crisis on the east coast is not caused by too few gas projects, but by the lack of robust export regulation.

Large gas producers contract to sell almost 90% of extracted gas to countries such as Japan, China and South Korea. Asset Energy says it would direct all gas from the project to the domestic market, but there is no legislative mandate requiring this.

What’s more, Russia’s invasion of Ukraine has triggered a spike in global gas prices. This creates yet another incentive for producers to sell gas on the international market.

An environmental risk

Advent Energy, which owns Asset Energy, says an environmental plan for the proposal was lodged with authorities and must be approved before commencement of any surveys.

But this did not appease community groups that feared the project would destroy the marine environment. Among their concerns was that the project may disrupt one of the world’s largest whale migration routes and endanger marine wildlife such as the Manly colony of little penguins.

Research shows offshore drilling for oil and gas in other parts of the world has brought substantial environmental risks.

Oil spills or gas leaks can permanently damage fragile marine and coastal ecosystems. We need only look to BP’s Deepwater Horizon oil spill in the Gulf of Mexico in 2010, which devastated marine and coastal wildlife.

During the exploration phase, sound, traffic and physical disturbance – from anchor chains, drill cuttings and drilling fluids – can be extensive.

Oil and gas rigs are large industrial facilities that operate continually. They can disturb species and ecosystems, impacting biodiversity that supports life on our planet.

During the production phase, physical impacts include disruption from installing infrastructure and possible contamination from the discharge of drilling mud and produced water that can damage surrounding ecosystems.

Further, gas and oil extraction undermines global efforts to tackle climate change. As the International Energy Agency has warned, no new fossil fuel projects can be approved if the world is to reach net-zero emissions.

No social license

The application to extend PEP 11 attracted vehement community opposition. This included a petition organised by community group Save Our Coast bearing 60,000 signatures, which was presented to federal parliament by Warringah MP Zali Steggall.

Should the PEP 11 extension be approved and production proceeds, residents fear oil rigs and infrastructure will be visible from shore. This would fundamentally alter the visual amenity of the New South Wales coastline, damaging tourism and real estate values.

An unacceptable plan

The revelations about Scott Morrison’s secret powers does not suddenly mean PEP 11 has become socially acceptable or environmentally responsible.

Nor should global disruptions caused by sanctions on Russia be used to justify the approval of an offshore gas project that will worsen the climate emergency without resolving the current energy crisis.

Australia’s fossil fuel reserves belong to all of us. Mandates to explore and extract them should be granted only when it’s in the public interest – and this proposal fails that test.