Economics and Industry Standing Committee

FLNG Safety Matters

Report No. 5
May 2015

Legislative Assembly
Parliament of Western Australia

Committee Members
Chair

Mr I.C. Blayney, MLA

Member for Geraldton

Deputy Chair

Hon F.M. Logan, MLA

Member for Cockburn

Members

Mr R.S. Love, MLA

Member for Moore
Mr J. Norberger, MLA
Member for Joondalup
Mr P.C. Tinley, AM, MLA
Member for Willagee

Committee Staff
Principal Research Officer

Dr Loraine Abernethie, PhD

Research Officer

Mr Michael Burton, BEc, BA (Hons)

Legislative Assembly
Parliament House
Harvest Terrace
PERTH WA 6000

Tel: (08) 9222 7494

Fax: (08) 9222 7804
Email: [email protected]
Website: www.parliament.wa.gov.au/eisc

Published by the Parliament of Western Australia, Perth.

May 2015.
ISBN: 978-1-925116-36-6
(Series: Western Australia. Parliament. Legislative Assembly. Committees.
Economics and Industry Standing Committee. Report 5)
328.365

EconomicsandIndustryStandingCommittee

FLNGSAFETYMATTERS

ReportNo.5
Presentedby

MrI.C.Blayney,MLA
LaidontheTableoftheLegislativeAssemblyon7May2015

ChairmansForeword

ampleasedtopresentthisreportbytheEconomicsandIndustryStanding
Committee(theCommittee)onourInquiryintoFloatingLiquefiedNaturalGas
(FLNG)safetyrelatedmatters.TheimpetusforthisInquirycamefromthe
CommitteespreviousworkontheeconomicimpactofFLNGonWesternAustralia.
ShellsPreludeFLNGfacilityapioneeringprojectandthefirstofitstypetobegin
operatinginAustralianwaterswhenitiscommissionedin2017willbeanchoredin
CommonwealthwatersofftheWesternAustralianKimberleycoast.Woodsidehasalso
announcedthatitspreferencefordevelopingitsBrowseBasinresourcesistouseFLNG
technology,andotheroperatorsarealsoconsideringusingFLNGfortheirprojects.It
seemslikely,then,thatwhileFLNGisaverynewtechnology,ithassignificantappeal
withinthepetroleumindustry.

DuringtheInquiryintotheeconomicimpactofprojectssuchasPreludeand
WoodsidesproposedBrowseBasindevelopment,considerableconcernwasraisedin
therelationtothesafetyofFLNGfacilities.Inparticular,concernswereraisedabout
thecompactnatureoftheworkingenvironmentrelativetoanonshoreprocessing
plant,thefactthatFLNGproponentssuchasShellandWoodsidedonotintendtode
mantheirfacilitiesduringcyclones,andtheadequacyofemergencyevacuation
infrastructureandprocedures.
TheCommitteetooktheseconcernsveryseriously.Theoilandgasindustryis
inherentlydangerousandaccidentsdohappen.Moreover,whilemajorincidentsare
relativelyrare,whentheydohappentheyareoftencatastrophic.Incidentssuchasthe
AlexanderL.Kiellandplatformcapsizeaccident,thePiperAlphaplatformdisaster,
MumbaiHighNorthplatformincident,theMontaraoilspillandtheMacondo
DeepwaterHorizondisasterallbearwitnesstothatsadfact.Inlightoftheconcerns
raised,theCommitteedeterminedtoinquireintomattersrelatingtothesafetyof
FLNGprojectsaswellasindustryandgovernmentscapacityandpreparednessto
respondtoasafetyorenvironmentalincidentinvolvingFLNG.
AnumberofkeypointshaveemergedinthecourseofthisInquiry.Firstandforemost,
itistheresponsibilityoftheFLNGfacilityoperatortoensurethatrisksrelatingto
humansafetyandenvironmentalprotectionarereducedtoaslowasreasonably
practicable(ALARP).Inshort,safetyistheoperatorsresponsibility.Itisessentialthat
operatorsdevelopandmaintainacultureofsafetythroughouttheirorganisationsto
ensurethatappropriateproceduresaredeveloped,continuallyenhanced,andalways
followed.
Whilesafetyistheoperatorsresponsibility,governmentdoeshaveamajorroleto
play.AttheCommonwealthlevel,itiscriticalthattheNationalOffshorePetroleum

SafetyandEnvironmentalManagementAuthority(NOPSEMA),astheindustry
regulator,isproperlyresourcedtocarryoutitsregulatoryfunctions.Perhapsespecially
becauseFLNGtechnologyisnew,itiscriticallyimportantthatNOPSEMAsassessment
andscrutinyoffacilitieslikePreludeisrigorousandeffective.Itisalsoimportantthat
theWesternAustralianGovernmenttakesamoreproactiveroleinassessingthelong
terminfrastructurerequirementsintheKimberleyregion.Tosaythatallcosts
associatedwithaprojectmustbebornebytheoperatorfailstoadequatelyconsider
theimportantrolethatinfrastructureplaysintheoveralldevelopmentofaregionsuch
astheKimberley.
Perhapsthequestiononeveryonesmindatthistimeis:IsFLNGsafe?Thatisa
questionthattheCommitteecannotanswer.WhattheCommitteecansay,though,is
thatthroughthisInquirymembershavebecomeawareoftheconsiderableefforts
madebyShellinworkingtoensurethattherisksassociatedwithitsPreludeFLNG
facilityareappropriatelyreduced.Ultimately,itisuptoNOPSEMAtoassessthe
informationprovidedbyShellanddeterminewhetherrisksare,infact,aslowas
reasonablypracticable.
Whatthisreportdoesdoisprovideaqualitativeassessmentoftheevidenceandadd
tothebodyofinformationpubliclyavailableinrelationtoFLNGregulationandsafety.
TheCommitteehopesthatitwillalsoserveasausefulstartingpointforanyMembers
whowishtobecomebetterinformedastohowworkplaceandenvironmentalsafetyin
Australiasoffshorepetroleumindustryanindustrythatisfundamentaltothe
WesternAustralianeconomyisregulated.
IwouldliketothankmyfellowCommitteemembers,HonFranLogan,MLA,Deputy
Chair,MrJanNorberger,MLA,MrPeterTinley,AM,MLAandMrShaneLove,MLA.
WithouttheirsignificantcontributionsthisInquirywouldnothavebeenpossible.I
wouldalsoliketothanktheCommitteesPrincipalResearchOfficer,DrLoraine
Abernethie,andResearchOfficer,MrMichaelBurton,fortheirassistancethroughout
thisInquiry.

MrI.C.Blayney,MLA
CHAIRMAN

Contents
ExecutiveSummary

MinisterialResponse

xi

FindingsandRecommendations

Chapter1

Introduction

xiii

Introduction

TheDevelopmentofFLNGprojects

Safetymatters

Majoraccidents

AlexanderL.Kiellandplatformcapsizeaccident

PiperAlphaplatformdisaster

MumbaiHighNorthplatformincident

10

MontaraDevelopmentProjectwellheadplatformincident

12

MacondoDeepwaterHorizondisaster

14

Applyingthelessonsfromhistory

16

TheCommittee

17

ConductoftheInquiry

18

Itemsofnote

19

Chapter2

21

Jurisdictionsandareasofresponsibility

FLNGtechnology

21

Australianmaritimejurisdictions

22

TerritorialSeaBaseline

23

Coastalwaters

23

Territorialsea

23

ExclusiveEconomicZone

23

ThedevelopmentofAustraliasmaritimejurisdiction

24

Federaljurisdiction

28

Responsibleagenciesandauthorities

29

NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority 29
AustralianMaritimeSafetyAuthority

31

WesternAustralianregulation

32

Incidentresponse

35

Chapter3

39

TheAustralianregulatoryregime

TheAustralianregulatoryregime

39

Objectivebasedregulation

40

ALARP

42

Fromprescriptivetoobjectivebasedregulation

45

TheRobensReport

46

TheCullenInquiry

50

Advantagesofobjectivebasedregulation

52

DevelopmentofAustraliassafetycaseregime

53

NOPSEMAandobjectivebasedregulation

57

Occupationalhealthandsafety

Chapter4

Regulationviasafetycases

59

63

Introduction

63

Safetycases

63

TheCullenInquiry

64

Australialearnsfromhistory

65

Nosafetycase,nofacility

67

Whatisasafetycase?

69

Requiredcontentsofasafetycase

70

Facilitydescription

70

Formalsafetyassessmentidentificationofhazardsandrisks

72

Safetymanagementsystem

77

ReducingrisktoALARPlevelsthroughsafetyindesign

80
81

Safetyindesign
AssessmentofthesafetycasebyNOPSEMA

85

Safetycaseassessment

85

EarlyEngagementSafetyCase

87

Validation

90

Fairandtechnicallycompetentassessment

91

Feeforserviceassessment

95

Monitoringofongoingimplementationofsafetycase

97

MaintainingALARPinasafetycaseregime

100

Consultationwiththeworkforce

105

Chapter5

113

Preludesafetyindesign

Hulldesign

114

Productstorageatseaovercomingthechallengeofsloshing

115

Theturretmooringsystem

117

Designedandtestedtorideoutastorm

119

Designingforthemetoceanconditions

121

ProducingLNGatseatheimportanceoffacilitylayout

124

Offloadingatsea

130

Chapter6

135

Environmentalmanagementregulation

Ensuringenvironmentalsafety

135

OffshoreProjectProposals

136

EnvironmentPlans

137

Assessment

140

ThePreludeProjectSubseaInstallationEnvironmentPlanSummary

144

Chapter7

Emergencyresponsemanagement

151

Introduction

151

Emergencymanagement:Nodifferentfromotheroperations?

152

Emergencyresponseplans

157

Chapter8

161

Whathappensduringacyclone?

Severeweatherevents

161

Cyclonewarnings

161

Cycloneavoidanceforvessels

163

Maintainskeletoncreworevacuate?

165

FLNGfacilitiesinasevereweatherevent

169

Chapter9

179

Whathappensiftheresanaccidentorotheremergency?

Firesandexplosions

179

Evacuation,escape,andrescueandrecoverystrategy

181

Emergencyevacuation

182

Medicalemergenciesandevacuation

186

Rescueandrecoveryinternationalresponsibilities

193

SearchandrescuebytheAustralianpetroleumindustry

195

Theneedforcoordination

198

Trainingforemergencypreparedness

203

Emergencyresponseexercises

203

Knowledgesharing

207
208

Operatorsascontrolauthorities

Chapter10

Whathappensiftheresalossofcontainment?

213

Oilpollution

213

SubseaFirstResponse

214

Dealingwithoilspillpollution

218

Theroleofgovernment

224

TherealityofFLNGpetroleumproducts

226

Chapter11

231

Infrastructure:Whoseresponsibilityisit?

Introduction

231

ValueofthepetroleumindustrytoWesternAustralia

232

TheNorthernCarnarvonBasin

233

TropicalCycloneOlwyn

235

TheBrowseBasin

237

OnshoreinfrastructureintheKimberley

240

Hospitalinfrastructure

241

Airfieldinfrastructure

245

PortInfrastructure

249

Infrastructureistheresponsibilityoftheprojectproponent/operator

252

Infrastructureandstatedevelopment

254

FLNGpresentsachallengetotheexpertregulatormodel

256

Emergencyresponsecommand

258

Theneedforclarity

265

Theneedforaregionalemergencyresponsecommand

269

Appendices

271

1 InquiryTermsofReference

271

2 Committeesfunctionsandpowers

273

3 Submissionsreceived

275

4 Hearings

277

5 Briefings

281

6 Glossary

289

7 BrowseFLNGDevelopmentMajorAccidentEventsSummary

293

8 ExampleofaHighPotentialIncidentAlert

295

ExecutiveSummary

heEconomicsandIndustryStandingCommittee(theCommittee)undertookthis
InquiryintoFLNGsafetyrelatedmattersbecauseofconcernsraisedduringits
previousInquiryintotheeconomicimpactofFLNGtechnologyonvarious
sectorsoftheWesternAustralianeconomy.Chapter1ofthisreportoutlinesthose
concernsandtheCommitteescurrentfocusonmeasurestakenbyFLNGproponentsto
ensureworkersafety,theadequacyofthestatesemergencypreparednessand
responsecapacity,andtheroleofstateandCommonwealthgovernmentsinrelationto
anFLNGfacilityemergency.
ThischapteralsoverybrieflyoutlinesthedevelopmentofFLNGtechnologyandnotes
that,intime,therewillpossiblybeanumberofFLNGfacilitiespermanentlymooredoff
theWesternAustraliancoast,eachrequiringsupportvesselsandonshoresupport
facilities.
Chapter1alsonotesthattheoilandgasindustryisinherentlyhazardousand
acknowledgesthestatementsofcommitmentfrommajorprojectproponentsthat
safetyandenvironmentprotectionisapriority.Todemonstratetheimportanceof
safetyintheoffshorepetroleumindustry,severalmajorincidentsinvolvingoffshore
petroleumfacilitiesaredescribed,namelythecapsizeoftheAlexanderLKielland
platform,theAlphaPiperplatformexplosionandfire,theMontarawellheadplatform
incident,andtheDeepwaterHorizonfloatingoilrigblowout.Overall,theseandother
offshoreincidentshaveshownthatmajoraccidentsdooccuronoffshorepetroleum
facilitiesforavarietyofreasons,andwithoftencatastrophicconsequences.Theyalso
demonstratetheneedforarobustregulatoryregimeandhighlightthepotentialrisks
toenergysecurity.Givensuchincidents,itisessentialthatthelessonsofhistoryare
learned.
Attentionisalsodrawntothefactthat,whileFLNGtechnologypresentsthesamerisks
asotheroffshorepetroleumactivities,italsohassomespecificcharacteristicsthat
needparticularconsiderationinrelationtosafetyandenvironmentalprotection.
Chapter2providesabriefoutlineofthewayinwhichAustraliasCommonwealthand
statemaritimejurisdictionshavebeendetermined.Generallyspeaking,jurisdiction
overAustraliasoffshorepetroleumresourceshasbeendeterminedthrougha
combinationoftheUnitedNationsConventionontheLawoftheSea,Commonwealth
legislationandthespiritofcooperativefederalism.AswithallstatesandTerritories,
WesternAustraliahasjurisdictionoveritscoastalwaters,whicharemainlythose
watersthatarewithinthreenauticalmilesofthecoastallowwaterline.AsFLNG
technologywillmostlikelybeusedtoaccessresourcesinincreasinglyremotelocations,


FLNGfacilitiesusedtodevelopcurrentlyknownpetroleumresourcesofftheWestern
AustraliancoastlinewillmostlikelyexclusivelyoperateinCommonwealthwaters.
ThedevelopmentofoffshorepetroleumresourcesinCommonwealthwatersis
primarilyregulatedthroughtheOffshorePetroleumandGreenhouseGasStorageAct
2006(Cth)(OPGGSAct)anditsassociatedregulations.Chapter2notesthatunderthis
Act,anFLNGoperationinAustralianwatersisdefinedandregulatedasapetroleum
facility.ThischapteralsobrieflydescribestheCommonwealthandstateregulatory
responsibilitiesfortheregulationofpetroleumresources.ItnotesthattheNational
OffshorePetroleumSafetyandEnvironmentalManagementAuthority(NOPSEMA)is
responsibleforoversightofpetroleumfacilities(thatis,thosethatarepermanently
anchored)inCommonwealthwaters,whiletheAustralianMaritimeSafetyAuthority
(AMSA)isresponsiblefortheregulationofoffshorepetroleuminfrastructuresuchas
supportvesselsandFLNGtankersthatdoesnotmeetthedefinitionofafacilityunder
theOPGGSAct.
PetroleumactivityinWesternAustraliancoastalwatersisregulatedbytheDepartment
ofMinesandPetroleum(DMP)undertheOffshorePetroleum(SubmergedLands)Act
1967(WA)anditsassociatedregulations.Clearly,someinfrastructuresuchassupport
vesselswilloperateinbothCommonwealthandstatejurisdictions,andtheefforts
beingmadetominimiseand/oreliminateregulatorydifferencesareacknowledgedin
Chapter2.Thischapteralsoexplainsthatwhileanoffshorepetroleumoperatoris
responsibleforrespondingtoanoffshoreincident,theoperatormayseekthe
assistanceofgovernmentthroughtherelevantregulator,thatis,throughNOPSEMAor
throughtheDepartmentofTransportinWesternAustralia.
WithChapters1and2settingthebroadscenefortheInquiry,Chapter3explainsin
moredetailtheAustralianregulatoryregimeasitappliestooffshorepetroleum
resources.Importantly,theunderlyingconceptoftheregulatoryregime,namely
objectivebasedregulation,isexplained.Thisnonprescriptivemethodofregulation
wasintroducedinmanyworldjurisdictionsfollowingthe1988PiperAlphadisaster.
Objectivebasedregulationhastwobasicprinciples:first,theoffshorefacilitys
operatorissolelyresponsibleforthesafeoperationofthefacility;andsecond,the
operatormustensureanddemonstratethatitsoperationsriskshavebeenreducedto
aslowasreasonablepracticable(ALARP).
GiventheimportanceoftheconceptofALARP,Chapter3detailsthelegislative
requirementsforsafetyandenvironmentalimpactsandriskstobereducedtolevels
acceptedbyNOPSEMAasALARP.NotingthatALARPdoesnotmeanaslowas
reasonablyaffordable,Chapter3alsosummariestwomajorreports,the1972Robens
Reportandthe1990reportfromtheCullenInquiryintothePiperAlphadisaster.The
verysignificantimpactthesereportshadonthedevelopmentoftheobjectivebased
regulatoryregimesinEuropeandAustraliaisoutlined.

ii


Australiasobjectivebasedregulatoryregimefortheoffshorepetroleumindustryrests
ontheobligationofoperatorstoprovidetoNOPSEMAbothasafetycaseandan
environmentplan,bothofwhichdemonstratetoNOPSEMAssatisfactionthatrisks
havebeenreducedtoALARPlevels.ThedevelopmentofAustraliassafetycaseregime
andofNOPSEMAasregulatorisoutlinedinChapter3andabriefsummaryof
NOPSEMAsroleisprovided.Thischapteralsonotesthattheoccupationalhealthand
safetyofworkersemployedon,orinrelationto,anoffshorepetroleumfacilitymust
alsobeaddressedaspartofthefacilityssafetycase.
Chapter4concentratesontherequirementforoperatorstosubmitasafetycaseto
NOPSEMA,andoutlinestheinfluenceoftheCullenInquiryonthedevelopmentofthe
safetycaseregime.ApetroleumfacilitycannotoperateinCommonwealthwaters
withoutasafetycasethathasbeenacceptedbyNOPSEMA,afactwellrecognisedby
industry.Chapter4describesindetailtherequiredcontentsofasafetycase,including
afacilitydescription,aformalsafetyassessmentofhazardsandrisks,andadetailed
descriptionofthesafetymanagementsystem.
Havingsetouttheregulatoryrequirements,Chapter4alsodiscussestheconceptof
safetyindesign,themethodusedbyindustrytoincorporatesafetyandrisk
managementintoafacilitysdesign.ThischapteralsooutlinesNOPSEMAs
responsibilitiesinrelationtoassessmentofsafetycases,aswellasitsearly
engagementsafetycasepolicyandvalidationpolicy.Theimportantfactthat
NOPSEMAsacceptanceofasafetycasedoesnotcertifythatthefacilityisguaranteed
tobesafeisalsoacknowledgedhere.
GiventhatAustraliaoperatesunderanobjectivebasedregime,withNOPSEMAhaving
theroleofexpertregulator,itisessentialthatNOPSEMAstaffareabletoprovideafair
andtechnicallycompetentassessment.Chapter4notesthatNOPSEMAhasbeengiven
exemptionsinrelationtopublicservicesalarylevelstoallowittorecruitandretain
experiencedprofessionals.Chapter4alsopointsoutthatNOPSEMAoperatesonafee
forservicebasisandprovidesinformationonthetypesofsubmissionsreceivedand
assessed,includingsafetycasesandenvironmentplans.
PartofNOPSEMAsresponsibilitiesistomonitortheongoingimplementationofa
safetycase.NOPSEMAcarriesoutthisresponsibilitythroughaprocessofplanned
inspectionsand,whereincidentshaveoccurred,investigations.AsChapter4
demonstrates,itisthroughthisprocessthatNOPSEMAaimstoensurethatrisklevels
aremaintainedatALARP.
ConcernswereraisedwiththeCommitteeinrelationtotheeffectivenessofthesafety
caseregime.ParticularconcernswereraisedinrelationtoassessingALARPlevelsfor
newtechnologiesandforensuringthatALARPlevelscouldbeamendedastechnology

iii


developed.NOPSEMAsassurancethatALARPisnotfixedandthatsafetycasesmust
changetoreflectnecessarysafetyimprovementsisalsoprovidedinChapter4.
Discussionoftheissueofworkforceparticipationinthedevelopmentofafacilitys
safetycaseisalsoincludedinChapter4.Workforceparticipationisaclearrequirement
ofthelegislationandisrequiredforbothnewsafetycasesandfortherevisionsof
existingsafetycases.NOPSEMA,inassessingthesafetycase,mustalsoassesswhether
therehasbeeneffectiveconsultationwith,andparticipationby,membersofthe
workforce.ThischapteralsooutlinestheCommitteesunderstandingofthecurrent
levelofengagementbyShellwithitsworkforce.
WiththeregulatoryrequirementsforasafetycasesetoutinChapter4,Chapter5
discussesthesafetyindesignelementsofShellsPreludefacility.Thisincludes
discussionofthehulldesign.Importantelementsherearethesize,weightandhigh
freeboardofthePreludefacilityitself,whichproponentsargueaddtostabilityand
allowPreludetowithstandsevereweatherconditions.Afurtherhulldesignelementis
thetwinstoragetankdesign,whichaimstoreducethedangerousdestabilisingeffect
ofsloshinginthetanks.
AnotherhulldesignsafetyelementdiscussedinChapter5istheturretmooringsystem.
ThePreludefacilitywillbepermanentlymooredinposition,withmooringchainsand
allgasflowlinesattachedviaanimmensecylindricalturretatoneendofthefacility.
ThekeyaspectoftheturretdesignistheabilityofPreludetoswivelaroundit,thus
allowingthefacilitytoweathervaneaccordingtoprevailingmetoceanconditions.
AccordingtoShell,itsdesignandtestingofthePreludefacilityformetoceanconditions
confirmedthatthefacilitywillbesafetoinhabitduringaonein10,000yearstorm.To
provideabetterunderstandingofwhatmetoceanconditionsmightbeintheBrowse
BasinthesiteofthePreludefacilityinformationontropicalcycloneformationand
categorisationisalsoincludedinChapter5.
Aswellasthesafetyelementsofthehull,thePreludefacilitystopsidealsoincludes
safetyindesignfeatures.TheproductionofLNGatseaaddsanadditionallayerof
complexitytoexistingfloating,production,storageandoffloading(FPSO)vessel
technology.TherearespecificrisksassociatedwithproducingFLNGatseaandShells
evidenceisthatthePreludefacilitytopsidewasdesignedwithsafetyastheparamount
consideration.Chapter5describesthefacilitylayout,whichhasbeendesignedtolimit
theconsequencesofaccidents.Theseincludethepositioningoftheaccommodation
andhelidecksattheoppositeendofthefacilitytotheproductionunits;protective
coatingofthesteelstructurestoreducetherisksassociatedwithhandlingcryogenic
material;theincorporationofsafetygapsbetweentopsidecomponents;andescape
routesthatrunalongthefulllengthofthefacility.Concernsvoicedaboutthelayoutof
thefacilityandwhetheritwouldensureworkersafetyarealsooutlinedinChapter5.

iv


ThesafetyindesignassociatedwithoffloadingcryogenicmaterialfromanFLNGfacility
toacarrierdockedalongsideisalsodiscussed.Toaddressthismajorchallenge,the
Preludefacilitysloadingarmhasbeendesignedtoadjustto,andcopewith,
movementsfromboththefacilityandthevessel.Stabilityduringloadingwillbe
assistedbythrustersemployedtomaintainaconstantfixedpositionforPrelude.
Finally,Chapter5reiteratestherequirementforthesesafetyindesignfeaturestobe
assessedbyNOPSEMAaspartofitssafetycaseassessmentandapprovalprocess.
Chapter6turnsattentiontotheenvironmentalregulationofAustraliasoffshore
petroleumindustry.EnvironmentalregulationoccursthroughtheOPGGSActandthe
EnvironmentProtectionandBiodiversityConservationAct1999(Cth).Whilethereare
somemoreprescriptiveelementsinenvironmentalregulation,itislargelyanobjective
basedregimeunderwhichproponentsmustsubmitanOffshoreProjectProposaland
associatedEnvironmentPlanstoNOPSEMAforassessmentandacceptance.These
mustdemonstratetoNOPSEMAssatisfactionthattheprojectwilloperatein
accordancewithAustraliasstatutoryenvironmentalrequirements,includingtheneed
toreducerisktoALARP.
TherequirementsforanOffshoreProjectProposalandassociatedEnvironmentPlans
aredescribedinChapter6.Keyamongstthesearetheneedtodemonstrate
considerationoftheimpacton,andrisksto,mattersofNationalEnvironmental
Significance,therequirementforanOilPollutionEmergencyPlanandademonstration
thattheproponenthasthefinancialcapacitytomeetthecostsandanypotential
liabilitiesassociatedwiththeproposedactivity.Chapter6alsooutlinesNOPSEMAs
assessmentresponsibilitiesandthemattersthatmustbeaddressedinEnvironment
Plansbeforeitcanbeaccepted.
SummariesofEnvironmentPlansubmissionsmadetoNOPSEMAarepublishedonits
website.Todate,fourEnvironmentPlansummariesforthePreludefacilityhavebeen
madeavailableinthisway.Threeoftheserelatetodrillingandthefourthtothe
installationofthefacilityssubseainfrastructure.ThePreludeProjectSubsea
InstallationEnvironmentPlanSummaryisoutlinedindetailinChapter6asauseful
exampleofthetypeofinformationmadepubliclyavailable.Thisincludesadescription
ofthephysicalandbiologicalenvironmentsinwhichPreludewilloperate;potential
impactsoftheproposedactivities;thepotentialhazardsandeventsparticularlyfuel
spillsandlossofcontainmentofhydrocarbonsandtheircontrolmeasures;corporate
policiesonhealth,safety,securityandenvironment;keystakeholdersconsultedduring
thepreparationoftheEnvironmentPlan;andShellsemergencyresponsestrategies
andprocedures.
WhileproponentsofFLNGtechnologyarguethattherearenotechnicalreasonswhy
thisnewtechnologycannotbesaferthanotherpetroleumindustrytechnology,history


showsthattheoffshorerecoveryandproductionofpetroleumresourcesisan
inherentlyriskyendeavour,onethatcanleadtocatastrophicoutcomes.Whilesuch
eventsarerelativelyrare,Australiasregulatoryregimerequiresprojectproponentsto
demonstrateviatheirSafetyCasesandEnvironmentPlansthattheyhaveidentified
risksthatcouldleadtomajoraccidentevents(MAE)ormarineoilpollution(MOP),and
thattheyhavetheappropriateemergencymanagementresponsesinplace.The
requirementforoffshorepetroleumoperationstohaveanevacuation,escapeand
rescueanalysis(EERA)andafireandexplosionriskanalysis(FERA)isdiscussedin
Chapter7.
Projectproponentshaveadvisedthatincidentmanagementandresponseprocesses
forFLNGfacilitieswillbethesameasforotherfacilitiestheyoperate.However,a
numberofconcernsabouttheemergencycapacityandpreparednessofFLNGfacilities
wereraised.Theseconcernscentredaroundevacuationprocedures,lifeboatand
infieldsupportvesselcapacityandtherisksassociatedwiththecompressionof
processingfacilitiesintoarelativelysmallspace.Theseconcernsarealsooutlinedin
Chapter7.
Followingthebriefoutlineoftheregulatoryrequirementsforemergencyresponsein
Chapter7,Chapters8,9and10discusstheproceduresandresourcesavailableonan
FLNGfacilityintheeventofacyclone,anaccidentorotheremergency,andalossof
containmentorspill,respectively.Thesechaptersnecessarilyrelyheavilyon
informationprovidedbyShellasthePreludefacilityisthemostadvancedatthistimein
termsofplanningandseekingregulatoryapprovalforoperatinginAustralianwaters.
ThesechaptersalsodemonstratetheimportanceofNOPSEMAsroleasregulatorand
theneedfortheAuthoritytobeabletoeffectivelyfulfilitsassessmentandmonitoring
role.
FLNGfacilitiesthatwilloperateofftheWesternAustraliancoastwillbelocatedina
regionsubjecttoextremeweathereventsincludingcyclones.Theprovisionofaccurate
andtimelyinformationisessentialtothesafeoperationoftheoffshorepetroleum
industryandChapter8brieflyoutlinestheinformationAustraliasBureauof
Meteorologyprovidestotheindustry.
Generally,thesafestcourseofactionforavesselatseainrelationtocyclonesisto
movepositiontoavoidthem.Forotheroffshoreinfrastructure,thesafestoptionshave
beentosignificantlyreducemanninglevelsortototallydeman,leavingnopersonnel
onboard.Thesethreeoptions,togetherwithindustrysstagedcycloneresponse,are
discussedinChapter8.
ShellandWoodsideFLNGfacilitieswillnotdemanduringacycloneasthePreludetype
facilityhasbeendesignedtowithstandaoneintenthousandyearweatherevent.
Nevertheless,thisapproachhasbeenthecauseofconsiderableconcern.Mostofthis

vi


centredonthefactthatthedesignhadnotyetbeentestedinsituandontheabilityof
thePreludefacilitysaccommodationunittoprovideasaferefugeforworkers.As
Chapter8shows,bothWoodsideandShellhaveconfidenceintheFLNGfacilitydesign
andtheirpoliciesandsystemsrelatingtocyclonepreparednessandresponse.While
offshoreoperatorsmayhaveappropriatepoliciesandresponseplansinplace,Chapter
8alsoraisestheneedforallthoseworkingon,orinsupportof,anFLNGfacilitytobe
trainedtorespondappropriatelyinanextremeweatherevent.
Again,whilemajoraccidenteventssuchasfiresandexplosionsonoffshorefacilities
mayberelativelyrare,theydohappen.Chapter9brieflyoutlinesthePreludefacilitys
emergencyresponseplansandstrategiesastheyrelatetofires,explosionsandcold
spills,aswellasevacuation,escape,andrescueandrecovery.ThefocusofChapter9,
though,isonemergencyevacuation,includingmedevacandsearchandrescue.Inthe
eventofanemergencyrequiringevacuation,therearethreeprimarymethods
providedonthePreludefacility:helicopter,lifeboatsandliferafts.Theinfieldsupport
vesselswouldalsobeusedifrequired.Thenumbersofpeopleabletobe
accommodatedineachoftheseisalsoprovidedinChapter9.Thischapteralsonotes
that,ratherthanuseaBillyPughtotransferpeoplefromthefacility,aFROGcrane
transferdevicewillbeused.
Inrelationtomedicalemergenciesandevacuations,Chapter9describestheguidelines
providedbytheInternationalAssociationofOil&GasProducersformanagingthe
healthofthoseworkingintheindustry.TheseguidelinesdescribewhattheAssociation
considerstobeappropriatelevelsoffirstresponderandhealthcareprofessionals,and
themedicalstructuresthatshouldbeinplacetoprovideprimary,secondaryand
tertiarycaretoinjuredworkers.BothShellandWoodsidehavestatedthattheywill
haveadequateonboardmedialresourcesfortheirFLNGfacilitiesaswellasthe
capacitytomedevacinjuredworkerstoshoreand,ifnecessary,totransfertoPerthor
Darwinforfurthertreatment.Theoilandgasindustrysaeromedicalevacuation
service,WestAustraliaResourcesAeroMedicalEvacuation(WARAME),isalso
describedinChapter9
FLNGfacilityoperatorsarealsorequiredtohaveinplaceadequatesearchandrescue
(SAR)capability.UnderAustraliasobjectivebasedregulatoryregime,theonusison
theoperatortoensurethatadequateemergencyresponsecapability,includingSAR,
existsintheremoteregionsinwhichitwantstoestablishanoffshorefacility.As
Chapter9shows,operatorshavecometoshareSARinfrastructuresuchashelicopters.
ItislikelythatmostoffshorepetroleumfacilitySARsituationscanbeimmediately
handledbytheoperator.However,theremaybeoccasionswhenanoperatorrequests
externalassistance.Chapter9explainsthattheCommissionerofWesternAustralia
PoliceistheHazardManagementAuthorityresponsibleforSARinthestates
jurisdiction,whiletheAustralianMaritimeSafetyAuthorityisresponsibleforSARin

vii


Commonwealthwaters.Nevertheless,thereisanInterGovernmentalAgreementon
NationalSARResponseArrangementswhichmakesprovisionforthecoordinationof
searchandrescueintheAustralianregion.
AswithallaspectsofFLNGsafety,ensuringtheworkforceisadequatelytrainedand
preparedtoresponseappropriatelytoanSARemergencyisessential.Onefavoured
methodtoensureresponsereadinessistoexerciseprocedures.Industryand
governmentinvolvementinsuchtrainingexercisesisdescribedinChapter9.This
chapteralsooutlinesShellsFLNGoperatortrainingthatistakingplaceatthe
AustralianCentreforEnergyandProcessTraining(ACEPT)inHenderson,Western
Australia.Giventhatneitherindustrynorgovernmentoperatingalonehasthecapacity
tomanagehighconsequenceoffshoreincidents,theneedforacollaborativeapproach
toemergencyresponseisalsodiscussedinChapter9.Whileacollaborativeapproachis
necessary,thegovernmentregulatorybodiesarenotemergencyorpollutionresponse
agencies,anditmustberememberedthattheprimaryresponsibilitytorespondalways
lieswiththeoperator.
Thethirdtypeofoffshorepetroleummajoreventconsideredinthisreportislossof
containment,andthisisthesubjectofChapter10.Aswithmattersconcerning
workforceandfacilitysafety,theoperatorisresponsibleforanyenvironmentalimpact
arisingfromthedevelopmentandoperationofthefacility.Nooffshorepetroleum
activitycanoccurwithoutNOPSEMAbeingsatisfiedthattheoperatorhasthecapacity
andcapabilitytorespondquicklytoalossofcontainmentandlimitanyenvironmental
damagethatmayarise.
Alossofcontainmentfromanoffshorepetroleumfacility,whetheratthewellheador
otherwise,willresultinpetroleumbeingreleasedintotheocean.Thisispotentiallya
veryseriousissue,andonethatrequiresanimmediateresponse.Chapter10describes
theAustralianpetroleumindustrysSubseaFirstResponseToolkit,whichconsistsof
sourcecontrolequipmentsuchascappingandcontainmentequipmentdesignedto
stopapetroleumspillatitssource.
Intheeventofanoilspilltherearegenerallyfourmethodsoftreatment,dependingon
thecompositionofthepetroleum,location,accessibilityandmetoceanconditionsat
thetime.Thesefourmethodsnaturalbiodegradation,containmentandcollection,
chemicaldispersants,andbiologicalagentsaredescribedinChapter10.Thischapter
alsodiscussestheindustrysmutualaidagreementsinplaceundertheAustralian
MarineOilSpillPlan.ThisincludestheestablishmentoftheAustralianMarineOilSpill
Centre(AMOSC),anotforprofitcompanyestablishedbyparticipatingoilcompaniesin
1991.AMOSCoperatestheAustralianpetroleumindustrysmajoroilspillresponse
facilities;maintainsstockpilesofoilspillequipmentandsuppliesinGeelong,Fremantle,
ExmouthandBroome;andofferstrainingtoworkersintheAustralianpetroleum
industry.

viii


TheCommonwealthandWesternAustralianGovernmentsroleinrespondingtooil
spillpollutionisalsooutlinedinChapter10.Thischapterconcludeswithadiscussionof
thetypeofnaturalgashydrocarbonsthatwillbedevelopedbyShellsPreludeFLNG
facilitynamelyLNG,LPGandcondensateandtherisksposedbyalossof
containmentoftheseproducts.Itseemsthattheseproductsposelessofarisktothe
marineenvironmentthanisthecaseforheavierpetroleumproducts,suchascrudeoil
(althoughthemethanecomponentofLNGisasignificantgreenhousegas).While
ShellsPreludefacilityhasbeendesignedtomeetcurrentworldsbestpractice
environmentalstandardsandmustsatisfyNOPSEMAthatriskshavebeenreducedto
ALARP,thethreatofoilspillpollutioniseverpresentintheproductionofpetroleum
products.ThisfactreinforcestheneedforNOPSEMAtoeffectivelyperformits
regulatoryfunctions.
Chapter11outlinesthreemajorpiecesofinfrastructurenecessarytothesafe
operationsofFLNGfacilities,namelymedicalfacilities,airportsandports.Thechapter
outlinesthefacilitiesandservicesavailableattheBroomeRegionalHealthCampus,the
LombadinaairportandtheBroomeport.Indoingso,italsoraisesparticularconcerns
inrelationtoeachofthesefacilities.ThelackofinfrastructureintheKimberleyregion
raisesthequestionofwhoseresponsibilityitistoprovidethenecessarysafetyrelated
infrastructure.AsChapter11notes,underAustraliasobjectivebasedregulatory
regime,thecostsrelatingtoaproject,includinginfrastructurecosts,mustbeborneby
theprojectproponent.Thisview,whichisthatadoptedbytheDepartmentofState
Development,doesnotconsiderthepotentiallynegativeconsequencesastrict
adherencetoanobjectivebasedphilosophymighthaveonstatedevelopment.
Chapter11alsodiscussesthechallengethatFLNGfacilitiesnecessarilyposefor
NOPSEMAastheexpertregulator.Giventhis,itisessentialthatFLNGfacilitiesproject
proponentsandoperatorsareparticularlycandidinsharinginformationwith
NOPSEMA.OnlythencantheauthorityreasonableconcludethatFLNGfacilitysafety
andenvironmentalriskshavebeenreducedtoALARP.
Thechapterconcludeswithadiscussionoftheuncertaintyaroundtheroleof
governmentauthoritiesinoffshoreemergencyresponsecoordination.Italsonotesthe
lackofconsiderationgiventotheaggregateeffectofmultipleFLNGoperationson
enablingsafetyinfrastructureandemergencyresponsecommand.

ix

MinisterialResponse
InaccordancewithStandingOrder277(1)oftheStandingOrdersoftheLegislative
Assembly,theEconomicsandIndustryStandingCommitteedirectsthattheMinister
forStateDevelopment,theMinisterforMinesandPetroleum,theMinisterfor
EmergencyservicesandtheMinisterforTransportreporttotheAssemblyastothe
action,ifany,proposedtobetakenbytheGovernmentwithrespecttothe
recommendationsoftheCommittee.

xi

FindingsandRecommendations
Finding1

Page4

ThereissignificantinterestwithinthepetroleumindustryinusingFLNGtechnologyto
developoilandgasreservesinAustralianwaters.
Finding2

Page27

Statesovereigntygenerallyextendstocoveralllandwithinastatesbordersandthe
firstthreenauticalmilesofoceanfromthelowwaterlinealongthecoastandoffshore
islands.
Finding3

Page28

Regulatoryresponsibilityforoffshorepetroleumresourcesdependsonwhetherthe
resourcesarelocatedinstateorCommonwealthwaters.Australiaspetroleum
resourcesarepredominantlyinCommonwealthwaters.
Finding4

Page29

BecauseanFLNGispermanentlymooredabovethepetroleumresourceitis
developing,undertheOffshorePetroleumandGreenhouseGasStorageAct2006(Cth)
itisdefinedandregulatedasafacilityasdefinedinthatAct.
Finding5

Page31

TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthorityis
theCommonwealthauthorityresponsiblefortheregulationofalloffshorepetroleum
activitiesinvolvinginfrastructurethatispermanentlyfixedinsomewaytotheseafloor
(apetroleumfacility).
Finding6

Page32

TheAustralianMarineSafetyAuthorityistheCommonwealthauthorityresponsiblefor
regulatingallshippingactivitiesinAustralianwaters.
Finding7

Page32

Whenashipbecomestetheredtoapetroleumfacility,regulatoryjurisdictionoverthat
vesselpassesfromtheAustralianMarineSafetyAuthoritytotheNationalOffshore
PetroleumSafetyandEnvironmentalManagementAuthority.
Finding8

Page35

PetroleumactivitiesundertakeninWesternAustraliancoastalwatersareregulatedby
theWesternAustralianGovernment.

xiii


Finding9

Page37

Intheeventofanemergency,anoperatormaydecidetoseektheassistanceof
government.ForoperationsinCommonwealthwaters,thecoordinationofthe
responsewouldmostlikelybebyeithertheOffshorePetroleumIncidentCoordination
CommitteeortheAustralianMaritimeSafetyAuthority,dependingonthetypeof
emergency.
Foroperationsinstatewaters,anassistedresponsewouldbecoordinatedbyeither
theDepartmentofMinesandPetroleumortheDepartmentofTransport,depending
uponthescopeoftheemergencyevent.
Finding10

Page42

TheoffshorepetroleumindustryinAustraliaissubjecttoobjectivebasedregulation,
whichmakestheoperatorresponsibleforidentifyingthesafetyandenvironmental
risksassociatedwithitsproposedactivitiesandsatisfyingtheregulatorthattheserisks
willbeappropriatelymanagedandmitigated.
Finding11

Page45

TheregulatoryregimethatappliestoAustraliasoffshorepetroleumindustryrequires
operatorstosatisfytheregulatorthatidentifiedriskshavebeenreducedtolevelsthat
areaslowasreasonablypracticable.
Finding12

Page45

Aslowasreasonablypracticabledoesnotmeanaslowasreasonablyaffordable.
Rather,itmeansassessingandadoptingappropriateriskcontrolmeasuresuntilthe
incrementalbenefitoffurthermeasuresisoutweighedbyotherissuessuchasthecost,
timeandeffortrequiredtoimplementthemeasure.
Finding13

Page69

Offshorepetroleumfacilities,includingFLNGfacilities,cannotoperatein
Commonwealthwaterswithoutasafetycasethathasbeenassessedandapprovedby
theNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority.
Finding14

Page69

Theoffshorepetroleumindustryregardsthesafetycaseregimeasworldsbest
practice.
Finding15

Page70

Asafetycaseisabodyofevidenceprovidedbyanoperatortotheregulatorto
demonstratethatrisksandhazardsassociatedwiththeproposeddevelopmenthave
beenidentifiedandthattheproposedsafetymanagementsystemwillreduceriskstoa
levelthatisaslowasreasonablypracticable.

xiv


Finding16

Page80

Asafetycaseinrespectofanoffshorepetroleumfacilitymustcontainthreemain
elements,being:
adetaileddescriptionofthefacility;
adetaileddescriptionoftheformalidentificationandassessmentofthehazards
andrisks;and
adetaileddescriptionofthecomprehensiveandintegratedhazardmanagement
system.
Finding17

Page84

Assafetyiscrucialtoanyoffshorepetroleumproject,reducingrisklevelstoaslowas
reasonablypracticablerequireshazardandriskmanagementtobeincorporatedinto
thedesignphaseofaproject.
Finding18

Page87

UndertheOffshorePetroleumandGreenhouseGasStorage(Safety)Regulations2009
(Cth),theNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authorityisresponsibleforassessingasafetycasetodeterminewhethertheidentified
hazardsandriskshavebeenreducedtoaslowasreasonablypracticable.
Finding19

Page90

TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthoritys
EarlyEngagementSafetyCasepolicyallowstheAuthoritytoengagewithanoperator
proposinganewtechnologyfacilityduringthedesignprocessand,thus,contributeto
thesaferdesignoftheproposedfacility.
Finding20

Page90

ShellengagedwiththeNationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthoritythroughanEarlyEngagementSafetyCaseprocessduringthe
FrontEndEngineeringandDesignstageofthePreludefacility.
Finding21

Page91

TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
mayrequireafacilityoperatortoprovideawrittenstatementbyanindependent
validatorinrelationtothedesign,constructionandinstallationoftheproposedfacility
oranysignificantchangestoanexistingfacility.
Finding22

Page91

ItisaNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
policytoalwaysrequestawrittenindependentvalidationinrelationtoanewfacility.

xv


Finding23

Page94

TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthoritys
acceptanceofafacilityssafetycasedoesnotcertifythesafetyofthefacility.Rather,it
representstheAuthoritysacceptancethattheoperatorhasmeasuresinplacethat
reducerisktolevelsthatareaslowasreasonablypracticable.
Finding24

Page95

TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
usestheexpertregulatormodel,whichmakesitessentialfortheAuthoritytoemploy
industrytrainedexpertswiththeappropriateskillsandcompetenciestoallowthemto
conducttechnicallycompetentassessmentsanddrawfairconclusions.
Finding25

Page97

TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
operatesonacostrecoverybasis,withindustrypayingfeesfortheAuthoritysservices.
Finding26

Page97

TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
monitorsanoperatorscontinuedcompliancewithafacilityssafetycasethrougha
systemofplannedinspectionsandriskbasedassessments.
Finding27

Page100

TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthoritys
PlannedInspectionpolicyrequiresplannedinspectionsofcontinuouslymanned
facilitiestobecarriedouttwiceayear.
Finding28

Page103

Asafetycaseisnotastaticdocument.Asoperatorsarerequiredtomaintainrisklevels
toaslowasreasonablypracticable,thesafetycasemustbechangedtoreflectany
changesonthefacilityandanysafetyimprovementsdeemedreasonable.
Finding29

Page107

TheAustralianregulatoryregimefortheoffshorepetroleumindustryrequires
operatorstoundertakeeffectiveconsultationwiththeworkforceduringthe
developmentofthesafetycaseforafacility.Thereisnolegalrequirementforthisto
includeunionsorotherrepresentativebodies.
Finding30

Page107

TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,in
assessingthesafetycase,mustbesatisfiedthattherehasbeeneffectiveparticipation
oftheworkforceindevelopingorrevisingasafetycaseforafacility.

xvi


Finding31

Page133

FLNGprojectproponentshaveusedasafetyindesignprocesstodevelopdesign
solutionsthatreducetherisklevelstoaslowasreasonablypracticable.
Finding32

Page133

ThedesignofanysafetyfeatureofanFLNGfacilitymustconsiderboththefacilitys
functionanditsparticularoperatingenvironment.
Finding33

Page136

Offshorepetroleumfacilities,includingFLNGfacilities,cannotoperateinAustralian
waterswithoutanOffshoreProjectProposal,togetherwithallassociatedEnvironment
Plans,firstbeingacceptedbytheNationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority.
Finding34

Page140

AnEnvironmentPlanforaproposedoffshorepetroleumactivitymustinclude:

adetaileddescriptionoftheactivitytobeundertakenandtheenvironmentin
whichitwilloccur;

anevaluationoftheenvironmentalrisksandimpactsassociatedwiththeactivity;

athoroughenvironmentalmanagementimplementationstrategy;

anOilPollutionEmergencyPlan;and

ademonstrationoftheproponentsfinancialcapacitytomeetthecostsand
potentialliabilitiesoftheproposedactivity.

Finding35

Page140

AnOilPollutionEmergencyPlanmustdescribethestepsthatwillbetakenintheevent
ofanoilspill,includingthecontrolmeasuresinplace,responsecapacityandcapability,
andarrangementformonitoringtheeffectivenessofcontrolmeasures.
Finding36

Page150

UndertheOffshorePetroleumandGreenhouseGasStorage(Environment)Regulations
2009(Cth),theNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authorityisrequiredtoassessand,ifappropriate,acceptaprojectproponents
EnvironmentPlan.ForanEnvironmentPlantobeacceptedtheproponentmust
demonstratebothanawarenessofrisksandpotentialenvironmentalimpacts,andthat
appropriatestrategiesandprocedureswillbeimplementedintheeventofalossof
containment.

xvii


Finding37

Page152

Thefocusoftheoffshorepetroleumindustrysemergencyresponsemanagementon
majoraccidenteventsreflectstherealitythat,whilemajoraccidentsarerelativelyrare,
theirimpactisoftenveryserious,withthepotentialforfatalitiestooccur.
Finding38

Page152

TheoffshorepetroleumindustryconsidersthatthereisnotechnicalreasonwhyFLNG
technologycannotbemadesaferthanotherhydrocarbonoperations.WhetherFLNG
facilitiesaresaferandenvironmentallylessriskythanotheroffshoreoperationsisyet
tobeproven.
Finding39

Page154

ProponentsofFLNGfacilitiesinAustralianwaterswillemploythesameemergency
managementandprogressiveresponseprocessesforFLNGfacilitiesasthoseadopted
fortheirotheroffshoreinstallationsintheregion.
Finding40

Page159

TheOffshorePetroleumGreenhouseGasStorage(Safety)Regulations2009(Cth)
requireaprojectproponentssafetycasetoincludeanevacuation,escapeandrescue
analysis,andafireandexplosionriskanalysis.
Finding41

Page163

Reliable,accurateandtimelymeteorologicalinformationisessentialtothesafe
operationsofalloffshorepetroleumfacilities.ThisisespeciallythecaseforFLNG
facilitieswhicharenecessarilypermanentlymooredinpositionandunabletomove
positiontoavoidanextremeweatherevent.
Finding42

Page163

OffshorepetroleumoperationsinAustralianwatersreceivemeteorologicalinformation
fromtheAustralianBureauofMeteorologyandfromotherprivateexpertservices.
Finding43

Page163

Theoffshorepetroleumindustryissatisfiedwiththequalityofmeteorological
informationitreceivesfromtheBureauofMeteorology.
Finding44

Page165

Duringacyclone,theinfieldsupportvesselsforanFLNGfacilitywillnotremainon
standby;rather,aswithallvessels,theywilltakestandardmaritimecycloneavoidance
measures.

xviii


Finding45

Page171

ThereissignificantconcerninrelationtoFLNGfacilitiesnotdemanningduring
extremeweatherevents.
Finding46

Page178

TheaccommodationunitoftheproposedFLNGfacilityhasbeendesignedtoprovidea
fullyselfcontainedlifesupportenvironmentforpersonnelduringemergencyevents.
Finding47

Page178

ProponentsofFLNGfacilitiesareconfidentthatthefacilitydesignmakesnotde
manningduringextremeweathereventsthesafestcourseofaction.
Finding48

Page178

ItisessentialthatallpersonnelonanFLNGfacilityanditsinfieldsupportvessels
receivethenecessarytrainingtoensuretheyarepreparedtorespondappropriately
duringanextremeweatherevent.
Finding49

Page178

Allaspectsofhealthandsafety,includingthementalhealthofworkersduringextreme
weatherevents,mustbeincludedinthesafetycaseandassessedbytheNational
OffshorePetroleumSafetyandEnvironmentalManagementAuthority.
Finding50

Page183

TherearethreemainmeansofevacuationfromanFLNGfacilitybyhelicopter,bylife
raftandbyusinginfieldsupportvessels.Theparticularmethod(s)usedduringan
emergencyeventwilldependupontheprevailingcircumstances.
Finding51

Page186

Concernhasbeenraisedinrelationtothecapacityandsafetyofevacuationmethods
forFLNGfacilities.
Finding52

Page186

EmergencyevacuationplanswillnotbeacceptedbytheNationalOffshorePetroleum
SafetyandEnvironmentalManagementAuthorityunlesstheyadequatelyensurethe
safetyofallthoseatrisk,regardlessoftheirlocationonthefacilityandthenumberson
board.
Finding53

Page186

AllpersonnelworkingonoraroundanFLNGfacilitymustreceiveappropriatetraining
toensuretheyareadequatelypreparedtorespondduringanemergencyevacuation.

xix


Finding54

Page189

Offshorepetroleumoperatorsmedicalresponseandmedicalevacuationprocedures
aregenerallyatieredprocess,frombasicfirstaidprovisiononsitethroughto
evacuationfordiagnosisandtreatmentofcomplexmedicalconditions.
Finding55

Page191

ThenumberandcapabilityofmedicalstaffonboardanFLNGfacilitymustbe
appropriatetothatparticularfacility.
Finding56

Page193

Tohelpovercomethedifficultiesassociatedwithmedicalevacuationsinremoteand
hazardousregionsinWesternAustralia,someoilandgascompanieshaveformedan
aeromedicalservicenamedtheWesternAustraliaResourcesAeroMedicalEvacuation.
Finding57

Page193

Emergencymedicalevacuationsfromoilandgasfacilitiesinthenorthwest,including
FLNGfacilities,willbetothenearestcapablefacility,mostlikelyPerthorDarwin.
Finding58

Page198

Anadequateandavailablesearchandrescuecapabilityisaregulatoryrequirementfor
alloffshorepetroleumfacilities,includingFLNGfacilities.Thesearchandrescue
capabilityrequirementsforanFLNGfacilityarenecessarilydictatedbyinternational
bestpracticeandthefacilitysparticularlocationandriskcharacteristics.
Finding59

Page198

Resourcecompanieshaveinvestedinsearchandrescueequipmentandservices,which
hashelpedaddressthepaucityofsearchandrescueinfrastructurealongtheKimberley
coastline.
Finding60

Page198

Onewayinwhichoffshoreoilandgasoperatorshavedischargedtheregulatory
requirementsforsearchandrescuecapabilityistocollaborateinprovidingtheirsearch
andrescuefacilitiesand,thus,enhanceeachindividualoperationscapability.
Finding61

Page200

Assafetyistheresponsibilityofanoffshorefacilitysoperator,intheeventofan
emergencytheoperatoristheControlAgency.
Finding62

Page200

Insevereemergencysituationsonoffshorepetroleumfacilities,includingFLNG
facilities,governmentassistancewouldberequired.InCommonwealthwaters,this

xx


assistancewouldbecoordinatedbytheAustralianMaritimeSafetyAuthority;instate
watersitwouldbecoordinatedbyWesternAustraliaPolice.
Finding63

Page205

Regularcollaborativeexerciseswhichallowpersonneltopractisetheirrolesarea
criticalcomponentofanFLNGfacilityssearchandrescuepreparedness.
Finding64

Page208

Itisessentialthatthepetroleumindustrycontinuestoshareinformationonsafety
lessonslearnedandonsafetyincidents.
Finding65

Page208

Whilesafetycasesandenvironmentalplansnecessarilycontainproprietary
information,thehighpotentialeventsummariespublishedontheAustralian
PetroleumProductandExplorationAssociationswebsiteneednotcontainproprietary
information.
Finding66

Page208

Highpotentialeventsummariescouldusefullybemadeavailabletoregulatorsandto
governmentagencies.Forexample,itwouldassisttheWesternAustralianGovernment
inthepreparationofWestplans.
Finding67

Page210

Asneitherindustrynorgovernmenthasthecapacitytomanagehighconsequence
offshoreincidentsalone,acollaborativeapproachtoemergencyresponsehas
developed.
Finding68

Page212

NeithertheNationalOffshorePetroleumSafetyandEnvironmentalManagement
AuthoritynortheOffshorePetroleumIncidentCoordinationCommitteeareemergency
orpollutionresponseagencies.Theresponsibilityforemergencyandpollution
responselieswiththefacilitysoperator.
Finding69

Page214

Astheriskofoilpollutionisinherenttoanypetroleumfacility,robustregulationand
managementpracticesarecritical.Itisessentialthatindustryandgovernmenthavea
strongfocusontheregulationandmanagementofoilpollutionriskandoccurrences.
Finding70

Page215

Intheeventofalossofcontainmentatthewellhead,theresponseneedstoinclude
targetedsubseasourcecontrol.

xxi


Finding71

Page217

TheoffshorepetroleumindustrysSubseaFirstResponseToolkitisdesignedtoaddress
apetroleumspillatitssource.
Finding72

Page220

Intheeventofoilpollution,thedeploymentoftheappropriateresourcesisas
importantasthespeedofresponse.Itisimportantthattherightmethodoftreatment
foraparticularspillisappliedinthemostefficientmanner.
Finding73

Page223

Todischargetheirregulatoryresponsibilityinrelationtomarinepetroleumspills,a
numberofoilcompaniesformedtheAustralianMarineOilSpillCentre,whichallows
forthepoolingofresourcestorespondtolossofcontainmentevents.
Finding74

Page224

TheAustralianMarineOilSpillCentrehasasuiteofoilpollutionresponseresource
stockpilesstrategicallylocatedaroundWesternAustralia.
Finding75

Page224

TheAustralianMarineOilSpillCentreoffersoilspillresponsetrainingpackages,and
workscollaborativelywithindustryandgovernmentagenciestohelpstaffdevelopthe
practicalskillsandknowledgetoallowthemtoresponseappropriatelyintheeventof
marineoilpollution.
Finding76

Page224

Emergencyresponseexercisessuchasthoseconductedandcoordinatedbythe
AustralianMarineOilSpillCentreareofsignificantbenefittotheoffshorepetroleum
industryasitallowsthecompetenciesofstaffandtheoperationalstatusofequipment
tobetestedandmaintained.
Finding77

Page224

AnFLNGbasedexerciseinvolvingallrelevantstakeholdersshouldtakeplaceoncethe
Preludefacilityisoperational.
Recommendation1

Page224

TheWesternAustralianGovernmentencouragetheCommonwealthGovernment,Shell
andotherstakeholderstoconductanemergencyresponseexercisebasedonthe
Preludefacilityassoonaspossiblefollowingitscommissioning.

xxii


Finding78

Page232

Thereisnoleadagencyresponsibleforcoordinatingstrategicdevelopmentof
necessarysafetyrelatedinfrastructureandservices,particularlythosenecessaryto
meetlikelyfuturerequirements.
Recommendation2

Page232

TheWesternAustralianGovernmentplaceontheCOAGagendatheneedforalead
agencyforthecoordinationofnecessarysafetyrelatedinfrastructureandservices.
Finding79

Page248

Projectproponentsareresponsibleforthedevelopmentofallinfrastructure,including
supportinfrastructure,necessaryforthesafeoperationoftheirfacilities.
Finding80

Page248

RelocatingandsealingtheunsealedsectionofCapeLevequeRoadwillensuretheall
yearavailabilityoffuelsuppliestoLombadinaAirportandlocalcommunities.
Finding81

Page252

ThereisanapparentpaucityofhydrographicinformationfortheLombadina/Cape
Levequearea.
Finding82

Page270

Thereisalackoftransparencyinrelationtotheemergencyresponseplaninformation
providedbyoperatorsintheirsafetycases.
Recommendation3

Page270

TheWesternAustralianGovernmentplaceontheCOAGagendatheneedforincreased
transparencyfromtheNationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthorityinrelationtoemergencyresponseplaninformation.
Finding83

Page270

Thereisalackofcertaintysurroundingthecommandstructureinplaceforamajor
emergencyincidentatanoffshorepetroleumfacility,particularlyanincidentrequiring
bothasafetyandenvironmentalemergencyresponse.
Recommendation4

Page270

TheWesternAustralianGovernmentplaceontheCOAGagendatheneedtodevelopa
programtoeducatestakeholdersinrelationtotheemergencyresponseresponsibilities
ofgovernmentagencies.

xxiii


Finding84

Page270

TheaggregateeffectofmultipleFLNGoperationsonsafetyinfrastructureandthe
complexityofanemergencyresponseinvolvingconcurrentmultipleFLNGoperationsis
currentlynotbeingconsideredbygovernment.
Recommendation5

Page270

TheWesternAustralianGovernmentplaceontheCOAGagendatheneedforaregional
planforoffshoreemergencyresponse,onethatconsiderstheaggregateeffectof
multipleFLNGoperationsonsafetyinfrastructureandthecomplexityofanemergency
responseinvolvingconcurrentmultipleFLNGoperations.

xxiv

Chapter1
Introduction

Introduction
1.1

InMay2014,theEconomicsandIndustryStandingCommittee(theCommittee)tabled
itsfirstreportonitsInquiryintotheeconomicimpactoffloatingliquefiednaturalgas
(FLNG)onparticularsectorsoftheWesternAustralianeconomy.Inthatreportthe
CommitteeacknowledgedthehighlevelofindustryinvestmentinFLNGtechnology
development,butnotedthatdesignassessmentandscaletestingareverydifferent
fromactualdeploymentinchallengingmarineenvironmentsandwithconfinedspace
operations.

1.2

DuringthatInquiry,theCommitteereceivedevidencefromindustry,governmentand
unionsraisingconcernsabouttheunprovennatureofFLNGfacilities,theirreliability
andsafety.

1.3

WhileChevronacknowledgedaplaceforFLNGtechnologyforsmaller,moreremote
gasfields,thecompanyalsoexpressedtheviewthat:
thereisstillalotmoredevelopmentworkthatneedstobedonebefore
wewouldcharacterisefloatingLNGasaproventechnology.Forus,
there are still some unanswered questions, including the safety case
forextremeweatherlocationsthoselocations,forexample,including
high or frequent cyclone areasand questions such as: how is the
vessel and the people on the vessel managed during these extreme
weather events, and how are annual plant maintenance turnarounds
conducted, considering the large number of people required to
effectively carry out a turnaround program? With this in mind, it is
uncleartoushowtheseissuesimpactonthecontinuityofoperations
on a daytoday basisspecifically, the availability and reliability of
thesefacilitieswhencomparedwithlandbasedplantfacilities.1

1.4

TheDepartmentofMinesandPetroleum(DMP)alsonotedthatFLNGisasyet,
unproventechnology.2DMPsevidencewasthatsignificantcommercialriskremains

1
2

MrRoyKrzywosinski,ManagingDirector,Chevron,TranscriptofEvidence,24October2013,p4.
SubmissionNo.18fromDepartmentofMinesandPetroleum,submissiontoInquiryinto
EconomicImpactofFloatingFLNGonWesternAustralia,30August2013,p9.

Chapter1
asasteadystateproductionfromanFLNGfacilityisnotyetdemonstrated.3
Furthermore,DMPexpressedconcerns:
aroundsafety,particularlyinregardstothecloseproximityofprocess
machinery, LNG storage and offloading facilities to living quarters. It
may take significant time, major reconstruction and, as a result,
additional tax deductions to ensure all safety [and] environmental
hazard[s]areproperlymanagedoncetheFLNGstartsfulloperation.4
1.5

Concernsraisedbyunionswhosememberswouldbeemployedtoworkon,orin
supportof,FLNGfacilitiescentredontheunprovennatureofthetechnology,confusion
aboutregulationsthatwillapplyandafacilityscapacitytorespondtoanemergency.

1.6

Forexample,theAustralianWorkersUnion(AWU)statedthatFLNGiscompletely
brandnewtechnologyanditiscompletelyuntriedandweareveryconcernedabout
thepotentialforsomethingtogowrong.5Similarly,theMaritimeUnionofAustralia
(MUA)arguedthatFLNGtechnologyistodateuntestedastherearenosuchfacilities
operatinganywhereintheworld.6

1.7

AfurtherconcernraisedbytheMUAwasthelackofcertaintyinrelationtoregulation
ofFLNGfacilities.TheMUAsubmittedthat:
therearenoregulationsthatcoverit[FLNGtechnology].So,thereisa
degree of uncertainty about the safety and the regulatory
requirements, whether it be AMSA [Australian Maritime Safety
Authority] or NOPSEMA [National Offshore Petroleum Safety and
Environmental Management Authority]. There does not appear to be
any certainty and we do not believe that anything around at the
momentwouldcoverthistypeofoperationgiventhehightechnology,
highdemand,isolationofworketcetera.7

1.8

EmergencyresponsecapabilitywasalsoafactorraisedintheCommitteesprevious
Inquiry.Particularconcernwasexpressedaboutlocatingtheprocessingtrainsand

3
4
5
6

ibid.
ibid.
MrStephenPrice,Secretary,TheAustralianWorkersUnion,TranscriptofEvidence,Inquiryinto
EconomicImpactofFloatingFLNGonWesternAustralia,1November2013,p3.
SubmissionNo.22fromMaritimeUnionofAustralia,submissiontoInquiryintoEconomicImpact
ofFloatingFLNGonWesternAustralia,3September2013,p5.SeealsoMrIanBray,Assistant
NationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,InquiryintoEconomic
ImpactofFloatingFLNGonWesternAustralia,1November2013,p2.
MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
InquiryintoEconomicImpactofFloatingFLNGonWesternAustralia,1November2013,p2.See
also:SubmissionNo.22fromMaritimeUnionofAustralia,submissiontoInquiryintoEconomic
ImpactofFloatingFLNGonWesternAustralia,3September2013,p5.

Chapter1
storagefacilitiesonthesamefacilityandinarelativelycompressedspace.8According
totheAWU,everythingisinoneplace.Ifsomethinggoeswrongonthatparticular
vesselnobodyisreallysurehowitwillbecontainedandwhattheoutcomewillbe.9
TheMUAsubmittedthatit:
hasgraveconcernabouttheabilityofaFLNGfacilitytorespondtoan
emergency given the remote areas where FLNGs are proposed to be
located.Thisisamajorconcerngiventhatthesafetyoftheworkforce
and the safe evacuation of the workforce must be the key
consideration in the event of a significant incident that could pose a
risktoworkers.10
1.9

AsnotedintheCommitteesMay2014report,safetyrelatedmatterswerenotwithin
thescopeofthatInquiry.However,giventheconcernsraisedandtheimportanceof
safetyintheoilandgasindustry,on15May2014theCommitteeannouncedthatit
wouldinquireintoandreportonFLNGsafetyrelatedmatters,payingparticularregard
tothemeasurestakenbyFLNGprojectproponentstoensureworkersafety,the
adequacyofthestatesemergencypreparednessandresponsecapacity,andtherole
ofstateandfederalgovernmentsinrelationtoanFLNGfacilityemergency.The
InquirysfulltermsofreferencecanbefoundinAppendixOne.

TheDevelopmentofFLNGprojects
1.10

1.11

1.12

Conventionally,thedevelopmentofoffshorenaturalgasresourcesforexporthas
requiredtheconstructionofcustommadeonshoreprocessingandliquefactionplants.
Whiletechnologicaladvancessuchascompressionplatformsandfloatingproduction,
storageandoffloading(FPSO)vesselshaveallowedsomeoffshoreprocessing,todate,
liquefactionofgasforexporthasalwaystakenplaceonshore.
ResearchintoFLNGtechnologycanbetracedbacktothe1970sand1980s,11andwhile
feasibilitystudiesshowedthetechnologytobeunviableatthattime,RoyalDutchShell
continuedresearchintotheconcept.In2008ShellformedaBasicDesignPackagefor
FLNGvessels,basedonadesignone,buildmanyprinciple.12
InMay2011Shelltookapositivefinalinvestmentdecision(FID)todevelopthePrelude
andConcertonaturalgasfieldsoffthecoastofWesternAustralia(WA)usingitsFLNG

MrStephenPrice,Secretary,TheAustralianWorkersUnion,TranscriptofEvidence,Inquiryinto
EconomicImpactofFloatingFLNGonWesternAustralia,1November2013,p4.
9 ibid.
10 SubmissionNo.22fromMaritimeUnionofAustralia,submissiontoInquiryintoEconomicImpact
ofFloatingFLNGonWesternAustralia,3September2013,p5.
11 Terry,M.C.,FloatingoffshoreLNGliquefactionfacilityAcosteffectivealternative,Paper
th
presentedatthe7 AnnualOffshoreTechnologyConference,Houston,May1975.
12 MrStevenKauffman,EngineeringManager,ShellAustralia,TranscriptofBriefing,Inquiryinto
EconomicImpactofFloatingFLNGonWesternAustralia,26June2013,p5.

Chapter1
technology.ThiswastheworldsfirstpositivedevelopmentdecisionbasedonFLNG
technology.Scheduledtobeginoperationby2016,Preludewilllikelybecomethe
worldssecondeverFLNGfacility.13
1.13

In2012PetroliamNasionalBerhad(PETRONAS),Malaysiasgovernmentownedoiland
gascompany,tookapositiveFIDtouseFLNGtechnologytodeveloptheKanowitgas
fieldsituatedoffSarawak.ItisexpectedthatthePETRONASvessel,PFLNG1,willbe
operationalbytheendof2015.WhilethiswillmakePFLNG1theworldsfirst
operationalFLNGplant,itissmallerindesignthanthePreludefacility.Itisunderstood
thatPETRONASmayreachFIDonasecondFLNGprojectintherelativelynearfuture.14

1.14

WoodsideisalsoconsideringFLNGtechnologytodevelopitsfieldsintheBrowseBasin.
InSeptember2013theBrowseJointVenturepartnersannouncedthatbasisofdesign
(BOD)workonadevelopmentconceptusingShellsFLNGtechnologyhadbegun.Such
adevelopmentofWoodsidesBrowseBasinreservesisestimatedtorequirethree
PreludetypeFLNGfacilities.15

1.15

ExxonMobilconsidersanFLNGfacilitytobetheleaddevelopmentoptionforits
Scarboroughgasfield,basedonabalanceofeconomic,environmentalandsocial
considerations.16
Finding1
ThereissignificantinterestwithinthepetroleumindustryinusingFLNGtechnologyto
developoilandgasreservesinAustralianwaters.

1.16

NotonlywillthefirstFLNGfacilityinAustralianwatersbepermanentlymooredoffthe
coastofWA,thereisclearlythepossibilitythat,overtime,therewillbeanumberof
FLNGfacilitiessituatedinthisregion.Itisalsoimportanttonotethatitisnotonlythe

13 Schilling,D.R.,Worldslargestshipeverbuiltandfirstfloatingliquefiednaturalgas(FLNG)
platformtobegindrillingin2017,Industrytap,16October2014.Availableat:
http://www.industrytap.com/worldslargestshipeverbuiltfirstfloatingliquefiednaturalgas
flngplatformbegindrilling2017/23119.Accessedon4December2014.
14 Forbes,A.,KeellayingkeepsPFLNG1ontrackfor2015startup,GastechNews,21January
2014.Availableat:http://www.gastechnews.com/lng/keellayingkeepspflng1ontrackfor
2015startup/.Accessedon4December2014.InMarch2012,anagreementwasannounced
betweenasubsidiaryoftheCanadianbasedPacificRubialesEnergyandExmar,aBelgian
shippingcompany.UnderthisagreementExmarwillprovide,ownandoperateonatolling
basis,afloatingliquefaction,regasificationandstorageunittoPacificRubialesEnergyfor
deploymentinColombia.Thisiscurrentlyexpectedtocomeonstreamin2015.
15 Woodside,BrowseFLNGdevelopment,FactSheet,April2014.Availableat:
http://www.woodside.com.au/OurBusiness/Browse/Documents/Browse_FLNG_Development_
_Fact_Sheet__April_2014.pdf.Accessedon5December2014.
16 SubmissionNo.1fromExxonMobil,10July2014,p1.Note:WhileGDFSUEZonceintendedto
developitsBonapartegasfieldsusingFLNGtechnology,andconsidersthetechnologytobe
technicallyrobust,GDFSUEZhasadvisedthatthetechnologydidnotmeetthecompanys
commercialrequirements,andotherdevelopmentoptionswouldbepursued.See:Submission
No.5fromGDFSUEZBonapartePtyLtd,30July2014,p1.

Chapter1
FLNGfacilitiesthatwillbeoperatingofftheWesternAustraliancoast.Theinstallation
andongoingsupportofFLNGfacilitieswillrequiresupportvesselsandonshoresupport
facilities.
1.17

Itisessentialthatallofthesefacilitiesandtheirassociatedsupportinfrastructure
operateandaremaintainedinawaythatprotectsthosetheyemployandthe
environmentinwhichtheyoperate.

Safetymatters
1.18

Volume2oftheCommitteesreportintotheeconomicimplicationsofFLNG
demonstratedtheincreasingprominenceofLNGintheglobalenergymix,withnatural
gasforecasttoincreasefrom22percentoftheworldsenergyin2010to24percent
by2035.17

1.19

ThatreportalsonotedthatpositiveFIDsweremadebetween2009and2012in
relationtosevengreenfieldLNGprojectsinAustralia.Asimilarexpansioninproductive
capacityoccurredinQatarbetween2004and2011.Asaresult,LNGfromQatarand
Australiaisestimatedtoprovideabout50percentofglobalsupplyby2020,upfrom
about20percentin2000.

1.20

Itisveryclearthatoffshoreoilandgasresourcesareanimportantpartoftheglobal
energysystemandanassetofhighvaluetomanydevelopedanddevelopingnations.18
Nevertheless,manyaspectsoftheseoperationsareintrinsicallyhazardousand
therebyposeriskstohealth,safety,andtheenvironment,aswellastoothersocietal
andcommercialinterests.19InadditiontothoserisksintrinsictoLNGoperations,there
isfurtherriskpotentialfromextremeweatherconditionsandothernaturalhazards
thatcaninterferewithoperationsandemergencyresponseatmanydrillingsites.20

1.21

Notsurprisingly,andaswillbedemonstratedthroughoutthisreport,ensuringthe
safetyofoilandgasoperationsisaconcernforprojectproponentsandoperators,
governments,unionsandotherstakeholders.Atthispoint,though,itisworthnoting
thestatedcommitmentofmajoroilandgascompaniestosafety,asexemplifiedinthe
followingstatementsbyprojectproponents.

1.22

First,ExxonMobilsubmittedthatit:
is committed to conducting business in a manner that is compatible
with the environmental and economic needs of the communities in

17 InternationalEnergyAgency,Worldenergyoutlook2012,2012,p53.
18 Baram,Michael,Linde,PrebenHempelandRenn,Ortwin,'Introduction:Insearchof
robustness',inMichaelBaram,PrebenHempelLindeandOrtwinRenn(eds.),Riskgovernance
ofoffshoreoilandgasoperations,CambridgeUniversityPress,NewYork,2014,p1.
19 ibid.
20 ibid.

Chapter1
whichweoperate,andthatprotectsthesafety,securityandhealthof
ouremployees,thoseinvolvedwithouroperationsandthepublic.21
1.23

Second,Woodsidestatedthatit:
hasoperatedunderthesafetycase(orgoalsetting)regimethatexists
in Australia for many years. During this time Woodside has
demonstrated its ability to safely operate facilities consistent with
legislationandthroughanapproachthatsetsbroadsafetygoals.This
approach has resulted in Woodside demonstrating year on year
improvement in its health and safety performance, . Woodside is
targetingcontinuedimprovementinhealthandsafetytosupportour
aspirationofglobaltopquartileperformance.22

1.24

Third,Shellsubmittedthat:
atShell,theprotectionofpeopleandtheenvironmentisourpriority.
Ourgoalistoachievezeroharmtopeopleandtheenvironment.23

Majoraccidents
1.25

Majoraccidentsareofparticularconcern,especiallyforoffshoreoilandgasfacilities.
Whiletherearesubstantialrisksthroughouttheentireresourcessector,withpossible
catastrophicconsequences,asLordCullennoted,offshoreinstallationshavethe
uniquerequirementtobeselfsufficientinprovidingimmediateprotectionto
personnelintheeventofanemergency.24

1.26

Itisnoexaggerationtosaythat:
thehistoryofoffshoreoperationsismarredbythesporadicoccurrence
of blowouts, explosions, and fires at drilling rigs and other incidents
that caused multiple injuries and deaths among the workforce,
destroyedcompanyassetsandotherproperty,andcausedmajorspills
thatcontaminatedvastoffshoreandcoastalareas,killedwildlife,and
disruptedfishing,transport,recreation,andotheractivities.25

21
22
23
24

SubmissionNo.1fromExxonMobil,10July2014,p1.
SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p7.
SubmissionNo.9fromShellDevelopment(Australia)PtyLtd,11August2014,p1.
DepartmentofEnergy,ThepublicinquiryintothePiperAlphadisaster,reportpreparedbyThe
HonLordCullen,fortheSecretaryofStateforEnergy,theStationeryOffice,Norwich,1990,p4.
25 Baram,Michael,Linde,PrebenHempelandRenn,Ortwin,'Introduction:Insearchof
robustness',inMichaelBaram,PrebenHempelLindeandOrtwinRenn(eds.),Riskgovernance
ofoffshoreoilandgasoperations,CambridgeUniversityPress,NewYork,2014,p1.

Chapter1
1.27

Thefollowingexampleshelptodemonstratewhyitisessentialthat:

therisksassociatedwithFLNGfacilitiesarewellunderstoodandpreparedfor;

governmentandindustryrolesandresponsibilitiesareclearlyunderstood;and

adequateemergencyresponseplansareinplace.

AlexanderL.Kiellandplatformcapsizeaccident
1.28

TheAlexanderL.Kiellandwasanoildrillingplatformdesignedandconstructedin
FranceasapentagonstructureanddeliveredtoNorwayin1976.26Itwasdesignedto
workintheEkofiskoilfieldlocatedapproximately320kilometressouthwestof
StavangerintheNorwegianjurisdictionoftheNorthSea.Theplatformwassupported
bythreelegs,eachwithanumberofbracingsjoiningthecolumnstoeachotherand/or
totheplatform.TheAlexanderL.Kielland,whichwasconvertedtoasemisubmersible
floatel,27wasinitiallydesignedtoaccommodate80people.In1978,thiswasincreased
to348.28Theplatformwasequippedwithseven50personlifeboatsandtwenty20
personrafts.

1.29

On27March1980,212workerswereoffdutyandsituatedintheaccommodation
area,themesshallandthecinema.AtthistimetheAlexanderL.Kiellandhadjustbeen
removedfromtheEkofiskEddaproductionplatform.Thereportedweatherconditions
weredrivingrain,mist,windgustsupto40knotsor74km/hrandwavesupto
12metreshigh.29

1.30

Atapproximately6.30pmworkersontheAlexanderL.Kiellandfeltasharpcrack
followedbysomekindoftremblingastheriglisted30degreesthenstabilised.This
initialmovementwascausedbythefailureofoneofthelegbracingsandwasfollowed
byallbutoneofthebracingsonthatlegfailing,causingtheplatformlisttoincrease.
Whentheremainingbracingsnappedsome20minuteslater,therigcapsized.30

1.31

Ofthefourlifeboatslaunched,onlyonemanagedtoreleasefromtheloweringcables.
Afifthlifeboatcameadriftandsurfacedupsidedown;itsoccupantsrighteditand

26 OfficeroftheWatch,AlexanderL.KiellandplatformcapsizeaccidentInvestigationreport,
29April2013.Availableat:http://officerofthewatch.com/2013/04/29/alexanderlkielland
platformcapsizeaccident/.Accessedon28January2015.
27 Afloatelisasemisubmersibleaccommodationandconstructionsupportvessel.
28 OfficeroftheWatch,AlexanderL.KiellandplatformcapsizeaccidentInvestigationreport,
29April2013.Availableat:http://officerofthewatch.com/2013/04/29/alexanderlkielland
platformcapsizeaccident/.Accessedon28January2015.
29 ibid.Seealso:OffshoreEnergyToday,34thanniversaryofNorwaysbiggestoffshoredisaster,27
March2014.Availableat:http://www.offshoreenergytoday.com/34thanniversaryofnorways
biggestoffshoredisaster/.Accessedon28January2015.
30 OfficeroftheWatch,AlexanderL.KiellandplatformcapsizeaccidentInvestigationreport,
29April2013.Availableat:http://officerofthewatch.com/2013/04/29/alexanderlkielland
platformcapsizeaccident/.Accessedon28January2015.

Chapter1
gathered19menfromthewater.31TwooftheAlexanderL.Kiellandsraftswere
detachedandthreemenwererescuedfromthem.Thirteenpeoplewererescuedfrom
two12manliferaftsthathadbeenthrownfromtheEddaplatform,sevenwere
rescuedbysupplyboatsandsevenswamtoEdda.Thestandbyvesselwasnotableto
rescueanyoneasittookanhourtoreachthelocation.32Thisincidentresultedin123
fatalities,makingitNorwaysworstoffshoredisastersinceWorldWarTwo.33
1.32

1.33

Investigationsintotheincidentrevealedfatiguefailureofonebraceduetoagross
fabricationdefect(preexistingcracksinthefilletwelds)astheinitialcause,followed
byafractureofthebraceandsubsequentfailureoftheremainingbracesjoiningthe
legtotheplatform.34Progressivefloodingandinadequateevacuationandrescue
operationswerealsoseenascausesoftheincident.Theseinclude:

evacuationnotplannedforanaccidentofthiskind

lackoflifeboats,survivalsuits

longmobilizingtimeforrescuevessels/helicopters.35

Inshort,theinquiryfound:
Deficienciesanderrorsintheexecutionandcontrolinallphasesofthe
platform(planning,building,andoperations);[and]
Regulations pertaining to manning boat manoeuvres and drills were
clearlynotmetonboard,[with]poorexecutionofemergencydrills.36

31 ibid.
32 ibid.
33 ibid.Seealso:OffshoreEnergyToday,34thanniversaryofNorwaysbiggestoffshoredisaster,27
March2014.Availableat:http://www.offshoreenergytoday.com/34thanniversaryofnorways
biggestoffshoredisaster/.Accessedon28January2015.
34 OfficeroftheWatch,AlexanderL.KiellandplatformcapsizeaccidentInvestigationreport,
29April2013.Availableat:http://officerofthewatch.com/2013/04/29/alexanderlkielland
platformcapsizeaccident/.Accessedon28January2015.
35 Moan,Torgeir,theAlexanderL.Kiellandaccident30yearslater.Whatdidwelearnandapply
andWhatshouldwenotforget?,PresentationforthePetroleumSafetyAuthorty,Norway.
Availableat:
http://www.psa.no/getfile.php/PDF/Konstruksjonsseminar%20aug2010/Alexander%20L.%20Kiell
and%20ulykken%20%E2%80%93%2030%20%C3%A5r%20etter%20
%20%20Torgeir%20Moan%20%28NTNU%29.pdf.Accessedon28January2015.
36 Fleming,MarkandScott,Natasha,Aregulatorsguidetosafetycultureandleadership,report
preparedforCanadaNovaScotiaoffshorePetroleumBoardandCanadaNewfoundlandand
LabradorOffshorePetroleumBoard,2000,p24.Availableat:https://docs.nebone.gc.ca/ll
eng/llisapi.dll/fetch/2000/90463/621169/700096/707045/A2C2A2_
_Safety_Culture_Report_%28Fleming%29__Technical.pdf?nodeid=707046&vernum=2.
Accessedon28January2015.

Chapter1
1.34

Itwasalsofoundthatthe14minutesbetweentheinitialfailureofthelegandtherigs
eventualcapsizeleftawindowinwhichmostofthepersonnelonboardcouldhave
escaped,givenamoreeffectivecommandstructure.Butitwouldseemthatnoone
tookchargeonthatnight.37TheAlexanderL.Kiellandaccidentledtothetighteningof
commandorganizationonoffshoreinstallationsintheNorthSeasothattherewasa
clearsourceofauthorityfororderingabandonmentincrises.38

1.35

ThePetroleumSafetyAuthorityNorwayacknowledgestheparticularsignificanceof
thisincidentforthecountryspetroleumindustry,statingthatithadenormousimpact
onsafetydevelopmentsonthe[NorwegianContinentalShelf]includingthe
regulations,theregulatoryregimeandthedivisionofregulatoryresponsibilities.39

PiperAlphaplatformdisaster
1.36

ThePiperAlphaplatformwasconstructedtodevelopthePiperField,andwaslocated
intheNorthSeaapproximately177kilometresnortheastofAberdeen.Theplatform
providedthefacilitiestodrillwellstotheproducingreservoirandextract,separate
andprocessthereservoirfluids,amixtureofoil,gasandwater.40Theplatform
consistedof,fromthetopdown,ahelideck,livingquarters,variousmodules(suchas
storage,mudandpods),fourproductionmodules,drilldeckandpipedeck,deck
supportframeanddivingarea.Theplatform,whichwaslinkedbythreegasandoneoil
pipelinestothreeotherplatforms,wasdesignedwithaproductioncapacityof250,000
barrelsofoilperday.Asat7amon6July1988,the24houraverageproductionwas
recordedassome119,000barrelsperday.41

1.37

Onthenightof6July1988,anexplosionoccurredontheproductiondeckofthe
platform,followedimmediatelybyafireatthewestendofBModuleandafireball
whicheruptedfromitswestface.Theinitialexplosionwasfollowedbyaseriesof
smallerexplosions.42

1.38

FastrescuecraftwerelaunchedfromstandbyvesselssuchastheSilverPitandthe
Sandhaven,andfromtheTharos,alargefirefightingandrescueplatform.Afurther

37 OfficeroftheWatch,AlexanderL.KiellandplatformcapsizeaccidentInvestigationreport,
29April2013.Availableat:http://officerofthewatch.com/2013/04/29/alexanderlkielland
platformcapsizeaccident/.Accessedon28January2015.
38 ibid.
39 PetroleumSafetyAuthorityNorway,AlexanderL.Kielland:Theblackday,20February2013.
Availableat:http://www.psa.no/articlesinsafetystatusandsignals20122013/alexanderl
kiellandtheblackdayarticle91201095.html.Accessedon29January2015.
40 DepartmentofEnergy,ThepublicinquiryintothePiperAlphadisaster,reportpreparedbyThe
HonLordCullen,fortheSecretaryofStateforEnergy,theStationeryOffice,Norwich,1990,p13.
41 ibid,pp4041.LordCullensreportalsodetailsthecondensateflowandtheexportflow
betweenplatformsforthatperiod.
42 DepartmentofEnergy,ThepublicinquiryintothePiperAlphadisaster,reportpreparedbyThe
HonLordCullen,fortheSecretaryofStateforEnergy,theStationeryOffice,Norwich,1990,p43.

Chapter1
massiveexplosionlaterthateveningdestroyedtheSandhavensfastrescuecraft,killing
twoofitsthreecrewandthesixmenithadrescued.43
1.39

Atthetimeofthedisastertherewere226peopleontheplatform,62onduty,with
mostoftheoffdutypersonnelinthelivingquarters.Atotalof167peoplediedasa
resultofthePiperAlphadisaster,165fromtheplatformandtwocrewmembersfrom
theSandhaven.44

1.40

ThereportofThepublicinquiryintothePiperAlphadisaster(LordCullensReport)
revealedthatmostoftheemergencysystemsoftheplatform,includingthefirewater
system,failedtocomeintooperation.45LordCullensReportalsofoundserious
deficienciesintheworkingofthepermittoworksystemonthePiperAlpha,andthat
therewereanumberofrespectsinwhichthelaiddownprocedurewasnotadheredto
andunsafepracticeswerefollowed.46Emergencyinductionandtrainingwascursory
andinconsistent,withmanagementfailingtoensurenecessarytrainingwasprovided,
andadoptingasuperficialattitudetotheassessmentoftheriskofmajorhazard.47In
effect,whilesafetypoliciesandprocedureswereestablished,theywerenot
adequatelyimplemented.

1.41

LordCullenwasalsocriticaloftheDepartmentofEnergysregulatoryregime,finding
theDepartmentsinspectionssuperficialtothepointofbeingoflittleuseasatestof
safetyontheplatform,andquestioningtheeffectivenessofsucharegimeinassessing
ormonitoringoperatorssafetymanagement.48

MumbaiHighNorthplatformincident
1.42

TheMumbaiHighBasin,160kilometreswestoftheMumbaicoast,isdividedintothe
northandsouthblocks.Thenorthernblockwasanoilandnaturalgasproduction
complexcomprisingfourbridgelinkedplatformsasmallwellheadplatform,a
residentialplatform,aprocessingplatformandaprocessplatform.49TheMumbaiHigh
Northplatformofthenorthernblockwasa30yearold,sevenstoreystructurewith

43 ibid,p44.
44 ibid;andThenighttheseacaughtfire:RememberingPiperAlpha,TheScotsman,13June2008,
np.Availableat:http://www.scotsman.com/news/thenighttheseacaughtfireremembering
piperalpha11433754.Accessedon8December2014.
45 DepartmentofEnergy,ThepublicinquiryintothePiperAlphadisaster,reportpreparedbyThe
HonLordCullen,fortheSecretaryofStateforEnergy,theStationeryOffice,Norwich,1990,p43.
46 ibid,p191andp2.
47 ibid,p3.
48 ibid,p3andp254.
49 Daley,Jenine,'MumbaiHighNorthplatformdisaster',Journalofundergraduateengineering
researchandscholarship,March2013,p2;andWalker,Steve,MumbaiHighNorthaccident,
HealthandSafetyExecutivepresentationtoMarineSafetyForum,nd,p3.

10

Chapter1
80,000plusbarrelsofoilperdayproductioncapability.Thesteelstructurehousedten
fluidimportrisersandfivegasinjectionrisers.50
1.43

On27July2005,acookworkingontheSamundraSuraksha,amultipurposesupport
vessel,cutoffthetipsoftwoofhisfingers.Duetothemonsoonrains,highwindsand
highseasatthetime,theinjuredpersoncouldnotbeevacuatedbyhelicoptertothe
MumbaiHighNorthplatform.Otherplatformsandjackupsintheareawerenotable
toofferthenecessaryassistance.ThevesselmasterandtheMumbaiHighNorth
OffshoreInstallationManager(OIM)agreedtoamanridingbaskettransferbetween
thevesselandtheplatform,usingtheplatformscrane.51

1.44

Theinjuredpersonwassuccessfullytransferredtotheplatform.However,asthe
SamundraSurakshamovedawayfromtheplatform,duetotheunfavourableweather
conditionsthevesselexperiencedastrongheave,andthehelideckstrucktherisers
(exportgaslift).52Thiscausedagasleakwhichquicklyignited,spreadingflamesto
adjacentrisers.Theflowofhydrocarbonsinseveralriserswasnotcontainedbythe
emergencyshutdownvalves.Theresultingexplosionandfiredestroyedtheprocessing
andresidentialplatforms,withthebalancebeingseverelyaffectedbyheatradiation.53

1.45

While362peoplewererescued,22peoplediedinthisdisaster.AccordingtotheUK
HealthandSafetyExecutive:
the fire significantly affected rescue, with only two out of the eight
complex lifeboats able to be launched, and only one out of ten life
rafts. Similarly, only half of the NCYs [the jackup, Noble Charlie
Yesters]rescuecraftcouldbelaunched.54

1.46

AtthetimeoftheMumbaiHighNorthdisaster,Indiadidnothavearegulatorybody
responsibleforthegovernanceofitsoffshoreoilandgasindustry.55Theestimated
damageswereinexcessofUS$200million.Furthermore,becauseIndiaproduced

50 ibid,p2;andBailey,Colin,Casestudies:Historicalfires:MumbaiHighNorthplatformfire,nd.
Availableat:
http://www.mace.manchester.ac.uk/project/research/structures/strucfire/CaseStudy/HistoricFir
es/Other/default.htm.Accessedon8December2014.
51 Daley,Jenine,'MumbaiHighNorthplatformdisaster',Journalofundergraduateengineering
researchandscholarship,March2013,p2;andWalker,Steve,MumbaiHighNorthaccident,
HealthandSafetyExecutivepresentationtoMarineSafetyForum,nd,p6.
52 Walker,Steve,MumbaiHighNorthaccident,HealthandSafetyExecutivepresentationto
MarineSafetyForum,nd,p7.
53 Daley,Jenine,'MumbaiHighNorthplatformdisaster',Journalofundergraduateengineering
researchandscholarship,March2013,p4;andWalker,Steve,MumbaiHighNorthaccident,
HealthandSafetyExecutivepresentationtoMarineSafetyForum,nd,p7.
54 Walker,Steve,MumbaiHighNorthaccident,HealthandSafetyExecutivepresentationto
MarineSafetyForum,nd,p8.
55 Daley,Jenine,'MumbaiHighNorthplatformdisaster',Journalofundergraduateengineering
researchandscholarship,March2013,p4.

11

Chapter1
50percentofitscrudedomesticallyandtheMumbaiHighNorthcomplexproduced
themajoritythecountrysoil,theIndiangovernmentwasforcedtosearchfor
alternativesuppliesfromotherjurisdictions.56

MontaraDevelopmentProjectwellheadplatformincident
1.47

TheMontaraDevelopmentProjectislocatedintheTimorSea,inAustralian
Commonwealthwaters,approximately250kmnorthwestoftheWesternAustralian
Kimberleycoastand690kmwestofDarwin.LocatedintheBonapartebasin,the
MontaraDevelopmentProjectcomprisestheMontara,Skua,SwiftandSwallow
fields.57Thereareatotaloftenwellsnineoilproductionwellsandonegasinjection
wellintheMontaradevelopmentproject.

1.48

Withrecoverablereservesof24millionbarrels,atfullproductiontheMontara
DevelopmentProjectisexpectedtoproducebetween30,000and35,000barrelsof
light,lowsulphurcrudeoilperday.ProductioncommencedinJune2013,withthe
projecthavinganexpected12yearlifespan.58

1.49

AccordingtoMrDavidBorthwick,CommissionertotheMontaraComissionofInquiry,
theobjectiveoftheMontaraDevelopmentProjectistoextractpetroleum[oilandgas]
fromtheMontaraOilfieldusingfourproductionwells(H1,H2H3andH4)andtore
injectgasintotheMontaraOilfieldusingtheGIwell.59Therearealsotwoproduction
wellsintheSkuaOilfieldandthreeproductionwellsintheSwift/SwallowOilfield.60

1.50

FacilitiesattheMontaraOilfieldincludeanunmannedfourleggedwellheadplatform
andtheMontaraVenture,anFPSOvesselwithanoperationalstoragecapacityof
750,000barrelsandaccommodationfor58people.61

1.51

ConstructionofoffshoreinfrastructurerequiredtoproducetheMontararesources
beganin2007.On21August2009,whatwasdescribedasasmallburpofoiland

56 ibid,p6.
57 Borthwick,AOPSM,David,Commissioner,ReportoftheMontaraCommissionofInquiry,
CommonwealthofAustralia,June2010,p36andp382;PTTEP,Ourbusiness,Montara.
Availableat:http://www.au.pttep.com/ourbusiness/montara/.Accessedon9December2014.
TheBonapartebasinalsocontainstheBlacktip,TernandPetrelfields.
58 PTTEP,Ourbusiness,Montara.Availableat:http://www.au.pttep.com/our
business/montara/.Accessedon9December2014;andMiningOilGasPtyLtd,Montara
MontaraField.Availableat:
http://www.miningoilgas.com.au/index.php/products/energy?energy2Task=energy2Details&cati
d=3&energy2Id=67.Accessedon9December2014.
59 Borthwick,AOPSM,David,Commissioner,ReportoftheMontaraCommissionofInquiry,
CommonwealthofAustralia,June2010,p36andp382.
60 ibid,p36.
61 PTTEP,Ourbusiness,Montara.Availableat:http://www.au.pttep.com/our
business/montara/.Accessedon9December2014;andPTTEP,MontaraProject.Factsheet,nd,
p1.

12

Chapter1
gasescapedfromtheH1WellattheMontarawellheadplatform(WHP).62Thisinitial
burpwasfollowedsometwohourslaterbytheH1Well:
kick[ing] with such force that a column of oil, fluid and gas was
expelledfromthetopofthewell,throughthehatchonthetopdeckof
the WHP, hitting the underside of the West Atlas drilling rig and
cascadingintothesea.63
1.52

TheleakfromtheH1Wellwasestimatedatbetween400and1,500barrelsofoilper
day,plusunknownquantitiesofgas,condensateandwater,untiltheReliefWell
operationsweresuccessfulinkillingthewellovertenweekslater.64

1.53

Thismeansthatforover10weeks,oilandgascontinuedtoflowunabatedintothe
TimorSea,approximately250kilometresoffthenorthwestcoastofAustralia.Patches
ofsheenorweatheredoilcouldhaveaffectedatvarioustimesanareaaslargeas
90,000squarekilometres.65

1.54

TheMontaraCommissionofInquiryfoundtheblowoutwasmostlikelycausedby
hydrocarbonsenteringtheH1Well,withtheprimarywellcontrolbarrierfailingto
preventtheflowupthecasing.Whilethiswastheinitialcauseoftheblowout,the
CommissionofInquiryalsofoundalackofsensibleoilfieldpracticeinthattherewere
notestedandverifiedbarriersinplaceatthetimeoftheBlowout.66

1.55

Investigatingfurther,theCommissionfoundanumberofsystemicandinterrelated
factorsindirectlycontributedtotheBlowout.67Theseincludedambiguousand
inappropriatewellconstructionstandards,alackofunderstandingofrigpersonnelin
relationtowellconstructionstandards,deficientdecisionmakingandjudgementof
seniorrigandonshorepersonnel,defectiverecordsandcommunicationmanagement,
andafailureincommunicationsbetweentheprojectandrigoperators.68

1.56

CommissionerBorthwickconcludedthat:
theBlowoutwasnotareflectionofoneunfortunateincident,orofbad
luck. What happened with the H1 Well was an accident waiting to
happen; the companys systems and processes were so deficient and

62 Borthwick,AOPSM,David,Commissioner,ReportoftheMontaraCommissionofInquiry,
CommonwealthofAustralia,June2010,p5.
63 ibid.
64 ibid,p38.
65 ibid,p5.
66 ibid,p7andp8.
67 ibid,p8.
68 ibid,pp811.

13

Chapter1
itskeypersonnelsolackinginbasiccompetence,thattheBlowoutcan
properlybesaidtohavebeenaneventwaitingtooccur.69
1.57

Inadditiontotheoperatorssystemicproblems,theCommissionofInquiryalso
revealederrorsmadebytheNorthernTerritoryDepartmentofResources(NTDoR),the
regulatorresponsibleforoversightofwellintegrityrequirementsinthatjurisdiction.
TheregulatorypracticesoftheNTDoRwerefoundtobetotallyinadequateandlittle
morethanatickandflickexercise.70

MacondoDeepwaterHorizondisaster
1.58

TheMacondooilandgasfieldislocatedintheUnitedStatesExclusiveEconomicZone
oftheGulfofMexico,offthecoastofLouisiana.Itwasoriginallyestimatedtocontain
approximately50to100millionbarrelsofoil,buttheoperatorlaterstatedthesizeof
thefieldwasundetermined.71ItwasreportedthattheMacondooilwellcouldbeone
ofthelargestintheworld,possiblycontainingasmuchas1billionbarrelsofoil.72

1.59

InitialdrillingoftheMacondowellbeganinOctober2009usingthedrillrigMarianas.
However,followingdamagesustainedbytheMarianasinHurricaneIda,theDeepwater
Horizonfloatingoilrigwasselectedasthereplacement.InFebruary2010,the
DeepwaterHorizonbeganitsdrillingoftheMacondowell.73

1.60

By8March2010,theDeepwaterHorizondrillinghadreached8,000feet
(approximately2,440metres).Atthistimetherewasaseriouswellcontrolevent
unexpectedlythewellformationfluidsflowedintothewellboreandtheinfluxwent
unnoticedforapproximately33minutes.74Theoperatorimplementedawellcontrol
eventandtheDeepwaterHorizondrillingcontinued.

1.61

Ontheeveningof20April2010,anuncontrolledflowofwater,oilmud,oil,gas,and
othermaterialscameoutofthedrillingriserandpossiblythedrillpipeonthe
DeepwaterHorizon.75Thiswasshortlyfollowedbyaseriesofexplosionsandan
enormousfire,whichengulfedthevesselandcontinuedburningfortwodays.

69 ibid,p11.
70 ibid,p14.
71 DeepwaterHorizonStudyGroup,FinalreportontheInvestigationoftheMacondowellblowout
disaster,CenterforCatastrophicRiskManagement,UniversityofCalifornia,Berkeley,1March
2011,p20.
72 Stiff,PeterandPagnamenta,Robin,'Macondowellmaycontain1bnbarrelsofoilandmayflow
foradecade',TheTimesofLondon,19June2010.
73 DeepwaterHorizonStudyGroup,FinalreportontheInvestigationoftheMacondowellblowout
disaster,CenterforCatastrophicRiskManagement,UniversityofCalifornia,Berkeley,1March
2011,p21.
74 ibid.
75 ibid,p6.

14

Chapter1
Indicationsarethatdrillinghadreached13,000feet(3,962metres)belowtheseabed
or18,000feet(5,486metres)belowtheseasurface.76
1.62

AccordingtoaninvestigationoftheMacondoblowout,theemergencydisconnection
systemmeanttoallowseparationoftheDeepwaterHorizonfromtheblowout
preventerattheseafloorcouldnotbeactivated;thustrappingtheunitunderandin
thehydrocarbonscomingfromthewellbelow.77

1.63

TheDeepwaterHorizonlostitscapacitytogeneratepower;emergencypowersystems
couldnotbestarted;andcriticalemergencycontrolequipmentcouldnotbe,orwere
not,activated,orweredamaged.TheDeepwaterHorizonwasinthedark,without
power,andwithoutthedynamicpositioningthrusterstomaintainitslocation.78

1.64

Survivorsevacuatedtolifeboats,butsomeofthelifeboatswerenotfullyfilledand
somecouldnotbeaccessed,andcrewalsoevacuatedbyjumpingintotheocean
wheretheywererescuedbysupportvesselsandfirstresponders.79Whilethe
DeepwaterHorizonwasabandonedsoonafterthefirebegan,11ofthe126people
aboarddiedandthevesselsank36hourslater.Theriseranddrillpipealsosanktothe
seabedandcontinuedtodischargeoilandgasintotheocean.80

1.65

Overthenext83days,aseriesofattemptsweremadetostoptheoilfromenter[ing]
theGulfofMexico.81However,alloftheapprovedplansandpreparationsfor
controllingandmitigatingtheblowoutrepeatedlyfailedorwereineffective.82Aseries
ofadhocsystemswereengineered,constructedandputinplaceuntilawaywas
foundtopumpmudandcementintothewell,thuskillingtheflow.83

1.66

AninvestigationoftheMacondooilwelldisasterwasscathingoftheoperator,stating
thatitdidnothaveafunctionalSafetyCultureanditssystemwasnotorientedtothe
objectiveofmaximumsafety;insteaditwasgearedtowardatripandfallcompliance
mentalityratherthanbeingfocusedontheBigPicture.84Furthermore,theoperators
system:
forgottobeafraid.Thesystemwasnotreflectiveofonehavingwell
informed,reporting,orjustcultures.Thesystemshowedlittleevidence
of being a highreliability organization possessing a rapid learning

76
77
78
79
80
81
82
83
84

ibid,p6andp7.
ibid,p7.
ibid.
ibid,p8
ibid,p6.
ibid,p7.
ibid,p8.
ibid.
ibid,p9.

15

Chapter1
culture that had the willingness and competence to draw the right
conclusionsfromthesystemssafetysignals.
The Macondo well disaster was an organizational accident whose
roots were deeply embedded in gross imbalances between the
systemsprovisionsforproductionandthoseforprotection.85
1.67

Aswellasthelossofhumanlife,theMacondowelldisasterresultedinhugeamounts
oftoxicreservoirfluidsandgasesescapingintotheGulfofMexico,bothonandbelow
thesurfacewaters.Whileunprecedentedamountsofdispersantsappliednearthe
seafloorpreventedanenormousamountofoilfromreachingthesurface,andthus
reducedtheenvironmentalimpactsonnearbywetlands,wildlifeandcommunities,it
allowedthedispersedtoxicfluidstobetakenbystrongcurrentstootherpartsofthe
GulfofMexico.86

1.68

The2010investigationnotedthattheequipmentandprocessesusedforcleanupand
containmentofhydrocarbonsintheoceanhaveproventoberelativelyineffective.87
Accordingtothatinvestigation,theMacondowelldisasterwasacascadeoffailures,a
disasterunprecedentedinthehistoryoftheoffshoreoilandgasindustry.88Itresulted
incoststohumanlives,injuries,propertyandproductivity,theaffectedcommunities
andtheirindustryandenvironment.TheMacondowelldisasterwasfoundtoexceed
byseveralordersofmagnitudethosepreviouslyexperiencedorthoughtpossible.89

Applyingthelessonsfromhistory
1.69

Technologicaladvances,suchasthoserepresentedbyFPSOsandFLNG,haveextended
theoilandgasindustryscapacitytoexploreanddevelopresourcesinpreviously
inaccessiblelocations,andtoprocessthoseresourcesoffshore.

1.70

FLNGfacilitieswillbesubjecttothesameriskeventsasotheroffshoreoperations,
includingaccidents,blowouts,collisions,adverseweathereventsandanyother
circumstancesuniquetotheirparticularlocation.However,aswillbeexaminedin
moredetailthroughoutthisreport,thereareanumberofsignificantdifferences
betweenmoreconventionaloffshoreinfrastructureandanFLNGfacilitythatrequire
specificconsiderationinrelationtotheirimpactonsafety.

85
86
87
88
89

ibid.
ibid,p8.
ibid.
ibid.
ibid,p9.

16

Chapter1
1.71

Inparticular,thefactthatFLNGfacilities:

arepermanentlymoored;

arenotdemannedduringcyclones;

haveprocessingtrains,andstorageandoffloadinginfrastructureonthesame
facility,andinareasonablycompressedspace;and

situateprocessmachineryandLNGstoragefacilitiesincloseproximitytoliving
quarters

meansthattheriskprofileofsuchfacilitiesisdifferentfromexistingoffshore
operations.
1.72

1.73

AstheabovesummariesoftheAlexanderL.Kielland,PiperAlpha,MumbaiHighNorth,
MontaraandMacondodisastersdemonstrate,itisessentialthat:

therisksareunderstoodandpreparedforbyindustryandgovernments;

therolesandresponsibilitiesofindustryandofstateandfederalgovernment
agenciesarewellunderstoodandappropriateemergencyplansareinplace;

operatorsdevelopandmaintainacultureofsafetyfirstthroughouttheirentire
organisationalstructureandsystems;and

regulatorsundertaketheirroleseffectivelysothattheyfulfilmorethanasimple
tickandflickfunction.

Thepossibleconsequencesofinadequateoperatorsystems,trainingandpractices,
ineffectiveregulationandalackofcapacitytorespondtoemergencysituationsare
catastrophicintermsofhumanlife,theenvironment,energysecurity,theeconomy
andinvestorconfidence.ItisforthesereasonsthattheCommitteedeterminedto
undertakethisInquiry.

TheCommittee
1.74

TheEconomicsandIndustryStandingCommitteeisaportfoliorelatedCommitteeof
theLegislativeAssemblyoftheParliamentofWesternAustralia.TheCommitteewas
appointedon9May2013.

1.75

PursuanttotheLegislativeAssemblysStandingOrder287(3)theSpeakerdetermined
thattheCommitteewouldhavetheportfolioresponsibilitiesof:StateDevelopment,
MinesandPetroleum,Fisheries,RegionalDevelopment,Lands,Tourism,Transport,

17

Chapter1
Commerce,Science,Housing,RacingandGaming,Planning,Energy,Water,Heritage,
AgricultureandFood,ForestryandSmallBusiness.90

ConductoftheInquiry
1.76

InaccordancewithStandingOrder287(2),on15May2014theCommitteeannounced
thatitwouldconductanInquiryintosafetyrelatedmattersrelatingtoFLNGprojectsin
AustralianwatersofftheWesternAustraliancoast.

1.77

AnadvertisementcontainingtheInquirytermsofreferenceandcallingforpublic
submissionswasplacedinTheWestAustralianon24May2014.Inadditiontothis,the
Committeeinvitedsubmissionsfromspecificstateandfederalgovernmentagencies,
majoroilandgascompanies,andprofessionalassociations,includingtradeunions.

1.78

Intotal,theCommitteereceived28submissions,aslistedinAppendixThree.

1.79

TheCommitteealsoconducteddocumentaryresearchandheld16formalevidence
hearings.ThosewhoprovidedevidenceathearingsarelistedinAppendixFour.

1.80

TheCommitteereceivedfundingforthreemembersandonestaffmembertotravelto
theNetherlands,NorwayandScotlandinJuly2014togatherinformationinrelationto
safetyandregulationintheoilandgasindustry.91DuringthistraveltheCommittee
receivedbriefingsfromgovernmentagencies,professionalassociationsandindustry.
ThistravelprovidedtheCommitteewithagreatlyenhancedunderstandingofthe
regulationoftheoilandgasindustryinEuropegenerally,andinrelationtosafetyand
environmentmattersinparticular.

1.81

InAugust2014,theCommitteealsotravelledtoGoejeinSouthKoreatoinspectthe
PreludefacilityandtomeetwithrepresentativesofShellandSamsungHeavy
Industries.

1.82

InMarch2015theCommitteetravelledtoDarwinandBroometovisitthesupplybase
forthePreludefacility,theDarwinportfacilities,andtheBroomeport,hospitaland
searchandrescuehelicopterbase.Thistravelalsoallowedmemberstomeetwith
variousstakeholderstodiscussemergencypreparednessintheregion.

1.83

AlistofbriefingsiscontainedinAppendixFive.

90 Hon.MichaelSutherland,MLA,SpeakeroftheLegislativeAssembly,WesternAustralia,Western
Australia,ParliamentaryDebates(Hansard),16April2013,p36.
91 ThistravelalsoassistedtheCommitteeinrelationtoitsongoinginquiryintotheeconomic
impactsofFLNGtechnologyontheWesternAustralianeconomy.Aseparatereportwillbe
tabledintheLegislativeAssembly.

18

Chapter1

Itemsofnote
1.84

ProponentsofFLNGfacilitiesthatwilloperateinAustralianwatersarecurrently
continuingtodeveloptheirsafetyandenvironmentplansforsubmissiontothe
NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
(NOPSEMA).Inlightofthis,theCommitteesreportcannot,andshouldnot,bereadas
adefinitivestatementonthelevelofsafetyachievedbytheoffshorepetroleum
industryinAustralia,ingeneralorinrelationtoFLNGtechnology,inparticular.Rather,
thisreportaddstothebodyofsafetyrelatedinformationavailableaboutthesectoras
awholeandunderlinestheCommitteesconvictionthatFLNGsafetymatters.

1.85

Italsoneedstobenotedthatthisreportpresentsaqualitativeassessmentofthe
evidence.Indoingsoitprovidesavoiceofcautiontothosewhoarguethatthereisno
differencebetweenFLNGtechnologiesandexistingtechnologies.FLNGtechnologyis
differentandthefirstFLNGfacilityintheworldisyettobecommissioned.

1.86

TheCommitteesfindingsinthisreportshouldnotbetakentomeanthatthe
CommitteehasnoconcernsaboutthesafetyofFLNGfacilities.TheCommitteeisnotin
apositiontostatethatFLNGtechnologyisnow,orwillalwaysbe,100percentsafe.

1.87

ItshouldalsobenotedthatthisInquiryislargelybasedonFLNGtechnologydeveloped
byShellthatis,byoneprojectproponent,ratherthanagenerictechnology
developedbytheoilandgasindustry.Itisalsoimportanttorecognisethatbecause
thereiscurrentlynoFLNGfacilityoperatinganywhereintheworld,thisreportshould
bereadasasnapshotofthesituationasitisin2015andbasedontheinformation
currentlyavailable.

1.88

Nevertheless,whatcanbesaidisthattheCommitteeisreassuredthatShellappearsto
havetakengreatcareandmadeconsiderableinvestmentinsafetyindesignforits
PreludeFLNGfacility.

1.89

ReviewingtheevidencetothisInquiryasawholerevealedanumberofkeythemes
thatnecessarilyrecurthroughoutthereportand,consequently,allowsanumberof
importantconclusionstobereached.Inbrief,itisessentialthatoperatorsdevelopand
maintainacultureofsafetythroughouttheirorganisationstoensurethatprocedures
arenotonlydeveloped,butarefollowed.ItisalsocriticalthatNOPSEMA,asthe
industryregulatorandinspector,isproperlyresourcedtocarryoutitsregulatory
functions.ItisequallycriticalthatNOPSEMAsassessmentandscrutinyisrigorousand
effective.

19

Chapter2
Jurisdictionsandareasofresponsibility

2.1

FloatingLNG(FLNG)technologyallowstherefinementandliquefactionofnaturalgas
tooccuratsea,andtheresultingcommoditiestobeexporteddirectfromthefacility.
ThischapterbrieflyexplainsFLNGtechnologyanddemonstrateswhymost,ifnotall,
FLNGfacilitiesoperatingofftheWesternAustraliancoastwillbemooredin
Commonwealthwaters.Followingthis,thechapterprovidesanoutlineofthe
CommonwealthandWesternAustralianmarinejurisdictionsandthemainagencies
responsibleforregulatingtheoffshorepetroleumindustry.

FLNGtechnology
2.2

Thesafeandcommerciallyviabledevelopmentofoffshorepetroleumresourceshas
beenachallengingundertakingsinceoffshoredrillingbeganataroundtheturnofthe
twentiethcentury.92Developinganoilorgasfieldlocatedatsearequiresworkingin
remotelocationsandinconditionsthatcanbebothharshandunpredictable.Ina
continuedefforttoovercomethesechallenges,numeroustechnologieshavebeen
developedthatenhanceboththesafetyandefficiencyofoffshorepetroleumrecovery.

2.3

Yetwhiletechnologicaldevelopmenthasenhancedourabilitytorecoveroffshore
petroleumresources,asthosefieldsthatareclosesttolandbecomeexhausted,
offshoreactivitiesmustoccurinincreasinglyremotelocations.93Thisremotenessis
especiallychallengingwhenthepetroleumresourceinquestionisnaturalgas.Unlike
liquidhydrocarbons,naturalgasdoesnotreadilylenditselftoefficienttransportinits
naturalstateandmusteitherbeconveyedthroughvastpipelinesor,wherepipelines
arenotfeasible,liquefiedforshippingoverseas.

2.4

Theliquefactionprocessreducesagivenquantityofnaturalgastoaround1/600thofits
originalvolume.ProducingLNGfromrawnaturalgasrequiressignificantandcomplex

92 LouisianaStateUniversityCentreforEnergyStudies,Historyoftheoffshoreoilandgasindustry
inSouthernLouisiana,UnitedStatesDepartmentoftheInterior,NewOrleans,September2008,
p25.
93 SubmissionNo.15fromShellinAustralia,submissiontoInquiryintoEconomicImpactofFloating
LNGonWesternAustralia,30August2013,p8.

21

Chapter2
infrastructurebecausethegasmustfirstundergoanextensiveprocessofrefinement
beforebeingchilledto161Celsiusandbecomingaliquid.94
2.5

TheCommitteehaspreviouslyobservedthatconventionally,thedevelopmentof
offshorenaturalgasresourcesforexporthasrequiredtheconstructionofcustom
madeonshoreprocessingandliquefactionplants,andthatwhiletechnological
developmenthadincreasedtheextenttowhichgasandoilisprocessedandrefined
offshoretheliquefactionofgasforexporthasalwaystakenplaceonshore,fora
rangeofreasons.95FLNGtechnology,however,enablesthisliquefactionprocessand
variousnecessaryprocessesofgasrefinementtooccuratsea.

2.6

FLNGtechnologyissuccinctlydescribedbyWoodsideinthefollowingterms:
FLNG technology involves the placement of conventional offshore
processing and gas liquefaction facilities, or topsides, on a large
floatingstructurewhichisthenpermanentlymooredoveragasfield.
The FLNG topsides and processing facilities comprise of gas and
condensate reception and separation facilities, condensate
stabilisationandrundown,acidgasremovalanddehydration,natural
gasliquidsextraction,fractionationandliquefactionusingestablished
LNGtechnology.96

2.7

Inessence,FLNGtechnologyavoidstheneedtopipenaturalgastolandforonshore
processing.Itthusrepresentsapossiblemethodfordevelopingremotepetroleum
resources,especiallythosewithlimitedtotalreserves,forwhichpipelineinfrastructure
wouldbetoocostly.Whereaparticularresourceeitherholdsgreaterreservesoris
locatedclosertoland,itseemslikelythatonshoreprocessingwouldremainan
attractiveproposition.97Assuch,whilefieldsizeandlocationaretechnicallyirrelevant
totheapplicationofFLNGtechnology,inalllikelihoodthetechnologywillfindits
greatestapplicationindevelopingmoreremoteresourcesthatarefarouttosea.Inthe
Australiancontext,thisisaspaceofalmostexclusiveCommonwealthjurisdiction.

Australianmaritimejurisdictions
2.8

AnappreciationastowhyFLNGfacilitieswilllikelyonlybesubjecttoCommonwealth
jurisdictionbeginswithanunderstandingofhowjurisdictionoverthewaters
surroundingAustraliaisdetermined.

94 AustralianPetroleumProductionandExplorationAssociation,Whatisliquefiednaturalgas
(LNG)?.Availableat:http://www.appea.com.au/oilgasexplained/oilandgas/whatisliquefied
naturalgaslng/.Accessedon19December2014.
95 EconomicsandIndustryStandingCommittee,TheeconomicimpactoffloatingLNGonWestern
Australia,StateLawPublisher,Perth,15May2014,p7.
96 SubmissionNo.8fromWoodside,8August2014,p4.
97 MrRoyKrzywosinski,ManagingDirector,Chevron,TranscriptofEvidence,24October2013,p6.

22

Chapter2
TerritorialSeaBaseline
2.9

TheseawardlimitsofAustraliasmaritimezonesaremeasuredfromtheTerritorialSea
Baseline(TSB),whichisgenerallythelowwaterlinealongthecoast(thatis,the
coastline).ItisfromtheTSBthatthejurisdictionalboundariesareset.

Coastalwaters
2.10

JurisdictionoverthefirstthreenauticalmilesseawardfromtheTSBisvestedinthe
adjacentstateorterritoryasiftheareaformedpartofthatStateorTerritory.98
Watersinstatejurisdictionarecommonlyreferredtoascoastalwaters.99Jurisdiction
toregulatethedevelopmentofanyresources,includingsubseapetroleumresources,
locatedinorundercoastalwatersisheldbytherelevantstateorterritory.

Territorialsea
2.11

Australiasterritorialseaisabeltofwater12nauticalmileswide,measuredseaward
fromtheTSB.GeoscienceAustraliaexplainsthatAustraliassovereigntyextendstothe
territorialsea,itsseabedandsubsoil,andtotheairspaceaboveit,withtheonly
majorlimitationonAustraliasexerciseofsovereigntyintheterritorialsea[being]the
rightofinnocentpassageforforeignships.100Theterritorialseaincludesallcoastal
waters,meaningthatexclusiveCommonwealthjurisdictioncoverswhatisanine
nauticalmilewidthofwater,fromthelimitofcoastalwaterstothelimitofthe
territorialsea.

ExclusiveEconomicZone
2.12

ThereisonefurtherbodyofwatertheExclusiveEconomicZone(EEZ)overwhich
theCommonwealthcanexerciseitsjurisdictioninaspecificway.Accordingto
GeoscienceAustralia,theEEZisanareabeyondandadjacenttotheterritorialsea,the
outerlimitofwhichcannotexceed200[nauticalmiles]fromthe[TSB].101Withinthe
EEZ,Australiahassovereignrightsforthepurposeofexploringandexploiting,

98 GeoscienceAustralia,Maritimeboundarydefinitions.Availableat:
http://www.ga.gov.au/scientifictopics/marine/jurisdiction/maritimeboundarydefinitions.
Accessedon12December2014.Oceanicdistanceismeasuredinnauticalmiles,withone
nauticalmilerepresentingaunitofdistanceequalto1,852metres.GeoscienceAustraliaexplains
thatthisvaluewasadoptedbytheInternationalHydrographicConferencein1929andhas
subsequentlybeenadoptedbytheInternationalBureauofWeightsandMeasures.See:
http://www.ga.gov.au/scientifictopics/marine/jurisdiction/maritimeboundarydefinitions.
Accessedon12December2014.
99 GeoscienceAustralia,Maritimeboundarydefinitions.Availableat:
http://www.ga.gov.au/scientifictopics/marine/jurisdiction/maritimeboundarydefinitions.
Accessedon12December2014.
100ibid.
101ibid.

23

Chapter2
conservingandmanagingallnaturalresourcesofthewaterssuperadjacenttothe
seabedandoftheseabedanditssubsoil.102

ThedevelopmentofAustraliasmaritimejurisdiction
2.13

AustraliasmaritimejurisdictionbegantotakeshapefollowingtheSecondWorldWar.
In1953,Australiaproclaimeditsjurisdictionandcontrolofoverthecountrysadjacent
continentalshelf.103Thisjurisdictionwasconfirmedin1958attheFirstUnitedNations
ConventionontheLawoftheSea(UNCLOS).104AtthatUNCLOS,itwasalsoessentially
agreedthatthesovereigntyovertheseawouldextendtoadistanceofthreenautical
milesfromthecoastlineoftheadjacentnation.105Inapracticalsense,thismeantthat
thesovereigntyofanynationwithamaritimeboundaryextendedthreenauticalmiles
outfromthecoastline,thatthewaterbeyondwasinternationalwaters,butthata
nationwouldhaveexclusiverightstoresources(suchasfishandpetroleum)thatwent
outtothecontinentalshelf(adistanceofnomorethan200nauticalmilesouttosea),
evenininternationalwaters.

2.14

AfurthercomplexityagreedatthefirstUNCLOSwasthatincertainplacessuchas
deeplyindentedareasofcoastlineorcoastalareaswithanearbyfringeofislandsa
nationsTSBwouldbeexpandedtocloseoffanysuchgeographicfeatures.106Insome
cases,thishadtheeffectofmovingtheTSBoutquitesomedistance.InWestern
Australia,forexample,theTSBwasdrawnaroundBarrowIsland,toincludeallofthe
waterbetweenBarrowIslandandthemainland.Waterslocatedonthelandsideofthe
TSBsometimesreferredtoasinternalwatersareconsideredcoastalwatersin
Australiaand,assuch,areanareaofexclusivestatejurisdiction.Thisisillustratedin
Figure2.1:

102ibid.
103CommonwealthofAustralia,Gazette,No56,11September1953,2563.SeeAttorneyGenerals
Department,Offshoreconstitutionalsettlement:Amilestoneincooperativefederalism,
AustralianGovernmentPublishingService,Canberra,1980,p1.Availableat:
http://www.ag.gov.au/Internationalrelations/InternationalLaw/Documents/offshore
constitutionalsettlementamilestoneincooperativefederalismpages110%20ocr.pdf.
Accessedon19December2014.Seealso:Rothwell,DonaldandStephens,Tim,TheInternational
LawoftheSea,HartPublishing,OxfordandPortland,Oregon,2010,p5.
104Rothwell,DonaldandBaird,Rachel,'Australiascoastalandmarineenvironment',inDRothwell
andRBaird(eds.),Australiancoastalandmarinelaw,TheFederationPress,Leichardt,2011,p2.
105ibid.
106Rothwell,DonaldandStephens,Tim,Theinternationallawofthesea,HartPublishing,Oxford
andPortland,Oregon,2010,pp7781.

24

Chapter2
107

Figure2.1:MapofcoastalwatersbetweentheExmouthandBurrupPeninsulas.

2.15

ToconfirmAustraliasmaritimejurisdictioninrelationtopetroleumresourcesinthe
EEZ,in1967theCommonwealthGovernmentenactedthePetroleum(Submerged
Lands)Act1967(Cth).Criticallyasitavoidedanyneedtoconsidertheconstitutional
jurisdictionoftheCommonwealthtoenactsuchlegislationthiswasdonein
agreementwiththeStates,andvestedregulatorypoweroveroffshorepetroleum
resourcesinarelevantDesignatedAuthorityforeachstate.108Shortlythereafterit
wasdecidedthatthenationalinterestwouldbebetterservediftheconstitutional
positionregardingjurisdictionoveroffshoreareaswasresolved.Ultimatelythisledto
thepassageoftheSeasandSubmergedLandsAct1973(Cth),whichwasimmediately
challengedintheHighCourtofAustraliabytheStateofNewSouthWales(withall
otherStatesinterveninginsupport).109Inthatcase,theHighCourtdeterminedthatthe
Commonwealth,byvirtueoftheexternalaffairsheadofpower,hadexclusive
jurisdictionoverallwaterfromthebeachouttothelimitsofthecontinentalshelf.110

2.16

However,inthespiritofcooperativefederalism,theCommonwealthsoughttoshare
resourcesandresponsibilitiesforoffshoreareaswiththeStates,fortwomain
reasons.111Firstwasthepracticalexigenciesofthefederalsystemand,second,the
difficultiesofmanagingoffshoreareaswithoutsufficientappreciationoflocal

107GeoscienceAustralia,Australiasmaritimejurisdictionmapseries.Availableat:web
http://www.ga.gov.au/marine/jurisdiction/mapseries.html.Accessedon14April2014.
108s14Petroleum(SubmergedLands)Act1967(Cth)(Repealed).TheDesignatedAuthorityisthe
relevantStateminister.
109Stephens,Tim,TheContinentalShelf,inDRothwellandRBaird(eds.),Australiancoastaland
marinelaw,TheFederationPress,Leichardt,2011,pp163165.Thiswaspossiblethroughthe
Commonwealthsexerciseofitsexternalaffairspowerins51(xxix)oftheAustralian
Constitution.
110NewSouthWalesvCommonwealth(1975)135CLR337.
111Baird,Rachel,Thenationallegalframework',inDRothwellandRBaird(eds.),Australiancoastal
andmarinelaw,TheFederationPress,Leichhardt,2011,p49.

25

Chapter2
issues.112Thissituationwasresolvedin1979whentheStatesandtheCommonwealth
metandagreedtotheOffshoreConstitutionalSettlement1979,whichwaslater
enactedintheCoastalWaters(StatePowers)Act1980(Cth).113ThisActconferred
jurisdictionoverAustraliasterritorialseauponeachadjacentstate.
2.17

In1980thecompletionofthethirdUNCLOSaddedyetanotherelementintothe
maritimejurisdictionequation,withthedefinitionofanationsterritorialseabeing
extendedoutfromthreetotwelvenauticalmiles.114ItisforthisreasonthatAustralia
hascoastalwatersthatrunfromthecoastlineouttothethreenauticalmilemarkand
thenaterritorialseathatcoversthenextninenauticalmilesofocean.Thischangedid
notaffecttheexistingconferralofAustralianwatersintostatejurisdiction,sothewater
betweenBarrowIslandandthemainland,forexample,thoughextendingbeyondthree
nauticalmiles,hasremainedunderWesternAustraliasjurisdiction.Thishasprovento
bequitecriticalasthatpartoftheIndianOceanwhichrunsroughlybetween
ExmouthandKarrathahaslongbeentheepicentreofnumerouspetroleumindustry
activitiesinWesternAustralia.

2.18

Furthermore,WesternAustraliasjurisdictionextendstocovercoastalwaters
surroundinganylandformationsintheIndianOceanthatarepartofthestates
territory.Significantly,thisterritoryincludesScottReef,whichliesoveramajorportion
oftheTorosagasfieldintheBrowseBasin.WoodsideEnergyhaslongheldthe
petroleumtitlesthatcovertheTorosagasfield,andFLNGisnowthepreferred
technologytousetodevelopthatresource.TheareasofstateandCommonwealth
jurisdictionarehighlightedinFigure2.2:

112ibid.
113ibid,p51.TheCommonwealthusedthepreviouslydormants51(xxxviii)oftheConstitutionan
exerciseofCommonwealthpowerattherequestofthestates.
114Rothwell,DonaldandStephens,Tim,Theinternationallawofthesea,HartPublishing,Oxford
andPortland,Oregon,2010,p13.

26

Chapter2
Figure2.2:AustraliasmaritimejurisdictionofftheWesternAustraliancoast

Finding2
Statesovereigntygenerallyextendstocoveralllandwithinastatesbordersandthe
firstthreenauticalmilesofoceanfromthelowwaterlinealongthecoastandoffshore
islands.
2.19

Insummary,anypetroleumindustryactivitytakingplaceeitherwithinthebeltof
coastalwatersthatsurroundtheWesternAustralianmainlandorelsewithincoastal
waterssurroundinglandformationsoffthecoastofWesternAustraliawouldoccur
withinanareaofexclusivestatejurisdiction.Anysuchactivitywould,therefore,be
regulatedbytheWesternAustralianGovernmentthroughtheDepartmentofMines
andPetroleum(DMP).Thisregulatoryregimeisdiscussedtowardtheendofthis
chapter.

2.20

AllotherpetroleumindustryactivityoccurringofftheWesternAustraliancoastwithin
AustraliasEEZwouldtakeplaceinanareaoffederaljurisdictionand,assuch,wouldbe
regulatedbytheCommonwealthGovernment.Twopointscanbemadehere.First,the
areaoffederalmaritimejurisdictionvastlyexceedsthatofstatejurisdiction.Second,
almostallknownpetroleumresourcesarelocatedinareasoffederaljurisdiction.Given

27

Chapter2
this,itseemslikelythattheuseofFLNGtechnologytodevelopcurrentlyknown
offshorepetroleumresourceswithinAustraliasEEZwillmostly,ifnotalways,occurin
anareaoffederaljurisdiction.
Finding3
Regulatoryresponsibilityforoffshorepetroleumresourcesdependsonwhetherthe
resourcesarelocatedinstateorCommonwealthwaters.Australiaspetroleum
resourcesarepredominantlyinCommonwealthwaters.

Federaljurisdiction
2.21

ThedevelopmentofoffshorepetroleumresourceslocatedinCommonwealthwatersis
principallyregulatedthroughtheOffshorePetroleumandGreenhouseGasStorageAct
2006(Cth)(OPGGSAct).AsDMPexplained,approvalisrequiredundertheOPGGSAct
toconstruct,operateanddecommissionapetroleumfacility.115

2.22

DMPfurtherexplainedthatthisapprovalprocesscaninvolvebothstateand
CommonwealthMinisters.AccordingtoDMP:
the current situation that applies in Commonwealth offshore areas is
thattheStateMinisterforMinesandPetroleumhasanequalright,in
thefirstinstance,toapprovemajordecisionswithhisCommonwealth
counterpart. However, the Commonwealth Minister can override the
Stateifhechoosestodoso.Section59(2)ofthe[OPPGSAct]provides
theCommonwealthMinisterpowertooverridetheState.116

2.23

Beforeanysuchapprovalcanbegiventoaprospectiveoperatorwishingtodevelopan
offshorepetroleumresourcelocatedinCommonwealthwatersanumberofdistinct
administrativeelementsmustbesatisfied.Thisincludesobtainingaproductionlicence
(underwhichtheholderhasthelegalrighttorecoverpetroleumfromaspecifiedarea)
andaninfrastructurelicence(underwhichtheholderisentitledtoconstructand/or
operateaninfrastructurefacilityinaspecifiedarea).Theoperatorisalsorequiredto
prepareandhaveacceptedbothasafetycaseandanenvironmentalplaninrelationto
theintendedoffshoreactivitiesthataretobeundertaken.Thesearediscussedindetail
inChapters4and6.

2.24

Itisalsoimportanttonotethatinfrastructurefacilitiesarespecificallydefinedats15
oftheOPGGSActtobestructuresusedintheprocessofdevelopingoffshore
petroleumresourcesthateitherreston,orelseareaffixedto,theseabedirrespective
ofwhetheranyelementofthefacility(orindeedthefacilityitself)floatsonthesurface

115SubmissionNo.4fromtheDepartmentofMinesandPetroleum,14July2014,p2.
116ibid.

28

Chapter2
oftheocean.117Thatis,adistinctionisdrawnbetweenoffshorepetroleumindustry
infrastructurethatoperatesinaspecificlocationforanextendedperiodoftime(which
areregulatedunderthetermsoftheOPGGSAct)andotherinfrastructurerequiredin
theprocessofdevelopingaresourcesuchastankervessels(whichareregulatedby
CommonwealthmaritimelegislationsuchastheAustralianMaritimeSafetyAuthority
Act1990(Cth)(AMSAAct)).BecauseFLNGfacilitieswillbeaffixedtotheseabedby
moorings,theiroperationwillberegulatedunderthetermsoftheOPGGSAct.118
Finding4
BecauseanFLNGispermanentlymooredabovethepetroleumresourceitis
developing,undertheOffshorePetroleumandGreenhouseGasStorageAct2006(Cth)
itisdefinedandregulatedasafacilityasdefinedinthatAct.

Responsibleagenciesandauthorities
NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
2.25

Inadditiontostipulatinghowoffshorepetroleumresourcedevelopmentisregulated,
Part6.9oftheOPGGSActestablishestheNationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority(NOPSEMA)asthestatutoryauthority
responsibleforadministeringthoseregulations.Inasubmissionprovidedtoaprevious
CommitteeInquiry,NOPSEMAexplainedthatitisanindependentCommonwealth
statutoryauthority[responsiblefor]regulatingthehealthandsafety,wellintegrityand
environmentalmanagementofoffshorepetroleumactivitiesinCommonwealthwaters,
andincoastalwaterswherestateandNorthernTerritoryfunctionshavebeen
conferred.119Notably,regulatoryfunctionsinWesternAustraliancoastalwatershave
notbeenconferreduponNOPSEMA;thesewatersremainundertheregulationofDMP
(seebelow).

2.26

NOPSEMAwaspreviouslytheNationalOffshorePetroleumSafetyAuthority(NOPSA),
whichhadnoenvironmentalmanagementresponsibilities.TheFinalGovernment
ResponsetotheReportoftheMontaraCommissionofInquiryrecommendedthat
NOPSAsremitbeextendedtoincludeenvironmentalmanagement.120NOPSEMAwas
createdasaresultandbeganoperationson1January2012.121

117s15OffshorePetroleumandGreenhouseGasStorageAct2006(Cth).
118MrStuartSmith,ChiefExecutiveOfficer,NationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthority,TranscriptofEvidence,12November2014,p2.SeealsoSubmission
No.9fromShellinAustralia,11August2014,p2.
119SubmissionNo.36fromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,submissiontoInquiryintoEconomicImpactofFloatingLNGonWesternAustralia,
22November2013,p1.
120DepartmentofResources,EnergyandTourism,FinalgovernmentresponsetotheReportofthe
MontaraCommissionofInquiry,2011.Availableat:
http://www.industry.gov.au/resource/Documents/upstreampetroleum/op

29

Chapter2
2.27

2.28

NOPSEMAslegislatedfunctionsarestipulatedats646oftheOPGGSAct.Thefunctions
areoutlinedbyNOPSEMAasbeing:

to promote the OHS [occupational health and safety] of persons

engagedinoffshorepetroleumoperationsoroffshoregreenhouse
gasstorageoperations;

to develop and implement effective monitoring and enforcement

strategies to ensure compliance under the OPGGS Act and
Regulations

toinvestigateaccidents,occurrencesandcircumstancesrelatingto
OHS,wellintegrityandenvironmentalmanagement

to advise on matters relating to OHS, well integrity and

environmentalmanagement

to make reports, including recommendations, to the responsible

Commonwealth minister and each responsible state/Northern
Territory(NT)minister;and

tocooperatewithotherCommonwealthandstate/NTagenciesor
authoritieshavingfunctionsrelatingtoregulatedoperations.122

ThereareanumberofwaysinwhichNOPSEMAworkstomeetitslegislatedfunctions.
Theseinclude,butarenotlimitedto:

assessinganoperatorssafetycaseandenvironmentplan;

conductingfacilityinspectionstomonitorcompliancewithsafetycasesand
environmentplans;

undertakinginspectionsfollowingincidents;and

administrationofWellOperationsManagementPlans(WOMPs)andtheapproval
ofwellactivities.

environment/assurance/FinalMontaraCommissionInquiryReport.pdf.Accessedon22December
2014.
121NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Historyof
NOPSEMA.Availableat:http://www.nopsema.gov.au/about/historyofnopsema/.Accessedon
22December2014.
122SubmissionNo.36fromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,submissiontoInquiryintoEconomicImpactofFloatingLNGonWesternAustralia,
22November2013,p1.

30

Chapter2
2.29

TheadministrationofWOMPsandapprovalofwellactivitiesareauthorisedunderPart
5oftheOffshorePetroleumandGreenhouseGasStorage(ResourceManagementand
Administration)Regulations2011(Cth).

2.30

TheworkNOPSEMAundertakestofulfilitsfunctionsisdiscussedthroughoutrelevant
chaptersofthisreport.
Finding5
TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthorityis
theCommonwealthauthorityresponsiblefortheregulationofalloffshorepetroleum
activitiesinvolvinginfrastructurethatispermanentlyfixedinsomewaytotheseafloor
(apetroleumfacility).

AustralianMaritimeSafetyAuthority
2.31

Infrastructureinvolvedinthedevelopmentofanoffshorepetroleumresourcethat
doesnotmeetthedefinitionofaninfrastructurefacilityunders15oftheOPGGSAct
suchas,forexample,supportvesselsandpetroleumtankersisgenerallynot
regulatedbyNOPSEMA.Thereis,however,onecriticalexception:whenapetroleum
tankeristetheredtoaninfrastructurefacilityforexample,whenanLNGtankeris
beingloadedwithLNGfromanFLNGfacilityunders15(1)(c)oftheOPGGSAct,the
tankerbecomespartofthefacilityforthepurposesoftheAct.Whenatankeror
supportvesselisnottetheredtoaninfrastructurefacility,however,itcomesunderthe
jurisdictionoftheAustralianMaritimeSafetyAuthority(AMSA).

2.32

AMSAisastatutoryauthorityestablishedundertheAMSAActandhasthefollowing
fourprincipalfunctions:

2.33

promoting maritime safety and protection of the marine

environment

preventing and combating shipsourced pollution in the marine

environment

providing infrastructure to support safety of navigation in

Australianwaters

providinganationalsearchandrescueservicetothemaritimeand
aviationsectors.123

AccordingtoAMSA,itsprimaryroleistominimisetheriskofshippingincidentsand
shipsourcedpollutioninAustralianwatersthroughshipsafetyandenvironment

123AustralianMaritimeSafetyAuthority,AbouttheAustralianMaritimeSafetyAuthority.Available
at:https://www.amsa.gov.au/aboutamsa/.Accessedon22December2014.

31

Chapter2
protectionregulationandservicesandmaximisepeoplesavedfrommaritimeand
aviationincidentsthroughsearchandrescuecoordination.124
2.34

Asnotedabove,regulationofoffshorefacilitiesandinstallationsisNOPSEMAsrole,
andAMSAisnotinvolvedinthisregulation.AMSAsubmittedthatits:
safety and marine environment protection regulatory role is clearly
limitedtovesselsorshipsusedinnavigation,andinthecaseofFLNG
facilities,theapplicationofAustralianandinternationalmaritimelaws
isadevelopingmatter.125

2.35

AMSAsroleinrelationtoFLNGtechnologyappearstobenodifferentfromitsrolein
relationtothecurrentexportofLNGfromonshoreplantsoritsroleinrelationtoany
ofthenumerousFloating,Production,StorageandOffloading(FPSO)facilitiespresently
operatingoffthecoastofWesternAustralia(WA).AccordingtoAMSA:
intheAustraliancontext,whenaFLNGfacilityisbeingconstructedor
isoperatingasaship,AMSAmaybeinvolvedundertheauspicesofthe
Navigation Act 2012. When a FLNG facility is operational and is
'connected to a riser' it is not subject to the Navigation Act 2012.
HoweveritissubjecttotheOffshorePetroleumandGreenhouseGas
StorageAct2006(OPGGSAct).126

2.36

AMSAsroleisdiscussedfurtherinChapter9.
Finding6
TheAustralianMarineSafetyAuthorityistheCommonwealthauthorityresponsiblefor
regulatingallshippingactivitiesinAustralianwaters.
Finding7
Whenashipbecomestetheredtoapetroleumfacility,regulatoryjurisdictionoverthat
vesselpassesfromtheAustralianMarineSafetyAuthoritytotheNationalOffshore
PetroleumSafetyandEnvironmentalManagementAuthority.

WesternAustralianregulation
2.37

Petroleumindustryactivityincoastalwatersoccursunderthejurisdictionofthe
WesternAustralianGovernment.AnysuchactivityisprincipallyregulatedbyDMP
underthetermsoftheOffshorePetroleum(SubmergedLands)Act1967(WA)

124SubmissionNo.21fromAustralianMaritimeSafetyAuthority,5December2014,p1.
125ibid.
126ibid.

32

Chapter2
(OPSLAct)andtheassociatedOffshorePetroleum(SubmergedLands)Regulations
1996(WA)(OPSLRegulations).127
2.38

ThismeansthatwhileNOPSEMAregulatespetroleumindustryactivitiesinareasof
Commonwealthjurisdiction,DMPhasregulatoryresponsibilityinareasunderWestern
Australianjurisdiction.AnypracticaldifferencesbetweenCommonwealthandWestern
AustralianGovernmentregulationofthepetroleumindustry,though,appeartobe
minor.AccordingtoDMPsExecutiveDirector,DepartmentofResourcesSafety,
MrSimonRidge,thereareminordifferencesinthewording,butfromthe
requirementsandoutcomes,therewouldbenodifference.128

2.39

TheCommitteewelcomesthefactthatstateandfederalagenciesareworkingtoward
developingcommonwordingintheirregulations.

2.40

Inprovidinganoverviewofhowoffshorepetroleumindustryactivitiesareregulatedin
areasofeitherstateorfederaljurisdiction,DMPlikenedFLNGtechnologytothatof
FPSOfacilitiesandadvisedthat,asatJuly2014,therewereatotaloftwelvesuch
facilitiesoperationalinWesternAustralianwaters.129However,noneofthesefacilities
operateexclusivelyinthestatesjurisdiction.130

2.41

Thisraisesthequestionastowhat,ifany,practicaldifferencesinregulationsthere
wouldbeifanFLNGfacilityweretooperateexclusivelyinWAscoastalwaters;thatis,
whotheregulatorwouldbeandwhatresponsibilitytheywouldhave.DMPsDirector,
PetroleumSafety,MrRossStidolph,explainedthatanysuchdifferencewouldbe
difficulttospecify.AccordingtoMrStidolph:
the principles would be very similar. I do not think [DMP] would be
doing anything that different to what NOPSEMA are doing, because
thepracticesaregenerallyquitewellestablishedintermsofthesafety
case and the safety management system that physically manages
behindit.Theprinciplesareexactlythesame.131

2.42

Itwasfurtherexplainedthateffortsarebeingmadetominimiseand/oreliminateany
regulatorydifferencethatdoesexist.Onthispoint,MrRidgestatedthatDMPwas

127SubmissionNo.4fromtheDepartmentofMinesandPetroleum,14July2014,p2.
128MrSimonRidge,ExecutiveDirector,ResourcesSafety,DepartmentofMinesandPetroleum,
TranscriptofEvidence,7November2014,p9.
129SubmissionNo.4fromtheDepartmentofMinesandPetroleum,14July2014,p1.
130MrSimonRidge,ExecutiveDirector,ResourcesSafety,DepartmentofMinesandPetroleum,
TranscriptofEvidence,7November2014,p5.
131MrRossStidolph,Director,PetroleumSafety,DepartmentofMinesandPetroleum,Transcriptof
Evidence,7November2014,p6.

33

Chapter2
takingtheimportantstepofendeavouringtoactuallycleanupthoseminor
differences.132Thiswasimportant:
becausethereareothervesselsthatcomeacrosstheboundariesquite
regularly, and it would be nonsensical for us to have a requirement
overandabovewhatNOPSEMAhavethatwouldcauseissuesforthose
operators coming across that boundary when there would be no
substantialvalueadded.Sowedoneedtomakesuretheyarelinedup
andreviewedregularlyandanyoftheseminorthingsdonotbecome
moremajorovertime.133
2.43

MrRidgefurtherexplainedthatDMPhasgivenanundertakingtomaintain[Western
Australias]lawssothattheyarereflectiveof[Commonwealthlaws]134andthat:
there is a process ongoing at the moment to look at bringing [DMP
regulatory practices] in line with NOPSEMA to get common
terminologyandcommonoutcomesCertainlyinthenext18months
we should end up with a process that enables us to be back on the
sametrack.135

2.44

AccordingtoDMPsDirectorGeneral,MrRichardSellers,however,oftentheonly
practicaldifferenceinstateandCommonwealthregulationrelatedtoissuesof
nomenclatureorbasicprocedure.Toemphasisethatactualdifferencesinregulatory
practicesareminimal,MrRidgegavetheexampleofpipelines:
A good example is our pipelines. They are out in Commonwealth
waters, they come into our waters and then they come on land.
Obviously,itwouldbenonsensicaltohavethreesafetycasesforthose
differentzones.Soingeneralterms,NOPSEMAwouldreceiveasafety
caseandwewouldgothroughit,butwewouldnotplaceanadditional
regulatory burden by requiring a separate one. In general terms, we
trytominimisetheredtapearoundthatsortofproblem.Itiscertainly
ourintentinallcasestominimisethosesortsofissues.136

2.45

WesternAustralianGovernmentagencyinvolvementinoffshoreincidentresponseis
furtherdiscussedinChapters9and10.

132MrSimonRidge,ExecutiveDirector,ResourcesSafety,DepartmentofMinesandPetroleum,
TranscriptofEvidence,7November2014,p9.
133ibid.
134ibid,p6.
135ibid.
136ibid.

34

Chapter2
Finding8
PetroleumactivitiesundertakeninWesternAustraliancoastalwatersareregulatedby
theWesternAustralianGovernment.

Incidentresponse
2.46

Afinalimportantpointrelatestoincidentresponse.Intheeventofanemergency
involvinganoffshorepetroleumfacilitytheoperatorisresponsibleforrespondingto
theincident;thatis,theoperatoristhecontrolagency,thecombatagencyandthe
coordinatoroftheresponse.ThisisdiscussedinmoredetailinChapters9and10.

2.47

Dependingontheseverityoftheincident,though,anoperatormaydecidetoseekthe
assistanceofgovernment.Thisiswheretheresponsibilitiesforcoordinationof
emergencyresponsesbecomemorecomplex.InthewakeoftheMontaraincident,the
CommonwealthGovernmentagreedthatacentralincidentcoordinationcommittee
wasnecessarytorespondtofutureoffshorepetroleumincidents.Thisledtothe
establishmentoftheOffshorePetroleumIncidentCoordinationCommittee(OPICC),
whichischairedbyaDeputySecretaryoftheDepartmentofIndustry.TheDepartment
ofIndustry,inconsultationwithotheragenciesandregulators,alsomakesthedecision
toactivatetheOPICC.

2.48

ThecompositionoftheOPICCisdeterminedbytheChair,andmembershipmaychange
dependingonthenatureoftheparticularincidentforwhichanOPICCcoordinated
responseisrequired.MembershipoftheOPICCcancompriseseniorrepresentatives
fromtherelevantgovernmentagenciesandfromindustry.Relevantgovernment
agenciesincludetheDepartmentofInfrastructureandRegionalDevelopment,
NOPSEMA,AMSA,theDepartmentoftheEnvironment,theDepartmentofForeign
AffairsandTrade,GeoscienceAustralia,theNationalOffshorePetroleumTitles
Administrator(NOPTA),theDepartmentofthePrimeMinisterandCabinet,the
DepartmentofImmigrationandBorderProtection,theAustralianCustomsandBorder
ProtectionService,theAttorneyGeneralsDepartment,theCrisisCoordinationCentre,
othergovernmentagenciesasrequired.OPICCsrolesandresponsibilitiesareoutlined
inChapter9.

2.49

Furthermore,accordingtotheAustralianGovernmentCrisisManagementFramework
(AGCMF),leadershipoftheAustralianGovernmentsresponsetoacrisiswill,inthe
firstinstance,betheresponsibilityoftherelevantportfoliominister.Consequently,
forasignificantpetroleumincidentinCommonwealthwaters,theMinisterforIndustry
wouldbetheleadCommonwealthMinister.

2.50

TheAGCMFisalsointendedtointerfacewithotheremergencyincidentresponse/
coordinationframeworks.TheseincludeoperatorsOilPollutionEmergencyPlans,the
NationalPlanforMaritimeEnvironmentalEmergencies(theNationalPlan),the

35

Chapter2
CommonwealthGovernmentsvariousCrisisManagementPlansandstateandterritory
contingencyplansasappropriate.
2.51

Thecomplexityofthesearrangementsandtheconfusionthatexistsinrelationto
jurisdictionalresponsibilities,particularlyinrelationtotheoverallcommandofan
emergencyresponseinvolvinggovernmentagencies,isdiscussedfurtherinChapter11.

2.52

Thesituationisslightlydifferentforanoffshoreemergencyeventoccurringinanarea
ofstatejurisdiction.TheDepartmentofTransport(DoT)explainedthatemergency
managementinWAiscoveredundertheEmergencyManagementAct2005[WA]and
theEmergencyManagementRegulations2006[WA].137Stateemergencymanagement
plans,referredtoasWestPlans,arepreparedbytheStateEmergencyManagement
Committee.

2.53

InWA,theDoTisresponsiblefordevelopingandmaintainingWestPlansforeithera
MaritimeTransportEmergency(MTE)oraMaritimeOilPollution(MOP)incidentin
statewaters.AccordingtotheDoT,theseWestPlanssetouttherolesand
responsibilitiesofgovernmentagenciesinrelationtopreventionandmitigation,
preparedness,responseandrecovery.138BothoftheseWestPlansstipulatethe
emergencymanagementarrangementsthatareinplaceforeachtypeofincident,
beforedetailingthestrategiesforpreventionandmitigation,andthepreparednessand
responseproceduresthatwouldfollowweresuchanincidenttooccur.

2.54

TheDoTsGeneralManager,MartimeSafety,MrRaymondBuchholz,characterisedthe
WestPlanMTEasplanningforshipsgettingintrouble,andtheWestPlanMOPas
planningforshipsorfacilitiesactuallypollutingthroughoilandnoxioussubstances.139
AccordingtoMrBuchholz,anintergovernmentalagencyagreementbetweenagencies
atbothCommonwealthandstatelevel:
commits the state of Western Australia to nominate a responsible
jurisdictionalauthoritytomanagemarineoilpollutioninstatewaters
and nominate a state marine pollution controller. The Emergency
Management Act 2005 and associated regulations effectively
prescribed the marine safety general manager of the Department of
Transport as the hazard management agency for both maritime
transport emergencies and for marine oil pollution. In effect, this
prescribestheDepartmentofTransportasthejurisdictionalauthority
forthosetwohazards.140

137SubmissionNo.2fromtheDepartmentofTransport,11July2014,p2.Italicsinoriginal.
138ibid.
139MrRaymondBuchholz,GeneralManager,MarineSafety,DepartmentofTransport,Transcriptof
Evidence,19November2014,p2.
140ibid.

36

Chapter2
2.55

MrBuchholzalsoexplainedthathispersonaldesignationashazardmanagement
authoritymeansthatheis:
responsibleforensuring,developing,implementingandreviewingboth
the Westplan MTE and the Westplan MOP [ and he has] overall
responsibility for ensuring that MTE and MOP have adequate
prevention, preparation, response and recovery arrangements and
strategiesinplaceandthattheyareimplementedasrequired.Those
obligations placed upon my position are direct from the State
EmergencyManagementActandtheregulations.141

2.56

Itmustalsobenoted,however,thatnotwithstandingthecentralroleoftheDoTin
relationtoboththeWestPlanMTEandtheWestPlanMOP,thestatutory
responsibilitiesofDMPforregulatingpetroleumindustryactivitiesincoastalwaters
meansthatDMPwould,inconjunctionwiththerelevantoperator,coordinatethe
responsetoanemergencyinvolvinganinfrastructurefacilityoperatinginanareaof
statejurisdiction.
Finding9
Intheeventofanemergency,anoperatormaydecidetoseektheassistanceof
government.ForoperationsinCommonwealthwaters,thecoordinationofthe
responsewouldmostlikelybebyeithertheOffshorePetroleumIncidentCoordination
CommitteeortheAustralianMaritimeSafetyAuthority,dependingonthetypeof
emergency.
Foroperationsinstatewaters,anassistedresponsewouldbecoordinatedbyeither
theDepartmentofMinesandPetroleumortheDepartmentofTransport,depending
uponthescopeoftheemergencyevent.

141ibid.

37

Chapter3
TheAustralianregulatoryregime

3.1

Thischapteroutlinestheregulatoryregimethatappliestotheactivitiesofthe
petroleumindustrywhenoperatinginAustralianjurisdictions.Aftersettingoutthe
legislationandregulationsthatapply,thechapterdetailstheobjectivebasedregime
thatappliesandtherequirementforoperatorstoachieveandmaintainrisklevelstoas
lowasreasonablypracticable(ALARP).

3.2

Followingthis,toprovidecontextforthebalanceofthereport,thedevelopmentofthe
currentsystemofregulationsisbrieflyexplainedandtheNationalOffshorePetroleum
SafetyandEnvironmentalManagementAuthoritys(NOPSEMAs)roleasregulatoris
outlined.

TheAustralianregulatoryregime
3.3

AustralianpetroleumindustryactivitiesoccurringinareasofCommonwealth
jurisdictionaresubjecttotheprovisionsoftheOffshorePetroleumandGreenhouse
GasStorageAct2006(Cth)(OPGGSAct)anditsassociatedregulations.Therearefour
setsofregulations,eachpertainingtoaparticularaspectofsafeoffshoreoperation:

TheOffshorePetroleumandGreenhouseGasStorage(Safety)Regulations2009,
(OPGGSSRegulations)whichregulatetheoccupationalhealthandsafetystandards
forworkersonoffshorepetroleumfacilities;

TheOffshorePetroleumandGreenhouseGasStorage(Environment)Regulations
2009(theOPGGSERegulations),whichaimtoensurethatoffshorepetroleum
activitiesarecarriedoutinamannerthatisecologicallysustainable,andbywhich
thelevelandriskofenvironmentalimpacthasbeenappropriatelyminimised;

TheOffshorePetroleumandGreenhouseGasStorage(ResourceManagementand
Administration)Regulations2011,whichaimtoensurethatoffshorepetroleum
activitiesarecarriedoutinamannerthatistransparenttogovernmentandin
accordancewithgoodoilfieldpractice;and

TheOffshorePetroleumandGreenhouseGasStorage(RegulatoryLevies)
Regulations2004,whichenableandclarifytheleviesthatareappliedtovarious
offshorepetroleumactivitiestofundthegovernmentsregulatoryrole.

39

Chapter3
3.4

TheOPGGSActanditssubsidiaryregulationsaredetailed,lengthyandcomplex.
Occupationalhealthandsafetylawsforthepurposesofoffshorepetroleumoperations
are,forexample,comprisedof:

theOPGGSSRegulations2009;

Part5oftheOffshorePetroleumandGreenhouseGasStorage(Resource
ManagementandAdministration)Regulations2011;

Sections603and609oftheOPGGSAct;and

Schedule3totheOPGGSAct.142

Objectivebasedregulation
3.5

Thecomplexityofthislegislativeframeworkbeliesaninherentsimplicity.InAustralia,
asinmuchofthepetroleumproducingworld,regulationofoffshorepetroleum
activitiesisreferredtoasobjectiveorperformancebasedregulation.Underan
objectivebasedregime:
theonusisplacedontheoperator,nottheregulator,todemonstrate
throughasafetycasethattheyhavereducedtherisksassociatedwith
theiroperationstoaslowasreasonablypracticable(ALARP).143

3.6

3.7

AccordingtoNOPSEMA,sucharegulatoryregimeisrecognisedasinternational
regulatorybestpracticebecauseitensuresthat:

thosewhocreatetheriskareresponsibleformanagingthatrisk;

riskmanagementistailoredsothatitisappropriateforthespecificactivityin
question;and

thereisflexibilitytoallowfortheimplementationofnewandemergent
technologiesastheybecomeavailable,whichcanleadtocontinuousimprovement
inhealthandsafety,andenvironmentalperformance.144

Untiltheearly1990s,Australiasoffshorepetroleumindustrywasregulatedthrough
prescriptivelegislationatbothstateandCommonwealthlevel.Thisregulationtookthe

142TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Offshore
OHSlegislativeframeworkinformationpaper.Availableat:
http://www.nopsema.gov.au/assets/Informationpapers/InformationPaperOffshoreOHS
LegislativeFrameworkOverviewJuly2010.pdf.Accessedon7January2015.
143SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p11.
144SubmissionNo.36fromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,submissiontoInquiryintoEconomicImpactofFloatingLNGonWesternAustralia,
22November2013,p1.

40

Chapter3
formofspecificlegalrequirementsthatoffshorepetroleumindustryoperatorswere
requiredtocomplywith.Underthisregime,theregulatorwasrequiredtoidentifythe
safetyofvariousoperativepracticesfortheindustry.
3.8

Inbrief,thisprescriptiveregulationchangedintheaftermathofthe1988PiperAlpha
disasterintheNorthSea,whichisdiscussedinChapters1and4.Likeallpetroleum
producingnations,AustraliaconsideredwhatlessonscouldbedrawnfromthePiper
Alphadisaster.Alongwithothercountries,Australiadecidedtointroducethesafety
caseapproach,nowcommonlyusedbypetroleumproducingnationsthroughoutthe
world.Thetransitionfromaprescriptivetoanobjectivebasedregulatoryregimeis
describedinaseparatesectionofthischapter.

3.9

NOPSEMAexplainedthattheobjectivebasedmethodofregulationisinformedbytwo
guidingprinciples:

3.10

the operator of an offshore facility is responsible for the safe

operationofthepetroleumfacility;and

the onus is placed on the industry to ensure and demonstrate to

regulatorsthatrisksrelatingtooilandgasoperationsarereduced
toaslowasreasonablypracticable(ALARP).145

Thatis,withsomelimitedexceptions,146Australiasoffshorepetroleumindustry
regulationsdonotprescribesafetystandardsthatmustbemet,orspecificsafety
measuresthatmustbetakenbyoperators.

3.11

Inlinewiththeabovetwoguidingprinciples,Australiasregulatoryregimeforoffshore
petroleumactivityisfundamentallybaseduponthesubmissionandadherenceto
humanandenvironmentalsafetycommitmentsmadebyprojectoperators.Inrelation
tohumansafety,thismodelisunderpinnedbytheOffshorePetroleumand
GreenhouseGasStorage(Safety)Regulations2009(Cth)(OPGGSSRegulations).147
SimilarregulationsrelatingtoenvironmentalsafetyarecontainedwithintheOffshore
PetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth)
(OPGGSERegulations).

3.12

Beforeanyproposedoffshorepetroleumactivitycancommence,theoperatormust
submittoNOPSEMAforassessmentadetailedriskmanagementplanfortheproject,
comprisedofboththerelevantsafetycaseandcorrespondingenvironmentplan.These

145ibid.
146TheOffshorePetroleumandGreenhouseGasStorage(Safety)Regulations2009(Cth)dospecify
anumberofelementsthatmustbeincludedwithinanysafetycase;theseregulationsalso
containsomerequirementsrelatingtoworkercapacityandcommandstructures.
147NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase
approach.Availableat:http://www.nopsema.gov.au/safety/safetycase/safetycaseapproach/.
Accessedon22December2014.

41

Chapter3
documentanddemonstratehowtheoperatorwillmanagetherisksandimpactsof
theirproposedoffshoreactivitiestotherequiredlevels,includinghowincident
responseandpreparednesswillbeaddressed.148
3.13

Thesafetycase,astheprimarymechanismthroughwhichoperatorsmeettheir
objectivesandlegalrequirements,isdiscussedindetailinChapter4.Environmental
regulationisdiscussedfurtherinChapter6.ThesechaptersalsodetailNOPSEMAsrole
inrelationtomonitoringandinspectingfacilities,includingthoseusingFLNG
technology.
Finding10
TheoffshorepetroleumindustryinAustraliaissubjecttoobjectivebasedregulation,
whichmakestheoperatorresponsibleforidentifyingthesafetyandenvironmental
risksassociatedwithitsproposedactivitiesandsatisfyingtheregulatorthattheserisks
willbeappropriatelymanagedandmitigated.

ALARP
3.14

ItisanobjectoftheOPGGSSRegulationstoensurethattheriskstothehealthand
safetyofpersonsandfacilitiesarereducedtoalevelthatisaslowasreasonably
practicable(ALARP).149Similarly,oneobjectiveoftheOPGGSERegulationsistoensure
thatanypetroleumactivityorgreenhousegasactivitycarriedoutinanoffshoreareais
carriedoutinamannerbywhichtheenvironmentalimpactsandrisksoftheactivity
willbereducedtoaslowasreasonablypracticable.150

3.15

Unders9ofSchedule3oftheOPGGSActanoperatorofafacility:
(1)[]musttakeallreasonablypracticablestepstoensurethat:
(a) the facility is safe and without risk to the health of any
personatornearthefacility;and
(b)allworkandotheractivitiescarriedoutonthefacilityare
carried out in a manner that is safe and without risk to the
healthofanypersonatornearthefacility.

3.16

Regulation10AoftheOPGGSERegulationsstatesthatthecriteriaforacceptanceofan
environmentplanarethattheplan:
(b) demonstrates that the environmental impacts and risks of the
activitywillbereducedtoaslowasreasonablypracticable;and

148SubmissionNo.36fromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,submissiontoInquiryintoEconomicImpactofFloatingLNGonWesternAustralia,
22November2013,p2.
149r1.4(3)OffshorePetroleumandGreenhouseGasStorage(Safety)Regulations2009(Cth).
150r3(b)OffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).

42

Chapter3
(c) demonstrates that the environmental impacts and risks of the
activitywillbeofanacceptablelevel.
3.17

DuringahearingattendedbyNOPSEMArepresentatives,theCommitteesought
clarificationonthepracticaldifferencebetweentheriskameliorationstandardsfor
humanandenvironmentalsafety.NOPSEMAsGeneralManager,Environment,
MrCameronGrebeconfirmedthatthedifferenceisminor:
[I]t is the same. The ALARP principle is embodied in our
[environmental] regulations in a similar fashion [to human safety],
obviously, related to environmental risk versus risk to people at
facilities.Environmentextendstoincludesocialandeconomicfeatures
of the environment in our legislation. There are additional decision
making criteria [for environmental safety] that include also to
acceptablelevels.Thatisduetothenatureofenvironmentalimpacts
andrisksversussafetyrisks.151

3.18

ThelegaldefinitionofALARPwasprovidedbyLordJusticeAsquithin1949:
Reasonably practicable is a narrower term than physically possible
and impl[ies] that a computation must be made by the owner, in
which the quantum of risk is placed on one scale and the sacrifice
involved in the measures necessary for averting the risk (whether in
money,timeortrouble)isplacedintheother;andthatifthereisa
gross disproportion between themthe risk being insignificant in
relationtothesacrificethedefendantsdischargetheonusonthem.
Moreover,thiscomputationfallstobemadebytheowneratapointof
timeanteriortotheaccident.152

3.19

ThisdefinitionhasbeenconfirmedinAustraliancourts.Forexample,drawingfrom
decidedcases,theHighCourtofAustraliainSlivakvLurgi(Australia)PtyLtd(2001)
statedthattherewerethreegeneralpropositionscontainedinthetermreasonably
practicable:

the phrase reasonably practicable means something narrower

thanphysicallypossibleorfeasible;

what is reasonably practicable is to be judged on the basis of

whatwasknownattherelevanttime;

151MrCameronGrebe,GeneralManager,Environment,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p7.
152LordJusticeAsquith,Edwardsvs.NationalCoalBoard(1949)inNationalOffshorePetroleum
SafetyandEnvironmentalManagementAuthority,ALARP,GuidancenoteN04300GN0166
Revision5,June2014,p3.

43

Chapter3

3.20

to determine what is reasonably practicable it is necessary to

balancethelikelihoodoftheriskoccurringagainstthecost,time
andtroublenecessarytoavertthatrisk.153

AccordingtotheUKHealthandSafetyExecutive(HSE),ensuringariskisALARPis
aboutweighingtheriskagainstthesacrificeneededtofurtherreduceit.154For
operatorstoavoidhavingtomakethissacrifice,theymustdemonstrate:
that it would be grossly disproportionate to the benefits of risk
reduction that would be achieved. Thus, the process is not one of
balancingthecostsandbenefitsofmeasuresbut,rather,ofadopting
measuresexceptwheretheyareruledoutbecausetheyinvolvegrossly
disproportionatesacrifices.155

3.21

NOPSEMAsALARPguidancenotestatesthatdeterminingwhatALARPmeansforarisk
requiresanassessmentoftherisktobeavoided,andanassessmentofthesacrifice(in
money,timeandeffort)involvedintakingmeasurestoavoidthatrisk,anda
comparisonofthetwo.156Logically,thegreaterthelevelofrisk,thegreateristhelevel
ofeffortnecessarytoshowthatthisriskhasbeenreducedtoALARP.However,as
NOPSEMAadvises,justbecausetheinitiallevelofriskmaybelowdoesntmeanitmay
notbereasonablypracticabletoreduceitfurther.157

3.22

Therisk/sacrificecomparisoninvolvesatestofgrossdisproportion.NOPSEMAs
ALARPguidancenotestatesthat:
ifameasureispracticableanditcannotbeshownthatthecostofthe
measure is grossly disproportionate to the benefit gained; then the
measure is considered reasonably practicable and should be
implemented.158

3.23

Itisimportantnottoconfusereasonablypracticablewithreasonablyaffordableas
justifiablecostandeffortisnotdeterminedbythebudgetconstraints/viabilityofa
project.159

3.24

Simplyput,toreducealevelofrisktoALARPmeanstoadoptavailableandsuitable
controlmeasuresuntilapointisreachedwhentheincrementalbenefitoffurtherrisk

153SlivakvLurgi(Australia)PtyLtd(2001).
154HealthandSafetyExecutive,UnitedKingdom,ALARPataglance,nd,np.Availableat:
http://www.hse.gov.uk/risk/theory/alarpglance.htm.Accessedon17December2014.
155ibid.
156NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,ALARP,
GuidancenoteN04300GN0166,June2014,p5.
157ibid.
158ibid.
159ibid.

44

Chapter3
controlmeasuresisoutweighedbyotherissuessuchascost,forexample,ordegreeof
difficultyofimplementingthemeasure.160
3.25

EvidencetothisInquirydemonstratesthatoilandgasoperators,includingthose
proposingtodeveloppetroleumresourcesusingFLNGtechnology,areawareofthe
obligationtheyhavetoreducerisktoALARPlevels.Forexample,Woodsidesubmitted
thatithasdemonstrateditscapabilityofoperatingwithinanobjectivebased(orgoal
setting)regulatoryregimeasexistsinAustralia,whichrequiresittodemonstratethat
riskmanagementcontrolsforadevelopmentareeffectiveandfitforpurposeandthat
suchrisksarereducedtoaslowasreasonablypracticable(ALARP).161

3.26

Similarly,indiscussingregulatoryrequirementsforriskidentificationandcontrol,a
submissionbyGDFSUEZBonapartenotesthatthisisaniterativeprocessthat
continuesuntilriskhasbeenreducedtoalevelthatisaslowasreasonablypracticable,
ALARP.162

3.27

InrelationtoitsFLNGtechnology,Shellsubmittedthatsafetyistheprimaryfocus,
withmultiple,formalsafetyassessmentscompletedandrecommendations
incorporatedintothedesigntoensurethedesignandrisklevelsareALARP.163
Finding11
TheregulatoryregimethatappliestoAustraliasoffshorepetroleumindustryrequires
operatorstosatisfytheregulatorthatidentifiedriskshavebeenreducedtolevelsthat
areaslowasreasonablypracticable.
Finding12
Aslowasreasonablypracticabledoesnotmeanaslowasreasonablyaffordable.
Rather,itmeansassessingandadoptingappropriateriskcontrolmeasuresuntilthe
incrementalbenefitoffurthermeasuresisoutweighedbyotherissuessuchasthecost,
timeandeffortrequiredtoimplementthemeasure.

Fromprescriptivetoobjectivebasedregulation
3.28

HavingoutlinedthecurrentregulatoryregimefortheAustralianoffshorepetroleum
industry,itsobjectivebasedphilosophyandtheconceptofALARP,itisusefulhereto
summarisetheinternationalinfluencesontheshiftfromtheformerprescriptive
regime.

160NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Thesafetycase
incontext:Anoverviewofthesafetycaseregime,GuidancenoteN04300GN0060,June2013,
p7.
161SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p4.Seealso:MrShaunGregory,
SeniorVicePresident,SustainabilityandTechnology,WoodsideEnergyLtd,Transcriptof
Evidence,7November2014,p2.
162SubmissionNo.5fromGDFSUEZBonapartePtyLtd,30July2014,p4.
163SubmissionNo.9,ShellDevelopment(Australia)PtyLtd,11August2014,p1.

45

Chapter3
3.29

Australiasregulationlargelyreflectstheoutcomesoftwomajorinquiriesinstigatedby
theUKgovernment,namelytheRobensReportandtheLordCullenInquiry.AsGDF
SUEZBonapartesubmited:
theshortcomingsofprescriptivebasedregulationasappliedtomajor
hazard industries were identified in the Cullen Inquiry [into the Piper
Alpha disaster] in 1990 and, prior to that, in the Robens Report [on
occupationalhealthandsafetygenerally]in1972.Theseshortcomings
remainequallyvalidtodayandareparticularlyrelevantinthecontext
of this inquiry into safety matters relating to a new and evolving
technology.164

TheRobensReport
3.30

TheRobensReportisthe1972reportoftheCommitteeonSafetyandHealthatWork,
whichwaschairedbyLordAlfredRobensandwasanimportantdevelopmentinthe
historyofoccupationalhealthandsafetylawglobally.

3.31

By1970concernhadarisenintheUKthatthetraditionalsystemofregulationwas
toorigidandcomplexandunabletokeeppacewithsocial,economicandtechnological
change.165Therefore,theCommitteeonSafetyandHealthatWorkwasappointedto
reviewworkplacehealthandsafety,anddeterminewhatlegislativeorvoluntary
changeswererequired,andhowthepublicmightbeprotectedfromindustrial,
constructionandcommercialsitehazards.166

3.32

TheRobensReportfoundthattherewas:
too much law relating to health and safety at work and the detailed
prescription of every aspect of work had the effect of persuading
people that health and safety was purely a matter of government
regulationandnotofindividualresponsibility.167

3.33

Partofthereasonwhytherewastoomuchlawwasthatatthattimetherewerenine
separategroupsofhealthandsafetystatutes,withenforcementofthesedivided

164SubmissionNo.5fromGDFSUEZBonaparte,14July2014,p2.
165SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p9;TheCommitteeonSafetyandHealthatWork,SafetyandHealthatWork,Her
MajestysStationeryOffice,London,1972.
166Browne,R.C.,'Safetyandhealthatwork:TheRobensReport',BritishJournalofIndustrial
Medicine,vol.30,1973,p87ofpp8794.Seealso:SubmissionNo.11fromAustralianPetroleum
ProductionandExplorationAssociation,20August2014,p9.Note:Thisinquirydidnotreview
safetyandhealthprovisionsfortransportworkers.
167SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p9.

46

Chapter3
betweenfivegovernmentdepartmentsandanumberofseparatelegalauthorities.168
Thiswasclearlyamajordisadvantagetothosetryingtoaddresshealthandsafetyin
theworkplace.169
3.34

Anothermajorfactorwasthatwheneveranewtechnologywasdeveloped,the
relevantregulatoryagencyimposedanewsetofdetailedrules.170Thisalsorelatesto
anotherproblemnotedbytheRobensReport,thatis,thattoomuchoftheexisting
lawwasirrelevanttorealproblems.171

3.35

TheRobensReportobservedthatprescriptiveregulationswhichlaydownprecise
methodsofcompliancehaveanintrinsicrigidity,andtheirdetailsmaybequickly
overtakenbynewtechnologicaldevelopments.172Thisobservationledtothe
recommendationthat,wherepossible,regulationsshouldbeconfinedtostatements
ofbroadrequirementsintermsoftheobjectivestobeachieved,because:
methods of meeting the requirements may often be highly technical
and subject to frequent change in the light of new knowledge. They
should,therefore,appearseparatelyinaformwhichenablesthemto
bereadilymodified.173

3.36

Animportantelementofthisviewconcernedthetimeordinarilytakentoamend
statutoryregulation.Describingthequestionofthedesirablebalancebetweentheuse
ofstatutoryregulationsandtheuseofnonstatutorycodesofpracticeas
controversial,theRobensReportexplainedthatwhilestatutoryregulationsexpress
unequivocallegalobligations,andcanbestrictlyenforced,theirinherentinflexibilityis
problematicbecausetheyalsooftentakealongtimetomake,technicaldetailscan
quicklybecomeoutofdate,andinpracticeoncemadetheyareseldomeasyto
revoke.174

3.37

APPEAexplainedthissituationasfollows:
Forindustriessubjecttorapidtechnologicalchangeandwhichoperate
indynamic,highriskenvironments,prescriptiveregulationislikelyto

168Browne,R.C.,'Safetyandhealthatwork:TheRobensReport',BritishJournalofIndustrial
Medicine,vol.30,1973,p88ofpp8794.
169SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p9.
170Browne,R.C.,'Safetyandhealthatwork:TheRobensReport',BritishJournalofIndustrial
Medicine,vol.30,1973,p87ofpp8794.
171ibid.
172TheCommitteeonSafetyandHealthatWork,Safetyandhealthatwork,HerMajestys
StationeryOffice,London,1972.
173ibid.
174ibid.

47

Chapter3
become quickly outdated and worse, counterproductive in ensuring
safeoperations.175
3.38

Similarly,GDFSUEZBonaparteexplainedthat:
prescriptiveregulationsandstandardstendtobeadistillationofpast
experience and are based upon the best engineering practices at the
timeofestablishingtheregulationorstandard.Theevolutionofbest
engineering practices, especially with new or emerging technology,
suchasFLNG,occursatapacethatprescriptivestandardscanquickly
becomedeficient.176

3.39

Bycontrast,astheRobensReportnoted:
nonstatutorycodesofpracticeandstandardsaremoreflexible.They
areeasiertointroduceandtorevise.Theyaremoreprogressiveinthat
they need not be restricted to minimum standards, and they are less
likelytoinhibitnewdevelopments.177

3.40

UltimatelytheCommitteeonSafetyandHealthatWorkexpressedsupportfortheuse
ofcodesofpractice,explainingthatthesehadprovenespeciallyeffectiveinareas
wheretheframingandimplementationofeffectivestatutoryregulationsmighthave
proveddifficultorimpossible.178AstheRobensReportexplained:
We[theCommitteeonSafetyandHealthatWork]areinnodoubtthat
asageneralruleanonstatutorycodeorstandardistobepreferredto
a statutory regulation in the interests of intelligibility and flexibility,
andasameansofprovidingpracticalguidancetowardsprogressively
higherstandards.179

175SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p5.
176SubmissionNo.5fromGDFSUEZBonaparte,14July2014,p2.
177TheCommitteeonSafetyandHealthatWork,Safetyandhealthatwork,HerMajestys
StationeryOffice,London,1972.
178ibid.
179ibid.

48

Chapter3
3.41

Accordingly,theRobensReportfoundthatgreateremphasisshouldbeplacedin
futureonstandardsettingbymeansofnonstatutorycodesofpracticeandstandards,
andrecommendedthat:
asageneralrule,statutoryregulationsshouldonlybemadewhenthe
alternativeofanonstatutorycodeorstandardhasbeenfullyexplored
andfoundwanting.180

3.42

Indiscussingwhatitfoundwrongwiththeexistingsystem,theRobensReportalso
notesthatthesubjectofsafetyisonewhichproducesanapatheticresponse,andthat
manypracticalimplicationsflowfromthis.181Furthermore,itnotesthathealthand
safetytoooftenevokeapositivereactionfrommanagementonlywhentheyareeither
financiallyoremotionallyfrightened.182

3.43

Overall,theRobensReportcalledfor:
better systems of safety organisation, for more management
initiatives, and for more involvement ofwork people themselves. The
objectives of future policy must therefore include not only increasing
the effectiveness of the states contribution to health and safety at
work but also, and more importantly, creating conditions for more
effectiveselfregulation.183

3.44

TheReportrecommendedthatathreetieredapproachtooccupationalhealthand
safetylawbeadopted.Thismodelwouldfirstspecifybroad,overarchinggeneralduties
(tierone),backedbymoredetailedprovisionsinregulations(tiertwo)andindustry
codesofpractice(tierthree).184

3.45

IntheUnitedKingdom,theobservationsandrecommendationscontainedwithinthe
RobensReportledtotheenactmentoftheHealthandSafetyatWorkAct1974(UK),
whichcontinuestodefinethestructureandauthorityforthepromotion,regulation
andenforcementofoccupationalhealthandsafetylawthere.

180ibid.
181Browne,R.C.,'Safetyandhealthatwork:TheRobensReport',BritishJournalofIndustrial
Medicine,vol.30,1973,p87ofpp8794.
182ibid.
183SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p10.
184AustralianNationalUniversity,OverviewofworkhealthandsafetyregulationinAustralia,
14January2013.Availableat:http://regnet.anu.edu.au/content/overviewworkhealthand
safetyregulationaustralia.Accessedon14January2015.

49

Chapter3
3.46

Australianlawwasalsoinfluencedbythischangeinapproach,withthevarious
jurisdictionseachenactingnewoccupationalhealthandsafetystatutesbasedonthe
threetieredapproach.185

TheCullenInquiry
3.47

Despitetheseearly1970sdevelopmentsinworkplacehealthandsafetylawgenerally,
someindustriesincludingtheoffshorepetroleumindustrycontinuedtobelargely
governedbyprescriptivesafetyregulations.However,the1988PiperAlphadisasterin
theNorthSeaservedasthecatalystforashiftawayfromprescriptiveregulation.

3.48

Intheaftermathofthatdisaster,apublicinquiryconductedbyLordWilliamCullen(the
CullenInquiry)emphasisedthesevereshortcomingsofusingprescriptiveregulationfor
thepetroleumindustry,andpavedthewayfortheadoptionofobjectivebased
regulationwithinthatindustryworldwide.

3.49

AccordingtoGDFSUEZBonaparte:
the Cullen Inquiry highlighted that the prescriptive regime in place
prior to the Piper Alpha incident had resulted in industry and the
regulators failing to recognise, understand and control the high
consequence, low likelihood hazards which can be unique to every
differentapplication.186

3.50

3.51

Inshort,LordCullensinquiryfound:

seriousdeficienciesinthewayinwhichthepermittoworksystemoperated;

setsafetypoliciesandprocedureswerenotfollowedontheplatform;

cursoryandinconsistentemergencyinductionandtrainingforworkers;

theoperatorsmanagementhadasuperficialattitudetowardtheassessmentof
majorhazardrisks;and

thegovernmentsregulatoryregimewasnotaneffectivemeansofassessingor
monitoringoperatorssafetymanagement.

IntablingtheCullenInquiryreportin1990,thethenUKSecretaryofStateforEnergy,
MrJohnWakeham,notedLordCullensobservationsonthesignificantflawsinthe
wayinwhichsafetywasmanagedbytheoperatorandhisbeliefthattheexisting

185SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p10.
186SubmissionNo.5fromGDFSUEZBonaparte,14July2014,p2.

50

Chapter3
systemdidnotgivesufficientemphasistotheauditingof[theoperators]
managementofsafety.187
3.52

MrWakehamalsoexplainedthattheprimaryresponsibilityforsafetyhasalwaysbeen,
andwillalwaysremain,withtheoperator.188APPEAalsoobservesthatakeyfindingof
theCullenInquirywasthatincomplex,dynamicandhighriskactivitysuchas
hydrocarbonprocessingfacilities,itisessentialthattheresponsibilityformanagingthe
risksliesatthepointofoperations.189

3.53

AccordingtoMrWakehamthemainthrustofLordCullensreportwasto:
propose a new approach, under which the operator would retain the
primary responsibility for safety, and would be required to prepare a
comprehensive safety case. The regulator would be responsible for
continuously reviewing the case. Lord Cullen believes that that is the
bestwaytopreventanyrecurrenceofsuchfailingsinthefuture,and
theGovernmentaccepthisconclusions.190

3.54

SubsequenttotheconclusionoftheCullenInquiry,offshorepetroleumindustry
regulationintheUKwasamended,withthegovernmentthereadoptingagoalsetting
approachtolegislation,implementingasafetycaseregimewithinthatapproachand
creatinganindependentoffshorehealthandsafetyregulatorybody.Australiaquickly
followedsuit,withtheConsultativeCommitteeonSafetyintheOffshorePetroleum
Industryrecommendingthat:

thesafetycaseregimebeadoptedinAustralia;and

theexistingprescriptivesafetyrulescontainedinthePetroleum(SubmergedLands)
Act1967(Cth)bereplacedwithnew,performancebasedregulations.191

187MrJohnWakeham,SecretaryofStateforEnergy,UnitedKingdom,HouseofCommons,
ParliamentaryDebates(Hansard),12November1990,column329.
188ibid.
189SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p11.
190MrJohnWakeham,SecretaryofStateforEnergy,UnitedKingdom,HouseofCommons,
ParliamentaryDebates(Hansard),12November1990,column329.
191DepartmentofIndustry,ScienceandResources,Futurearrangementsfortheregulationof
offshorepetroleumsafety,p11.Availableat:
http://www.nopsema.gov.au/assets/document/FutureArrangementsforregulatingOffshore
PetroleumSafety.pdf.Accessedon13January2015.

51

Chapter3
Advantagesofobjectivebasedregulation
3.55

Generallyspeaking,thepetroleumindustryseesadvantagesinherentinanobjective
basedregulatoryregime.AsAPPEAexplained:
regulationofpetroleumoperationsshouldreflectleadingpracticeand
be objectivebased. [R]egulations need to set clear objectives and
leave it to operators to determine how these objectives are to be
achieved and to provide robust justification (or case for safety,
environment and structural integrity) to an independent and
competentregulator.192

3.56

ForAPPEA:
a policing style of regulation where finding blame is the main game
and prescriptive requirements are ticked off does not and cannot
contributetobestindustrypracticeandperformancethroughsharing
oflessonsandexperiences.193

3.57

APPEAalsodescribedhowtheobjectivebasedregulatoryregimefunctionstoensure
thatadvancesinsafetybyindividualoperatorsarequicklyadoptedbytheindustryasa
whole:
Itisimperativeinhighhazardindustriessuchaspetroleumoperations
that experiences and lessons are shared across the industry as
effectively and rapidly as possible. This open approach is highly
dependent on having in place a mature regulator(s) engaged with
industry to share and problem solve, backed up by clear objective
basedregulationandfirmbutfairenforcement.194

3.58

Notwithstandingthesecomments,itisclearthatthereissometensioninherentto
relyinguponanapparentlycollaborativemodeltoregulateacompetitiveindustry.
Whenquestionedonthispoint,however,NOPSEMAarguedthatdisseminating
knowledgeofimprovedsafetytechniques(evenwherethatknowledgemaybe
proprietary)wasroutineworkfortheregulator.195Thisisdiscussedfurtherin
Chapter4.

192SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p5.
193ibid.
194ibid.
195MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p11.

52

Chapter3

DevelopmentofAustraliassafetycaseregime
3.59

DescribingthemostsignificantoutcomefromtheCulleninquiryasbeingthemove
fromaprescriptiveregulatoryapproachthatattemptedtoenforceminimum
compliancetoagoalsettingregime,APPEAsubmitedthat:
the onus is [now] placed on the operator, not the regulator, to
demonstrate through a safety case that they have reduced the risks
associated with their operations to as low as reasonably practicable
(ALARP).196

3.60

Theintroductionofasafetycaseobligationintooffshorepetroleumindustryactivities
issaidtostrengthentheimplementationoftheRobensstyledutyofcareregimeby
introducingtheprincipleofcontinuousimprovementtotheregulatorymodel.197In
fact,thesafetycasemodelisthecentrepieceofAustraliasobjectivebasedregulatory
regimethatplacestheonusforsafetyupontheoperator.

3.61

LegislationtoamendthePetroleum(SubmergedLands)Act1967(Cth)wasintroduced
in1992,andthesafetycaseregimewasinfulleffectinAustraliaby1996.198Oversight
ofthisregime,however,wasinconsistent.Astherewasnofederalregulatoryauthority,
itwaslefttothestatesandtheNorthernTerritorytocarryoutdaytodayoffshore
petroleumsafetyregulationusingprescriptivelegislativerulesaugmentedbythesafety
caseapproach.199Amidconcernsabouttheconsistencyofthismethodofregulation,in
1999theCommonwealthGovernmentcommissionedareviewtoexaminethe
situation.

3.62

ThereviewwasmanagedandcoordinatedbytheOffshoreSafetySectionofthe
DepartmentofIndustry,ScienceandResources,withoversightfromasteering
committeecomprisingrepresentativesoftheCommonwealthandstateandterritory
governments,theoffshorepetroleumindustryandtheworkforce.200Thereviewitself
wasconductedbyaninternationalteamofoffshoresafetyexpertswhosereport

196SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p11.
197ibid.
198DepartmentofIndustry,ScienceandResources,Futurearrangementsfortheregulationof
offshorepetroleumsafety,p11.Availableat:
http://www.nopsema.gov.au/assets/document/FutureArrangementsforregulatingOffshore
PetroleumSafety.pdf.Accessedon13January2015.
199TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Historyof
NOPSEMA.Availableat:http://www.nopsema.gov.au/about/historyofnopsema/.Accessedon
12January2015.
200DepartmentofIndustry,ScienceandResources,Futurearrangementsfortheregulationof
offshorepetroleumsafety,p2.Availableat:
http://www.nopsema.gov.au/assets/document/FutureArrangementsforregulatingOffshore
PetroleumSafety.pdf.Accessedon13January2015.

53

Chapter3
wassubmittedtotheCommonwealthon30March2000.201Thereport,entitledFuture
arrangementsfortheregulationofoffshorepetroleumsafety,wascriticalofthe
complexityandinconsistenceofAustraliasframeworkoflawsandregulations.
3.63

3.64

AccordingtoAPPEA,thosewhohadconductedthereviewfoundthat:

theAustralianlegalandadministrativeframework,andthedayto
dayapplicationofthisframework,forregulationofhealth,safety
andenvironmentintheoffshorepetroleumindustryiscomplicated
andinsufficienttoensureappropriateandcostefficientregulation
oftheoffshorepetroleumindustry;

there were too many acts, directions and regulations regulating

offshore petroleum activities, their boundaries were unclear and
applicationinconsistent;

theroleoftheDesignatedAuthoritieswasunclearandundefined;

the regulators appeared to have inconsistent philosophies,

procedures and approaches to regulation, both in regard to the
dischargeoftheirroleinsafetycasedevelopmentandassessment,
andinregardtoauditingactivities;and

resourcing all of the regulators with competent and experienced

personneltoworkwithwhatareoftencomplexworkactivitieswas
a real concern, and salary levels made it difficult to recruit and
retainacriticalmass.202

Inlightofthesefindings,thereportrecommendedatotalrevisionofthewayinwhich
Australiasoffshorepetroleumindustryactivitieswereregulated,beginningwiththe
establishmentofanationalpetroleumsafetyregulatoryauthority.InSeptember2002,
theMinisterialCouncilonMineralandPetroleumResources,comprisingvarious
MinistersresponsibleforpetroleumsafetyacrossAustralia,endorsedtheformationof
anindependentnationaloffshoresafetyauthority.203Inordertoensureconsistent
regulationacrossalljurisdictions,itwasagreedthattheauthoritywhichwouldbe
knownastheNationalOffshorePetroleumSafetyAuthority(NOPSA)wouldbegiven
responsibilityforregulatingCommonwealthandstatewaters,andwouldbe
accountabletotheCommonwealth,StateandNorthernTerritoryMinisters.204

201ibid,p5.
202SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p12.
203ibid.
204ibid.

54

Chapter3
3.65

NOPSAwasestablishedwiththepassageofthePetroleum(SubmergedLands)
AmendmentBill2003,theexplanatorymemorandumforwhichexplainedthatthe
AuthoritywoulddeliverauniformnationalsafetyregulatoryregimeforAustralias
offshorepetroleumindustryandreducetheregulatoryburdenfacedbyindustry
participants.205ItwasfurtherexplainedthatamendmenttothePetroleum(Submerged
Lands)Act1967(Cth)wasnecessarybecause:
the occupational health and safety (OHS) requirements in Schedule 7
oftheActdonot[currently]applytoCommonwealthwatersadjacent
toaStateortheNorthernTerritoryifthelawofthatStateorTerritory
provides, to any extent, for matters relating to the occupational
healthandsafetyofpersonsemployedinthearea.Inthatcase,the
OHSlawsoftheStateorTerritoryapply.206

3.66

Asaresultofthisprovision,theapplicationofoccupationalhealthandsafetylawsat
seadifferedbyjurisdiction,whichwasdeemedtobeanunnecessaryandunhelpful
burdenuponoffshorepetroleumoperators.AmendingthePetroleum(Submerged
Lands)Act1967madeNOPSAsolelyresponsibleforadministeringthesafetycase
regulatorymodelwithintheCommonwealthsoffshorepetroleumindustryand
streamlinedtheapplicationofoccupationalhealthandsafetylawatsea.Thesafety
casewasalsoexplainedasaregulatorymodelbywhichoperatorscanachievethose
objectivesbydevelopingsystemsandproceduresthatbestsuittheirneedsand
agreeingthosewiththeregulator.207Thesafetycaseitselfwasdescribedas:
therulesbywhichtheoperationofthefacilityisgoverned,[including]
details of safety management arrangements and risk assessment
studies,which,oncesubmittedtoandacceptedbytheregulator,sets
both the standards to be achieved and the mechanism for achieving
them.208

3.67

NOPSAbeganoperationson1January2005.ThoughthePetroleum(SubmergedLands)
Act1967(Cth)wasreplacedbytheOPGGSAct,NOPSAsregulatoryroleremained
largelyunchangeduntiltheOPGGSActwasamendedin2009.Atthistime,inresponse
toapairofreportsconcerningtheoffshorepetroleumindustry,theOPGGSActwas
amendedtoexpandNOPSAsregulatoryrole.Inadditiontoitsexistingduties,NOPSA
wasgivenresponsibilityfornonOHSstructuralintegrityoffacilities,including

205ExplanatorymemorandumtothePetroleum(SubmergedLands)AmendmentBill2003(Cth).
206ibid
207ibid.
208ibid.

55

Chapter3
pipelines,wellsandwellrelatedequipment.209NOPSAsrole(andindeed,itsname)
wasfurtherexpandedintheaftermathoftheMontaraoilspillintheTimorSea.
3.68

TheMontaraoilspillwhichwassubsequentlyacknowledgedasbeingtheworstofits
kindinAustraliasoffshorepetroleumindustryhistoryoccurredinAugust2009.210In
response,theCommonwealthGovernmentappointedtheMontaraCommissionof
Inquirytoinvestigateandreportuponthedisaster;followingasevenmonthinquiry
theCommission,havingidentifiedanumberofsignificantdeficienciesinAustralias
regulationofoffshorepetroleumindustryactivities,providedareportcontaining100
findingsand105recommendationstotheGovernment.211

3.69

ItisworthnotingthatwhiletheMontaraCommissionofInquiryvoicedbroadsupport
forobjectivebasedregulationwithintheoffshorepetroleumindustry,thissupportwas
expressedwithanoteofcaution.Initsreport,theCommissionobservedthat:
while it is the case that industry, under the current regime, has a
greater level of responsibility for itself than exists under more
prescriptive regimes, a regulator must still ensure that a companys
proceduresmeetthestatutorystandardofgoodoilfieldpractice.212

3.70

TheviewexpressedwithintheCommissionreportwasthatthepracticesofthe
NorthernTerritorysDepartmentofResources(theauthorityresponsibleforregulating
wellintegrityatthetimeoftheMontaraoilspill)fellwellshortofwhatgood
contemporaryregulatorypracticerequiredinrelationtotheregulationofmatters
bearinguponwellintegrityintheoffshoreareaitwasresponsiblefor.213The
Commissionsviewwasthat:
whilethemovementtowardamoreobjectivebasedregulatoryregime
is appropriate, it demands that more effort be devoted to carefully
ensuringthatwhatisproposedbyanoperatorisnotapprovedunless
itisconsistentwithgoodoilfieldpracticeandsuchapprovalisfollowed
up with targeted monitoring, audit and compliance activities. The
regulatorneedstoactivelyprobeandinquire;itshouldnotbepassive;
the regulator needs to ask questions of the owner/operator and be

209ibid.
210MontaraCommissionofInquiry,ReportoftheMontaraCommissionofInquiry,17June2010,p5.
211AustralianGovernment,FinalGovernmentResponsetotheReportoftheMontaraCommissionof
Inquiry,2011,p4.
212MontaraCommissionofInquiry,ReportoftheMontaraCommissionofInquiry,17June2010,
p16.
213ibid,p232.

56

Chapter3
preparedtoengageinatechnicaldebatewithanoperatoraboutwhat
trulyisgoodoilfieldpractice.214
3.71

Thisledtotheimportantandinfluentialfindingthat:
theInquirysupportstheobjective(ratherthanprescriptive)approach
to regulation now followed in Australia. However, the pendulum has
swung too far away from prescriptive standards. In some areas
relatingtowellintegritythereneedstobeminimumstandards.215

3.72

InApril2010,withtheMontaraCommissionofInquirydrawingtowardsitsconclusion,
thepetroleumindustrywasagainmetwithanotheroffshoredisaster.IntheGulfof
Mexico,theMacondoDeepwaterHorizondisasterclaimedthelivesof11offshore
workers,andresultedinthelargestmarineoilspillinhistory.Twooffshoredisasters
withinthespaceofeightmonthsmeantthatregulatoryreformwithintheAustralian
petroleumindustrywasinevitableand,ultimately,thevastmajorityofthe
recommendationsmadebytheCommissionwereacceptedbytheCommonwealth,
withNOPSAbeinggiventheadditionalresponsibilityofregulatingenvironmental
managementpracticeswithintheoffshorepetroleumindustry.In2011theOPGGSAct
wasamendedtoturnNOPSAintotheNationalOffshorePetroleumandEnvironmental
ManagementAuthorityNOPSEMAAustraliasnationalregulatorforsafety,well
integrityandenvironmentalmanagementinrelationtooffshorepetroleumactivities.

NOPSEMAandobjectivebasedregulation
3.73

Beforeasafetycase,awelloperationsmanagementplanoranenvironmentplancan
besubmittedforvalidation,itmustalsohavebeenverifiedbyanindependent
assessor.Asapartofthisprocess,theoperatorisrequiredtosatisfyNOPSEMAthat
eachpersonwhoundertookthevalidationhadthenecessaryindependence,
competence,abilityandaccesstodata,inrespectofeachmatterbeingvalidated,to
arriveatanindependentopiniononthematter.216

3.74

Onceasafetycaseforaparticularfacilityhasbeenvalidatedandsubmitted,
NOPSEMAsrole:
is to provide independent assurance that health and safety risks are
properly controlled by challenging the operators risk management
arrangements during safety case assessment and then verifying by

214ibid,p15.
215ibid,p232.
216TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Historyof
NOPSEMA.Availableat:http://www.nopsema.gov.au/about/historyofnopsema/.Accessedon
12January2015.

57

Chapter3
planned inspection that the operator has implemented its risk
managementcommitmentsdocumentedinthesafetycase.217
3.75

Asimilarprocessisundertakeninrelationtoanoperatorswelloperations
managementplansandenvironmentplans.

3.76

Theintroductionofasafetycaseandenvironmentplanobligationonoperators,anda
regulatoryobligationonNOPSEMA,complementsdutybasedoccupationalhealthand
safetylawsbyensuringthatstandardsareimprovedasknowledgeandunderstanding
ofriskameliorationimproves.

3.77

Thougheachoftheseresponsibilitiesiscreatedpursuanttoadifferentsetof
regulations,becauseeachsetofregulationsisobjectivebased,NOPSEMAgenerally
dischargesitssafety,wellintegrityandenvironmentalmanagementresponsibilitiesin
muchthesameway.Workersafetyisregulatedbythesafetycaseregime,well
integrityisregulatedbywhatisknownasthewelloperationsmanagementplan
regimeandenvironmentalmanagementpracticesaresubjecttoregulationthroughthe
environmentplanregime.Again,eachregimerequirestheoperatortoprepareand
submitdetailedplansofhowitwillmanagetherisksassociatedwithitsoperations,and
theseplansmustbeapprovedbyNOPSEMAbeforeanyoffshoreactivitiescantake
place.Inturn,NOPSEMAholdsoperatorsaccountabletothecommitmentscontained
withintheirapprovedplans.

3.78

FurtherdetaileddiscussionofNOPSEMAsroleiscontainedinChapter4onthesafety
caseregimeinAustraliaandChapter6onenvironmentalregulation.

3.79

Atthispoint,though,itisusefultonotethesteadyincreaseinthenumberofannual
inspectionsundertakenbyNOPSEMA(anditsimmediatepredecessor,NOPSA)since
2005,whichisillustratedinFigure3.1below.

217TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Validation
guideline.Availableat:http://www.nopsema.gov.au/assets/Guidelines/N04200GL0525
ValidationRev9June2013.pdf.Accessedon24February2015.

58

Chapter3
218

Figure3.1:NOPSA/NOPSEMAinspectedfacilities,wellsandactivities

160
140
120
100
80
60
40
20
0
2005

2006

2007

2008

2009

2010

2011

2012

2013

3.80

Themarkedincreaseinannualinspectionssince2010wouldreflect,inpart,aresponse
toincreasedoffshorepetroleumindustryactivitiesandNOPSEMAsnewenvironmental
managementresponsibilities.Itisalsolikelythatthe2009Montaradisasterhashadan
influenceonthefrequencywithwhichinspectionsareconducted.Whateverthe
reason,itisclearthatinspectionrateshaveincreasedmarkedlysince2005.

3.81

IntheAustraliancontext,theMontaraoilspillmadeitclearthattheassessment
processisperhapsthemostcriticalelementofsuccessfulobjectivebasedregulation.
Whiletherequirementsassociatedwithpreparingandsubmittingsafetycases,well
operationsmanagementplansandenvironmentplansplacesignificantresponsibility
ontheoperator,itiscriticalthattheregulatorisequippedwiththeresourcesand
expertisenecessarytofullytestandassesstheclaimscontainedwithineachplan.
Indeed,theimportanceofbeingabletotakesucharigorousapproachisunderscored
bytheroleplayedbyNOPSEMAinassessingeachoftheseplans.

Occupationalhealthandsafety
3.82

Giventhatconcernsrelatingtotheoccupationalhealthandsafetyofthoseemployed
onFLNGfacilitiesorinsupportroleswerethemotivationforthisInquiry,andwhile
occupationalhealthandsafetyissuesmustbeaddressedinanoperatorssafetycase,
theissuewarrantssomefurtherdiscussion.

3.83

NotwithstandingNOPSEMAsregulatorydutiesandexpertise,itisimportantto
understandthattheprimaryresponsibilityforthehealthandsafetyforthoseworking

218AuditorGeneral,AustralianNationalAuditOffice,Establishmentandadministrationofthe
NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Commonwealth
ofAustralia,Canberra,2014,p109.

59

Chapter3
onanoffshorepetroleumfacilityfallstotheoperatorofthefacilityinquestion.
NOPSEMAobservesthattheregulationofoccupationalhealthandsafetywithin
Australiasoffshorepetroleumindustryisaperformancebasedregimetypicalofall
modernOHSregimes,whetherapplyingoffshoreormoregenerallyatworkplaces.219
AccordingtoNOSPEMA:
those regimes impose general duties on parties to the regime,
especially operators and employers. The principle underlying these
performancebased, general duties regimes is: the primary
responsibilityforensuringhealthandsafetyshouldliewiththosewho
createrisksandthosewhoworkwiththem.220
3.84

Inrelationtooccupationalhealthandsafety,thissituationismostclearlyreflectedin
thecompositionandcontentoftheOffshorePetroleumandGreenhouseGasStorage
(Safety)Regulations2009(OPGGSSRegulations).TheOPGGSSRegulationsstrengthen
theimplementationofthedutyofcareregimewithintheOPGGSActbyimposing
uponeachfacilityoperatorasafetycaseobligation.221

3.85

TheguidingprincipleofAustraliasoffshorepetroleumindustryregulationinthisarea
canbefoundwithinSchedule3totheOPGGSAct,whichmakesitclearthatthe
operatorofanoffshorefacilityisdutyboundtotakeallreasonablypracticablesteps
toensurethefacilityanditsactivitiesaresafeandwithoutrisktohealth.222

3.86

WithinSchedule3totheOPGGSAct,Clauses915setoutaseriesofdutiesthatmust
beatalltimesdischargedbyfacilityoperators,employersoffacilityworkers,
manufacturersandsuppliersofequipmentandsubstancesusedonfacilities,petroleum
and/orgreenhousegastitleholdersoperatingwells,andpersonsworkingatoron
facilities.Clause16Adefineseachofthesedutiesasahealthandsafetyrequirement,
andClauses16Band16Cenforcethedischargeofthesedutiesbymakingitan
offencepunishablebycivilpenaltytobreachahealthandsafetyrequirement,
whetherrecklesslyorthroughnegligence.

3.87

Schedule3alsoseekstopromoteacultureofsafetywithinAustraliasoffshore
petroleumindustry,withaseriesoffurtherclausesaimedatensuringthatexpert
adviceisavailableonoccupationalhealthandsafetymatters,foralloffshorefacilities,
andthattheoccupationalenvironmentformembersoftheworkforceatsuchfacilities

219TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Offshore
OHSlegislativeframeworkinformationpaper.Availableat:
http://www.nopsema.gov.au/assets/Informationpapers/InformationPaperOffshoreOHS
LegislativeFrameworkOverviewJuly2010.pdf.Accessedon7January2015.
220ibid.
221ibid.
222ibid.

60

Chapter3
isadaptedtotheirneedsrelatingtohealthandsafety.223Toachievethisobjective,
Schedule3outlinesaprocessbywhichworkersonoffshorepetroleumfacilitiesare
abletoraiseanysafetyconcernstheymayhave,withtheaimoffosteringa
consultativerelationshipbetweenallrelevantpersonsconcerningthehealth,safety
andwelfareofmembersoftheworkforceatthosefacilities.224
3.88

AfinalimportantaspectofSchedule3isthatitempowersNOPSEMAofficersto,atany
reasonabletime,enterandinspectanoffshorefacilityinordertodeterminewhether
thespecifiedoccupationalhealthandsafetylawsarebeingcompliedwith.225
NOPSEMAsinspectionactivitiesarediscussedfurtherinChapter4onsafetycases.

3.89

Themeritsofobjectivebasedoccupationalhealthandsafetyregulationdependvery
muchontheskill,expertiseandrigourwithwhichtheregulatordischargesitsduties.
Therefore,whileAustraliahashadanobjectivebasedregulatoryregimeinplacefor
thebestpartoftwodecades,afeatureofthismodelhasbeen,andshouldremain,its
capacitytocontinuallyevolve.

3.90

Furthermore,datapresentedbyAPPEAsuggeststhatthiscontinualevolutionhasbeen
togoodeffect.AccordingtoAPPEA,sincetheintroductionofAPPEAsmodernsafety
performancereportingin1996,thesafetyperformanceoftheAustralianoffshoreoil
andgasindustryhassteadilyimproved.226APPEAfurthersubmitthatthesafety
performanceoftheAustralianpetroleumindustryhasconsistentlybeenthebest
performerofanyindustryinAustraliaparticularlywhencomparedtosimilarrisk
profileindustriessuchasminingandmanufacturing.227

3.91

Insupportofthisclaim,APPEAprovideddataonthetotalinjuryfrequencyrateinthe
offshorepetroleumindustrybetween1996and2013,aswellasthelosttimeinjury
frequencyrateoverthesameperiod.ThisinformationisprovidedinFigures3.2and
3.3below.

223OffshorePetroleumandGreenhouseGasStorageAct2006(Cth).
224ibid.
225ibid.
226SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p6.
227ibid.

61

Chapter3
228

Figure3.2:Totalinjuryfrequencyrate(permillionhoursworked)

16
14
12
10
8
6
4
2
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

229

Figure3.3:Losttimeinjuryfrequencyrate(permillionhoursworked)

4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

3.92

Bothsetsofdatashowanindustrywithacontinuallyimprovingsafetyrecord.Itis
incumbentonindustry,withappropriatesupportfromNOPSEMA,toensurethatthis
trendcontinues.

228ibid,p7.
229ibid.

62

Chapter4
Regulationviasafetycases

Introduction
4.1

AsnotedinChapter2,theAustralianregulatoryregimefortheoilandgasindustryis
anobjectivebasedorgoalorientedregime.Priortothedevelopmentofthisobjective
basedregime,Australiasregulationwasprescriptive,withgovernmentresponsiblefor
specifyingtherequiredsafetymeasuresinlegislation.Now,though,ratherthanbeing
prescriptive,thebroadsafetyobjectivesorgoalsaresetoutinlegislationandthe
operatorisresponsiblefordevelopingthemostappropriatemethodsofachieving
thosegoals.230Inotherwords,anoperatorisprimarilyresponsibleforthesafetyofan
oilandgasfacility,thehealthandsafetyofthosewhoworkonornearit,and
safeguardingtheenvironmentinwhichthefacilitywilloperate.Chapter2alsooutlined
theconceptofALARPandtheoperatorsresponsibilitytoensurethatrisksrelatingto
humansafetyandenvironmentalprotectionarereducedtolevelsthatareaslowas
reasonablypracticable(ALARP).

4.2

InaccordancewiththeOffshorePetroleumGreenhouseGasStorage(Safety)
Regulations2009(Cth)(OPGGSSRegulations),thesafetycaseistheprimary
mechanismthroughwhichoperators,includingthoseusingFLNGfacilities,
demonstratethattheyhaveidentified,assessedandreducedriskstohumansafetyto
ALARPlevels,andthattheywillmonitorandmaintainsuchriskstoanALARPlevel.

Safetycases
4.3

TheunderlyingrationaleforAustraliassafetycaseregimefortheoffshorepetroleum
industryreflectstheoutcomesoftwomajorinquiriesinstigatedbytheUKgovernment,
namelytheRobensReportandtheLordCullenInquiry.Thegeneralimpactofthese
reportsonAustraliasoffshorepetroleumregulatoryregimewasexplainedinChapter
3.Atthisstage,anoutlineoftheCullenInquirysparticularinfluenceonthe
developmentofthesafetycaseregimeisuseful.

230NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safety,safety
case,safetycaseapproach,nd.Availableat:http://www.nopsema.gov.au/safety/safety
case/safetycaseapproach/.Accessedon15December2014.

63

Chapter4
TheCullenInquiry
4.4

AsoutlinedinChapter1,theCullenInquirywastheUKgovernmentsresponsetothe
PiperAlphadisasterintheNorthSeain1988.LordCullensreportcontained106
recommendations.Ofparticularimportanceherearethoserelatingtothesafetycase
(nos.113),legislation(nos.1722)andtheregulatorybody(nos.2326).

4.5

Recommendation1wasthattheoperatorshouldberequiredbyregulationtosubmit
totheregulatorybodyaSafetyCaseinrespectofitsinstallations.231Forfacilitiessuch
asthoseinvolvedinprocessinghydrocarbons,whereactivitiesarecomplex,dynamic
andhighrisk,theCullenReportfoundthatitisessentialthattheresponsibilityfor
managingtherisksliesatthepointofoperations.232

4.6

Recommendation2proposedthatthesafetycaseshowthatparticularobjectivesare
met,including:
(i) thatthesafetymanagementsystemofthecompany(SMS)and
thatoftheinstallationareadequatetoensurethat(a)thedesign
and(b)theoperationoftheinstallationanditsequipmentaresafe
(paras17.36and21.5657);
(ii) thatthepotentialmajorhazardsoftheinstallationandtherisksto
personnelthereonhavebeenidentifiedandappropriatecontrols
provided(para17.37);and
(iii) thatadequateprovisionismadeforensuring,intheeventofa
majoremergencyaffectingtheinstallation(a)aTemporarySafe
Refuge(TSR)forpersonnelontheinstallation;and(b)theirsafe
andfullevacuation,escapeandrescue(paras17.3738,19.109,
19.157and20.8).233

4.7

Recommendation4suggestedthattheoperatorssafetycaseshoulddemonstratethat
sofarasisreasonablypracticablehazardsarisingfromtheinventoryofhydrocarbons
onthefacilityandtheassociatedrisersandpipelineshavebeenminimised.234Italso

231DepartmentofEnergy,ThepublicinquiryintothePiperAlphadisaster,reportpreparedbyThe
HonLordCullen,fortheSecretaryofStateforEnergy,theStationeryOffice,Norwich,1990,
p387.
232SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p11.
233DepartmentofEnergy,ThepublicinquiryintothePiperAlphadisaster,reportpreparedbyThe
HonLordCullen,fortheSecretaryofStateforEnergy,theStationeryOffice,Norwich,1990,
p387388.
234ibid,p388.

64

Chapter4
calledforademonstrationthatplatformworkersexposuretoaccidentaleventsand
theirconsequenceshavebeenminimisedsofarasisreasonablypracticable.235
4.8

Theremainingsafetycaserecommendationsprovideinformationonwhatshouldbe
coveredinasafetycase,withrecommendation10callingforsafetycasestobe
updatedbetweenthreeandfiveyearsfromtheirpreviousassessment,and
recommendation11statingthatoperatorsshouldadvisetheregulatorofany
modificationstoinstallations,equipmentorprocedurespriortoimplementingthemso
astodetermineanynecessaryamendmentstothesafetycase.236

4.9

TheCullenInquiryreportrecommendedthattheprincipalregulationsinregardto
offshoresafetyshouldtaketheformofrequiringthatstatedobjectivesaretobemet
(referredtoasgoalsettingregulations)ratherthanprescribingthatdetailed
measuresaretobetaken.237Furthermore,whiletherewouldstillneedtobesome
prescribeddetailedmeasures,guidancenotestothegoalsettingregulations:
should give nonmandatory advice on one or more methods of
achievingsuchobjectiveswithoutprescribinganyparticularmethodas
aminimumorasthemeasuretobetakenindefaultofanacceptable
alternative.238

4.10

Inrelationtogovernmentregulation,thereportsrecommendation23clearlystated
thatthereshouldbeasingleregulatorybodyforoffshoresafety.239Further
recommendations(nos.2426)werethattheregulationofoffshoresafetyshouldbe
dischargedbyadiscretedivisionoftheHSE,whichshouldemployaspecialist
inspectorateandhaveaclearidentityandstronginfluenceintheHSE.240

Australialearnsfromhistory
4.11

TheAustralianPetroleumProductionandExplorationAssociation(APPEA)submitted
thattheweaknessesidentified[]bytheUKsRobensReportalsoexistedin
Australiasapproachtosafetyregulation.241ThereisnodoubtthattheLordRobens
andLordCulleninquirieshaveheavilyinfluencedAustralianoffshoreoilandgas
regulations.AsAPPEAnoted,inthe1980sand1990s,eachoftheAustralian
jurisdictionsenactednewoccupationalhealthandsafety(OHS)statutesbased,to
varyingdegrees,onthemodelproposedbyRobens.242Furthermore,followingLord

235ibid.
236ibid,p390391.
237ibid.
238ibid,p390391,Recommendation17.
239ibid,p391.
240ibid,p392.
241SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p10.
242ibid.

65

Chapter4
Cullensreport,Australiaadoptedasafetycaseapproach,againfirmlyplacingthe
responsibilityforongoingfacilitysafetymanagementwiththeoperator,ratherthan
theregulator.
4.12

InDecember1993,thePetroleum(SubmergedLands)Act1967(Cth)wasamendedto
formalisetheapplicationofthesafetycaseregimetooperatorsofoilandgasfacilities
inCommonwealthwaters.243

4.13

Aswellasadoptingthesafetycaseapproach,Australiaalsoretain[ed]theOHSgeneral
dutyofcareprovisions.244Inthisway,regulationoftheoffshorepetroleumindustry
addressestwoseparate,yetrelated,issues:protectingworkforcehealthandsafety,
andpreventingsignificanteventsthatcouldresultinmultiplecasualties/fatalitiesand
significantdamagetoassetsandtheenvironment,togetherwiththeirmitigationif
suchaneventweretooccur.245

4.14

In2001,thefinalreportoftheAustralianOffshorePetroleumSafetyCaseReview(the
AOPSCReview)proposedthatthereshouldbeonesinglesafetyauthorityresponsible
fortheregulationofsafetyinCommonwealthwaters.246Thatsingleauthoritywouldbe
directlyanswerabletoafederalminister,woulduseuniformpolicyandprocedures
throughout,andofferpayandconditionstoallowtherecruitmentandretentionof
staffwiththenecessaryskillsandexperience.247

4.15

TheAOPSCReviewalsofoundthatthereweretoomanyActs,Directionsand
RegulationsregulatingtheAustralianoffshorepetroleumactivitiesandthattheir
boundariesareunclearandapplicationisinconsistent.248Furthermore,itfound
overlapsinthelegislation,thatrequirementswereopentoinconsistentinterpretation
byregulatorsandguidelineswereoftenappliedasiftheywerecompulsory
regulations.249

243DepartmentofIndustryScienceandResources,Futurearrangementsfortheregulationof
offshorepetroleumsafety,CommonwealthofAustralia,Canberra,2001,p72.Note:Thisreview
wascommissionedin1999.
244SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p10.
245ibid.
246DepartmentofIndustryScienceandResources,Futurearrangementsfortheregulationof
offshorepetroleumsafety,CommonwealthofAustralia,Canberra,2001,p8.
247ibid.
248ibid,p36.
249ibidSeealso:SubmissionNo.11fromAustralianPetroleumProductionandExploration
Association,20August2014,pp1112.

66

Chapter4
4.16

Importantlyforthepurposeofthischapter,theAOPSCreviewendorsedtheformation
ofoneindependentnationaloffshoresafetyauthorityandconfirmedthatthesafety
caseregimewasasoundmodel,onethatwasapplicabletotheoilandgasindustry.250

4.17

NOPSEMAarguesthatregulatorsinotherjurisdictionssuchastheUnitedKingdomand
Norwayhavebeensuccessfullyadministeringsafetycaseregimesformanyyears.251

Nosafetycase,nofacility
4.18

ItisanobjectoftheOPGGSSRegulationsto:
ensure that facilities are designed, constructed, installed, operated,
modified and decommissioned in Commonwealth waters only in
accordance with safety cases that have been accepted by the Safety
Authority.252

4.19

Thismeansthatafacility,includinganFLNGfacility,cannotoperateinfederalwaters
withoutasafetycasethathasbeenapprovedbyNOPSEMA.NOPSEMAsrolein
assessingandapprovingsafetycasesisdiscussedfurtherbelow.

4.20

EvidencetothisInquirysuggeststhatthisiswellrecognisedbythepetroleumindustry.
Forexample,APPEAsubmittedthatinCommonwealthwaters,afacilityincludinga
FloatingLNGfacilitycannotbeconstructed,installed,operated,modifiedor
decommissionedwithoutasafetycaseinforceforthatstageinthelifeofthat
facility.253

4.21

ConocoPhillipsadvisedthatwithanydevelopmentwehaveasafetycasethatweput
together.Thatisprettymuchthebestpracticeacrossindustryanditissomethingwe
dohearmostlyintheAustralianarea.254

4.22

InnotingthattheobjectivebasedregulatoryframeworkinplaceundertheOPGGSAct
[OffshorePetroleumGreenhouseGasStorageAct2006(Cth)]isnot'selfregulation',

250DepartmentofIndustryScienceandResources,Futurearrangementsfortheregulationof
offshorepetroleumsafety,CommonwealthofAustralia,Canberra,2001,p31andp38.Seealso:
SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p12.WhiletheNationalOffshorePetroleumSafetyAuthority(NOPSA)wasestablishedin
2005andsupersededbyNOPSEMAin2012,thereisnotonesingleregulatorforpetroleum
facilitiesinfederal,stateandterritorywaters.ThisisdiscussedfurtherinChapter2.
251NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,ALARP,
GuidancenoteN04300GN0166Revision5,June2014,p4.
252r1.4(1),OffshorePetroleumandGreenhouseGasStorage(Safety)Regulations2009(Cth).
253SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p12.
254MrMarkLeigh,TeamLeader,AssetIntegrityandProcessSafety,ConocoPhillips,Transcriptof
Evidence,10November2014,p1.

67

Chapter4
GDFSUEZBonapartePtyLtdarealsoawarethatindustryisobligedtosubmitasafety
casetotheregulatorforreviewandacceptance.255
4.23

Woodsidesubmittedthatithadoperatedunderthesafetycaseregimeformany
yearsandthat:
during this time Woodside has demonstrated its ability to safely
operatefacilitiesconsistentwithlegislationandthroughanapproach
thatsetsbroadsafetygoals.ThisapproachhasresultedinWoodside
demonstrating year on year improvement in its health and safety
performance.256

4.24

Notonlyistheoilandgasindustryawareoftheregulatoryrequirementsforasafety
caseundertheOPGGSAct,evidencetotheInquirydemonstratesthatthisisseenas
worldsbestpractice,somethingthatactuallyimprovessafety.Forexample,MrLuke
Musgrave,VicePresident,LNGforExxonMobilstatedthatthe:
value of having a safetycase approach is that it lifts the standard
acrosstheentireindustry.[]Wewelcomethesafetycaseapproach.
Wedonotseeitasaburdenorasonerous;weseeitascomplimentary
towhatwearedoing.Ithinkapproacheslikethesafetycaseapproach
evolvedoutofproblemsthatoccurredpreviouslyintheindustryandit
is there to ensure that all players in the industry at least meet some
sortofacceptablestandard.257

4.25

GDFSUEZBonapartesubmittedthat:
the safety case processes that have been established to support the
development of offshore fields in Commonwealth waters, in
conjunction with the integrated approach to workforce involvement,
willresultinthedevelopmentandoperationofanFLNGfacility,orany
other facility type, with suitable measures in place to protect the
healthandsafetyoftheworkers.258

4.26

ConocoPhillipsalsostatedthatthesafetycaseregimeisthewaytogoandthatthe
regimehadservedindustrywell.259

255SubmissionNo.5fromGDFSUEZBonapartePtyLtd,30July2014,p2.
256SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p7.
257MrLukeMusgrave,VicePresident,LNG,ExxonMobil,TranscriptofEvidence,10November2014,
p9.
258SubmissionNo.5fromGDFSUEZBonapartePtyLtd,30July2014,p7.Theissueofworker
involvementinthedevelopmentofasafetycaseisdiscussedfurtherinthischapter.
259MrMarkLeigh,TeamLeader,AssetIntegrityandProcessSafety,ConocoPhillips,Transcriptof
Evidence,10November2014,p9.

68

Chapter4
Finding13
Offshorepetroleumfacilities,includingFLNGfacilities,cannotoperatein
Commonwealthwaterswithoutasafetycasethathasbeenassessedandapprovedby
theNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority.
Finding14
Theoffshorepetroleumindustryregardsthesafetycaseregimeasworldsbest
practice.

Whatisasafetycase?
4.27

Safetycasesarebasedontheabovementionedprinciplethatthosewhocreatethe
riskmustmanageit.260Thisislargelybecause,astheCullenInquiryreportfound,in
complex,dynamicandhighriskactivitysuchashydrocarbonprocessingfacilities,itis
essentialthattheresponsibilityformanagingtherisksliesatthepointof
operations.261

4.28

Furthermore,asNOPSEMAstated,itistheoperators'jobtoassesstheirprocesses,
proceduresandsystemstoidentifyandevaluaterisksandimplementtheappropriate
controls,becausetheoperatorhasthegreatestindepthknowledgeoftheir
installation.262

4.29

CitingtheUKDefenceStandard0056,GDFSUEZBonapartesubmittedthat,ingeneral
terms:
a Safety Case is a structured argument, supported by a body of
evidence, that provides a compelling, comprehensible and valid case
thatasystemissafeforagivenapplicationinagivenenvironment.263

4.30

Thesafetycasedocumentallowstheoperatorandtheregulatortobeconfidentthat
theoperatorhastheabilityandmeanstocontrolmajoraccidentriskseffectively.It
providesanextralevelofregulatorycontrolontopofregulations.264

4.31

Thisconfidenceisgeneratedthroughtherequiredcontentsofthesafetycase,the
operatorsdevelopmentofthesafetycase,theregulatorsassessmentofthesafety

260NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Whatisasafety
case,nd,np.Availableat:http://www.nopsema.gov.au/safety/safetycase/whatisasafety
case/].Accessedon17December2014.
261SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p10.
262NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Whatisasafety
case,nd,np.Availableat:http://www.nopsema.gov.au/safety/safetycase/whatisasafety
case/].Accessedon17December2014.
263SubmissionNo.5fromGDFSUEZBonapartePtyLtd,30July2014,p2.
264HealthandSafetyExecutive,UnitedKingdom,AguidetotheOffshoreInstallations(SafetyCase)
Regulations2005.Guidanceonregulations,HSEBooks,Suffolk,2006,p6.

69

Chapter4
caseandthemonitoringofthecontinuedimplementationofthesafetycaseprovisions.
ThebalanceofthischapterelaboratesontheseaspectsoftheregulationofAustralias
offshorepetroleumindustry.
Finding15
Asafetycaseisabodyofevidenceprovidedbyanoperatortotheregulatorto
demonstratethatrisksandhazardsassociatedwiththeproposeddevelopmenthave
beenidentifiedandthattheproposedsafetymanagementsystemwillreduceriskstoa
levelthatisaslowasreasonablypracticable.

Requiredcontentsofasafetycase
4.32

AsAPPEAsubmitted,thesafetycaseregulatoryregimeapplyingtoallAustralian
offshorepetroleumfacilitiesaddressesprocesssafetyaswellaspersonalsafety.265
Thisisachievedthroughthespecificrequirementsforthecontentsofasafetycase,as
prescribedinDivision1oftheOPGGSSRegulations.

4.33

AccordingtoNOPSEMA,therearethreeaspectstothesafetycaseasdefinedin[the]
regulations,namelyadescriptionofthefacility,adetaileddescriptionoftheformal
identificationofhazardsandrisks,andadetaileddescriptionofthesafetymanagement
system.266Thefollowingsectionprovidesanoverviewofeachofthesesafetycase
aspects.

Facilitydescription
4.34

Regulation2.5(1)providesthatasafetycasemustcontainadetaileddescriptionofthe
facility.Thisdescriptiondefinestheintendedrangeorscopeofoperationofthe
facility.267Cleardefinitionofthescopeofoperationisessentialasitdelimitstherange
ofoperationspossibleatorinconnectionwiththefacilityand,asNOPSEMAstates,
operationcontrarytothesafetycaseinforceisnotpermitted.268

4.35

Thefacilitydescriptionmustalsodescribethephysicalarrangementofthefacility,all
oftheactivitiesonthefacility,surroundingactivitiesnearthefacility,andthenumbers
ofpeoplepresentinvolvedineachtypeofactivity.269Forafacilitythatisapipeline,
r2.5(1)(d)providesthatdetailsofthepipelinesroutecorridor,thecompositionsofthe
petroleumtopassthroughthepipelineandthesafeoperatinglimitsforthose
compositionsmustalsobeincludedinthefacilitydescription.

265SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociation,20August
2014,p8.
266MrGavinGuyan,GeneralManager,Safetyandintegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p4.
267NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase
contentandlevelofdetail,GuidancenoteN04300GN0106,November2013,p16.
268ibid.
269ibid.

70

Chapter4
4.36

AccordingtoMrGavinGuyan,GeneralManager,SafetyandIntegrity,NOPSEMA,a
descriptionoftheactivitiestobeundertakenatthefacilitywouldinclude:
theobviousonesaroundprocessingthehydrocarbonsthatyouwould
expectandunderstand,butitmightalso,forinstance,addressdiving
activitiesinrelationtoinspection;itmightaddressothermaintenance
workoritmightaddressaspectsaroundhelicopteroperationsthatare
clearlyessentialforcrewingthevessel.270

4.37

AccordingtoNOPSEMAsSafetycasecontentandlevelofdetailguidancenote:
the purpose of the facility description is to provide the factual
information regarding the physical layout, the controls and proposed
activitiesrequiredtounderstandthemajoraccidenteventsthathave
been identified and assessed in the FSA [Formal Safety Assessment],
the arrangements for managing the risks of those MAEs [Major
Accident Event] and the interactions between those risk control
measuresandthesafetymanagementsystem.271

4.38

Facilitydesignandriskassessmentareclearlyiterativeprocesses,andthisisalso
reflectedinthesafetycasedescription.Thefactualinformationinthefacility
descriptionsectionofthesafetycaseprovidesthefoundationfortheFormalSafety
Assessment(FSA)andsomeofthesafetymanagementsystem.Asthedevelopmentof
theFSAmayleadtodesignmodifications,thefacilitydescriptionalsodocumentssome
oftheoutputsoftheFSAdevelopmentprocesses.272

4.39

Thefacilitydescriptioncoversbothdesignandoperatingrangesforfacilitysystems,
withdescriptionslinkedtoperformancestandardssetforcontrolmeasuresand
demonstrationthatmachineryandequipmentisfitforitsfunction.273Accordingto
NOPSEMA,aswellasincludingtheoutputofthedesignprocess,thefacilitydescription
shouldalsodescribethedesignbasisandphilosophyofthefacility,includingthe
potentialusesofthefacilityorwhatthefacilityisphysicallycapableof.274Thefacility
descriptionalsooutlinesthephysicalsystemsinplacetoensurethatthedesign
envelopeisnotbreached,orifitis,themeasuresinplaceforbringingthesituation
backundercontrol.275

270MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p4.
271NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase
contentandlevelofdetail,GuidancenoteN04300GN0106,November2013,p16.
272ibid.
273ibid,p17.
274ibid.
275ibid.

71

Chapter4
4.40

Theimportanceofthelayoutofanoilandgasfacilityinrelationtosafetyisclearly
recognisedbyindustry.Forexample,Woodsidesubmittedthatthelayoutofany
hydrocarbonfacilityhasamajoreffectontheconsequencesofmajoreventsandon
thearrangementsrequiredforemergencyresponse.276Shelladvisedthatprocess
safetyhasbeenthesinglemostimportantguidingprinciplefordevelopingtheFLNG
facilityslayout.277

Formalsafetyassessmentidentificationofhazardsandrisks
4.41

OPGGSSr2.5(2)statesthatafacilitysafetycasemustalsodescribeindetailtheformal
safetyassessmentforthefacility(FSA).Thisassessment(orseriesofassessments)is
conductedbytheoperatorand:
(a)identifiesallhazardshavingthepotentialtocauseamajoraccident
event;and
(b)isadetailedandsystematicassessmentoftheriskassociatedwith
each of those hazards, including the likelihood and consequences of
eachpotentialmajoraccidentevent;and
(c) identifies the technical and other control measures that are
necessary to reduce that risk to a level that is as low as reasonably
practicable.

4.42

NOPSEMAsguidancenotestatesthatanFSAprovidesevidenceof:

anunderstandingofthefactorsthatinfluenceriskandthecontrols
thatarecriticaltomanagingrisk;

the magnitude and severity of the consequences arising from

majoraccidenteventsfortherangeofpossibleoutcomes;

thelikelihoodofpotentialmajoraccidentevents;

clearlinkagesbetweenhazards,themajoraccidentevents,control
measuresandtheassociatedconsequencesandrisk;and

a prioritised list of actions that reduce risks to a level that is

ALARP.278

276SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p10.
277SubmissionNo.9,ShellDevelopment(Australia)PtyLtd,11August2014,p4.
278NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase
contentandlevelofdetail,GuidancenoteN04300GN0106,November2013,p38.

72

Chapter4
4.43

TheFSAprocessisshowninFigure4.1below.
279

Figure4.1:TheFSAProcess

Steps
Identifyhazardsandpotential
causesofevents
Acknowledgeinherentcontrols
inplace
Assessconsequences
Identifyandscrutiniseexisting
controlmeasures
Conducttheinitialrisk
assessment(likelihoodof
consequence)toassessthelevel
ofrisk,takingexistingcontrols
intoaccount
Identifypotentialadditional
controls
Assessadequacyofcontrolsand
ensureallreasonablypracticable
stepstoreduceriskhavebeen
considered
IdentifyMajorAccidentEvents
(MAEs)
Conductthefinalrisk
assessmentassessthelevelof
risktakingintoaccountboth
existingcontrolsandany
additionalcontrols(identified
improvementactions)SHOW
RESIDUALRISKALARP
Prepareperformancestandards
andensureprocedures/audits
areinplace

279ibidp39.

73

Chapter4
4.44

4.45

4.46

Woodsidesformalsafetyassessmentprocess,whichitstatedisconsistentwith
Australiansafetyregulationsandindustrygoodpracticeguidancenotes,providesan
exampleofanoperatorsapproachtothisaspectofthesafetycase.280Woodside
submittedthatitsformalsafetyassessmentprocess:

systematicallyidentifieshazards;

identif[ies]andassess[es]thecontrolmeasurestobeadopted;and

iscomprisedofanumberofstandardstudiesthatmirrortherequirementsof
currentAustraliansafetyregulations.281

ThefollowingarethekeyareasaddressedinWoodsidesformalsafetyassessmentof
itsoilandgasfacilities:

Hazard identification studies (including MAE) and accompanying

hazardregisters;

Anassessmentoffireandexplosionshazards;

Detailed assessment as required to assess other MAE scenarios,

for example dropped objects, ship collision risk and structural
integrity;

An assessment of escape, temporary refuge, evacuation and

rescue provisions, including emergency response arrangements;
and

Assessment of key control measures and development of

associatedperformancestandards.282

IdentifyinghazardsthatcouldleadtoaMajorAccidentEvent(MAE)isacomplex
process,particularlyasoneMAEmayhaveseveralindependenthazardsor
combinationsofhazards,eachofwhichcouldleadtothatincident,aswellasseveral
controlmeasureswhichmayimpactononeormoreofthosehazards.283

280SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p9.
281ibid.
282ibid.
283NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase
contentandlevelofdetail,GuidancenoteN04300GN0106,November2013,p40.

74

Chapter4
4.47

Asnotedabove,r2.5(2)statesthattheriskassessmentmustbedetailedand
systematic.Thismeansthattheriskassessmentmust:

coverallhazardshavingthepotentialtocauseamajoraccidentevent;

addressallpartsofthefacility(identifiedinthehazardidentification);

addressalloftheaspectsofriskforeachMAE(nature,likelihood,consequence,
etc.);

employalogical,transparentandreproducibleprocesswhichallowsa
comparisonoftherangeofundesirableeventsandtheidentificationofthemost
importantcontributorstothefacilitysoverallriskprofile.284

4.48

WhileNOPSEMArecognisesthatuncertaintycannotalwaysbeeliminated,the
uncertaintycontainedintheriskassessment,andanyassumptionsmadedueto
uncertainty,mustbedescribedinthesafetycase.285

4.49

Notonlymusthazardsbeidentifiedandassociatedrisksconsidered,asafetycasemust
showthattherisks,individuallyorincombination,areeliminatedorreducedtoALARP.
Asnotedabove,anMAEmayhaveseveralindependenthazardsandcontrolmeasures,
andtheriskassessmentshoulddemonstrateanoperatorsunderstandingofthetotal
likelihoodofeachMAEandtherelativeimportanceofeachseparatehazardand
controlmeasure.286

4.50

Controlmeasuresincludeafacilitysphysicallayoutandelementsoftheoperators
managementsystemforthefacility,andcantakemanyformsincludingphysical
equipment,processcontrolsystems,managementprocesses,operatingor
maintenanceprocedures,theemergencyplan,keypersonnelandtheiractions.287
Thereisahierarchyofcontrolmeasures,witheliminationbeingthehighestpriority,
followedbyprevention,reductionandmitigation.288

4.51

Aswellasdiscussingthetechnicalandothercontrolmeasuresselectedtoreducerisk
toALARP,thesafetycasemustdiscussthosemeasuresconsideredbutnotselected,
andthereasonstheywerenotconsideredappropriate.289

284ibid,p41.
285ibid.
286ibid,p42.
287NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Control
measuresandperformancestandards,GuidancenoteN04300GN0271,December2012,p1.
288ibid.
289NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase
contentandlevelofdetail,GuidancenoteN04300GN0106,November2013,p43.

75

Chapter4
4.52

Aformalsafetyassessmentisacomplexprocess,onethatinvolvesunderstandingthe
linkagesbetweenthecontrolmeasureandthehazardsgivingrisetotheMAEorother
hazardousevent.290Itisessentialthatthewayinwhichacontrolworksinrelationto
theriskisunderstood.Thisincludesunderstanding:
thenature,scaleandrangeofhazardsandoutcomesthateachcontrol
measure is designed to address, and the relationship of the control
measure to the hazard, the possible MAEs or undesirable health and
safetyoutcomesandothercontrolmeasures.291

4.53

Onecommonandusefulapproachtorepresentingcomplexhazard/controls/MAE
relationshipsistouseabowtieorcauseconsequencediagram.AsFigure4.2shows,a
bowtieapproachisbasedonhavingproactivecontrolsandbarrierstoprevent
incidentsoreventsfromhappening,andreactivecontrolsandrecoveryormitigating
barriersfollowinganincident.
Figure4.2:Bowtiediagram292

4.54

Thebowtieapproachtoriskassessmentisusedbyoperatorsandregulators,andthisis
discussedfurtherbelow.

290NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Control
measuresandperformancestandards,GuidancenoteN04300GN0271,December2012,p18.
291ibid.
292ibid.

76

Chapter4
Safetymanagementsystem
4.55

OPGGSSr2.5(3)requiresthatthesafetycaseincludeadetaileddescriptionofthe
safetymanagementsystemthatdemonstratesthatthesystem:
(a)iscomprehensiveandintegrated;and
(b)providesforallactivitiesthatwill,orarelikelyto,takeplaceat,or
inconnectionwith,thefacility;and
(c)providesforthecontinualandsystematicidentificationofhazards
tohealthandsafetyofpersonsatornearthefacility;and
(d)providesforthecontinualandsystematicassessmentof:
(i) the likelihood of the occurrence, during normal or
emergency situations, of injury or occupational illness
associatedwiththosehazards;and
(ii)thelikelynatureofsuchinjuryoroccupationalillness;and
(e) provides for the reduction to a level that is as low as reasonably
practicable of risks to health and safety of persons at or near the
facilityincluding,butnotlimitedto:
(i)risksarisingduringevacuation,escapeandrescueincaseof
emergency;and
(ii)risksarisingfromequipmentandhardware;and
(f)providesforinspection,testingandmaintenanceoftheequipment
and hardware that are the physical control measures for those risks;
and
(g) provides for adequate communications between the facility and
anyrelevant[facility,vessel,aircraftoronshoreinstallation];and
(h)providesforanyothermatterthatisnecessarytoensurethatthe
safety management system meets the requirements and objects of
theseRegulations;and
(i)specifiestheperformancestandardsthatapply.

4.56

OPGGSSr2.5(3)alsonotesthatthesafetymanagementsystemmustprovideforall
hazardsandriskstopersonsatthefacility,notjustrisksofmajoraccidentevents.
NOPSEMAstressesthatallsafetymanagementsystems(SMSs)mustprovidea
managementfocusonthespecificcontrolmeasuresrequiredforsafeoperationofthe

77

Chapter4
particularfacilitywithregardtomajoraccidenteventsandoccupationalhealthand
safetyhazards.293
4.57

ThustheSMSforafacility,astheoperationalandproceduralsystemsofcontrolto
ensuresafeoperationofthefacility,istheprincipaltoolthroughwhichanoperator
achievestheoverallobjectivesoftheOPGGSSRegulations.294

4.58

ThesafetycasedescriptionoftheSMSshoulddemonstratethattheSMSis
comprehensiveandintegratedaswellasaccessible,comprehensible,documented,
facilitywide,realistic,dynamicandcontinuouslyimproving.295Acomprehensivesafety
casecaninclude:

4.59

Identifyingthecontrolmeasures;

Definingtheirperformancerequirements;

Implementingthemeasuresthemselves,includingtheprovisionof
anyassociatedtraining,etc.;

Monitoring and maintaining the control measures against the

performancerequirements;

Rectifyinganyshortcomingsthatmayarise;and

Reviewingandimprovingthecontrolmeasures.296

AnintegratedSMSrecognisesthefactthatfailuresincomplexsystemsoftenstem
fromacomplexcombinationofcircumstances,andmustensurethat:

hazardsarelinkedwithrelevantcontrolmeasures;

controlmeasuresworktogethereffectivelyasawhole;and

controlmeasuresdonotconflictwitheachother,andprovidelayersof
protection.297

293NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safety
managementsystems,GuidancenoteN04300GN1052,December2012,p16.
294ibid,p3.
295ibidp8.
296ibid.
297ibid.

78

Chapter4
4.60

AfacilitysSMSmustspecifytheperformancestandardsthatapply.Theperformance
standardsaretheparametersagainstwhichcontrolmeasuresforMAEsareassessedto
ensuretheyreducetheriskstoALARPonanongoingbasis.298ForNOPSEMA:
the performance standards are key to the effectiveness of all of the
controls.Thosearespecified,soonafacilitybyfacilitybasis,ofcourse,
thatchanges.Eachhasitsapplicationandareveryeffective,sothere
areanumberofwaysthatthesecanbetestedandassessed.299

4.61

Importantly,theSMSshouldincludecomplianceauditsagainstitsrequirementsand
systemsauditstoprovideassurancethatitisachievingintendedhealthandsafety
outcomes.300AccordingtoNOPSEMA,theSMSshouldprovideacommunication,
decisionmakingandactionprocesswhichisonthelookoutforinteractionswithinthe
systemwhichcouldcombinetocausemajoraccidentevents,orposethreatstohealth
andsafety.301

4.62

Anoperatorshouldensurethatallcriticalinformationanddecisionsareadequately
documentedtoformanaudittrailtoprovideassurancetoNOPSEMAthattheSMSis
functioningeffectivelyandisbeingimplementedinpractice.302

4.63

InrelationtoidentifyingdeficienciesinanSMS,r2.6requiresasafetycaseto
demonstrateeffectivemeansofensuringnotonlytheSMSsimplementation,butthe
continualandsystematicidentificationofdeficienciesintheSMSanditscontinual
andsystematicimprovement,whichinvolvesmonitoring,auditandreview.

4.64

TherearethreeaspectstomonitoringanSMS:

4.65

checkingthatitsactivitiesarebeingundertaken;

measuringtheperformanceofSMSelements/activities;and

comparingactualperformanceagainstperformancestandardsandtargets.303

AuditinganSMSinvolvescheckingthattheoverallestablishedSMSisunderstoodand
isbeingcompliedwithandthatthemanagementframework(inparticularthe

298NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Control
measuresandperformancestandards,GuidancenoteN04300GN0271,December2012,p1.
299MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p10.
300NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safety
managementsystems,GuidancenoteN04300GN1052,December2012,p8.
301ibid.
302ibid.
303ibid,p15.

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Chapter4
monitoringandcorrectiveactionprocesses)isbeingimplementedandiseffective.304
Therequiredchecksarethat:

activitiesoccur;

activitiesarebeingperformedtoasuitablestandard;and

systems,procedures,controlsetcareachievingthedesiredresults.305

Finding16
Asafetycaseinrespectofanoffshorepetroleumfacilitymustcontainthreemain
elements,being:
adetaileddescriptionofthefacility;
adetaileddescriptionoftheformalidentificationandassessmentofthehazards
andrisks;and
adetaileddescriptionofthecomprehensiveandintegratedhazardmanagement
system.

ReducingrisktoALARPlevelsthroughsafetyindesign
4.66

Asoutlinedabove,thereisarequirementforoilandgasprojectoperatorstoreduce
riskstoALARP,withthesafetycasebeingthemechanismthroughwhichoperators
mustdemonstratethatprocessandpersonalsafetyriskshavebeenidentified,assessed
andreducedtoALARP.

4.67

ThissameregulatoryregimeappliestoanFLNGfacility,andanoperatorofanFLNG
facilitymustcomplywiththeregulatoryrequirementstoprovideasafetycase.

4.68

AsnotedinChapter1,ShellsPreludeFLNGfacilityisscheduledtobeginoperationby
2017andWoodsidehasannouncedithascommencedbasisofdesign(BOD)workfor
itsBrowseBasinfieldsasanFLNGproject.Inlightofthis,thefollowingdiscussion
drawslargelyfromevidenceinrelationtothesetwoFLNGprojects.306

4.69

EvidencetothisInquiryshowsthatreducingriskstoALARPlevelsislargelythroughthe
conceptofsafetyindesignandthroughtheuseofthebowtieapproachtoadverse
eventpreventionandmitigation.

304ibid.Evaluatingthedegreeofcomplianceagainststandardscanalsobeincludedintheaudit
process.
305ibid.
306TheCommitteenotethespeculationthatduetotherecentfallinoilpricesWoodsidesBrowse
Basinprojectwillbedelayed.

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Chapter4
Safetyindesign
4.70

BasedonevidencegatheredthroughoutthisInquiry,theindustryviewisthatifrisk
reductiontoALARPlevelsistobeachieved,ensuringsafetythroughhazardandrisk
managementneedstobeincorporatedintothedesign;thatis,safetyisinherenttothe
project,beginningwithitsdesignphase.

4.71

Forexample,ExxonMobilexplainedthatithasanOperationsIntegrityManagement
System(OIMS)foraddressingrisksandapplicationoftheOIMSFrameworkisrequired
acrossallofExxonMobil,withparticularemphasisondesign,constructionand
operations.307WhiledevelopmentoftheScarboroughfieldisinitsinitialstages,
ExxonMobilsearlyprojectactivitieshavebeenguidedbytwoelementsofitsOIMS
Framework:RiskAssessmentandManagement;andFacilitiesDesignandConstruction.
MrLukeMusgraveadvisedthatExxonMobils:
preliminary facility concept design [for Scarborough] has been
underpinned by a range of technical studies including a close
understandingofmetoceanandotherenvironmentalconditionsatthe
locationoftheScarboroughfield,butfurtherworkisstilltobedone,
which will support futuredevelopmentof a detailed risk assessments
and emergency response plans along with the facility safety cases
requiredbytherelevantlegislation.308

4.72

AccordingtoWoodside,'inherentsafetydesignisanapproachtodesigninwhichthe
hazardsassociatedwithmaterialsandoperationshavebeenreducedoreliminated'
throughriskmanagementcontrolsidentifiedandselectedbasedonthefollowing
hierarchy:

Eliminationofriskbyremovingthehazard;

Substitutionofahazardwithalesshazardousone;

Preventionofpotentialevents;

Separationofpeoplefromtheconsequencesofpotentialevents;

Controlofthemagnitudeandfrequencyofanevent;

Mitigationoftheimpactofaneventonpeople;and

Emergencyresponseandcontingencyplanning.309

307SubmissionNo.1fromExxonMobil,10July2014,p1.
308MrLukeMusgrave,VicePresident,LNG,ExxonMobil,TranscriptofEvidence,10November2014,
p2.Seealso:SubmissionNo.1fromExxonMobil,10July2014,p3.
309SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p8.

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Chapter4
4.73

ThishierarchyofpreventionprinciplesispromotedbyNOPSEMAinitsALARPguidance
noteandhasbeenadaptedfromtheHealthandSafetyExecutive,UnitedKingdom
(HSE)regulatoryregime.310

4.74

Woodsidesubmittedthat'eliminatinghazards,followedbytheimplementationof
preventionmeasuresisthemosteffectiveapproachtominimisingriskinadesignand
achievinginherentlysaferoutcomes'.311

4.75

WoodsidehasdevelopedandappliedfiveinherentlysaferdesigngoalstoitsBrowse
project.ThesearesetoutinFigure4.3below.
Figure4.3:Woodsidesinherentlysaferdesigngoals312

4.76

Woodside's'internalprocessesrequireearlydevelopmentofadesignsafetycase
duringthedevelopphaseofaprojecttoprovideinternalassurancetokeystakeholders
thatriskscanbemanaged'.313AccordingtoWoodside,thedesignsafetycaseallowsthe
companyto'demonstratethatthehealthandsafetyrisksaretolerableandaslowas
reasonablypracticable(ALARP)'.314

310NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,ALARP,
GuidancenoteN04300GN0166Revision5,June2014,p5.Referalso:HSEinformationsheet
2/2006.
311SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p8.
312ibid.
313ibid,p9.
314WoodsideEnergyLtd,SubmissionNo.15,1December2014.See:BrowseFLNGdevelopment.
Healthandsafetyindesign,ZCard.

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Chapter4
4.77

Shellalsostressedtheimportanceofsafetyindesign,statingthatShell'sdesignprocess
is'afundamentaldeeplyheldprocessintermsofdeliveringsafetyinthebasecasefor
ourselvesandanyoneelse'.315ThecompanysGeneralManagerforHealth,Safety,
SecurityandEnvironment(HSSE),MrAndrewDoherty,describedShell'sapproachto
safetyindesignasfollows:
In regards to demonstrating safety in the design case for ALARP, we
evaluatethemajorhazardsandwepresentthroughthedesigncasea
demonstration that we have managed these risks to as low as
reasonably practicable and we also provide through the multiple
reviews and assessments a reassurance that indeed those things are
beingtestedthoroughlyaspartoftheprocess.316

4.78

MrIanJewitt,Shell'sFLNGHSSETeamLeader,alsoadvisedthatthecompany'sFLNG
safetyphilosophieswereidentifiedin2003andsafetywasincorporatedintothedesign
andtestedwithregulatorsandorganisationssuchasLloyds.317

4.79

DuringitsvisittotheMaritimeResearchInstituteNetherlands(MARIN)testingfacility
andShellintheNetherlands,theCommitteelearnedoftheiterativenatureofthe
safetyindesignprocess.Thiswillbediscussedbelowinrelationtoindividualsafety
issuesconsidered.

4.80

Asnotedabove,companiesoftenuseabowtieapproachtoriskassessmentand
identifyinghazardsandMAE's.Woodside'sdesignsafetycasebowtieisprovidedat
AppendixSeven.Thisidentifies12MAEsanddescribesthepreventativebarriersto
stoptheeventfromhappeningandthemitigativebarrierstolessentheevent's
consequences.

4.81

Theinformationgeneratedbyanoperator'ssafetyindesignprocessescanthenbe
incorporatedintoitssafetycaseforsubmissiontotheregulator.AsShellhas
progressedthePreludesafetycaseitsapproachprovidesausefulexample.

4.82

TakingadvantageofNOPSEMA'sEarlyEngagementSafetyCaseAssessmentPolicy,
duringFrontEndEngineeringDesign(FEED)forPrelude,ShellprovidedNOPSA(now
NOPSEMA)with'asequenceofdeliverablesdetailingtherigorousapproachtosafetyin

315MrAndrewDoherty,GeneralManager,HSSE,ShellAustralia,TranscriptofEvidence,
12November2014,p3.
316ibid.
317MrIanJewitt,FLNGHSSETeamLeader,Shell,TheHague,CommitteeBriefing,22July2014.

83

Chapter4
design'.318Thesedeliverablesresultedinthedesignsafetycasewhich'includedthe
DesignIntegrityandALARPdemonstrationofthePreludeFLNGFacility'.319
4.83

DuringtheCommitteesmeetingwithShellintheNetherlands,MrIanJewittexplained
thatthesafetyindesignapproachforPreludehasallowedShelltosummarisethe
identificationandassessmentofrisks,andunderstandhowtocontroltherisk,andhow
torecoverthesituation.Thisincludesthose'normal'hazardsforanyLNGfacility,such
ashelicopteraccidents,shippingaccidents,environmentalspillsandothersimilar
generalrisks,togetherwithrisksthatarepeculiartoFLNGfacilities,suchasthose
associatedwithhavingprocessingtrainsinrelativelycloseproximitytoliving
quarters.320

4.84

ShelladvisedthattherearethreephasestothesubmissionofthePreludeFLNGsafety
casetoNOPSEMA.Thefirstphase,relatingtosubseainfrastructureinstallation,was
submittedinApril2014andacceptedinSeptember2014.Thesecondphasewillbethe
hookupandcommissioning.Thethirdphasespecifiesthetechnicalandoperational
integritycontrolsreadyforstartupandoperatephase.321

4.85

AsthediagramatAppendixSevenshows,thereareanumberofMAEsconsidered
duringthedesignphaseofanFLNGfacilityandbothpreventativeandmitigative
barriersdevelopedtoreducerisktoALARPlevels.Theseincludelossofcontainmentof
hydrocarbons,lossofcontrolofsuspendedload,lossofmarinevesselseparation,loss
ofstructuralintegrity,lossofstabilityandposition,lossofcontrolledflight,
occupationalhazardsandaccommodationfire.

4.86

Basedontheirsafetyindesignprocess,WoodsideandShelladvisedthattheyhave
developedparticulardesignsolutionstoreducerisklevelstoALARP,including,butnot
limitedto,facilitylayout,hulldesignandtheturretmooringsystem.Thesedesign
solutionsarediscussedinChapter5.
Finding17
Assafetyiscrucialtoanyoffshorepetroleumproject,reducingrisklevelstoaslowas
reasonablypracticablerequireshazardandriskmanagementtobeincorporatedinto
thedesignphaseofaproject.

318SubmissionNo.9,ShellDevelopment(Australia)PtyLtd,11August2014,p9.NOPSEMAsEarly
EngagementSafetyCaseAssessmentPolicyisdiscussedinthesectionontheregulators
assessmentofsafetycases.
319ibid.InaccordancewithNOPSEMApolicy,thiswasbeforetheFinalInvestmentDecision(FID)
wastaken.
320MrIanJewitt,FLNGHSSETeamLeader,Shell,TheHague,CommitteeBriefing,22July2014.
321SubmissionNo.9,ShellDevelopment(Australia)PtyLtd,11August2014,p9.Seealso:
MrAndrewDoherty,GeneralManager,HSSE,ShellAustralia,TranscriptofEvidence,
12November2014,p3.

84

Chapter4

AssessmentofthesafetycasebyNOPSEMA
4.87

Asnotedpreviously,afacility,includinganFLNGfacility,cannotbeconstructed,
installed,operated,modifiedordecommissionedwithoutasafetycaseinforceforthat
stageinthelifeofthefacility.322

4.88

UndertheOPGGSSRegulations,NOPSEMAmustassessarangeofdocumentsprovided
byproponentsordutyholders,withthesepermissioningdocumentsincludingsafety
cases,welloperationsmanagementplans(WOMPs)andenvironmentplans,including
oilspillcontingencyplans.323

4.89

UnderOPGGSSr2.24,ifanoperatorwantstohaveasafetycaseacceptedforafacility
thatsafetycasemustbesubmittedtoNOPSEMAforassessmentandadecisionmade
astowhetherthesafetycaseisacceptedorrejected.Asdiscussedabove,operators
arerequiredbyCommonwealthlegislationtoreducerisktoALARP.Inadditiontothis,
undertheOPGGSSRegulationsanoperatormustcommittoongoingimprovementof
allaspectsoftheoperatorssafetymanagementsystemand,undertheOffshore
PetroleumandGreenhouseGasStorage(Environment)Regulations2009(OPGGSE
Regulations),operatorsmustcarryoutactivitiesinamannerconsistentwiththe
principlesofecologicallysustainabledevelopment.324

Safetycaseassessment
4.90

MrGavinGuyan,GeneralManager,SafetyandIntegrity,NOPSEMA,describedthe
Authoritysassessmentprocessasfollows:
Our assessment process is to assess the documentation received
against the contents requirements of the regulations. The principal,
butnottheonly,criteriaforacceptanceorrejectionofthesafetycase
iswhetherornotthesafetycasemeetscontentsrequirementsofthe
regulations, which go to identifying the hazards and risks and a

322NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase,nd,
np.Availableat:http://www.nopsema.gov.au/safety/safetycase/].Accessedon11December
2014.
323NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Assessment
policy,PolicyNo.N04000PL0050,28February2014,p1;andAustralianNationalAuditOffice,
EstablishmentandAdministrationoftheNationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthority,CommonwealthofAustralia,Canberra,2014,p47.Note:Well
operationsmanagementplansarerequiredbys5.04oftheOffshorePetroleumandGreenhouse
GasStorage(ResourceManagementandAdministration)Regulations2011;environmentplans
arerequiredbys.6oftheOffshorePetroleumandGreenhouseGasStorage(Environment)
Regulations2009.
324NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Assessment
policy,PolicyNo.N04000PL0050,28February2014,p1.

85

Chapter4
demonstration that those risks have been reduced to as low as is
reasonablypracticable.325
4.91

NOPSEMAsSafetycaseassessmentpolicydescribesitsthreepartassessmentofthe
safetycaseagainsttheOPGGSSregulations.Part1involvesNOPSEMAassessing
whether,ingeneralterms,thesafetycaseisappropriatetothefacilityandthe
activitiestobeconductedatthefacility[]andcomplieswithallitemsrequired[]for
eachstateofthelifeofthefacilityinrespecttowhichthesafetycaseissubmitted.326

4.92

Part2oftheassessmentprocessiscomprisedofthreesubparts.Firstisadetailed
assessmentofspecificregulationsthatNOPSEMAwillalwaysassess:

whethertheoperatorsformalsafetyassessmentidentifiesallhazardsthat
potentiallycouldcauseanMAE,isdetailedandsystematicinitsassessmentofthe
risksassociatedwiththosehazards,andidentifiesthecontrolmeasuresnecessary
toreducerisklevelstoALARP(asperOPGGSSr2.5(2));and

whetherthedescriptionofthesafetymanagementsystemshowsthatitis
comprehensiveandintegrated(asperOPGGSSr2.5(3)(a));andprovidesforhealth
andsafetyriskstobereducedtoALARPlevels(asperOPGGSSr2.5(3)(e)).

4.93

NOPSEMAspolicyisthatasitisimpracticaltoassesseveryaspectofasafetycasein
detailinrelationtoOPGGSSrr2.5(2),2.5(3)(a)and2.5(3)(e),thisisdoneaspartofthe
topicbasedsamplingcomponentoftheassessment,whichisoutlinedfurtherbelow.

4.94

Thisgeneralassessmentofspecificregulationsalsoincludesanassessmentofthe
requirementsforeffectiveconsultationwithmembersoftheworkforceinrelationto
thedevelopmentofthesafetycase(OPGGSSr2.11(1)(a))andinrelationtoworkforce
awarenessoftherisksandhazardstheymaybeexposedtoonthefacility(OPGGSS
r2.11(1)(b)).Thisissueofworkforceconsultationisalsodiscussedfurtherbelow.

4.95

Aswellasthisgeneraldetailedassessmentofspecificregulations,thesecondpartof
NOPSEMAsassessmentofsafetycasesalsoinvolvessamplingofselectedtopics.This
appliestonewsafetycasesubmissionsandfiveyearlyrevisions,andinvolvesa
detailedassessmentofthreeormoretopicareas,withatleasttwoofthesetopic
areas,wherepossible,beingfocusedonparticularMAEs.327

325MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p4.
326NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase
assessment,PolicyNo.N04300PL0052,December2014,p3.
327ibid,p4.

86

Chapter4
4.96

ThescopeofNOPSEMAstopicbasedassessmentcomponentis,wherepossible:
informedbyrelevantpriorassessments,inspectionsandinvestigations
and consider factors such as (but not limited to): levels of risk,
uncertainty,useofnoveltechnology,andthetimingandgeographical
locationofparticularactivities.328

4.97

Forfacilitiesthatcanbedisconnectedfromtheproductionriser,NOPSEMA,in
conjunctionwiththeAustralianMaritimeSafetyAuthority(AMSA),alsoassesses
whetherthecommandstructurecomplieswithOPGGSSr2.8.329

4.98

MrGuyanexplainedthatanumberofmethodswereavailabletoNOPSEMAtoassess
whetherariskhasbeenreducedtoALARP.330Inessence,bothqualitativeand
quantitativeassessmentsofriskaremade,thentheriskisreduceddowntoalevel
whereanyfurtherreductionwouldrequireagrosslydisproportionateexpenditureof
resourcestoachievethatmatchedincrementofreduction.331

4.99

Thestartingpointintheprocessinvolvesanassessmentofthecrediblerisks,and
considerationofthelikelihoodoftheriskeventuatingandthepossiblefeasiblecontrols
thatcanbeputinplace.Thisincludesconsiderationofeliminationoftherisk,
engineeringcontrols,andadministrationandproceduralcontrols.332

4.100

AccordingtoMrGuyan,thefollowonquestionsbecomewhatisgrossly
disproportionateinrelationtoanyriskreductionandthatbecomesamatterofwhat
actuallyisfeasibleandatwhatstageinthelifeofthefacility.333
Finding18
UndertheOffshorePetroleumandGreenhouseGasStorage(Safety)Regulations2009
(Cth),theNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authorityisresponsibleforassessingasafetycasetodeterminewhethertheidentified
hazardsandriskshavebeenreducedtoaslowasreasonablypracticable.

EarlyEngagementSafetyCase
4.101

TheOPGGSSRegulationsapplytooffshoreoilandgasfacilitiesregardlessofwhether
thetechnologyisnewornot,withNOPSEMAprocessesdevisedaroundadesign
alreadybeingcompleteforafacility.Itmayormaynotalreadybebuilt;however,the

328ibid.
329ibid.
330MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p7.
331ibid.
332ibid.
333ibid.

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Chapter4
designisavailableand,therefore,youcangosomewaydowntheroadandlookatthe
standardsthathavebeenorwillbeapplied.334
4.102

Clearlythisdoesnotaddressissuesthatmayhavearisenduringthedesignstage,and
thesemaybeimportanttoNOPSEMAsassessmentofaprojectproponentsreduction
ofriskstoALARP.Bywayofanexample,MrGuyannotedthatNOPSEMAspolicyto
requireavalidationforaproposedFLNGfacilityssafetycase:
doesnotaddressanyoftheconceptualissuesthatmightariseduring
consideration of different designs. That may be at the fundamental
levelofwhattypeoffacilityshouldbeusedhereand,havingdecided
that,whatshouldthelayoutbeandwhatarethekeyfactorsthose
types of things. It is difficult to get to that within the current
regulations.335

4.103

Therefore,theearlyengagementsafetycase(EESC)policywasdevelopedasa
mechanismwherebyNOPSEMAcould:
engage with an operator coming with a new technology facility in
particularwhereNOPSEMAcouldprovideadvicetotheproponentand
haveanexchangeaboutthelikelyrisksandthethingsthatneedtobe
considered in the design of the facility in the context of how these
wouldneedtobeaddressedinasafetycasethatcouldbeacceptedby
NOPSEMAatsomepointinthefuture.336

4.104

AnEESCsubmissionisavoluntarysubmissiontoNOPSEMAofasafetycaseforthe
operationsstageofaproposedoffshorepetroleumorgreenhousegasstoragefacility.
AnEESCissubmittedsoonaftertheprojectconceptselectionstageandpriortoaFinal
InvestmentDecisionismadeand/ordetaileddesignforthefacilityiscommenced.337

4.105

ForNOPSEMA,theobjectivesofsubmissionandassessmentofanEESCareasfollows:

to realise potential benefits to the workforce, in terms of lower

risk, of early regulatory engagement with an operator of a
proposedfacility;

toprovideafacilityoperatorwithamechanismforregulatoryrisk
mitigation prior to making a Final Investment Decision or
commencingdetaileddesign;and

334ibid,p4.
335ibid.
336ibid,pp45.
337NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Early
EngagementSafetyCaseAssessment,PolicyNo.N04050PL0755,February2012,p2.

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Chapter4

to provide NOPSEMA with the opportunity to challenge an

operatorsconceptselection,designandconsiderationofinherent
safetyatanappropriatelyearlystageinafacilityslifecycle.338

4.106

Asnotedabove,duringtheFEEDstageforPrelude,ShellprovidedNOPSEMAwitha
seriesofdeliverablesasevidenceofitssafetyindesignapproach.Thus,indoingso,
ShelltookadvantageofNOPSEMAsEESCpolicy.

4.107

NOPSEMAconfirmedthattheAuthorityhasengagedintheEESCprocesswithShellin
relationtothePreludefacility.AccordingtoMrGuyan,ShellprovidedNOPSEMAwith:
submissions that were essentially safetycase submissions, but in the
context that because the facility was not designed and was not
completeandallthematerialthatisrequiredbytheregulationstobe
within the safety case that could be accepted by NOPSEMA, it was
always understood that the outcome would be an exchange of
informationidentifyingareasthatwouldrequireworktobeincludedin
any future submission of a safety case, which has not yet been
received.339

4.108

DuringNOPSEMAsEESCprocesswithShelloverthepasttwoyears,theAuthorityhas
receivedsubmissionsinfoursignificanttranchesandhasprovidedfeedbackinthe
formofquestionsonsome180issues,askingforinformationonhowShellintendsto
addressthem.340Throughthisprocessanumberofissueshavebeenresolvedand
somehavebeen:
parked for further study and analysis, but all of which have been
identified for inclusion in the future safety case. I suggest that the
engagementhasbeensubstantialanddocumented.341

4.109

InworkingtoreducerisklevelstoALARP,theEESCprocessallowstheoperatorand
NOPSEMAtocontemplatetherisksbeforeafacilityhasbeennotonlydesignedbut
builtandapplicationreadytooperate.342Clearly,consideringchangesatthedesign
stageismuchlessexpensivethanleavingthisuntilmuchlaterintheprocess.Thus,
NOPSEMAsEESCsubmissionprocess,asadesignnotificationprocess,hasconsiderable
benefittooperatorsandprojectproponents.

338ibid.
339MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p6.
340ibid.
341ibid.
342ibid,p7.

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Chapter4
Finding19
TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthoritys
EarlyEngagementSafetyCasepolicyallowstheAuthoritytoengagewithanoperator
proposinganewtechnologyfacilityduringthedesignprocessand,thus,contributeto
thesaferdesignoftheproposedfacility.
Finding20
ShellengagedwiththeNationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthoritythroughanEarlyEngagementSafetyCaseprocessduringthe
FrontEndEngineeringandDesignstageofthePreludefacility.

Validation
4.110

ThethirdareaofNOPSEMAssafetycaseassessmentisvalidation.UnderOPGGSS
r2.4(1),NOPSEMAmayrequiretheoperatorofafacilitytoprovideavalidationin
relationtoaproposedfacilityorasignificantchangetoanexistingfacility.However,it
isNOPSEMApolicytorequestavalidationinrespectofallproposedfacilitiesandall
significantchangestoafacility.343ThiswasconfirmedbyMrGuyan,whostated:
theregulationssaythatNOPSEMAmayrequestavalidationinrelation
to a facility. As a matter of policy, NOPSEMA will always request a
validationinrelationtoanewfacility.344

4.111

Foraproposedfacility,underOPGGSSr2.40(2),avalidationis:
a statement in writing by an independent validator in respect of the
design, construction and installation (including instrumentation,
process layout and process control systems) of the facility, to the
extent that these matters are covered by the scope of the validation
agreedbetweentheSafetyAuthorityandtheoperator.

4.112

ThevalidationforaproposedfacilitymustassureNOPSEMAthatthedesign,
constructionandinstallation(includinginstrumentation,processlayoutandprocess
controlsystems)ofthefacilityincorporatemeasuresthatarenotonlyconsistentwith
theformalsafetyassessmentforthefacility,butwillprotectthehealthandsafetyof
personsatthefacility.345

4.113

Forasignificantchangetoanexistingfacility,r2.40(3)providesthatavalidationisa
statementinwritingbyanindependentvalidatorinrespectoftheproposedchange,to

343NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Validation,
PolicyNo.N04200PL0286,June2013,p1.
344MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p4.Emphasis
added.
345r2.40(4)(a)OPGGSSRegulations.

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Chapter4
theextentrequiredbythescopeofthevalidationagreedbetweentheSafetyAuthority
andtheoperator.ThisvalidationmustalsoassureNOPSEMAthatafteranychanges,
measureswillbeincorporatedthatwillprotectthehealthandsafetyofpersonsator
nearthefacility.346
4.114

AccordingtoNOPSEMAsValidationpolicyvalidationdealswithhardware,firmware
andsoftwarewhereasthesafetycasepertainstothefacilityandtheactivities
conductedatthefacility.347AsMrGuyanexplained:
the definition of a validation is specified in the regs and it goes to
standards that will protect the health and safety of personnel at the
specific facility. However, it does not address any of the conceptual
issuesthatmightariseduringconsiderationofdifferentdesigns.348

4.115

AssurancetoNOPSEMAintheformofavalidationformspartofthesafetycase
acceptancecriteriaand,therefore,mustbecompletedandprovidedtoNOPSEMA
priortotheendofthesafetycaseassessmentperiod.349
Finding21
TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
mayrequireafacilityoperatortoprovideawrittenstatementbyanindependent
validatorinrelationtothedesign,constructionandinstallationoftheproposedfacility
oranysignificantchangestoanexistingfacility.
Finding22
ItisaNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
policytoalwaysrequestawrittenindependentvalidationinrelationtoanewfacility.

Fairandtechnicallycompetentassessment
4.116

Regulation2.26oftheOPGGSSRegulationsprovidesthatNOPSEMAmustaccepta
safetycaseifitisappropriatetothefacilityandtotheactivitiesconductedatthe
facility,anditcomplieswiththerelevantsectionsoftheregulations.350Thismeans,in

346r2.40(4)(a)OPGGSSRegulations.Avalidatormustmeetcriteriaspecifiedintheregulationsand
theoperatormustdemonstratethevalidatorselectionprocess,thevalidatorsindependence
andcompetence,andthevalidatorsfreeaccesstodata.
347NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Validation,
PolicyNo.N04200PL0286,June2013,p1.
348MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p4.
349NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Validation,nd,
np.Availableat:http://www.nopsema.gov.au/safety/safetycase/validation].Accessedon
11December2014.
350NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Whatisasafety
case,nd,np.Availableat:http://www.nopsema.gov.au/safety/safetycase/whatisasafety
case/].Accessedon17December2014.

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Chapter4
effect,thatforasafetycasetobeacceptedbyNOPSEMA,theAuthoritymustbe
satisfiedthatthearrangementssetoutinthedocumentdemonstratethattherisks
willbereducedtoaslowasisreasonablypracticable(ALARP).351
4.117

Workingonthefundamentalassumptionthattheinformationinthesafetycaseis
correct,theleadassessorwillmakejudgementsontheadequacyofthesafetycase
basedonthecontentofthesafetycasesubmissionand,whereapplicable,further
writteninformationthatmayberequestedbyNOPSEMAduringthecourseofthe
assessment.352

4.118

Twoimportantpointsneedtobenotedhere.First,NOPSEMAsassessmentdoesnot
allowtheAuthoritytosaywhetherornotthefacilityistotallysafeorthatthereareno
risks.WhatisdoesallowisforNOPSEMAtomakeanassessmentonwhetherthe
operatorhasmeasuresinplacethatreducerisk,particularlyrisksassociatedwith
MAEs,toALARPlevels.

4.119

Thisisalsotheapproachtakeninotherjurisdictions.Forexample,asHSEadvised,the
UKgovernmentacceptsthedemonstrationofsafety,butdoesnotcertifythesafetyof
thetechnology.353IntheNetherlands,companiesarealsoresponsibleforsafety,andto
getalicence,andbeforebeingallowedtooperate,theymustdemonstratetheirsafety
totheStateSupervisionofMines.354Similarly,thePetroleumSafetyAuthorityNorway
advisedthatitsbasicprincipalisthatgovernmentisnotresponsibleforsafety;safetyis
theresponsibilityofcompanies.ThismeansthatratherthanthePetroleumSafety
AuthorityNorwayapprovinganactivityortechnology,itconsentstoactivities,with
consentmeaningthatsomethingmaybeusedonafacility.Thesafetyresponsibilityfor
assessedactivitiesremainswiththecompany.Consentsforaseabedinstallation,the
useofinstallationsormodifications,forexample,aregiventooperatorsatvarious
milestonesandsignaltheAuthoritysconfidenceintheoperatorsabilitytomanagethe
particularactivity.355

351Regulation2.26(b)requiresthesafetycasetocomplywithSubdivisionsA,BandCofDivision1of
theRegulationsforeachstageinthelifeofthefacility;andr2.26(c)requiresthesafetycaseto
complywithSubdivisionDofDivision1oftheRegulations.TheOPGGSSRegulationsalsoprovide
forNOPSEMAtorequestmoreinformationfromanoperator,fortherejectionofasafetycase
andforthesubmissionofarevisedsafetycase.
352NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase
assessment,PolicyNo.N04300PL0052,December2014,p2.
353UKHealthandSafetyExecutive,CommitteeBriefing,Aberdeen,Scotland,28July2014.
354StateSupervisionofMines,MinistryofEconomicAffairs,TheHague,theNetherlands,
CommitteeBriefing,21July2014.
355PetroleumSafetyAuthorityNorway,CommitteeBriefing,Stavanger,Norway,23July2014.

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Chapter4
4.120

Second,ifNOPSEMAistoconducttechnicallycompetentassessmentsandmakefair
conclusions,itmusthaveappropriatelyskilledstaff.AccordingtoNOPSEMAs
Assessmentpolicy,theassessmentprocessistransparentand:
each assessment will be conducted by an assessment team with the
appropriate skills and competencies. The assessment team will have
(or have access to) an appropriate combination of technical and
operationalexpertiseandexperiencetoperformtheirallocatedroles.
In addition, all assessment team members will receive training to
ensure that they are competent in the use of NOPSEMA core
processes.356

4.121

MrStuartSmith,NOPSEMAsChiefExecutiveOfficer,advisedthat:
it is important that we [NOPSEMA] have deep expertise within the
organisation, but that is not to say that we just rely on our own
expertise; if we are seeking input from others we need to be able to
understandwhattheyaresayingatatechnicallevelaswellasamore
superficial level. We see it as critical that we have and maintain a
greatdepthofexpertise,andwebelievewehavethat.357

4.122

MrGuyanconfirmedthatintheexpertregulatormodelthatAustraliahasinplace,itis
essentialthattheregulatorunderstand[s]therisksandwhatALARPlookslike.358
AccordingtoMrGuyan,inlinewithNOPSEMApolicy,theAuthorityhasrecruited
industrypractitionersandexpertsfirstandforemost.359MrGuyandescribed
NOPSEMAsexpertiseasfollows:
Typically we have people with 20plus years experience in industry
roles. They are almost without exception tertiary educated or with
equivalent professional qualifications and then we go to an
understanding of the legislation. So the technical expertise is
paramountit is primary. For example, we have 10 or 12 marine
personnel who have experience as foreigngoing masters, masters of
FPSOs,chiefsofengineersoftankersandFPSOs,navalarchitectsand
soonacrosstheboard.ExmarinesurveyorsfromDNVandAMSA,for
example, are in that group. When you consider that in terms of
producing vessel facilitiesvessel facilities producing hydrocarbons

356NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Assessment,
PolicyNo.N04000PL0050,February2014,p2.
357MrStuartSmith,ChiefExecutiveOfficer,NationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthority,TranscriptofEvidence,12November2014,p5.
358MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p5.
359ibid.

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Chapter4
right now there are roughly a dozen in the regime. We have a very
highratioofexpertinspectorsversusthenumberoffacilitiesthatthey
needtolookafter.Similarlywithprocess,structuralandpipework,we
have the same approachindustry experience first and foremost,
often at very senior levels. Within drilling we typically have drilling
superintendents with manager level people who again have 20plus
years experience and are tertiary educated. Absolutely that is the
model.360
4.123

AstheCommitteenotedinitsMay2014reportontheeconomicimpactofFLNGonthe
WAeconomy,aswellasthethreeLNGplantscurrentlyoperationalinAustralia(the
NorthWestShelf,PlutoandDarwinLNGplants)afurthersevenarecurrentlyunder
construction.361Notonlyhasthiscreatedahighdemandforskilled,technicallyexpert
workers,governmentauthoritiessuchasNOPSEMAneedtocompetewiththeprivate
sectorforexperiencedprofessionals.

4.124

Giventhehigherwagesandsalariesintheresourcessector,thiscanmakeitdifficultfor
governmenttoemployandretainappropriatelyqualifiedandexperiencedstaff.
However,asMrSmithexplained,theCommonwealthgovernmenthasgiven
exemptionsinregardforrecruitmentsothatwecanpaythesortofmoneyrequiredto
attracttherightexpertise.362

4.125

Thisissueofrecruitingandretainingappropriatestaffisalsofoundinother
jurisdictions.TheStateSupervisionofMinesintheNetherlandsadvisedthatitneeds
experiencedstaffwiththerightskillstoassessprojectproponentssafetycases.The
StateSupervisionofMineshasfounditdifficulttogetappropriateinspectoratestaffas
italsoneedstocompetewithhighsalariesintheprivatesector.363Similarly,the
NorwegianPetroleumDirectorateadvisedtheCommitteethatbecauseoftheneedto
hireexpertsandtocompetewiththeprivatesector,ithasobtainedMinistry
permissiontogobeyondthenormalpublicservicesalary.364
Finding23
TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthoritys
acceptanceofafacilityssafetycasedoesnotcertifythesafetyofthefacility.Rather,it
representstheAuthoritysacceptancethattheoperatorhasmeasuresinplacethat
reducerisktolevelsthatareaslowasreasonablypracticable.

360ibid.
361EconomicsandIndustryStandingCommittee,TheeconomicimpactoffloatingLNGonWestern
Australia,LegislativeAssembly,ParliamentofWesternAustralia,Perth,2014,p6.
362MrStuartSmith,ChiefExecutiveOfficer,NationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthority,TranscriptofEvidence,12November2014,p5.
363StateSupervisionofMines,MinistryofEconomicAffairs,TheHague,theNetherlands,
CommitteeBriefing,21July2014.
364NorwegianPetroleumDirectorate,CommitteeBriefing,Stavanger,Norway,23July2014.

94

Chapter4
Finding24
TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
usestheexpertregulatormodel,whichmakesitessentialfortheAuthoritytoemploy
industrytrainedexpertswiththeappropriateskillsandcompetenciestoallowthemto
conducttechnicallycompetentassessmentsanddrawfairconclusions.

Feeforserviceassessment
4.126

NOPSEMA,asAustraliasindependentoffshorepetroleumregulator,isfundedona
costrecoverybasisthroughleviesandfeespaidbyindustry.365Theseleviesandfees
areprovidedforunders685oftheOPGGSAct,r60oftheOffshorePetroleumand
GreenhouseGasStorage(RegulatoryLevies)Act2003(Cth)andtheOffshorePetroleum
andGreenhouseGasStorage(RegulatoryLevies)Regulations2004(Cth).366

4.127

Thesystemoffeesandleviescoversregulatoryactivities,includingtheassessmentof
safetycases,welloperationsmanagementplansandenvironmentplans,andthe
conductofinvestigations.

4.128

MrStuartSmithadvisedthatNOPSEMAisfullycostrecoveredanddoesnotreceive
fundingfromgovernment,forinstance.367Usingalevymodelthatissimilartothat
providedforinWesternAustraliasstatemininglegislation,NOPSEMAhasthecapacity
undertheOffshorePetroleumandGreenhouseGasStorage(RegulatoryLevies)Act
2003(Cth)toapplyafeeforserviceforsomespecificservices,includingifithappens
tobefromagovernmententityaswellasfromanindustryentity,buttheyarefor
specificservices.368AsMrGuyanexplainedit,leviesarechargedtoanoperatorofa
facilityinrelationtothefacilityitselfandinrelationtothesafetymanagement
systemEffectively,thereisasafetycaselevyandafacilitylevyamount.369MrGuyan
alsoconfirmedthatleviesarecategorisedaccordingtoactivities,soadifferentlevyis
chargedtotheoperatorofadrillingrig,forexamplecomparedtotheoperatorofa
productionfacility.370

4.129

AccordingtotheAustralianNationalAuditOffice(ANAO)2014performanceaudit
reportontheestablishmentandadministrationofNOPSEMA,forthe20122013

365NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,About
NOPSEMA.Costrecoveryandlevies.Availableat:http://www.nopsema.gov.au/about/cost
recoveryandlevies/.Accessedon13January2015.
366NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Costrecovery
impactstatement1January2014to31December2015,p23.
367MrStuartSmith,ChiefExecutiveOfficer,NationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthority,TranscriptofEvidence,12November2014,p6.
368ibid.
369MrGavinGuyan,ActingChiefExecutiveOfficer,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,7April2015,p12.
370ibid.

95

Chapter4
financialyeartheAuthorityreceived$24.5millioninrevenue,371coveringNOPSEMAs
RegulatoryoversightofSafetyCases,WellOperationsManagementPlansand
EnvironmentalPlanscoupledwitheffectivemonitoring,investigationand
enforcement.372Forthe20132014financialyear,NOPSEMAsfeesandlevyrevenue
was$29million,withanoperatingexpenditureof$31.8million.373
4.130

NOPSEMAreceivedatotalof468submissionsin20122013and389in20132014.
Theseincludedthefollowing:

areatobeavoided(ATBA)accessapplication

applicationforapprovaltoundertakewellactivity(AAUWA)

divingsafetymanagementsystem(DSMS)

environmentplan(EP)

petroleumsafetyzone(PSZ)accessapplication

PSZapplication

safetycase

scopeofvalidation

welloperationsmanagementplan(WOMP)

divingstartupnotice.374

371AuditorGeneral,AustralianNationalAuditOffice,Establishmentandadministrationofthe
NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Commonwealth
ofAustralia,Canberra,2014,p20.
372NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Annualreport
201314,CommonwealthofAustralia,2014,p75.
373ibid,p30andp46.
374NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Annualreport
201314,CommonwealthofAustralia,2014,p26.

96

Chapter4
4.131

Table4.1belowprovidesthenumbersofsubmissionsreceivedbyNOPSEMAfornew
safetycases,revisedsafetycasesandscopeofvalidationassessments.
375

Table4.1:SafetycaserelatedsubmissionsreceivedbyNOPSEMA

SubmissionType

20122013

20132014

Safetycasenew

24

19

Safetycaserevised

89

68

Scopeofvalidation

50

40

Total

163

127

Finding25
TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
operatesonacostrecoverybasis,withindustrypayingfeesfortheAuthoritysservices.
Finding26
TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority
monitorsanoperatorscontinuedcompliancewithafacilityssafetycasethrougha
systemofplannedinspectionsandriskbasedassessments.

Monitoringofongoingimplementationofsafetycase
4.132

HavingdemonstratedthatrisklevelshavebeenreducedtoALARP,andhavinghadthe
facilityssafetycaseacceptedbyNOPSEMA,anoperatormustcontinuetomaintain
thoseALARPrisklevels.AsNOPSEMAadvises,theoperatorownsthesafetycaseand,
followingtheacceptanceofasafetycase,theAuthoritysroleisoneofinspecting/
auditingtheoperatorscontinuedcompliancewiththesafetycaseinforceandthe
associatedlegislation.376

4.133

TheOPGGSActgivesNOPSEMAinspectorstheauthoritytoconductinspectionsto
ascertainwhethertherequirementsoftheActandsubordinateregulationsarebeing
compliedwith.377WhiletheOPGGSActdoesnotdifferentiatebetweeninspectionand
investigation,NOPSEMAspolicyistoconsidertheseasdifferent,butrelated,
functions.

375DatasourcedfromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,Annualreport201314,CommonwealthofAustralia,p27;andNationalOffshore
PetroleumSafetyandEnvironmentalManagementAuthority,Annualreport201213,
CommonwealthofAustralia,p29.
376NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Thesafetycase
incontext:Anoverviewofthesafetycaseregime,GuidancenoteN04300GN0060,June2013,
p1.
377NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,OHSplanned
inspectionpolicy,24July2013,p1.

97

Chapter4
4.134

Aplannedinspectionisaninspectioncarriedouttodeterminewhetheroccupational
healthandsafetylaw(OHS)isbeingcompliedwithatafacilityandmayinclude
monitoringcompliancewithafacilitySafetyCasebyinspectingtheriskmanagement
commitmentsofthefacilityoperator.378

4.135

Aninvestigationisaninspectioninrelationtoaccidents,dangerousoccurrences,a
contraventionorapossiblecontraventionofalistedOHSlawasabasisfor
enforcementaction.379

4.136

NOPSEMAinspectorsdonotphysicallyexamineeveryaspectofafacility;rather,
inspectionsarebasedonasampleofcontrolsandSMSsinplaceatthefacility.The
followingactivitiesmaybeincludedinaplannedinspection:

4.137

confirmingthatthehardwareandproceduralsystemsdescribedin
thesafetycaseorDSMS[divingsafetymanagementsystem]arein
place;

obtainingevidencethatsuchsystemsarefunctionalinpractice;

gainingassurancethattheimplementationofthesystemswillbe
ongoing;

verifyingthatriskcontrolimprovementshavebeenimplemented;

verifying that actions arising from recommendations of previous

inspectionshavebeencompleted;

testing personnel knowledge and understanding of selected

aspectsofthesafetycaseorDSMSandsupportingdocumentation
asrelevant;and

CommunicationwithOH&SRepresentativesandtheworkforce.380

Ineffect,aplannedinspectionasks:

Arethecontrolsimplemented?

Arethecontrolsfunctional?

Arethecontrolsmaintained?

Arethecontrolsaudited?

378ibid.
379ibid.
380ibid,p2.

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Chapter4

Istheworkforcecompetent?381

4.138

NOPSEMAsstartingpointincompliancemonitoringandhowwe[NOPSEMA]will
conductourinspectionsisbasedonthesafetycasethathasbeensubmittedand
accepted.382Giventhesafetycaseassessmentprocess,bythetimeafacilityison
location,NOPSEMAwillbefamiliarindetailwiththatspecificfacilityandtherisksand
controlsatthatfacility.383

4.139

Fromthatstartingpoint,andpriortoconductingaphysicalinspectionofafacility,the
NOPSEMAinspectorswillhave:
willhavethoroughlypreparedwhattheyaregoingtoinspect,testand
verify in relation to particular major accident events based on what
hasbeendefinedinthesafetycasebecausethesafetycaseisalegally
binding commitment on the operator. So, they will have done that
preparation, identified the controls they want to test. They will have
done some of that testing verification officebased, then they will
traveltothefacility.384

4.140

Then,oncetheinspectorsareatthefacility,theywill:
inspect the effectiveness of the risk controls in relation to the major
accident events first and foremost in relation to that facility. We will
dothatonasampledandsystemicbasis.Wewilllookattheintegrity
ofthestructure;wewilllookatthemaintenancesystem;wewilllook
at the emergency shutdown and blowdown systems and general
controlsystemsrelatingtoeachofthemajoraccidentevents.385

4.141

InlinewithNOPSEMAsOHSplannedinspectionpolicy,plannedinspectionsofany
facilitythatiscontinuouslymannedarecarriedouttwiceayear.386

381NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safety.
inspections,nd,np.Availableat:http://www.nopsema.gov.au/safety/inspections/.Accessedon
14January2014.
382MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p9.
383ibid.
384ibid.
385ibid.
386ibid;andNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,OHS
plannedinspectionpolicy,24July2013,p2.

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Chapter4
4.142

Inrelationtoinvestigations,MrGuyanalsoadvisedthatNOPSEMAnotonly
investigatescatastrophicevents,itwillinvestigateotherincidentsdependingonthe
issueinvolved.AccordingtoMrGuyan,NOPSEMA:
mayinvestigateonthebasisofpotential,sotherehasbeennoinjury,
however there might have been under other circumstances. We will
conduct an investigation, which is essentially an inspection using
similar powers and focusing on that particular event. I am actually
talkingaboutthecategorywhereitisunlikelythatweareconsidering
a prosecution case. We look to see what the deficiencies were and
what the lessons can be with the view to disseminating that
information.387

4.143

Ifaninspectionrevealsdeficienciesintheimplementedcontrolsandsystems,alackof
systemsavailable,orsignificantomissionsorerrorsinthesafetycaseandthese
constituteregulatorynoncomplianceoropportunitiesforimprovement,NOPSEMA
engageswiththeoperatortopromotecompliance(throughmakingrecommendations)
ortakesenforcementaction,asappropriate.388NOPSEMAinspectorsareabletoissue
noticesanddirectionstoresponsiblepartiestoensurecompliancewithaduty
specifiedintheOPGGSActorrequiredintheRegulations.389

4.144

Itisthroughthissystemofplanned,riskbasedassessmentsthatNOPSEMAwill
monitorandenforceanFLNGfacilityoperatorscompliancewiththeirobligations
undertheOPGGSActandassociatedRegulations.
Finding27
TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthoritys
PlannedInspectionpolicyrequiresplannedinspectionsofcontinuouslymanned
facilitiestobecarriedouttwiceayear.

MaintainingALARPinasafetycaseregime
4.145

DuringtheInquiryconcernswereraisedinrelationtotheeffectivenessofthesafety
caseregime.Inparticular,thereisaconcernthatasafetycasesubmissionand
assessmentissimplyaformfillingexercise,withnomechanismtoreviewandamend
thesafetycaseotherthanafteramajorincident.Thisconcernwasincreasedbythe
factthatFLNGisnewtechnology.

387MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p12.
388NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,OHSPlanned
InspectionPolicy,24July2013,p2andpp45.
389NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,NOPSEMA
inspectorOHSenforcementdecisionappeals.Guidancenoteno.N5000gl0069,16December
2014,p2.

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Chapter4
4.146

Forexample,theAustralianManufacturingWorkersUnion(AMWU)expressedthe
followingview:
The safety case is something that is produced before a venture
commences.Itisdrawnupbythecompanyssafetyexperts,butonce
the venture starts, once the work starts and the commissioning and
the processing starts andthe guys geton the tools and maintain the
equipment, there is no mechanism for reviewnone whatsoever
becausethesafetycaseisbasicallyatickandflick;itisapprovedandit
isvolumesoffilesinthesafetymanagersofficenevertobereviewed
again. The only trigger to review a safety case is after an incident
andIthinkbythenitisalittlebittoolate.390

4.147

InrelationtoFLNGfacilities,theAMWUexpressedconfidencethattheengineering
designofFLNGwillstanduptorigorousscrutiny;theconcernisthatanFLNG:
isstillnotoperational.Whenitbecomesoperationalanditissittingoff
the coast and producing LNG, that is when the reviews should take
place to determine whether we are doing best practice
environmentally,industriallyhealthandsafetywise.Areweoperating
inthebestway?Thesafetycasedoesnothavethatmechanism.Whilst
they are developing a safety case, they are developing a safety case
thatshouldworklikethis,butwedonotknowthatyet.391

4.148

AgainnotingthatFLNGisnewtechnology,theAMWUarguedthat:
itwillbeadifficultasktomaintainasafeworkingenvironmentwhen
we have an organisation, NOPSEMA, to which you send in a safety
caseandyourchequethatisyourpaymentyouhavetopay;Iamnot
sayinganythingdifferentthanthatandthatisthelastyouhearfrom
ituntilthereisanincident.Therearenoregularinspectionsandthere
arenocommitteesinsideNOPSEMAtryingtoworkoutwaystomake
thelegislationsaferandthejobssafer.392

4.149

Whileacceptingthatthesafetycaseregimefortheoffshoreindustryisagood
process,albeitwithsomeshortcomings,theAustralianWorkersUnion(AWU)
expressedconcernthatassafetycaseswerepreparedaspartofanapprovalprocess

390MrGlennMcLaren,UnionOfficial,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p5.
391ibid,p8.
392MrStevenMcCartney,StateSecretary,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p2.

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Chapter4
theywerenotalwaysadequatelyassessedoraudited.393TheAWUsBranchSecretary,
MrStephenPrice,statedthat:
thereneedstobearegularreviewandupdatingofthem,andIdonot
think there is a requirement at the moment for that to occur.
Historically,whatwehaveseenisthattheyarequitesimilar,sooncea
particular safety case is done for one type of vessel, the next one is
very similar, and they all contain similar information and responses
withinthem.394
4.150

ThisisofparticularconcerntotheAWUforFLNGfacilities,whicharebasedonbrand
newtechnology:
thereisnohistorythere,asfaraswe[theAWU]areaware,thatwe
canactuallylearnfrom.Ifwearegoingtoallowwhichthelegislation
doesthecompanytoidentifytheissuestheythinkaregoingtocome
up and their responses to it, then we are almost abrogating our
responsibility to the company to put something in place, and should
something go wrong, then of course we will be able to hold the
company accountable for that, but, to me, we are missing a golden
opportunitytoensurethatthatprocessisdonewithalittlebitofa,I
suppose, higher degree of inspection to ensure that we get the best
possibleoutcomefromthebeginning.395

4.151

TheAMWUsuggestedthatwhileasubstantialsafetycaseissubmittedforanoffshore
facility,itwasnotclearwhetherthemanagementstafforanyoneelsewillhavetheir
headsaroundtheirownsafetycase,becausetraditionallythatdoesnothappen.396
Rather,accordingtotheAMWU,oncethesafetycaseisaccepted:
the skipper or the project manager has full responsibility, and then
they run a collaborativetype approach on the job with safety reps,
HSRs and others to try to build a safer environmenton the job. They
workoutsideofNOPSEMAtomakeitwork.397

4.152

AsthischapterandChapter3show,thelegislationthatappliestotheoffshore
petroleumindustry,particularlytheOPGGSActandtheOPGGSSRegulations,requires
operatorstomaintainrisklevelstoALARP,andNOPSEMAisrequiredtoconduct

393MrStephenPrice,BranchSecretary,AustralianWorkersUnion,TranscriptofEvidence,
10November2014,p4.
394ibid.
395ibid.
396MrStevenMcCartney,StateSecretary,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p2.
397ibid.

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Chapter4
regularinspectionsandhastheauthoritytotakevariousenforcementactionstoobtain
compliancewiththelegislation.
4.153

ItisimportanttorecognisethatALARPisnotafixedlevelofrisk;rather,itisa
moveablecriterion.398AsMrGuyanexplained,whatwasALARP20yearsago,mayno
longerbeALARP.Simplynewtechnology,newprocessesbecomeavailable;whatis
nowreasonablypracticablehasmoved.399

4.154

Becauseofthis,thesafetycaseregimeisanimportantmechanisminensuringoriginal
risklevelsareALARP,thatALARPlevelsaremaintainedandthatrisksarereviewedand
continualimprovementsaremade.ThisissupportedbyNOPSEMAsguidancenoteas
follows:
While the safety case may place emphasis on reducing the risk to a
level that is ALARP, it should not detractfrom the need for continual
improvement. Reducing risks to a level that is ALARP and continual
improvement are both key objectives of the regulations, and relate
bothtowhatisdonecurrentlyandtowhatisplannedforthefuture.400

4.155

AccordingtoNOPSEMA,safetycasesdrivecontinuousimprovementinanumberof
areas,includingthrougharevisionoveraperiodoftimeorarevisionbeingrequired
byregulationsovertimeorduetoimprovementinknowledgeandinformationthatis
containedwithintheregulations.401
Finding28
Asafetycaseisnotastaticdocument.Asoperatorsarerequiredtomaintainrisklevels
toaslowasreasonablypracticable,thesafetycasemustbechangedtoreflectany
changesonthefacilityandanysafetyimprovementsdeemedreasonable.

4.156

Aswellasdrivingcontinuousimprovementthroughmonitoringsafetycase
implementationviainspections,NOPSEMAarguesthatitworkstoachieveimproved
standardsthroughengagingwithindustryandotherstakeholdersinanonprescriptive
way.Forexample,NOPSEMAparticipatesinpublicforumstorais[e]awarenessof
differentapproachesthatcouldbeappliedandmaybeworthconsidering.402In

398MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p8.
399ibid.
400NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Thesafetycase
incontext:Anoverviewofthesafetycaseregime,GuidancenoteN04300GN0060,June2013,
p7.
401MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p8.
402MrStuartSmith,ChiefExecutiveOfficer,NationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthority,TranscriptofEvidence,12November2014,p11.

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Chapter4
additiontothistypeofactivity,thereisalsoknowledgeinterchangewithintheindustry
itself.
4.157

Nevertheless,asMrGuyanexplained,NOPSEMAsprimaryapproachtoimproving
standardsis:
throughourinspectionprocesswhereuponrecognisingthatoperator
Ahasnottakenadvantageoftheprocessoftechnologyorsystemthat
weareawareoforthatwehaveseeninrelationtooperatorB,that
doesnotpreventusfrommakingarecommendation.403

4.158

Itmustberecognisedthatbecausethereisaconsiderableamountofproprietary
knowledgeinthepetroleumindustry,NOPSEMAdoesnottakeaprescriptiveapproach
toimprovingindustrystandards.Rather,partoftheAuthoritys:
role in driving and promoting improvement is to facilit[ate] that
transfer of information, and our principal mechanism is by
recommendationsininspectionswherewewillrecommendthat,Yes,
whatyouhavegotisinlinewithwhatyouhavecommittedtointhe
safety case. However, you may wish to consider this and we will
provideanexplanationthatwillallowrecognisingofcoursethatwe
are in a mature and professional industry in this contextprovide
enoughinformationfortheproponenttounderstandtheissue.404

4.159

NOPSEMAviewsthisaspartoftheirroleinmanagingagingassets,andwillraisean
issuewithanoperatorandrecommendand/orrequireanoperatortoconsidera
particularnewriskthathasbeenrevealed,oftentragicallythroughaccidentselsewhere
intheworld,thatrelatetothatfacility.405

4.160

TheCommitteeunderstandstheunionsconcernsinrelationtooperatorsmaintaining
risklevelstoALARP.Again,itwaslargelyuponhearingaboutsuchissuesduringthe
InquiryintotheeconomicimpactofFLNGontheWAeconomythattheCommittee
determinedtoundertakeitscurrentInquiry.

4.161

Nevertheless,havingreviewedtheevidencepresentedtothisInquirytheCommittee
understandsthatasafetycaseisintendedtobealivingdocument,onethatcanbe
refinedandrevisedasafacilityoperatesandisinspectedbyNOPSEMA.Thisisprimarily
drivenbythelegislatedrequirementforoperatorstomaintainrisksatanALARPlevel
throughoutthelifeofthefacility.Infact,ifimplementedeffectively,thesafetycase
regimeshouldleadtocontinuousimprovement.

403MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,12November2014,p11.
404ibid.
405ibid.

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Chapter4
4.162

AsthesafetycaseregimeisthemechanismbywhichAustraliaaimstoensurethe
safetyofitspetroleumindustry,governmentalsoneedstoensurethatNOPSEMA
undertakesitsrolediligentlyandisappropriatelyresourcedtoallowittoeffectively
regulatetheoffshorepetroleumindustry.Onlythenwillthesafetyoftheoilandgas
workforceandtheenvironmentbeprotected.

Consultationwiththeworkforce
4.163

AfurthermajorconcernraisedinthisInquirywaswhatisseenasalackofconsultation
withtheworkforce,particularlyinrelationtosafetycases,bythosecompanies
undertakingorconsideringundertakingFLNGoperations.

4.164

Whilethesafetycaseispreparedbytheoperator,thelegislationmakesitclearthat
operatorsmustconsultwiththeworkforceinrelationtosafetycases.OPGGSS
r2.11(1)(a)providesthattheoperatormustdemonstratetotheAuthoritythat:
inthedevelopmentorrevisionofthesafetycaseforthefacility,there
hasbeeneffectiveconsultationwith,andparticipationof,membersof
theworkforce.

4.165

Here,inaccordancewithr2.11(3),membersoftheworkforceincludethosewhoare:
(a)identifiablebeforethesafetycaseisdeveloped;and
(b)working,orlikelytobeworking,ontherelevantfacility.

4.166

Thenotestor2.11statethatPart3ofSchedule3totheOPGGSActsetsoutthebroad
consultativeprovisionsthatapply,includingprovisionsfortheestablishmentof
designatedworkgroups,theelectionofhealthandsafetyrepresentativesandthe
establishmentofOHScommittees.

4.167

Therequirementforworkforceconsultationinthedevelopmentofasafetycaseisalso
setoutinNOPSEMAspolicyandguidancenotes.Forexample,NOPSEMAsguidance
noteprovidinganoverviewofthesafetycaseregimestatesthattheoperatormust
ensuretherehasbeeneffectiveconsultationwith,andparticipationby,membersof
theworkforceinthedevelopmentorrevisionofasafetycase.406

406NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Thesafetycase
incontext:Anoverviewofthesafetycaseregime,GuidancenoteN04300GN0060,June2013,
p1.

105

Chapter4
4.168

NOPSEMAstatesthattheprocessforeffectiveworkforceconsultationinthe
development,preparationandrevisionofthesafetycaseasperr2.11(1)(b)would
generallyneedtocover:

Preparingorrevisingthesafetycase;

Identifyingthehazards,includingthosethatcouldleadtoMAEs;

Conductingand/orreviewingsafetyassessments;

Identifying risk control measures and performance indicators for

thesemeasures,aswellassettingperformancestandards;

Establishing and/or implementing the Safety Management

System;and

Developing the emergency response plan under the umbrella of

the broaderbased plan discussed under Emergency Response
Preparedness.407

4.169

Asthischapterhasshown,thesafetycaseregimerequiresaformalsafetyassessment
tobeincludedinthesafetycasetodemonstratethatrisksassociatedwithMAEsare
understoodandthatappropriatecontrolmeasures,basedonrequiredperformance
standards,areinplace.AccordingtoNOPSEMA,therequirementtounderstandthe
risksextendstotheworkforce;theworkforceshouldbeabletoidentifythemajor
contributingfactorstotheriskandthecriticalactivitiesormeasureswhichcan
significantlyinfluencerisklevels.408Itshouldbenotedthatthereisnolegal
requirementofthisconsultationtoincludeunions.

4.170

Consultationwith,andparticipationby,theworkforceinrelationtonewsafetycases
andtherevisionofexistingsafetycasesisrecognisedasbeingimportantfortwomain
reasons.409

4.171

First,thisprocessallowsinputfromthosewithexperienceofworkingonfacilities.This
isrecognisedbyGDFSUEZBonaparte,whoadvisedthattheoperationsand
maintenanceworkforce(theworkforce)playsacriticalroleintheriskmanagementand
safetycaseprocessthroughoutthelifecycleofadevelopment.410AccordingtoGDF
SUEZBonaparte,theworkforcebringsadiverserangeofexperiencesandhandson
knowledgethatisinstrumentalineffectivelyidentifyinghazards,understandingrisk

407ibid,p18.
408ibid,p12.
409NOPSEMAs,SafetycaseInvolvingtheworkforce,Guidancenoteno.N04300GN1054,July
2013,p10liststenreasonswhyeffectiveworkforceinvolvementisimportant.
410SubmissionNo.5fromGDFSUEZBonapartePtyLtd,30July2014,p3.

106

Chapter4
andaddressingtherangeofpotentialoperationaldemandsontheFacility.411Similarly,
ConocoPhillipsstatedthatthesafetycasedoesrequireastrongconsultationwiththe
workforce,becausetheyaretheguyswhohavegottheexperienceofactually
operatingkit.412
4.172

Second,itallowstheworkforcetounderstandtherisksandhazardstowhichtheymay
beexposedonthefacility.413AccordingtoNOPSEMA,membersoftheworkforcemust
beknowledgeableandinformedontheriskcontrols,thecontroleffectivenessand
theirvulnerabilities,andtheimportanceofmonitoringriskcontrolmeasure
degradation.414ForNOPSEMA,thebestwayofachievingthisisthroughappropriate
participationintheformalsafetyassessmentprocess.415Thisclearlyreflectsthe
provisionsofOPGGSSr2.11(1)(b)thatrequiresasafetycasetoprovide:
(b) adequately for effective consultation with, and the effective
participationof,themembersoftheworkforce,sothattheyareable
to arrive at informed opinions about the risks and hazards to which
theymaybeexposedonthefacility.
Finding29
TheAustralianregulatoryregimefortheoffshorepetroleumindustryrequires
operatorstoundertakeeffectiveconsultationwiththeworkforceduringthe
developmentofthesafetycaseforafacility.Thereisnolegalrequirementforthisto
includeunionsorotherrepresentativebodies.
Finding30
TheNationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,in
assessingthesafetycase,mustbesatisfiedthattherehasbeeneffectiveparticipation
oftheworkforceindevelopingorrevisingasafetycaseforafacility.

4.173

UnderOPGGSSr2.11(1),NOPSEMAmustbereasonablysatisfiedthattherehasbeen
effectiveconsultationwithandparticipationbymembersoftheworkforceinthe
developmentorrevisionofasafetycase.416Ineffect,asNOPSEMAsSafetyCase
AssessmentPolicystates,theleadassessorwillmakejudgementsontheadequacyof
thesafetycasebasedonthecontentofthesafetycasesubmission[including

411ibid.
412MrMarkLeigh,TeamLeader,AssetIntegrityandProcessSafety,ConocoPhillips,Transcriptof
Evidence,10November2014,p2.
413NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Thesafetycase
incontext:Anoverviewofthesafetycaseregime,GuidancenoteN04300GN0060,June2013,
p1andp9.
414ibid,p1andp12.
415ibid,p12.
416r2.11(1)statestheoperatorofafacilitymustdemonstrate[workforceconsultationand
participation]totheSafetyAuthority,tothereasonablesatisfactionoftheSafetyAuthority.

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Chapter4
documentationrequiredunderOPGGSSr2.11(b)](workforceconsultation).417Thisis
alsoclearlyrecognisedinNOPSEMAsguidancenote,SafetycaseInvolvingthe
workforce.
4.174

Whiledemonstrationofworkforceinvolvementdoesnotneedtobeincludedwiththe
safetycase,NOPSEMAstatesthatitmaybethebestplacetodocumentthe
demonstrationrequired.418Therearetwomainreasonsforthis.First,NOPSEMA
requiressupportingdocumentstobereasonablysatisfiedand,thus,acceptasafety
case,and,second,thesafetycaseisthekeyhealthandsafetydocumentforthe
facility.419

4.175

WorkforceparticipationinsafetycasedevelopmentinaccordancewithOPGGSS
r2.11(1)(a)andr2.11(1)(b)isoneofthelegislativerequirementsthatNOPSEMAmust
alwaysassessindetail,andisoneelementintheAuthoritysdetailedassessmentof
specificregulationsassessmentcomponent.

4.176

NOPSEMArecognisesthatsometimesasafetycaseisdevelopedpriortothe
recruitmentoftheentireworkforce.420NOPSEMAalsopointstodatathatindicates
workforceinvolvementiscommonlycentredonaspectsoftheFormalSafety
Assessment(FSA)suchashazardidentification,riskassessmentandcontrolmeasure
identification.421Thereappearstobelowerlevelsofworkforceinvolvementinthe
facilitydescriptionandsafetymanagementsystemdescriptioncomponentsofasafety
case,despitethefactthatsuchinvolvementwouldprovidesignificantbenefitstothe
operator.422

4.177

AgainstthebackdropofthisregulationandNOPSEMApolicy,unionswhoprovided
evidencetotheInquiryexpressedconcernabouttheactuallevelofcompliancewith
therequirementforengagementoftheworkforce,particularlyinthepreparationof
thesafetycase.

4.178

Forexample,theAWUsMrStephenPrice,indiscussingwhetherornotasafetycase
takesintoconsiderationacompanyssafetycultureandapproachtosafetyonthejob,
statedthatlotofthetimesthey[safetycases]arealsopreparedaspartofanapproval

417NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase
assessmentpolicy,December2014,p2.
418NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Safetycase
Involvingtheworkforce,Guidancenoteno.N04300GN1054,July2013,p6.
419ibid.
420ibid.
421ibid,p7.
422ibid,pp78.

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Chapter4
process,sotheyaredonewithouttheinvolvementandengagementoftheir
employees.423
4.179

However,asnotedabove,GDFSUEZBonaparterecognisestheimportanceof
workforceinvolvement.GDFSUEZBonaparteadvisedthataspartofitsconsideration
ofusingFLNGtechnologytodevelopitsBonapartefieldit:
established an integrated Project team, including Operations and
Maintenance personnel, who were involved from the early design
studiesinthepreFrontEndEngineeringandDesign(preFEED)phase.
The plan was to increase workforce involvement as the project
progressedintoFEED.Theworkforcewasinvolvedinthereviewofthe
design, in the formal hazard identification processes, formal design
reviews and human factors reviews. This approach ensures the full
integration and application of workforce experience throughout the
developmentlifecycle.424

4.180

TheCommitteesoughttobetterunderstandthelevelofengagementoftheworkforce
inhealthandsafetyissuesinrelationtoPreludeinparticularasitwillbethefirstFLNG
facilitytobemooredofftheWAcoast.

4.181

DuringitssitevisittotheSamsungShipyardsinKoreatoinspectthePreludefacility,
membersmetanumberofAustralianswhoareatthefacilitytofamiliarisethemselves
withthevesselasitisbeingbuilt.Theseworkersgavetheimpressionthattheywere
beinginvolvedinsettingupsomeofthesafetysystemsaroundtheoperationofthat
vessel.

4.182

However,theAWUarguedthatwhileoperatorsareinvolvedearlyintheprocess,their
inputdoesnotgenerallyendupinthesafetycase.AccordingtoMrStephenPrice:
it is the approach that all the organisations take when they are
building a new kit or a new facility. They get the operators involved
quite early. They will send them off and train them on simulators or
equivalentpiecesofequipmentsomewherearoundtheglobe.Theywill
take that experience they have and seek their input into putting in
place the operational processes. But whether that then actually
translatesintotheinformationthatiscapturedwithinthesafetycase
thattheyhavetopresent,Iamnotconvinced.425

423MrStephenPrice,BranchSecretary,AustralianWorkersUnion,TranscriptofEvidence,
10November2014,p4.
424SubmissionNo.5fromGDFSUEZBonapartePtyLtd,30July2014,p3.
425MrStephenPrice,BranchSecretary,AustralianWorkersUnion,TranscriptofEvidence,
10November2014,p4.

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Chapter4
4.183

Giventhis,theCommitteeaskedShellaboutitsconsultationwithAustralianunionsin
relationtodevelopingthePreludesafetycaseandwhethertherecruitedoperators
wereinvolvedinworkingonsomeoftheorganisational/culturalaspectsofthesafety
case.Inresponse,MrAndrewDohertyofShellreplied:ourengagementsare
widespreadwithmanycommunitiesandstakeholders.Weareandhavebeenengaging
withpeopleinthedevelopmentoftheHSSEcase.426

4.184

MrIanGrosealsostatedthatShellhas:
had some engagement with unions over the past few years and no
doubt we will have more in the future. We work with our operators
principally around makingsure that they are competent and haveall
the necessary training to do their work and that they go to Geoje to
learnhowthefacilitywillwork.427

4.185

MrDixonalsocommentedonoperatorsinvolvementintheearlyBODstage:
Shell operates many offshore assets around the globe and it has
engagedwithdedicatedoperatorstocomeinandbepartofthedesign
processthroughallaspectsofthebuildandthedesignconceptsgoing
forward.428

4.186

WhenaskedwhetherornotShellsawunionengagementasintegraltosafety
discussions,MrDohertyreplied:
recognisingthatrightnowwearestillinthephaseofconstructionand
thatthereismuchmoredevelopmentworktotakeplace,therehas,as
Ian said already, been some engagement with unions and I am sure
thatthatengagementwilldevelopastheprojectdevelops.429

4.187

MrGrosealsoadvisedthatShellsPreludefacilitywas:
still in the construction phase. We would not normally consult third
partiesaboutoursafetycase.Weworkoursafetyupandsubmititto
theregulator.Itisnotsomethingwenecessarilydiscuss.430

426MrAndrewDoherty,GeneralManager,HSSE,Shell,TranscriptofEvidence,12November2014,
p7.
427MrIanGrose,CommercialManager,Prelude,Shell,TranscriptofEvidence,12November2014,
p7.
428MrGeraldDixon,HSSEManager,Prelude,Shell,TranscriptofEvidence,12November2014,p7.
429MrAndrewDoherty,GeneralManager,HSSE,Shell,TranscriptofEvidence,12November2014,
p7.
430MrIanGrose,CommercialManager,Prelude,Shell,TranscriptofEvidence,12November2014,
p7.

110

Chapter4
4.188

Itisdifficulttoreconcilethisstatementwiththeregulatoryrequirementtoensure
workforceconsultationandparticipationduringthedevelopmentofthesafetycase.It
istobehopedthatShellwillbeabletodemonstratetoNOPSEMA,asrequired,that
therehasbeenanappropriatelevelofworkforceinvolvementinthedevelopmentof
thesafetycase.

4.189

MrIanBray,AssistantNationalSecretaryfortheMUA,statedthat:
itisverysadtosaythattherehasbeenverylittleengagementinterms
of discussions around the operations of an FLNG vessel. In fact, it
would be nice to say that we have had minimum discussions but I
wouldreallyputthediscussionatzero.WedonotknowwhatShellis
anticipating in terms of intentions for training and job preparedness
foramarineoperationonanFLNGfacility.431

4.190

ForMrBray,theproblemseemstostemfromalackofconsultationwiththeactual
workforcebecauseofthetopdownapproachofriskbeingmanagedfromofficers
andpeopleemployedspecificallytolookatthoseHSCofficersetcetera.Infact,teams
areemployedinofficesinPerth,forexample,lookingatmitigatingrisk.432

4.191

Whilenotbeingcriticalofthatperse,MrBraydidseealackofdirectengagementwith
thosewhoparticipateinwhateverthosemitigationsare,whetherthatbeemergency
responseorjustgeneralsafesystemsofworkasafailureofthesystem.433Accepting
thattheUnionneededtotakesomeresponsibilitytodevelopamoreinclusiveculture,
MrBrayarguedthatabetterconsultativeapproachisneeded,particularlyinrelationto
howtoengagetheemployeeswhoareatriskonthesejobstomakesurethatthose
placesofworkaregettingworldsbestpracticeintermsofsafety.434Again,MrBray
arguedthat:
learningfromtheworkforcewhattheyseeandwhattheyperceiveto
bethebiggestissuesintermsofsafetyexposuretoit,redressit,all
thesekindsofthings.Itisjustnotoccurring.Yougotoasafetyforum,
itisallmanagers.Nobodyisfacilitatedtocomefromtheworkplace
because of the cost, again, of getting a safety rep off the job in a
remote part of Western Australia down to Perth for a twoday
conferenceandthenhowtogetthembackout.Also,thecostofwho
covers their job while they are not there et cetera. You go to these

431MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
7November2014,p5.
432ibid.
433ibid.
434ibid,p6.

111

Chapter4
forums and, sadly, there are no workers there; it is mostly
managers.435
4.192

TheAMWUadvisedthatithadhadnodiscussionswithShellinrelationtoPreludes
safetycase.AccordingtoMrStevenMcCartney,followingarequesttomeetwithShell
todiscussemploymentopportunitiesandsafetyonPrelude,Shelldidnotseemto
tak[ing]anyconsultationwithourunionseriouslyatall.436ItisMrMcCartneysview
thatShellisgoingtodevelopitsPreludesafetycaseandthensaytakeitortakeit.437

4.193

TheAWUsMrStephenPriceadvisedthathehadhadonemeetingwithShells
AustralianCountryChair,MrAndrewSmith,whobroadlyoutlinedthefacilityand
showedsomevideofootageofthefacility.Sincethattime,asMrPricestated,hehas
madeanumberofapproachestoShelltomeetwiththemandhavea
conversation about where they are going regarding their employees
and development of the safety case and stuff, but they have not
engagedback.438

435ibid,p5.
436MrStevenMcCartney,StateSecretary,AustralianMetalWorkersUnion,TranscriptofEvidence,
26November2014,p8.
437ibid.Note:thismeetingwasarrangedthroughHonGaryGray,andwhileaShellrepresentative
didmeetwithMrMcCartneyhewasnotabletoprovidetheinformationsoughtbytheunion.
438MrStephenPrice,BranchSecretary,AustralianWorkersUnion,TranscriptofEvidence,
10November2014,p5.

112

Chapter5
Preludesafetyindesign

5.1

InMay2011Shellannouncedthatithadmadeapositivefinalinvestmentdecision(FID)
todevelopthePreludeandConcertogasfieldsintheBrowsebasinusingfloating
liquefiednaturalgas(FLNG)technology.ThiswastheworldsfirstFIDbasedonFLNG
technology.WoodsidehasannouncedthatitisprogressingFLNGasitspreferred
developmentconcepttodevelopitsBrowseBasinfields.

5.2

WhiletheconceptofFLNGtechnologyhadbeenaroundforsometime,challenges
associatedwithproducing,storingandtransferringLNGatseafirstneededtobe
overcomebeforeFLNGcouldbecomeaviabledevelopmentoptionforoffshore
petroleumresources.439ThroughoutitsevidencetotheInquiry,Shellexpressedits
beliefthatthePreludefacilitysFLNGdesignisabletoaddressandovercomethese
challenges.

5.3

AsdiscussedinChapters3,4and6,FLNGprojectproponentsmustdemonstrate
throughtheirsafetycasesandenvironmentalplansthattheyhaveconsideredthe
hazardsassociatedwithFLNGfacilitiesandreducedrisktolevelsthatareaslowas
reasonablypracticable(ALARP).Shelladvisedthat,basedontheirsafetyindesign
process,theyhavedevelopedparticulardesignsolutionstoreducerisklevelstoALARP,
including,butnotlimitedto,hulldesign,theturretmooringsystemandthefacility
layout.440

5.4

Inconsideringthesesafetyfeatures,itisusefultodividethePreludefacilityintotwo
broadcomponents,thehullandthetopsides.Thehull,incombinationwithvarious
supportingelements,hasbeendesignedtoovercomethechallengeofremaining
permanentlymooredintheBrowsebasin.Thetopsides,designedtoovercomethe
challengeofsafelyproducingLNGatsea,shouldalsolimitthepotentialnegative
consequencesintheeventofanaccident.Thatis,whilePreludeisanintegratedfacility
consistingofseveralimportantcomponents,basedonevidenceprovidedbyShell,itis
broadlythecasethatthefacilityasawholehasbeendesignedtowithstandthe
elementsinwhichitwilloperate,withtheliquefactionandcryogenicstorageand
handlinginfrastructuredesignedtoovercomethechallengeassociatedwithlimited
availableoperationalspace.

439Referto:EconomicsandIndustryStandingCommittee,TheeconomicimpactoffloatingLNGon
WesternAustralia,Volume1,LegislativeAssembly,ParliamentofWesternAustralia,2014.
440NotethatWoodsidesproposedBrowseFLNGfacilitieswillbeusingShellsPreludeFLNGdesign.

113

Chapter5
5.5

Thischapterbeginswithaconsiderationofthefacilityshulldesign,includingitssize
andmass,andmooringandstoragesystems,aswellastheprocessesandknowledge
thatinformedthedesignofeachoftheseelements.Thelayoutoftheliquefaction
infrastructureisthendiscussed,alongsideconcernsthathavebeenraisedby
representativesofworkersunionsastoworkersafetyinrelationtothisnew
technology.Finally,thedifficultprocessoftransferringLNGandotherpetroleum
productsatseafromadynamicfacilitytoacargovesselisconsidered.

5.6

ItisalsoimportanttorecognisethatShellisrequiredbyNOPSEMAtoprovidea
validationofitsdesign.TheCommitteeunderstandsthatthisvalidatorforthePrelude
facilitydesignisLloydsRegister.441

Hulldesign
5.7

ThePreludefacility,whichhasbeendescribedasthelargestoffshorefloatingfacility
everbuilt,isimmense.442Withahull488metreslongand74metreswide,whenfully
ballasteditwillweighinexcessof600,000tonnes,whichisroughlysixtimesasmuch
asthelargestaircraftcarrier.443Whileitssheersizeis,inpart,afunctionofthetask
thatitwillperform,asShellsEngineeringManager,MrStevenKauffman,explained,
thissizeisalsoanimportantsafetyfeature444asitisfundamentaltotheabilityofthe
facilitytoatalltimes,includingduringacyclone,[remain]onlocation,withpersonnel
remainingonboard.445

5.8

Toachievethisoutcome,ShellhasdesignedthePreludefacilitytowithstand1in
10,000yearweathereventswhichmeanswavesinexcessof28mandwindgustingat
morethan300km/h.446Theenergyassociatedwithsuchextrememetocean447
conditionsisvast,butShellsubmittedthatthesizeandmassofPreludeisasignificant
helpindealingwiththeseforces.448

441SubmissionNo.9fromShellDevelopment(Australia)PtyLtd,11August2014,p1.
442Sullivan,Robert,'Thebiggestshipintheworld(Thoughitisntexactlyaship)',TheNewYork
times,31October2014,pMM40(SundayMagazine).Availableat:
http://www.nytimes.com/2014/11/02/magazine/thebiggestshipintheworldthoughitisnt
exactlyaship.html.Accessedon29January2015.
443Shell,Preludefloatingliquefiednaturalgas(FLNG)development.Availableat:
http://www.shell.com.au/aboutshell/whoweare/shellau/operations/upstream/Prelude.html.
Accessedon21January2015.
444MrStevenKauffman,EngineeringManager,ShellAustralia,TranscriptofBriefing,26June2013,
p6.
445SubmissionNo.15fromShellinAustralia,submissiontoInquiryintotheEconomicImpactof
FloatingLNGonWesternAustralia,30August2013,p6.
446ibid.
447Thetermmetoceanisanabbreviationofmeteorologicalandoceanographicusedwithinthe
offshorepetroleumindustrytodescribethephysicalenvironmentnearanoffshorefacility.
448SubmissionNo.15fromShellinAustralia,submissiontoInquiryintotheEconomicImpactof
FloatingLNGonWesternAustralia,30August2013,p6.

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Chapter5
5.9

Thehullitselfhasalsobeendesignedforoptimumstabilityduringadverseweather
conditions.Describingthehullasakeyelementinthefacilitysabilitytowithstand
severeweather,Shellexplainedthatdynamicballasttanksinsidethehullwilltakeon
andexpelseawaterinaccordancewithhowmuchproductisbeingstoredatanyone
time.Thiswillallowthefacilitytoachievetheoptimaldraftatalltimes.449According
toShell,byachievingandmaintainingoptimaldraftconditions,facilitymotioncaused
bysevereweatherconditionsisreduced.Inturn,thisreducesworkplaceand
equipmentstress.Furthermore,thedepthofthehullanditsdynamicballastsystem
reducesmovementattheforwardandaftendsofthefacilityduetoswell.450Shell
explainedthatthisdesignwillhavetheeffectofminimisingslamoccurrenceswhich
typicallyoccurwhenahullhitsawaveandriseswithit,thendropsasthewavemoves
past.451

5.10

ThePreludefacilitywilloperatewithahighfreeboard,whichwillpreventlarge
amountsofgreenwaterfromreachingthedeck,thusprotectingemployeesand
limitingtheamountofseawaterreachingtheprocessingfacilities.452Theheightof
thefreeboardalsoactsasabarrieragainstmaritimepiracy.453

5.11

Toensurestructuralintegrity,thefacilityconsistsofacompletedoublehull,
incorporatingadoublebottom,doublesideanddoubledeckconfiguration,454withsix
metresbetweentheinnerandouterhulls.Thisdesignistoprovide[s]strengthandin
theunlikelyeventofacollision,[helpensurethat]thehullsintegrityisunlikelytobe
compromised.455Shellalsoexplainedthatthehullis:
further reinforced by a centre line double plate bulkhead, forming a
substantialcentregirderwhichefficientlybalancesthetopsidesweight
against hull buoyancy forces, creating further stability for the
facility.456

Productstorageatseaovercomingthechallengeofsloshing
5.12

ThePreludehullisalsocomprisedofanumberofotherelementsdesignedtohelpthe
facilitycombatextremeweatherconditions,includingitstwinstoragetanksforall
storedpetroleumproducts.ThisimportantelementofthePreludehulldesignworksto

449SubmissionNo.9fromShellinAustralia,11August2014,p3.
450ibid.
451ibid.
452ibid.Freeboardisthedistancefromthewaterlinetotheupperdecklevel.Greenwaterissea
waterthatcomesupoverthedeck
453ThisaspectofthePreludefacilitysfreeboardheightwasexplainedduringaCommitteetourof
thePreludefacilityasitwasunderconstructionintheSamsungHeavyIndustriesshipyardin
Geoje,RepublicofKorea,inAugust2014.
454SubmissionNo.9fromShellinAustralia,11August2014,p3.
455ibid.
456ibid.

115

Chapter5
minimisetheeffectsofaphenomenonknownassloshing.Sloshingreferstothe
dynamic,destabilisingeffectthatoccurswhenlargequantitiesofstoredliquidsbegin
tooscillateandgathermomentumwithpotentiallydisastrousconsequences.Sloshing
canoccurduringfillingorasaconsequenceofenvironmentalconditions.
5.13

AccordingtoProfessorMurrayRudmanofMonashUniversityandDrPaulClearyofthe
CommonwealthScientificandIndustrialResearchOrganisation(CSIRO),sloshingisa
dangerousphenomenonthatmustbeaccountedforinthedesignofanyLNGcarrying
vessel.Thisisbecauseit:
may resonate with structural frequencies and those of waveinduced
ship motions. This can subsequently affect ship stability and, of
particular importance here, can produce large loads on the internal
tank membranes. In turn this can lead to structural damage to tank
membranesandinsulation,leakageandpotentiallytotankrupture.457

5.14

InthatLNGisatechnologythatfacilitatesthemaritimetransportofnaturalgas,anti
sloshingtechnologyisnotnew.AccordingtoShell,however,FLNGrequiresadifferent
approachtocontainmentofliquidsonboardofthefacilitycomparedtoconventional
LNGcarriers,andthisrequirementhasproducedadesigninwhichpairsofsidebyside
storagetanksareincorporatedintothePreludehull.458Thedistinctionbetweena
conventionalsinglestoragetankonanLNGcarrierandthedualstoragetanklayout
withinthePreludehullisillustratedinFigure5.1.Shellexplainedthatthisdesigngives
the[Prelude]facilitymuchgreaterabilitytowithstandeffectsofliquidmotionbecause
by:
splitting the liquids into sidebyside tanks, the impact of the
movementduetosloshingisreduced.Theshiftingoftheweightdueto
sloshing is also distributed between the sidebyside tanks, providing
balance (rather than the weight moving to one side of a larger
tank).459

457Rudman,MurrayandCleary,Paul,'ModellingSloshinginLNGTanks',SeventhInternational
ConferenceonCFDintheMineralsandProcessIndustries,CSIRO,Melbourne,911December
2009,p1.Availableat:http://www.cfd.com.au/cfd_conf09/PDFs/102RUD.pdf.Accessedon
27January2015.
458SubmissionNo.9fromShellinAustralia,11August2014,p3.
459ibid,p4.

116

Chapter5
460

Figure5.1:Dualstoragetankdesigncomparedagainstsinglerowtankdesign.

Theturretmooringsystem
5.15

PerhapsthemostsignificantcomponentofthePreludedesignistheturretmooring
system.AswellasmooringPreludeatthefieldlocation,theturretmooringsystem
addstotheimmensesizeandmassofthefacility.Figure5.2showsonesectionofthe
Preludeturretmooringsystem,whichShelldescribesasanimportantsafetyfeature
whichensuresthattheFLNGfacilityremainssecurelyonlocationinthefield.461

5.16

ShellfurtherexplainedthatPrelude:
will be moored near to the field location by four groups of mooring
chains which connect at the turret. Each of these groups consists of
fourmooringchains,whichwillbeheldtotheseafloorbydrivensteel
pileseach65mlongand5.5mindiameter.462

460ibid,p3.
461ibid,p2.
462ibid.

117

Chapter5
463

Figure5.2:AmoduleofthePreludeFLNGturretmooringsystemunderconstruction.

5.17

Thefourgroupsofmooringchainswillbefabricatedfromsome8,000tonnesofsteel,
witheachlinkbeingapproximately350kilograms.464Theturretitselfisa12,000tonne
cylindricalstructuresome30metresindiameterand93metrestall,whichisintegrated
intothePreludehullatoneend.465Acriticalelementofthefacility,theturretisthe
pointatwhichallgasflowlinesandmooringchainsareattached.Ineffect,theturretis
fixedinplaceandthehullisabletoweathervanearounditsothatthefacilityasa
wholewillalwaysassumethepositionofleastresistanceagainsttheprevailing
metoceanconditions.

463ibid.
464YouTube,PreludeAroundtheWorld,17December2014.Availableat:
https://www.youtube.com/watch?v=b7LHA2rkOY.Accessedon21January2015.
465SubmissionNo.9fromShellinAustralia,11August2014,p2.

118

Chapter5
5.18

AccordingtoShell:
theturretsswiveldesignenablesthefacilitytoweathervanewhilst
the mooring lines remain fixed to the sea floor. This feature enables
the facility to rotate according to weather and sea conditions. The
ability to weather vane matched with the facilitys sheer size and
weightcreatesstabilityandensuressafeandeffectiveoffloadingcan
takeplaceatsea.466

Designedandtestedtorideoutastorm
5.19

ToensurethatthePreludefacilitywillbeabletowithstandextrememetocean
conditions,ShellengagedtheMaritimeResearchInstituteNetherlands(MARIN)to
assistintheprocessofdesign.MARIN,agloballeaderinhydrodynamicresearchand
maritimetechnology,assistsinmaritimedesignbyprovidingasuiteofsimulation,
modeltesting,fullscalemeasurementandtrainingservices.467AttheMARINtesting
facilityinWageningentheoffshoredepartmenttestedandhelpedrefinethePrelude
facilitydesignbyconductingscalemodeltestingofthefacilityinitsvarioustesting
basins.Onesuchtest,involvingamodelofanLNGcarrierdockedalongsideaPrelude
model,isillustratedatFigure5.3.
468

Figure5.3:PreludemodeltestingattheMARINtestingfacility.

5.20

ByusingtheMARINtestingbasins,thehulldesign,turretmooringsystem,moorings
andmooringchainswereallabletobetestedinwindandwaveconditionsofvarying
extremes.Inparticular,thebasinswereconfiguredtosimulate1in100yearweather

466ibid.
467MaritimeResearchInstituteNetherlands,History.Availableat:
http://www.marin.nl/web/Organisation/History.htm.Accessedon28January2015.
468SubmissionNo.15fromShellinAustralia,submissiontoInquiryintotheEconomicImpactof
FloatingLNGonWesternAustralia,30August2013,p3.

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Chapter5
conditionsand1in10,000yearweatherconditions.ThePreludemodelwassubjected
totheseconditionsandtheresultingdatausedbyShelltorefineandenhancetheir
design.469AccordingtoShell,inadditiontothefactthatthePreludefacilityhull
complieswithallinternationalrequirementsforconstruction,strengthandstabilityin
offshorestructures,theMARINanalyticalstudyandwavebasintestingwas:
carried out to prove the suitability of the complete facility during a
range of adverse weather events up to, and including, an equivalent
one in 10,000 year storm at the Prelude location. This testing and
assessmentconfirmedthatitwillbesafetoinhabitthefacilityduring
severeweather,andthateveninthemostextremeeventthefacilities
structuralintegritywillnotbecompromised.470
5.21

ThePreludefacility,thatis,hasbeendesignednotonlytowithstandextreme
metoceanconditions,buttoremaininplaceandstaffedatalltimes.Ratherthan
representingarisktohumansafety,however,Shellsubmitthatthisdesignisitselfa
criticalsafetyfeatureessentiallybecauseevacuationisaninherentlyhighriskactivity.
Outliningthedesignduringahearing,theShellsCommercialManager,Prelude,MrIan
Grose,explainedthat:
the reason we [Shell] went that way was that it is far safer to make
things completely able to withstand the weather and safe for all to
stay on board than it is to design something that has to pick up and
leaveorhastobedemannedandtohavehelicoptersencroachingbad
weather trying to get people off. This is intrinsically a much safer
solution by going the other way and making the FLNG facility itself
absolutelyasafehaveninsuchanevent.471

5.22

MrGrosesevidenceechoedearlierevidencegivenbyMrMarkLeigh,TeamLeaderfor
AssetIntegrityandProcessSafetyatConocoPhillips.ConocoPhillipshaveoperatedthe
DarwinLNGplantsinceJune2003,alongwiththeassociatedLiberdadefloatingstorage
andoffloading(FSO)facility,whichispermanentlymooredabovetheBayuUndanfield
intheTimorSea,some500kilometresoffshorefromDarwin.MrLeighexplainedthat,
havingdonetheanalysisonthemooringsandthepiles,andthefacilityingeneral,the
designforLiberdadesurvivedthe10,000yeartest.472MrLeighalsoexplainedthat
whileitisnotConocoPhillipspolicytohaveworkersontheLiberdaderemainonboard
throughanextremeweatherevent,adecisionastowhethertoevacuatethefacility

469TheCommitteewasbriefedonthistestingprocessduringasitetouroftheMARINtestingfacility
inWageningeninJuly2014.
470SubmissionNo.9fromShellinAustralia,11August2014,p7.
471MrIanGrose,CommercialManager,Prelude,ShellinAustralia,TranscriptofEvidence,
12November2014,p5.
472MrMarkLeigh,TeamLeader,AssetIntegrityandProcessSafety,ConocoPhillips,Transcriptof
Evidence,10November2014,p4.

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Chapter5
duringcyclonicweatherwasneverstraightforward.473Thisissueofdemanningis
discussedfurtherinChapter8.

Designingforthemetoceanconditions
5.23

WiththeLiberdadeFSOinoperationformorethan10years,MrLeighsevidence
demonstratesthatalthoughFLNGtechnologyisnewandPreludeisapioneering
facility,inmanywaysandparticularlywithrespecttohulldesignthePreluderisk
profileappearstobeverysimilartothatofmanyfloatingproductionstorageand
offloading(FPSO)facilities.TherearecurrentlythirteenFPSOsoperatinginwatersoff
theWesternAustraliancoastline.

5.24

ThePreludefacilitywillbelocatedwithinabout20kilometresofaverysimilarfloating
facilityalsocurrentlyunderconstructiontheINPEXIchthysFPSO.Abriefdiscussionof
theIchthysFPSOwillhelptoillustratehowoffshorepetroleumfacilitiesaredesigned
fortheconditionsinwhichtheyoperate.

5.25

DescribingtheIchthysFPSOasamongstthelargestintheworld,MrWilliam
Townsend,GeneralManagerofExternalAffairsandJointVentureatINPEX,explained
thatthefacilitysstoragecapacityisslightlyunder1.2millionbarrels;thelengthis
336metres,and[itis59]metresinbreadth.474TheIchthysFPSO,whilenotaslarge
asthePreludefacility,isanimmenseoffshorefloatingfacilityinitsownright.Like
Prelude,theIchthysFPSO(picturedunderconstructionatFigure5.4)willusean
internalturretmooringsystemtoremainpermanentlymooredatsea.Alsolike
Prelude,theIchthysFPSOhasbeendesignedtoremainmannedduringcyclones.475

473ibid,pp34.
474MrWilliamTownsend,GeneralManager,ExternalAffairsandJointVenture,INPEX,Transcriptof
Evidence,7November2014,p4.
475ibid,p3.

121

Chapter5
476

Figure5.4:TheIchthysFPSOunderconstructionattheDaewooShipbuildingandMarineEngineeringshipyard.

5.26

MrTownsendexplainedthatINPEXhaddesignedalloftheIchthysprojectfacilitiesto
withstandtheonein10000yearevent.477Toputthisdesignintocontext,
MrTownsendalsoexplainedthatthesizeofthefacilitiesbeingasbigastheyare
meansthattheyareprettyrobustagainsttheweatherconditions.478Whenquestioned
ontheprocedurethatwouldbefollowedintheeventofacyclone,MrTownsend
indicatedthattheplannedresponsewillbetoreducemanninglevels,but[forthe
FPSO]toremainmanned.479Inrelationtohowsuchareductionwouldbecoordinated
ifcyclonicactivitywereimminent,MrTownsendindicatedthatthelocationofthe
Ichthysfield(whichisneartheboundarybetweentheIndianOceanandtheTimorSea)
meantthatanysuchprocedurewouldbecomplex:
OneofthechallengesoftheTimorSeaasopposedto,say,NorthWest
Shelfisthatcyclonestendtoformclosertothatareaandwehaveless
timetorespond.Thatisthenegative.Thepositiveisthatbecausethey
arestillforming,theytendnottobeasstrong.480

5.27

ThisobservationwassubsequentlyconfirmedbytheBureauofMeteorologysActing
RegionalDirectorforWesternAustralia,MrRussellStringer,whoexplainedthat
tropicalcyclonesare:

476OffshoreEnergyToday,IchthysFPSOhulllaunched,7July2014.Availableat:
http://www.offshoreenergytoday.com/ichthysfpsohulllaunched/.Accessedon22January
2015.
477MrWilliamTownsend,GeneralManager,ExternalAffairsandJointVenture,INPEX,Transcriptof
Evidence,7November2014,p3.
478ibid.
479ibid.
480ibid,p12.

122

Chapter5
low pressure systems that form over warm tropical waters and have
gale force winds near the centrethat is, sustained winds of 63
kilometresanhourorgreater,andgustsinexcessof90kilometresan
hour.481
5.28

MrStringerfurtherexplainedthatthesystemofcategorisingtheintensityofcyclones,
whichinAustraliaisdoneonascaleof15,isbaseduponmaximumwindstrength.The
BureauofMeteorologyssystemofcycloneclassificationisoutlinedinTable5.1.
482

Table5.1:CyclonecategorisationinAustralia.

5.29

Cyclone
category

Windspeed
(gust,km/h)

90125

Negligiblehousedamage.Damagetosomecrops,
treesandcaravans.Craftmaydragmoorings.

125164

Minorhousedamage.Significantdamagetosigns,
treesandcaravans.Heavydamagetosomecrops.Risk
ofpowerfailure.Smallcraftmaybreakmoorings.

165224

Someroofandstructuraldamage.Somecaravans
destroyed.Powerfailureslikely.

225279

Significantroofinglossandstructuraldamage.Many
caravansdestroyedandblownaway.Dangerous
airbornedebris.Widespreadpowerfailures.

280+

Likelyeffect

Extremelydangerouswithwidespreaddestruction.

Afterexplainingthatwhenatropicalcyclonereachescategory3intensityitiscalleda
severetropicalcyclone,MrStringerprovidedsomeinsightintohowcyclonicactivityin
watersofftheWesternAustraliancoastmightimpactuponpetroleumindustry
activitiesinthatregionand,inparticular,intheBrowseBasin,whereboththePrelude
FLNGfacilityandtheIchthysFPSOwilloperate.483AccordingtoMrStringer:
inothertropicalpartsoftheworldwherethereareextensiveoffshore
oilandgasinstallations,suchastheGulfofMexicoortheSouthChina

481MrRussellStringer,ActingRegionalDirectorforWesternAustralia,BureauofMeteorology,
TranscriptofEvidence,26November2014,p2.
482BureauofMeteorology,TropicalCycloneIntensityandImpacts.Availableat:
http://www.bom.gov.au/cyclone/about/intensity.shtml.Accessedon27January2015.
483MrRussellStringer,ActingRegionalDirectorforWesternAustralia,BureauofMeteorology,
TranscriptofEvidence,26November2014,p2.

123

Chapter5
Sea,cyclonestypicallyformatadistanceandthenmoveintothearea
ofinterest.484
5.30

Bycontrast,theBrowseBasinisanareawherecyclonesoftenforminsitu.Whilethis
makesitmoredifficulttoprovideaccurateforecastsatlongleadtimes,cyclonesin
thisareahavetypicallynothadasmuchtimetointensify[becausethey]tendto
intensifyastheyheadfurthersouthtowardthePilbara.485MrStringerthenprovided
somecontextforhisevidence:
We can illustrate this by considering how many severe tropical
cyclones passed through the Timor Sea, the Browse Basin and the
North West Shelf over a forty year period from 197172 through to
201011. In each case, a circle of radius 220 kilometres was
consideredthatis,120nauticalmiles,ortwodegreesoflatitude.The
number of severe tropical cyclones experienced in each region was
one, nine and 30respectivelythat is, one in the north west part of
theTimorSea,nineintheBrowseBasinandthirtyofftheNorthWest
Shelf. I need to caution that that is just a quick and indicative
inspectionofcycloneoccurrence,butithelpstoillustratethepoint.486

5.31

HowevermanyseveretropicalcyclonesmayormaynotimpactuponthePrelude
facilityonceitbecomesoperational,itisclearthattheBrowseBasinareaisa
challengingenvironment,periodicallysubjecttoextrememetoceanconditions.As
such,thedesignofthePreludehullandindeedthatofanyfacilitythatwilloperate
nearbyisundoubtedlyafundamentalsafetyfeature.

ProducingLNGatseatheimportanceoffacilitylayout
5.32

FLNGtechnologynecessarilyinvolvestheproductionofLNGatsea.Thisrepresentsan
addedlayerofcomplexityand,therefore,itisusefultoconsiderwhatspecificrisksare
associatedwiththisprocess,andhowShellseesitsPreludedesignmitigatingthese
LNGspecificrisks.

5.33

FPSOtechnologyenablestheproduction,storageandoffloadingofliquidhydrocarbons
atsea.FLNGtechnologyissimilar,butalsoaddstheliquefactionofnaturalgasintothe
offshoreequationaprocessthatinvolvesrefining,thenchillingandultimatelystoring
andhandlingnaturalgasat161Celsius.OnPrelude,mostofthecomplexand
sophisticatedequipmentrequiredinthisprocesswillbelocatedonthefacilitysdeck;
thesemodulesareoftenreferredtoasthefacilitystopsides.Thestartingpointfor

484ibid.
485ibid.
486ibid,pp23.

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Chapter5
Shellindesigningthetopsideswithsafetyastheparamountconsiderationwasthe
layoutoftheprocessmodulesonthedeckitself.
5.34

InprovidinganoverviewofthePreludefacility,Shellexplainedthattopsidemodule
designwasinformedbycarefulconsiderationofwhatisreferredtoasprocesssafety.
AccordingtoShell,processsafetymanagementisconcernedwiththe:
preventionofincidents(suchasfireorexplosion),resultingfrom[the]
unintentional release of energy or hazardous substances. Process
safety has been the single most important guiding principle for
developing the FLNG facilitys layout. This is primarily managed by
adherence to the relevant international and industry process safety
standards, and by the evaluation of the layout and process through
multiple formal safety assessment and quantitative risk assessments,
performedatrelevantdesignphasesoftheproject.487

5.35

Fundamentally,thelayoutofthePreludetopsidemodulesisdoneaccordingtorisk
profile,withthemosthazardouselementssuchastheflareplacedattheopposite
endofthefacilitytothelivingquarters.Preludehasbeenspecificallydesignedsothat
itsoperatorshaveminimalneedtoworkincloseproximitytothemorehazardous
modules.Shellexplainedthatthe:
livingquarters,thehelidecks,thecontrolroomandtheworkshopare
located at the back of the FLNG facility. These areas, where people
maybeworkingorresting,arebydesignfurthestawayfromtheturret
and processing facilities. These processing facilities are further
separatedbyrelativelylowriskequipmentandutilities.488

487SubmissionNo.9fromShellinAustralia,11August2014,p7.
488ibid,p4.

125

Chapter5
489

Figure5.5:LayoutofthePreludeFLNGdesign.

5.36

Passiveprotectiondesignelementsaimedatlimitingtheconsequencesof
accidentsisfundamentalinamelioratingtherisksassociatedwithLNGproduction
andcontainmentonthePreludefacility.Thedecklayoutprovidesoneexampleof
passiveprotectionwhichhasbeeninformedbyanunderstandingofhowalossof
integrityinonemodulecanhavecatastrophicconsequencesifothermodulesare
subsequentlyalsocompromised.Thisunderstandingwasreflectedinasubmissionby
Woodsidethatthelayoutofanyhydrocarbonfacilityhasamajoreffectonthe
consequencesofmajoreventsandonthearrangementsrequiredforemergency
response.490Itisalsoreflectedinthefactthat,asoutlinedinChapter4,adescription
ofthefacilitylayoutisanessentialelementofitssafetycase.

5.37

PreludeHSSEManager,MrGeraldDixon,explainedthatwhileonsomeolderfirst
generationassets,themodulestendtobestackedupononeanother,Shell
approachedthetaskofdesigningthelayoutofthetopsidemodulesonPreludetogive
maximumsafetyprofilefortheworkersontheassetforlivingandworkpractices.491

5.38

Theriskassociatedwithhandlingcryogenicmaterialinanoffshoreenvironment
providesanotherexampleofhowpassiveprotectionhasbeenintegratedintothe
Preludedesigntolimittheconsequencesofalossofintegritywithinsomeparticular
module.Amongthenumeroushazardsassociatedwiththeextremelycoldtemperature

489ibid,p2.
490SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p10.
491MrGeraldDixon,HSSEManager,Prelude,ShellinAustralia,TranscriptofEvidence,12November
2014,p4.

126

Chapter5
ofLNGisthatitwillembrittleanysteelthatitmightcomeintocontactwith.This
couldquicklyprovecatastrophicifalossofintegrityweretooccurwithinaPreludeLNG
module.Therefore,inordertoreducetheriskofembrittlement,thePreludefacilityhas
beenpaintedwithasubstanceknownasChartek7,whichwasoriginallydesignedasa
fireprotectant.492Chartek7shighspecificheatmeansthatitisalsoexcellentat
withstandingextremecoldanditsapplicationonPreludeistohelpthefacilityssteel
withstandcryogenictemperatures.
5.39

AnotherimportantexampleofpassiveprotectioninthePreludedesignisthe
incorporationofsafetygapsbetweenvarioustopsidecomponentsonthefacility.A
criticalsafetyfeature,thesafetygapsthreeofwhichare20metresinwidthandrun
perpendiculartothedecklayoutareanalogoustofirebreaks.Intheeventofalossof
hydrocarboncontainment,thesafetygapspermithydrocarbonstodissipate,
diminishingthepotentialoccurrenceofanexplosionandapotentialchainreaction
onthePreludefacility.AccordingtoShell:
intheunlikelyeventofanincident,thesafetygapswouldreducethe
riskofescalationby:

5.40

physicallyseparatingtheequipment

improving the dispersion of any leaked gas through free air

circulation,reducingthesizeofanypotentialgascloudcausedby
suchanincident

in the unlikely case of a gas cloud igniting, reducing flame

acceleration along the entire length of the process area, hence
decreasingtheoverpressurelevels.493

AsnotedintheCommittees2014report,concernshavebeenraisedastowhetherand
howthelayoutofthefacilitywillfunctiontoensurethesafetyofthosewhowillwork
onboard.TheWABranchSecretaryoftheAustralianWorkersUnion(AWU),
MrStephenPrice,explainedthattheAWUhas:
concerns over [the facilitys] structural design, considering we have
taken what normally would consume a fairly large footprint on terra
firma and sort of compacted it into this extremely large floating
facility; but where we normally have the benefit of space to provide

492InternationalProtectiveCoatings,Chartek7.Availableat:http://www.international
pc.com/products/info/FireProtection/Chartek7.aspx.Accessedon28January2015.According
toitsmanufacturers,Chartek7isahighperformanceepoxyintumescentfireprotectioncoating
system.
493SubmissionNo.9fromShellinAustralia,11August2014,p4.

127

Chapter5
added protection within an onshore facility, that ability has been
removedwhenwelookatfloatingtechnology.494
5.41

Similarly,theWAStateSecretaryoftheAustralianManufacturingWorkersUnion
(AMWU),MrStevenMcCartneyexplainedtotheCommitteethathisworry:
aboutthiswholeprojectisthatwhenIgotoWoodside,thereisaclear
definedareathatisthebombproofzoneandeveryoneknowsthatyou
have to evacuate to the bombproof zone if there is an explosion.
Inside Woodsides safety case there is a set up for tragedy and how
peoplewhocanevacuatetheareaintimewillevacuatebeforeitgoes
bang.Oneconcernis:whereisthatpointon[Prelude]?
[]
Our point isit always has been and always will bewhere are the
safezonesonthatboat?495

5.42

MrMcCartneyalsoexpressedconcernthatbecausethePreludefacilitywillbe
processingthegasandthegasisalreadyonboardeverylineon[the]vesselisfullof
gasandisapotentialproblemandapotentialhazard.496Puttingthisconcerninto
context,MrMcCartneyfurtherexplainedthateventhoughthefacilityisapparently
designedtotaketheebbandthrustoftheconditionsitwilloperatein,thereis
nowheretorunandnowheretoevacuatetoandnoabilitytoevacuate.497Therefore,
accordingtoMrMcCartney:
our question is: will they shut down the facility and fly everyone off
becauseofacyclone?Idonotthinkthattheywill.Ithinktheywilltry
to build a safety case that includes a skeleton staff etcetera. If they
saythattheywillhaveaskeletoncrew,thosearethepeople,Ithink,
whotheyarepreparedtorisk.Ihavenotseenasafetycaseanywhere
thathasthemanywhereelsebutonthatvesselinacatastropheandin
trouble.498

5.43

Issuesrelatingtoremainingmannedordemanningduringcyclonesarediscussed
furtherinChapter7.

494MrStephenPrice,BranchSecretary(WesternAustralia),AustralianWorkersUnion,Transcriptof
Evidence,10November2014,pp12.
495MrStevenMcCartney,StateSecretary(WesternAustralia),AustralianManufacturingWorkers
Union,TranscriptofEvidence,26November2014,p4andp10.
496ibid.
497ibid.
498ibid.

128

Chapter5
5.44

ShellalsosubmittedthatallofthesafetycriticalelementsonthePreludedeckhave
beendesignedwithmultipleredundancies.AsShellexplained,fulllengthescape
routesthatleadtotemporaryrefugesrunalongeachsideofthevessel,whilethe
centralalleyontheprocessdecklevelbetweentheportandstarboardsidemodules
providesanotherescapeway.499Asaresult,multipledifferentroutesfornavigating
thedeckarepossiblesothatinanemergencysituationmovingbetweenareasshould
notbeconstrainedbyaparticularhazard.

5.45

Finally,intheeventofahazardousincident,thelivingquartersdoubleupasthe
temporaryrefuge.500Furthermore,thelivingquarters,whichareseparatedfromall
processingequipmentbyafireandblastproofwall,havedirectaccesstoallmeansof
evacuationviahelicopter,freefalllifeboats(locatedaft)andintegratedchutebased
liferafts.501Emergencyplanningandresponseproceduresandinfrastructurearealso
furtherconsideredinChapter7.

5.46

AfurtherconcernraisedbytheAMWUrelatedtotheremotelocationoftheBrowse
basin,andthedifficultiessometimesexperiencedbyworkerswhospendweeksata
timeworkinginsuchlocations.MrGlennMcLaren,anAMWUOfficial,explainedtothe
Committeethatoneoftheissuesexperiencedbyworkersonexistingoffshorefacilities
iscommunicationorlackthereof.502MrMcLarennotedtheimportanceoftelephones
andtheinternettooffshoreworkers.Notonlydoesitallowthemtocommunicatewith
familyandfriends,itisrelieduponforactivitiessuchasbankingorpayingbills.
MrMcLarendescribedthedifficultiesofoperatingoutsideoftelecommunicationrange
asfollows:
Thereisadelayinthecommunication.Obviously,whenyouaredoing
internetbanking,ittimesoutbecauseofthetechnologicaldelay.The
problem we also find is trying to ring the family, given that workers
worka12hourshift;forexample,thenormalpatternisfrom11.00am
to 11.00pm and 11.00pm to 11.00am. We have peak times of
communicationwhentheworkersaretryingtogetontoacomputer
orringtheirlovedonesandkids.503

5.47

Theoutcomeofthisiscongestion,withsomenegativeconsequencesforworkers.
MrMcLarenprovidedthefollowingexampleofasituationthatariseswhenworkers
arenotabletocommunicatewithhome:

499SubmissionNo.9fromShellinAustralia,11August2014,p4.
500ibid.
501ibid
502MrGlennMcLaren,UnionOfficial,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p6.
503ibid.

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Chapter5
The phone dropped out. I was halfway through a conversation with
mywifeandtryingtoresolveanissuethatsbeenbrewingforawhile
andthephonedropsout.Icantresolveituntilthefollowingday.That
causesanxietyforourmembersoffshore.504
5.48

InMrMcLarensview,thecompaniesarenotinvestingheavilyenoughontheabilityto
communicatewithhomeandthatthencausesitsowninherentproblems.505

5.49

TheconcernsexpressedbyMrMcLarenareundoubtedlysignificant.InMay2014Shell
andINPEXjointlyannouncedplanstoconstructa$100million,2,000kilometresubsea
fibreopticcommunicationscablelinkingtheIchthysandPreludefacilitiestoPort
HedlandandDarwin.Thisinfrastructureaimstoensurethatprojectslocatedinthe
BrowseBasinoffNorthWestAustraliahaveaccesstohighspeeddataandvoice
communicationservicesforthelifeoftheiroperations.506Furthermore,thesystems
bandwidthisvast:withaninitialdesigncapacityof80x40Gbps,itwillalsohavethe
potentialtoscalewellbeyondthatastechnologymatures.507

Offloadingatsea
5.50

AmajorchallengeassociatedwithFLNGtechnologyistheneedtotransfercryogenic
materialbetweentwofloatingvessels.WhileLNGisordinarilyoffloadedfromawharf
toaship,orviceversa,safelytransferringcryogenicmaterialbetweentwofloating
vesselsisadifferentmatterentirely.

5.51

TransferringLNGatseaisacriticalareaofsafety,particularlyasLNGisnot
conventionallyprocessedandtransferredatsea,andthistransferoccursinadynamic
environment.ThissituationisrecognisedbybothShellandWoodside,astheir
discussionofthedesignoftheloadingarmforanFLNGfacilitydemonstrates.

5.52

Acknowledgingthatweatherisacriticalconcernforoffloadingsafety,MrGeraldDixon,
WoodsidesHSSEManagerPrelude,discussedthestrictweatherpoliciesinplacein
relationtotheuseofISVstobringtheLNGtankertotheFLNGfacility.MrDixonstated:
we have strict marine adverse weather policies for operation, and
there is also the additional guide wire, which ensures that when the

504MrGlennMcLaren,UnionOfficial,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p6.
505ibid.
506ShellAustraliaMediaRelations,INPEXandShelltopartnerwithNextgenGrouptobuildsubsea
fibreopticcable,MediaStatement,ShellinAustralia,12May2014.Availableat:
http://www.shell.com.au/aboutshell/mediacentre/newsandmediareleases/2014/fibre
optic.html.Accessedon4February2015.
507ibid.Gbpsreferstogigabitspersecond.

130

Chapter5
loadingarmsdogoacrosstothemanifold,whichisanindustryproven
technology,itwilllatchontothatloadingpoint.508
5.53

Similarly,inrelationtooffloadingandbringinganothervesselalongside[anFLNG
facility]andintheplanningandweatherforecastingforthisactivity,Woodsides
SeniorVicePresident,SustainabilityandTechnology,MrShaunGregory,stated
offloadingissomethingwedoalmosteveryday,butsidebysidewithavesselis
somethingwearespendingalotoftimeplanning,bothindesignandinprocedures
andhazardmanagement.509

5.54

Toaddressthischallenge,PreludehasbeendesignedtooffloadLNG(andLPG)intoa
carrierdockedalongsidethefacilityviaadoublecounterweightloadingarmthatcan
extenddownasfaras10mtoreachtheLNGorLPGcarriers.510AccordingtoShell:
thismeansthearmcanadjustandcopewithmovementfromboththe
facilityandcarrierduringoffloading.Anewcouplingdesignallowsfor
thearmsandcarriertoconnectsafelydespitethemovement.511

5.55

5.56

Duringloading,three6,700horsepower,azimuththrusters512willbeusedtohelplimit
themotionofthePreludefacilityandmaintainaconstantfixedposition.
Notwithstandingthisaspectoftheloadingarmdesign,Shellsubmittedthatthedesign
isanotherwiseconventionalloadingarmdesignwhichhasbeenprovenonLNG
operationsfordecades.513
Duringahearing,ShellsGeneralManagerforHealth,Safety,Securityand
Environment,MrAndrewDoherty,reiteratedthattheloadingarmtechnologyon
Preludewouldbesimilartechnologytoanyloadingarm,butacknowledgedthatthe
dynamicrelationshipbetweenthefacilityandaloadingLNGcarrierhadrequired
carefuldesignandtesting.MrDohertyexplainedthattheloadingarmhadbeen:
designedandtestedusingliquidnitrogen[which,at196Celsius,is
colderthanLNG]togiveusassurancethatindeedthatloadingarmwill
operatesafely.514

508MrGeraldDixon,HSSEManager,Prelude,ShellinAustralia,TranscriptofEvidence,12November
2014,pp1011.
509MrShaunGregory,SeniorVicePresident,SustainabilityandTechnology,Woodside,Transcriptof
Evidence,7November2014,p4.
510SubmissionNo.9fromShellinAustralia,11August2014,p4.
511ibid,p4.
512Anazimuththrusterisaconfigurationofmarinepropellersplacedinpodsthatcanberotated
through360degreeshorizontally,makingarudderunnecessary.
513SubmissionNo.9fromShellinAustralia,11August2014,p4.
514MrAndrewDoherty,GeneralManager,HSSE,ShellinAustralia,TranscriptofEvidence,
12November2014,p11.

131

Chapter5
5.57

MrDixonaddedthatthefacilitysadverseweatherpolicywasacriticalelementin
ensuringsafeLNGtransfer.AccordingtoMrDixon,theoffloadingoperationwillbe
subjectto:
strict weather criteria and the use of the [infield support vessels] to
bring in the LNG tanker and then it is fixed, obviously, with the
mooringlinestothefacilityiftheweatherconditionsareadverse
wind, tide, sea statethen that LNG tanker will not come alongside
thefacility.515

5.58

Aswithallofthefacilitysvariouselements,thedecisiontoconfigurePreludeforside
bysideLNGtransferwasbasedupontheprevailingmetoceanconditions.Thiswas
emphasisedbytheVicePresidentofLNGatExxonMobil,MrLukeMusgrave,whenhe
explainedthatplansforanFLNGfacilitytodeveloptheScarboroughgasfieldinthe
CarnarvonBasinwouldrequireadifferentoffloadingprocedure.Accordingto
MrMusgrove,LNGcarriersloadingfromaScarboroughFLNGwouldnotbetakinga
loadfromtheside,butwouldinsteadtandemoffload.516AsMrMusgroveexplained:
in a comparison between the systems that Shell are deploying at
Prelude and what [ExxonMobil] would deploy in the outer Carnarvon
basin for Scarborough, it is determined by the ocean conditions.
Because the prevailing sea states are a little rougher in the outer
Carnarvon [basin], the sidebyside loading and offloading is not the
most safe, so the tandem loading is by far a preferable
configuration.517

5.59

MrMusgravesevidencedemonstratesthatthedesignofanysafetyfeatureonan
offshorepetroleumfacilityisbasednotonlyuponthefunctionitistoperform,butalso
uponthecircumstancesinwhichitistooperate.InPrelude,Shellhasdesignednotonly
theworldsfirsteverFLNGfacility,butalsooneofthefirstfacilitiestobeinstalledin

515MrGeraldDixon,HSSEManager,Prelude,ShellinAustralia,TranscriptofEvidence,12November
2014,p11.
516MrLukeMusgrave,VicePresident,LNG,ExxonMobil,TranscriptofEvidence,10November2014,
p5.Thetransferatseaofconventionalliquidhydrocarbonssuchascrudeoilandcondensateis
ordinarilydonethroughafloatinghoseloadingsystem,amethodthatallowsconsiderable
distancetobekeptbetweenanFPSOandapetroleumcarrierduringloading.BecauseLNGisa
cryogenicsubstance,thereispresentlynosuitablefloatinghosetechnologythatcouldbeusedto
offloadLNGatareasonablerateoftransfer.AssuchthePreludefacilityhasbeendesignedto
offloadLNGviaarigidarm,whichisnecessarilymuchshorterthanafloatinghose.Shellsdesign
forthePreludefacilitywillseeLNGcarriersdockimmediatelyalongsideforthepurposeof
loading.Bycontrast,tandemoffloading,asenvisagedbyExxonMobil,wouldseeanLNGcarrier
dockingtoanFLNGfacilityinabowtosternconfiguration.
517MrLukeMusgrave,VicePresident,LNG,ExxonMobil,TranscriptofEvidence,10November2014,
p6.

132

Chapter5
theBrowsebasin.Furthermore,WoodsidesBODforitsBrowseBasinfieldsis
progressingonthebasisofusingShellsPreludedesign.
5.60

EachofthevarioussafetyfeaturesonthePreludefacilitywill,ofcourse,bedescribed
insignificantdetailinthesafetycaseandenvironmentalplanthatShellmustprepare
andsubmitforapprovalbytheNationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthority(NOPSEMA)beforethefacilitycanbeginoperationsin
Australia.

5.61

Aspreviouslystated,intheirsubmissionstoNOPSEMA,Shellwillberequiredto
provideevidenceoftheeffortstheyhavetaken,orwilltake,toreduceoperationalrisk
totheALARPstandard.Thesesubmissionswillthenbeassessedand,ifapprovalis
grantedandPreludebeginsoperations,NOPSEMAwillsubsequentlybeginmonitoring
andinspectingfacilityasperitspolicies.Underthesecircumstances,itisreasonableto
expectthatfurtherimprovementstosafetywillbemadeovertimeandthePrelude
safetycasewillbeamendedaccordingly.
Finding31
FLNGprojectproponentshaveusedasafetyindesignprocesstodevelopdesign
solutionsthatreducetherisklevelstoaslowasreasonablypracticable.
Finding32
ThedesignofanysafetyfeatureofanFLNGfacilitymustconsiderboththefacilitys
functionanditsparticularoperatingenvironment.

133

Chapter6
Environmentalmanagementregulation

Ensuringenvironmentalsafety
6.1

EnvironmentalmanagementisacriticalelementofallAustralianoffshorepetroleum
industryactivities.Inanoverviewofoffshorepetroleumlegislation,theDepartmentof
IndustryexplainedthattheOffshorePetroleumandGreenhouseGasStorageAct2006
(Cth)(OPGGSAct)andEnvironmentProtectionandBiodiversityConservationAct1999
(Cth)(EPBCAct)functiontoensurethatpetroleumcompaniesoperatinginAustralia
arerequiredtoconducttheiractivitiesinamannerthatensuresahighstandardof
environmentalprotection.518

6.2

TheOPGGSandEPBCActs,inconjunctionwiththeOffshorePetroleumand
GreenhouseGasStorage(Environment)Regulations2009(OPGGSERegulations),
stipulatecertainrequirementsforpetroleumindustryenvironmentalmanagement
practicesaswellasthepenaltiesthatmayapplyiftheserequirementsarebreached.By
andlarge,however,theenvironmentalsafetyregulatoryregimeinAustraliais
objectivebased,withindustrybeingreliedupontosetitsownenvironmental
objectivesandthenheldtoaccountagainstthesecommitments.Inabroadsense,the
aimofthisregulatoryregimeistoensurethatoffshorepetroleumindustryactivitiesin
Australiaarecarriedoutinanecologicallysustainablemanner,andinamannerby
whichtheassociatedenvironmentalimpactsandrisksarereducedtoalevelthatisas
lowasreasonablypracticable(ALARP)andacceptable.519

6.3

TheregulationofenvironmentalmanagementpracticesinAustraliasoffshore
petroleumindustryisthereforeverysimilartotheregulationofsafetystandards.In
bothcases,proponentsofoffshoreoperationsarerequiredtoconvinceandcontinually
demonstratetotheregulatorthattherisksandimpactsassociatedwiththeir
operationshavebeenreducedtotheALARPstandard.Forthepurposesofsafety,this
involvesreceivingregulatorapprovalforasubmittedSafetyCase,aprocessthatis
describedinChapter4.Forthepurposesofenvironmentalsafety,aproponentmust
receiveregulatorapprovalfortheirsubmittedOffshoreProjectProposaland
associatedEnvironmentPlansbeforetheycancommenceanyoffshoreactivity.This

518AustralianGovernment,DepartmentofIndustry,GeoscienceAustralia,OffshorePetroleum
ExplorationAcreageReleaseAustralia2014GeneralandSpecialNotices,p3.Availableat:
http://www.petroleumacreage.gov.au/2014.Accessedon2February2015.
519r3OffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).

135

Chapter6
chapterprovidesanoverviewoftheOffshoreProjectProposalandEnvironmentPlan
requirementsandoutlinestheassessmentprocessthatisfollowedforeach.This
overviewisthengivencontextviaadetailedexaminationofasummaryofShells
EnvironmentPlanfortheinstallationofsubseainfrastructureforthePreludeFLNG
project.ThisEnvironmentPlanreceivedregulatorapprovalinNovember2014.
6.4

Asthesoledesignatedassessorforenvironmentalmanagementofoffshorepetroleum
activitiesinCommonwealthwaters,itistheroleoftheNationalOffshorePetroleum
SafetyandEnvironmentalManagementAuthority(NOPSEMA)toensurethatthe
petroleumindustryoperatesincompliancewithAustraliasstatutoryenvironmental
requirements.520NOPSEMAsprimarydutyinthisregardistoassessandensure
compliancebyindustryoperatorswiththeirsubmittedOffshoreProjectProposalsand
EnvironmentPlans.
Finding33
Offshorepetroleumfacilities,includingFLNGfacilities,cannotoperateinAustralian
waterswithoutanOffshoreProjectProposal,togetherwithallassociatedEnvironment
Plans,firstbeingacceptedbytheNationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority.

OffshoreProjectProposals
6.5

Producingpetroleumresourcesfromadiscoveredoffshorereserverequiresthe
constructionandinstallationofvariouspiecesofinfrastructuresuchassubseawells
andpipelines,andoffshoreproductionandstoragefacilities.Thoughthespecific
infrastructurewillvaryaccordingtofieldcomposition,forthepurposesoftheOPGGSE
Regulations,aproponentsactivitiestodevelopaspecificresourcearegrouped
togetherunderthedescriptionofanoffshoreproject.Specifically,theOPGGSE
Regulationsdefineanoffshoreprojecttomean:
one or more activities that are undertaken for the purpose of the
recoveryofpetroleum,otherthanonanappraisalbasis,includingany
conveyance of recovered petroleum by pipeline (whether or not the
activityisundertakenforotherpurposes).521

6.6

Beforeanysuchoffshoreprojectcancommence,OPGGSEr5Arequirestheproponent
tosubmitanOffshoreProjectProposaltoNOPSEMAforassessmentonawholeof
lifecyclebasis.522AnOffshoreProjectProposalessentiallyprovidesanoverviewofall

520AustralianGovernment,DepartmentofIndustry,GeoscienceAustralia,OffshorePetroleum
ExplorationAcreageReleaseAustralia2014GeneralandSpecialNotices.Availableat:
http://www.petroleumacreage.gov.au/2014.Accessedon2February2015.
521r4OffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).
522NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Streamlining
environmentalregulationofpetroleumactivitiesinCommonwealthWaters,28February2014,

136

Chapter6
ofthevariousactivitiesthatwillbeundertakeninthedevelopmentofaspecific
(discovered)petroleumresource,fromdrillingandestablishingwells,toinstalling
pipelinesandcommissioningproductionplatforms.Aproposalmustincludedetailsof
theproject,describetheassociatedenvironmentalimpactsandrisks,setoutthe
environmentalperformanceoutcomesfortheproject,andincludeadescriptionofany
feasiblealternative.523
6.7

OnceitisinreceiptofanOffshoreProjectProposal,NOPSEMAmustfirstdetermine
whethertheproposalappropriatelyidentifiesandevaluatestheenvironmentalimpacts
andrisksoftheproject,whilealsosettingoutenvironmentalperformanceoutcomes
thatarerelevantandconsistentwiththeprinciplesofecologicallysustainable
development.IfareceivedOffshoreProjectProposalsatisfiesthesecriteriaitwillbe
deemedsuitableforpublicationandpublishedonNOPSEMAswebsitefora
mandatoryperiodofpubliccomment.524Attheendoftheperiodofpubliccomment,
theproponentisrequiredtoresubmittheOffshoreProjectProposal,alongwitha
summaryofallcommentsreceived,anassessmentofthemeritsofthesecomments,
andastatementofresponsetoeachclaim,includingademonstrationofanychanges,
ifany,thathavebeenmadetotheproposalasaresult.525NOPSEMAwillthen
ultimatelydeterminewhethertoaccepttheOffshoreProjectProposal,withacceptance
grantingtheproponentpermissiontobeginsubmittingEnvironmentPlansforeachof
theindividualactivitiesitwishestoundertakeinrelationtotheoverallproposal.

EnvironmentPlans
6.8

Beforeanyproposedpetroleumactivityincludingexplorationcancommencein
Commonwealthwaters,NOPSEMAmusthaveconsideredandacceptedtheassociated
EnvironmentPlan.ApetroleumactivityisdefinedintheOPGGSERegulationsas
operationsorworkscarriedoutinanoffshorearea,eitherpursuanttoarightthathas
beengrantedorinsatisfactionofanobligationthathasbeenimposed.526An
EnvironmentPlanisadetailedsubmissionthatdemonstrateshowtheenvironmental
impactsandrisksassociatedwithsomeproposedpetroleumactivitywillbereducedto
anALARPandacceptablelevel.

p2.Availableat:http://www.nopsema.gov.au/assets/Informationpapers/N04750IP1382
StreamliningenvironmentalregulationofpetroleumactivitiesinCommonwealthwaters.pdf.
Accessedon4February2015.
523r5AOffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).
524NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Streamlining
environmentalregulationofpetroleumactivitiesinCommonwealthWaters,28February2014,
pp23.Availableat:http://www.nopsema.gov.au/assets/Informationpapers/N04750IP1382
StreamliningenvironmentalregulationofpetroleumactivitiesinCommonwealthwaters.pdf.
Accessedon4February2015.
525r5DOffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).
526r4OffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).

137

Chapter6
6.9

BasiccontentrequirementsforanyEnvironmentPlanaredetailedatDivision2.3ofthe
OPGGSERegulations.Theseincludedetaileddescriptionsoftheactivitytobe
undertakenandtheenvironmentinwhichitwilloccur,anevaluationofthe
environmentalrisksandimpactsassociatedwiththeproposedactivityandathorough
environmentalmanagementimplementationstrategy.527Afterensuringthatthese
detailsareinorder,NOPSEMAbeginstheprocessofconsideringanEnvironmentPlan
byapplyingthecriteriaforacceptance,whicharespecifiedbyOPGGSEr10A.Inorder
tobeacceptedbyNOPSEMA,theOPGGSERegulationsrequirethatanEnvironment
Plan:
(a) isappropriateforthenatureandscaleoftheactivity;and
(b) demonstrates that the environmental impacts and risks of the
activitywillbereducedtoaslowasreasonablypracticable;and
(c) demonstrates that the environmental impacts and risks of the
activitywillbeofanacceptablelevel;and
(d) provides for appropriate environmental performance outcomes,
environmentalperformancestandardsandmeasurementcriteria;
and
(e) includesanappropriateimplementationstrategyandmonitoring,
recordingandreportingarrangements;and
(f) does not involve the activity or part of the activity, other than
arrangements for environmental monitoring or for responding to
anemergency,beingundertakeninanypartofadeclaredWorld
HeritagepropertywithinthemeaningoftheEPBCAct.528

6.10

Regulation10Aalsorequirestheproponenttoundertakeconsultationswithany
stakeholderswhosefunctions,interestsoractivitiesmaybeaffectedbytheactivities
tobecarriedout.529Tothisend,anEnvironmentPlanmustincludeareportonall
consultationsundertaken,includinganassessmentofthemeritsofanyobjectionor
claimandtheproponentsresponses,whilealsodemonstratingthatappropriate
arrangementshavebeenmadeforongoingstakeholderconsultation.

6.11

AftercompletingthisgeneralassessmentofthesubmittedEnvironmentPlan,
NOPSEMAwillthencloselyexaminethekeytopicareasassociatedwiththeproposed

527rr1216OffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).
528r10AOffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).
529ibid.

138

Chapter6
activity.530NOPSEMAexplainsthatkeytopicareasarecomponentsoftheprojector
activitythatposethegreatestlevelsofenvironmentalimpactorrisk,withthescopeof
thissecondaryassessmentprocesstakingintoaccountvariousfactorsincludinglevels
ofrisk,uncertainty,useofinnovativetechnology,andthetimingandgeographical
locationoftheactivitiesproposed.531
6.12

Animportantaspectofthesekeytopicareasistherequirementthatproponents
specificallyconsidertheimpactonandrisktomattersofNationalEnvironmental
Significance,asdefinedwithintheEPBCAct.532Specificinformationonmattersof
NationalEnvironmentalSignificance,whichrelatetosuchthingsofendangeredand
vulnerablespeciesandWorldandNationalHeritageareas,iscontainedinapublicly
accessibledatabasemaintainedbytheDepartmentofEnvironment.The
CommonwealthGovernmentexplainsthatproponentsareencouragedtoconsultthis
database[and]considertherangeofimpactsandriskstomattersofNational
EnvironmentalSignificanceassociatedwiththeirproposedactivities.533Inproviding
generaladviceregardingtheregulationofpetroleumactivitiesinAustralia,the
DepartmentofIndustrymakesitclearthatanyactivitiesproposedtooccurin:
areasofimportantecologicalandheritagevaluewillbesubjecttoa
high level of environmental scrutiny, and further assessment and an
EPBCACTapprovalmayberequired.534

6.13

AnotherimportantrequiredcomponentofeveryEnvironmentPlanisanOilPollution
EmergencyPlan(OPEP).WhereanEnvironmentPlanismostlypreventativeinscope,
anOPEPisacontingencyplanthatdescribeswhatstepswillbetakenintheeventof
actualenvironmentaldamageoccurring.Inordertoensurethattheproponentis
adequatelypreparedtorespondtoanoilspill,anOPEPmustincludeadequate
arrangementsforrespondingtoandmonitoringoilpollution,including:
(a) the control measures necessary for timely response to an
emergencythatresultsormayresultinoilpollution;
(b) the arrangements and capability that will be in place, for the
duration of the activity, to ensure timely implementation of the
control measures, including arrangements for ongoing
maintenanceofresponsecapability;

530NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Environmental
assessment,December2014,p3.Availableat:http://www.nopsema.gov.au/assets/Policies/N
04750PL1347EnvironmentAssessmentPolicy.pdf.Accessedon4February2015.
531ibid.
532AustralianGovernment,DepartmentofIndustry,GeoscienceAustralia,OffshorePetroleum
ExplorationAcreageReleaseAustralia2014GeneralandSpecialNotices,p4.Availableat:
http://www.petroleumacreage.gov.au/2014.Accessedon2February2015.
533ibid.
534ibid,p5.

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Chapter6
(c) the arrangements and capability that will be in place for
monitoringtheeffectivenessofthecontrolmeasuresandensuring
that the environmental performance standards for the control
measuresaremet;[and]
(d) the arrangements and capability in place for monitoring oil
pollutiontoinformresponseactivities.535
6.14

Inaddition,theOPGGSActrequirestheproponenttodemonstratethathassufficient
financialcapacitytomeetnotonlythecostsbutalsothepotentialliabilitiesassociated
withundertakingtheproposedactivity.536
Finding34
AnEnvironmentPlanforaproposedoffshorepetroleumactivitymustinclude:

adetaileddescriptionoftheactivitytobeundertakenandtheenvironmentin
whichitwilloccur;

anevaluationoftheenvironmentalrisksandimpactsassociatedwiththeactivity;

athoroughenvironmentalmanagementimplementationstrategy;

anOilPollutionEmergencyPlan;and

ademonstrationoftheproponentsfinancialcapacitytomeetthecostsand
potentialliabilitiesoftheproposedactivity.

Finding35
AnOilPollutionEmergencyPlanmustdescribethestepsthatwillbetakenintheevent
ofanoilspill,includingthecontrolmeasuresinplace,responsecapacityandcapability,
andarrangementformonitoringtheeffectivenessofcontrolmeasures.

Assessment
6.15

WhenitreceivesaproponentsEnvironmentPlan,NOPSEMAwillassessanddecide
whetherornottoacceptit.537UndertheprovisionsofOPGGSEr10,NOPSEMAisduty
boundtonotifytheproponentofitsdecisionwithin30days,thoughtheEnvironment
Regulationsalsoallowforanextensiontothistimeframeforvariousreasons(suchasif
thesubmissionisunusuallycomplexorifsomedetailsneedtobeclarified).Inthe

535r14(8AA)OffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009
(Cth).
536AustralianGovernment,DepartmentofIndustry,GeoscienceAustralia,OffshorePetroleum
ExplorationAcreageReleaseAustralia2014GeneralandSpecialNotices,p4.Availableat:
http://www.petroleumacreage.gov.au/2014.Accessedon2February2015.
537ibid.

140

Chapter6
eventthatNOPSEMAdoesnotacceptasubmittedEnvironmentPlaninthefirst
instance,theproponentwillbeadvisedandgivenanopportunitytomodifyand
resubmittheplan.IfNOPSEMAremainsunsatisfiedwitharesubmittedplan,itwill
refusetoaccepttheplan.538NOPSEMAadvisesthatitwillrefusetoacceptany
EnvironmentPlan:
that does not contain appropriate environmental performance
outcomes, environmental performance standards and measurement
criteria to demonstrate that the environmental impacts and risks of
theactivitywillbemanagedtoaslowasreasonablypracticableandto
acceptablelevels.539
6.16

OPGGSEr6makesitanoffenceofstrictliabilitytocommenceaproposedpetroleum
activitywithoutNOSPEMAfirsthavingacceptedtheassociatedEnvironmentPlan.540
ThismeansthatshouldanoperatorcommenceanactivitywithoutanEnvironment
Plan,thereisnoneedtoprovethatthiswasdoneintentionally,knowingly,recklessly
orevennegligently.541

6.17

NOPSEMAhasalsopublishedatableofgeneraladviceforproponents,detailing
mattersthatmustbeconsideredintheprocessofdraftinganEnvironmentPlan.
NOPSEMAsadviceissummarisedinTable6.1below.

538r10OffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).
539NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Streamlining
environmentalregulationofpetroleumactivitiesinCommonwealthWaters,28February2014,
p3.Availableat:http://www.nopsema.gov.au/assets/Informationpapers/N04750IP1382
StreamliningenvironmentalregulationofpetroleumactivitiesinCommonwealthwaters.pdf.
Accessedon4February2015.
540r6OffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).
541Strictliabilityisdefinedunders6.1oftheCriminalCodeAct1995(Cth).Seealso:
http://www.airborneaviation.com.au/resources/kbarticles/legalstrictliability.php.Accessed
on6February2015.

141

Chapter6
542

Table6.1:NOPSEMAEnvironmentPlanadvice

Matterprotected

NOPSEMAprohibitions

WorldHeritage
properties

NOPSEMAwillnotacceptanEnvironmentPlanthatinvolvesany
activity,otherthanarrangementsforenvironmentalmonitoring
oremergencyresponse,beingconductedinanypartofa
declaredWorldHeritageproperty(asdefinedbytheEPBCAct).
NOPSEMAwillnotacceptanEnvironmentPlanthatproposes
activitiesthatwouldcontraveneaplanofmanagementfora
WorldHeritagepropertyorproposesunacceptableimpactsto
theworldheritagevaluesofaWorldHeritageproperty.

Nationalheritage
valuesofdeclared
NationalHeritage
places

NOPSEMAwillnotacceptanEnvironmentPlanthatproposes
activitiesthatwillcontraveneaplanofmanagementfora
NationalHeritageplaceorproposesunacceptableimpactsto
theNationalheritagevaluesofaNationalHeritageplace.

Wetlandsof
international
importance

NOPSEMAwillnotacceptanEnvironmentPlanthatproposes
activitiesthatwillcontraveneaplanofmanagementfora
Ramsarwetlandorproposesunacceptableimpactstothe
ecologicalcharacterofaRamsarwetland.543

Listedthreatened
speciesand
ecological
communities

NOPSEMAwillnotacceptanEnvironmentPlanthatproposes
activitiesthatwillresultinunacceptableimpactsto,oris
inconsistentwitharecoveryplanorthreatabatementplanfor,a
listedthreatenedspeciesorecologicalcommunity.

Listedmigratory
species

NOPSEMAwillnotacceptanEnvironmentPlanthatproposes
activitiesthatwillresultinunacceptableimpactstoamigratory
speciesoranareaofimportanthabitatforamigratoryspecies.

Commonwealth
marine
environment

NOPSEMAwillnotacceptanEnvironmentPlanthatproposes
activitiesthatwillresultinunacceptableimpactstothe
environmentofaCommonwealthmarinearea.

542NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Streamlining
environmentalregulationofpetroleumactivitiesinCommonwealthWaters,28February2014,
pp45.Availableat:http://www.nopsema.gov.au/assets/Informationpapers/N04750IP1382
StreamliningenvironmentalregulationofpetroleumactivitiesinCommonwealthwaters.pdf.
Accessedon4February2015.
543TheConventiononWetlandsofInternationalImportancewassignedinRamsar,Iranin1971.

142

Chapter6
6.18

AfinalimportantaspectofallEnvironmentPlansistherequirementfortheproponent
tosubmitasummaryofanacceptedplantoNOPSEMAwithin10daysafterreceiving
noticeofacceptance.NOPSEMAthenpublishesthesummaryonitswebsite.The
purposeofthisrequirement,madeunderOPGGSEr11(3),isto:
inform the public about petroleum activities being conducted in
Commonwealth waters, to allow [proponents] to demonstrate that
they are carrying out their activities in a manner consistent with the
principlesofecologicallysustainabledevelopmentandtodemonstrate
that environmental impacts and risks are being managed to
acceptablelevelsand[are]aslowasreasonablypracticable.544

6.19

6.20

ProponentsarenotrequiredtodisclosethefullcontentoftheirEnvironmentPlansas
thesecontaintechnical(andoftenproprietary)information,whichiscommunicatedto
NOPSEMAthroughalegislativeprocessundertheexpectationtheinformationwillbe
keptconfidential.545Nevertheless,proponentsmustensurethattheirEnvironment
Plansummariescontainsufficientinformationto:

informthepublicofthepetroleumactivity;

demonstratehowthepotentialenvironmentalimpactsandrisksof
theproposedactivityhavebeenidentified;

demonstratehowthetitleholderismanagingthoseenvironmental
impactsandrisks;

demonstrate how the titleholder has consulted with relevant

personsanddetailthetitleholdersplansforongoingconsultation;

demonstrate how the titleholder has considered and addressed

anyobjectionsorclaimsraisedbyrelevantpersons;

demonstrate that the titleholder has sufficient arrangements in

placetorespondtopotentialoilspillemergencies;and

demonstratethatthetitleholderisabletoeffectivelymonitortheir
environmentalperformanceforthelifeoftheactivity.546

Detailsofthe283EnvironmentPlansubmissionsmadetoNOPSEMAareavailableon
theregulatorswebsite.Ofthese,256havebeenapproved,eightwerewithdrawn,one

544NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Environment
PlanSummaries,June2014,p3.Availableat:http://www.nopsema.gov.au/assets/Guidance
notes/N04750GN1448EnvironmentPlanSummaries.pdf.Accessedon4February2015.
545ibid,p2.
546ibid,p3.

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Chapter6
wasrefusedandafurther18arepresentlyunderassessment.547On4February2015,
summarieswereavailablefor247ofthe256EnvironmentPlansthathadbeen
approvedfourofwhichpertainedtoShellsPreludeFLNGproject.548

ThePreludeProjectSubseaInstallationEnvironmentPlanSummary
6.21

ShellsPreludeprojectisscheduledtobeginproductionin2017.Toachievethisgoal,
variousdrillingcampaignseachofwhichwasconductedsubsequenttothe
acceptanceofanassociatedEnvironmentPlanhavebeenconductedinthefield.
Furthermore,inNovember2014NOPSEMAacceptedShellsEnvironmentPlanin
relationtotheconstructionandinstallationofsubseainfrastructureassociatedwith
thePreludeproject.Assuch,ofthefourEnvironmentPlansummariesthathavebeen
providedbyShellandpublishedonNOPSEMAswebsite,threerelatetodrillingand
oneprovidesdetailsoftheinstallationofthePreludesubseainfrastructure.549Asthe
mostrecentpublishedEnvironmentPlansummary,thePreludeSubseaInstallation
EnvironmentPlanSummary(theSummary),providesausefulexampleofthe
informationthatismadepubliclyavailableasaresultoftheEnvironmentPlan
summaryrequirement.

6.22

TheSummarybeginsbydescribingthePreludeprojectlocationandoutliningthe
specificsubseainfrastructurethatwillbeinstalled,whichincludes:

twoproductionmanifolds;

oneriserbasemanifold;

fourproductionflowlines;

onesubseaumbilicalandassociatedsubseadistributionhardware;

jumpers,steelflyingleads,umbilicalterminationassemblies;

16mooringlinesand16piles;and

associated temporary equipment (initiation anchors and parking

frames)necessaryfortheinstallationactivities.550

547NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,EPSubmissions
&SummariesSearch.Availableat:http://www.nopsema.gov.au/environmental
management/epsubmissionsandsummaries/search/.Accessedon4February2015.
548ibid.
549ibid.
550ShellAustraliaPtyLtd,EnvironmentPlanPreludeSubseaInstallationSummary,9December
2014,p3.Availableat:http://www.nopsema.gov.au/assets/epsummaries/EnvironmentPlan
SummaryShellAustraliaPtyLtdPreludeSubseaInstallation.pdf.Accessedon4February2015.

144

Chapter6
6.23

TheSummarythendescribestheactivitiesthatwillbeundertakentoinstallthis
infrastructure,explainingthattheinstallationcampaignwillcommenceinmid2015to
mid2016andwillinvolvebetweenoneandsixvesselsoperatingintheprojectfieldto
performtheinstallationactivities.551AccordingtotheSummary:
upon arriving in the field, the installation vessel will set up a seabed
surveyarraytoaccuratelypositionthestructures.Thevesselwillthen
install the facilities on the seabed guided by Remotely Operated
Vehicles(ROVs).ApostinstallationvisualROVsurveywillalsobedone
torecordasbuiltandaslaidconditionsoftheinstalledfacilities.
Following offshore installation of the subsea facilities, there shall be
precommissioning work conducted by a precommissioning vessel.
The precommissioning activities include strengthtesting of the
flowlines after installation, and leak testing of the flowlines and
connectors. The subsea facilities will be installed filled with primarily
[ethyleneglycol]/watermixture.
Piles installation and mooring system prelay will be carried out by a
DPHeavyLiftInstallationVessel.Thepileswillbehammerdriven.
The subsea facilities will have a significant duration (for some
equipmentaround18months)betweenequipmentinstallationatsite
and hookup to and startup of the Prelude FLNG facility. In order to
ensure that equipment is able to perform safely as intended during
future operations, preservation activities are planned such as
surveillanceinspectionsandassessmentthroughmeasurements.These
preservation activities will typically comprise of general visual
nonintrusiveinspectionsusingROVs.552

6.24

TheSummarynextprovidesdescriptionsofboththephysicalandbiologicalprofileof
theenvironmentinwhichthesubseainstallationactivitieswilloccur.Accordingtothe
Summary,therearenosignificanttopographicalfeaturesintheregionofthePrelude
projectarea,withthemostsensitiveseabedfeaturesinthebroaderBrowseBasin
[being]thecoralreefsandislandstheclosestof[which]islocatedsome40kmsouth
southeastofthePreludelocation.553Owingtothisdistance,theplannedactivitiesare
notexpectedtoimpactanyofthesefeatures.554Insightintothemetoceanconditions
oftheareaisalsoprovidedwithintheSummary.

551ibid,p4.
552ibid,pp45.
553ibid,p5.
554ibid.

145

Chapter6
6.25

Inconsideringtheimpacton,andriskto,thebiologicalenvironment,theSummary
explainsthatwhiletheEnvironmentProtectionBiodiversityConservation(EPBC)
ProtectedMattersDatabasedoesnotlistanyThreatenedEcologicalCommunities
occurringinthemarineenvironment,thereareninelistedThreatenedSpeciesthat
couldpotentiallytransversethearea.555ThesespeciesareidentifiedasHumpbackand
BlueWhales,Flatback,Green,Leatherback,Hawksbill,OliveRidleyandLoggerhead
Turtles,andWhaleSharks.TheSummaryexplains,however,thattheareaofproposed
operationsdoesnotcontainanyrecognisedfeeding,breedingoraggregationareas
foranyofthesespecies.556

6.26

ConsiderationisalsogivenintheSummarytotheimpactoftheproposedactivitieson
thesocioeconomicenvironment,becausetheprojectareaoverlapswithavarietyof
commercialfishingmanagementareas.557AccordingtotheSummary,although
commercialfishingisconcentratedmostlyincoastalwatersandminimumfishing
occurswithinthevicinityofthepermitareashouldtherebeaspillresultingfroma
wellheadrelease,somefisheriesmayfallwithinthezoneofpotentialimpact.558

6.27

Similarly,thoughtheareaofproposedoperationsisnotlocatedinanyMarine
ProtectedAreas,intheeventofwellheadhydrocarbonrelease:
anumberofMarineReservesliewithinthezoneofpotentialimpact.
These include: Ashmore Reef, Cartier Island, ArgoRowley Terrace,
Oceanic Shoals, Mermaid Reef, Eighty Mile Beach, Roebuck,
Montebello, Kimberley Commonwealth Marine Reserve areas and
parts of the Southern coastline of the Indonesian Archipelago and
TimorIsland.559

6.28

Inlightofthesepotentialconsequences,theSummarythenoutlinestherisks
associatedwitheachplannedandeachunplannedevent,with[t]helevelofrisk
[having]beendeterminedbyassessingrisklikelihoodandconsequenceusingtheShell
RiskAssessmentMatrix.560Inprovidinganoverviewofallpotentialhazards,the
Summarycontainsatableoftenplannedeventsandsixunplannedhazards,the
potentialenvironmentalimpactassociatedwitheachandthemitigationmeasuresthat
ShellwilltaketoreducethesehazardstotheALARPstandard.Threeoftheunplanned
hazardsprovideusefulinsight;andarereproducedatTable6.2below.

555ibid,p6.
556ibid.
557ibid,p7.
558ibid.
559ibid.
560ibid,pp89.

146

Atsearefuellingwilloccurwithstrictadherencetorefuellingprocedures,reinforcedhoseswithdry
breakcouplingsandfailsafefittings;Operationwillcommenceindaylightundernormalconditions;
FavourablewindandseaconditionsasdeterminedbytheVesselMaster;Fuelhoseschanged
annuallyandrefuellingconstantlyobservedbycrewmemberinradiocontactwithVesselMaster.
ShipboardOilPollutionEmergencyPlans.
RegulatoracceptedOilPollutionEmergencyPlan.
OilSpillModellingindicatessurfacespilthydrocarbonsfromarefuellingincidenthaveno
probabilityofreachingenvironmentalsensitivitiesatlevelsabovethresholdsthatmayimpact
sensitivitiesinthearea.
ANoticetoMarinersadvisingofthepresenceoftheinstallationvesselswillbeissuedthrough
AMSApriortothecommencementoftheactivity.Ongoingcommunicationwith[theAustralian
FisheriesManagementAuthority]andothercommercialmarinerssuchthatthatpresenceof
vesselsiswidelycommunicated.
Allvesselsroutesarepredeterminedandriskassessed.
Vesselsequippedwithsuitablenavigationsystems.
Asupportvesselwillmonitorforapproachingvesselsduringtheinstallationactivities.
RegulatoracceptedOilPollutionEmergencyPlan.
RegulatoracceptedInstallationSafetyCaseandinstallationprogrammeetingShellsrequirements:

Training;

GlobalStandardsforWellDesignIntegrity;

RiskidentificationandmitigationthroughSafetyCases;and

Robustbarrierstoprotectagainstreleaseprevention.
RigorousliftingprocedurehasbeendevelopedbyShellandTechniptopreventtheriskofdropped
objects.
Aworstcasescenarioofhydrocarbonreleasefromthewellheadmayresultinentrainedand
dissolvedconcentrationsthatareabovethresholdsthatmayimpactsensitivitiesinthearea.
RegulatoracceptedOilPollutionEmergencyPlanoutlinesresponseactivitiestoreducethe
environmentalimpactandlinkstotheworstcasescenariocontingencyplan.

Potentialacute/chronic
toxiceffectsanddirect
physicalsmotheringof
marineorganisms.

Potentiallossofgasand
condensatetothe
marineenvironment
causingacute/chronic
toxicandphysicaleffect
onmarineorganismsand
habitats.

Dieselspill
resultingfroma
collisionwith
anothervessel

Hydrocarbon
Releasefrom
Formationdue
todropped
object

ControlsMitigationMeasure

Potentiallossofdieselor
fueltothemarine
environmentcausing
localisedandtemporary
acutetoxiceffectsand
directphysical
smotheringofmarine
organisms.

PotentialEnvironmental
Impact

Fuelspillduring
refuellingatsea

Hazard/Event

Chapter6

Table6.2:ExcerptfromSummaryEnvironmentPlanKeyenvironmentalhazardsandcontrolmeasures
561

561ibid,p13.

147

Chapter6
6.29

TheSummaryconcludesbyprovidinganoutlineofShellscorporatepoliciesonHealth,
Safety,SecurityandEnvironment(HSSE)andSocialPerformance(SP),explainingthat
Shellhasaprogramofauditsthattakeplaceatpremobilisationandduringthe
activities,andifanyneworincreasedrisksareidentifiedduringsuchanaudit:
anassessmentoftheriskwillbeundertaken.Ittheriskisdetermined
to be significant new or significantly increased risk, the associated
activities will not continue until acceptance of the management
approachtothenew/changedriskshasbeenprovidedandaccepted
byNOPSEMAandtheDepartmentofEnvironment.562

6.30

TheSummaryalsorevealsthatShellconsultedwithvariouskeystakeholdersinthe
courseofpreparingthePreludesubseainstallationEnvironmentPlan,including:

Commonwealth government departments (Department of

Industry, Department of Foreign Affairs and Trade, NOPSEMA,
NOPTA,AMOSC,AIMS,AMSA);

WesternAustraliagovernmentdepartments(DepartmentofMines
and Petroleum, Department of Transport, Department of Parks
andWildlife,DepartmentofEnvironmentRegulation);

Northern Territory government departments (Darwin Port

Corporation, Department of Mines and Energy, Department of
Business,DepartmentoftheChiefMinister);

Industrybodies(APPEA,CME);

Broomecommunitystakeholders(BroomeChamberofCommerce,
Djarindjin Aboriginal Corporation, Lombadina Council, Kimberley
MarineTourismAssociations);

Broomelocalgovernmentagencies(ShireofBroome,BroomePort
Authority);

Fishing industry associations (WAFIC, CommFish, AusTuna,

RecFish, NT Seafood Council, Kimberley Professional Fishermans
Association,PearlProducersAssociation);

562ibid,p14.

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Chapter6

6.31

Individual commercial fishing licence holders (Southern Bluefin

Tuna Fishery, Western Skipjack Tuna Fishery, Western Tuna and
Billfish Fishery, North West Slope Trawlery, Northern Prawn
Fishery, Northern Demersal Scalefish Fishery, Mackeral Managed
Fishery,NorthCoastSharkFishery,WestCoastDeepSeaFishery);
and

Environmental NGOs (Environs Kimberley, Save the Kimberley,

WWF,ConservationCouncil).563

Shellssummaryofresponsestrategiesintheoilpollutionemergencyplanisincluded
intheSummaryasanappendix.564ThissecondsummaryexplainsthatthePrelude
SubseaInstallationOilPollutionEmergencyPlan,whichwassubmittedtoand
acceptedbyNOPSEMAasacomponentoftheoriginalsubseainstallationEnvironment
Plan,setsoutShellandContractorresponsibilitiesandresponseactionsintheunlikely
eventofanoilspillduringtheseoperations.565TheOPEPidentifiesShellasthe
CombatAgencyforanyspillsemanatingfromPreludesubseainstallationactivities,
andexplainsthat,intheunlikelyeventofanoilspillduringtheseactivities:
Shellhasanumberofformalarrangementsinplacetoaccessexternal
assistanceifrequired.Theseinclude:

6.32

AustralianMarineOilSpillCentre(AMOSC)resources;

Australian Maritime Safety Authority (AMSA) has access to

resourcesundertheNationalPlan;

ShellsAMOSCmanagedsharedBroomeStockpile;

Mutual Aid arrangements (industry support from other

participatingpetroleumcompanies);

OilSpillResponseLtd(OSRL);and

ShellGlobalResponseSupportNetwork(GRSN).566

TheSummaryoutlinestheprocedurethatwillbefollowedintheeventofanoilspill,
explainingthat:
Shellwillimmediatelyfollowthevesselsprocedurestoprotecthuman
life, equipment and reduce the risk of fire or explosion. This may

563ibid,p15.
564ibid,p17.
565ibid.
566ibid.

149

Chapter6
involvecuttingoffsupplytothespillage,containingspillondeckifsafe
todosoandimplementingvesselsShipboardOilPollutionEmergency
Plan(SOPEP).NOPSEMAandotherrelevantauthoritiessuchasAMSA,
DepartmentofFisheries,DepartmentofTransportandDepartmentof
theEnvironmentwillbenotified,ifrequired.567
6.33

TheSummaryalsoprovidesanoverviewofthestrategiesandproceduresthatwillbe
followedtocontainandreducetheimpactofanysuchspill.

6.34

InsatisfyingtherequirementsofOPGGSEr11(3),theSummaryprovidesbasicdetailsof
themeasuresthatShellwilltaketoensurethatriskto,andimpactupon,the
environmentasaconsequenceofinstallingthesubseainfrastructureforthePrelude
projectwillbereducedtotheALARPlevel.

6.35

Ratherthanbeingadocumentthatissubjectedtoscrutiny,itmustberemembered
thattheSummaryisintendedtosimplydemonstratethattheproponentinthiscase
Shellunderstandsthefullrangeofrisksto,andimpactsupon,theenvironmentthatis
associatedwiththesubseainstallationcampaign.UltimatelyforNOPSEMAtohave
acceptedtheEnvironmentPlanfromwhichtheSummaryoriginated,Shellmusthave
demonstratednotonlythattheywereawareoftheserisksandimpacts,butthatthey
havedevisedandwillimplementappropriatestrategiesandproceduresinresponse.

6.36

Furthermore,itshouldalsoberecalledthatafteranEnvironmentPlanhasbeen
assessedandaccepted,NOPSEMAwillcontinuallymonitortheproponents
performanceoftheirenvironmentalcommitments,througharegimeofperiodic
inspections.
Finding36
UndertheOffshorePetroleumandGreenhouseGasStorage(Environment)Regulations
2009(Cth),theNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authorityisrequiredtoassessand,ifappropriate,acceptaprojectproponents
EnvironmentPlan.ForanEnvironmentPlantobeacceptedtheproponentmust
demonstratebothanawarenessofrisksandpotentialenvironmentalimpacts,andthat
appropriatestrategiesandprocedureswillbeimplementedintheeventofalossof
containment.

567ibid.

150

Chapter7
Emergencyresponsemanagement

Introduction
7.1

AccordingtoproponentsofFLNGtechnology,FLNGfacilitiesdonotincludeanytypeor
magnitudeofhazardssubstantiallydifferentfromthosealreadyinexistencein
Australiawhenconsidering:offshoresubseadevelopments,offshoreoilandgas
treatmentfacilities,floatingproductionandstorageandoffshore(sic)(FPSOs),floating
storageoffshore(FSOs)andLNGCarriers.568ConocoPhillipsMrMarkLeighstatedthat
thereisnotechnicalreasonwhyyoucannotmakeFLNGsaferthananyother
hydrocarbonbusiness.Itisfundamentallynodifferent.[]Idonotthinkthereis
anythingspecificallymagicanddifferentaboutit.Ithastobeaddressedonits
merits.569

7.2

Historyhasshown,though,thatnotonlydooffshoreplatforms,drillingrigsand
supportinfrastructureexperiencerelativelyminorincidents,therehavebeenanumber
ofmajorcatastrophiceventsintheoffshorepetroleumindustry.Someofthesewere
outlinedinChapter1ofthisreport.Furthermore,whilesomeseeFLNGtechnologyas
anevolutionofexistingtechnologies(suchasFPSOs)andothersseeitasrevolutionary,
regardlessofwhetheritisevolutionaryorrevolutionary,FLNGtechnologyisdifferent,
andthelargestFLNGfacilityintheworldwillsoonbemooredofftheWestern
Australiancoast.

7.3

While,asMrAndrewWoodhamsoftheAustralianPetroleumProductionand
ExplorationAssociation(APPEA)stated,majoraccidenteventsarerelativelyrare,570as
Chapter1hasshown,whenmajoraccidentsoreventsdohappen,theyoftenhave
seriousand,sometimesfatal,consequencesforthosewhoworkonornearthem,as
wellasmajorenvironmentalimpacts.AsMrRaymondBuchholz,GeneralManager,
MarineSafety,DepartmentofTransportadvised,thesetypesofincidentsoccurrarely,

568SubmissionNo.12fromConocoPhillips,15August2014,p2.
569MrMarkLeigh,TeamLeader,AssetIntegrityandProcessandSafety,ConocoPhillips,Transcript
ofEvidence,10November2014,p9.
570MrAndrewWoodhams,Director,SafetyandEnvironment,AustralianPetroleumProductionand
ExplorationAssociationLimited,TranscriptofEvidence,7November2014,p8.

151

Chapter7
butwhentheydotheyarereallybig.571WhetherFLNGfacilitiesprovetohaveabetter
safetyandenvironmentrecordthanothertypesofoperationsisyettobeproven.
7.4

Thisreport,tothispoint,hassummarisedthefederalregulatoryregimeforAustralias
offshorepetroleumindustry.Underthisobjectivebasedregime,theindustryis
responsibleforthesafetyofitsoperationsandworkforce,andtheenvironmentin
whichitoperates.Asstatedthroughoutthisreport,projectproponentsmust
demonstrateviatheirsafetycasesandenvironmentplansthatrisksassociatedwith
FLNGfacilitieshavebeenreducedtolevelsthatareaslowasreasonablypracticable
(ALARP).TheNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority(NOPSEMA),asregulator,providesoversightintheformofassessingsafety
casesandenvironmentplans,monitoringtheimplementationofcontrolsandsystems,
andconductinginspections.Thisregimewillapplytomost,ifnotall,FLNGfacilitiesoff
theWesternAustraliancoastastheymostlikelywillbeanchoredinCommonwealth
waters.

7.5

Chapters8,9and10outlineindustryapproachestoanumberofspecifichazardsthat
areparticularlyrelevanttoFLNGfacilities.Theseparticularhazardsareafunctionof
twomainfacts.First,ShellandWoodsidehaveindicatedthattheirFLNGfacilitieswill
notdemanduringsevereweathereventssuchastropicalcyclonesand,second,FLNG
facilitieswillbeproducingandoffloadingLNGatsea,ratherthanpipinggastoshorefor
processing.
Finding37
Thefocusoftheoffshorepetroleumindustrysemergencyresponsemanagementon
majoraccidenteventsreflectstherealitythat,whilemajoraccidentsarerelativelyrare,
theirimpactisoftenveryserious,withthepotentialforfatalitiestooccur.
Finding38
TheoffshorepetroleumindustryconsidersthatthereisnotechnicalreasonwhyFLNG
technologycannotbemadesaferthanotherhydrocarbonoperations.WhetherFLNG
facilitiesaresaferandenvironmentallylessriskythanotheroffshoreoperationsisyet
tobeproven.

Emergencymanagement:Nodifferentfromotheroperations?
7.6

AsChapters4and6explained,theoperatorisresponsibleforprovidingNOPSEMAwith
asafetycaseandanenvironmentplan.Notonlydothesedocumentsshowhow
hazardsareidentifiedandmajoremergencyeventswillbeprevented,theymustdetail
theoperatorsplannedresponsetoanyaccidentoremergencysituation.Thatis,the

571MrRaymondBuchholz,GeneralManager,MarineSafety,DepartmentofTransport,Transcriptof
Evidence,19November2014,p5.

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Chapter7
safetycasemustcontainanemergencyresponseplanwhichalsoclearlyshowsthat
resourcesareavailabletoimplementthatplan.
7.7

Inparticular,theOffshorePetroleumandGreenhouseGasStorageAct2006(Cth)
(OPGGSAct)imposesdutiesonoperatorsofFLNGfacilitiesinrelationtoFirefighting,
helicopter,searchandrescue,medicalfacilities,totheextentthattheyrelatetothe
healthandsafetyofpersonnelatafacility.572TheOffshorePetroleumandGreenhouse
GasStorage(Safety)Regulations2009(Cth)(OPGGSSRegulations)requirethattheSC
[safetycase]forafacilitymustcontainadetaileddescriptionofanevacuation,escape
andrescueanalysis[EERA],andafireandexplosionriskanalysis[FERA]bothof
whichformpartoftheformalsafetyassessmentforafacility.573Furtherdetailon
EERAsandFERAsisprovidedbelow.

7.8

ProponentsofFLNGtechnologyhaveadvisedthattheirincidentresponseprocessesfor
FLNGfacilitieswillbethesameasforotherfacilitiestheyoperate.Forexample,
Woodsidehasstatedthatintheeventofanemergency,itwilladoptthesame
processesandsystemstomanageemergencyresponseandincidentmanagement
effortsascurrentlyappliedacrossallofourexistingfacilitiesandassetsinAustraliaand
acrosstheglobe.574AccordingtoWoodsidesMrShaunGregory,thecompanyhas:
acorporatewideapproach,soitactuallyscalesandworksnomatter
what, whether it is a kidnapping event, a lost traveller event, an oil
spill event or a cyclone event. Ittriggers the exact same emergency
structure. It saves the crisis management team having to learn
differentsystems;itisthesame.575

7.9

GDFSUEZBonapartesubmittedthatwhenconsideringFLNGtechnologytodevelopthe
Bonapartefieldsitidentifiedtherequirementsforemergencyresponseandthe
evacuationofpersonnelfortherangeofpotentialemergencyscenarios,fromsmall
scalemedicalevents,throughtolargescaleevacuationsduetomajoraccident
events.576Fromthisitdeterminedthatthemanagementofpersonnelfollowing
evacuationfromthefacilityandtheirrecovery,andthesubsequentmedicalresponse
andtreatment,wouldhavebeeninamannerconsistentwiththearrangements
currentlyinplaceforexplorationandproductionactivitiesintheCommonwealth
watersofthenorthwestandnorthofAustralia.577

572SubmissionNo.20fromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,11December2014,p1.Emphasisinoriginal.
573ibid.
574SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p20.
575MrShaunGregory,SeniorVicePresident,SustainabilityandTechnology,WoodsideEnergyLtd,
TranscriptofEvidence,7November2014,p6.
576SubmissionNo.5fromGDFSUEZBonapartePtyLtd,30July2014,p5.
577ibid.

153

Chapter7
7.10

Similarly,ShelladvisedthatitsPreludeFLNGresponsestoscenariossuchasman
overboard,fireoraleakofhazardousmaterialwillbenodifferenttothatofanyother
offshoreinstallationoperatingintheregion.578
Finding39
ProponentsofFLNGfacilitiesinAustralianwaterswillemploythesameemergency
managementandprogressiveresponseprocessesforFLNGfacilitiesasthoseadopted
fortheirotheroffshoreinstallationsintheregion.

7.11

TheCommitteehasalsoheardanumberofconcernsinrelationtotheemergency
capacityandpreparednessofoperatorsofFLNGfacilities.Theserelatelargelytothe
remotenessofFLNGfacilitylocations,thesafeevacuationofthefacility,thecompact
environmentinwhichpeoplewillbeworkingandthelimitedamountofknowledgein
thepublicrealm.

7.12

Forexample,theMaritimeUnionofAustralia(MUA)statedthatithas:
grave concerns about the ability of a FLNG facility to respond to an
emergency, as well as the ability of onshore emergency services to
respond to an emergency, given the remote areas where FLNGs are
proposed to be located. The waters off the remote Kimberley region
are a difficult maritime environment to say the least and an area
susceptibletocyclones.Thisisamajorconcerngiventhatthesafetyof
the workforce and the safe evacuation of the workforce is the key
consideration in the event of a significant incident that could pose a
risktoworkers.579

7.13

FortheMUA,inaneventofabandonmentofanFLNGvessel,thereareunanswered
questionsregardingtheoperationoflifeboatsandotherlifeflotationdevices.580

7.14

InrelationtothecompactworkingenvironmentonanFLNGfacility,theAustralian
ManufacturingWorkersUnion(AMWU)comparedanFLNGfacilitylayoutwiththatof
anonshoreLNGfacilitywheretheproductioninfrastructureismorespreadoutalong
theground,withastart,amiddleandanend.581TheAMWUsconcernisthat:
FLNGisgoingtograbthatwholeprocessandturnitthatway[vertical]
sothateverybodywillbeworkingontopofeveryone.Therewillbea
lotmoreissuesaroundworkingaboveandbelowpeoplethanyouwill
everfindinanyotherfacilityanywhere.Becausethewholeprocesswill

578SubmissionNo.25fromShellinAustralia,19December2014,p6.
579SubmissionNo.13fromMaritimeUnionofAustralia,3November2014,p4.
580ibid.
581MrStevenMcCartney,StateSecretary,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p7.

154

Chapter7
bedoneoffshore,itwillbeactingverydifferentlytoanFPSO,because
theFPSO,ofcourse,onlydoesthefirstprocessoffshore.Thisisdoing
thewholeprocessfromgotowoeoffshore,sothatmeansthefreezing
facility, the storage facilityall those thingsare all together in one
bigpackage.AsIsaidbefore,theothertensionbehindthatis:where
doyougowhenitgoeswrong?582
7.15

ThecompressionofprocessingfacilitiesisclearlydemonstratedinFigure7.1which
comparesthedeckareaofthePreludefacility(highlightedinorange)tothefootprint
ofWoodsidesPlutoLNGfacilityontheBurrupPeninsula(highlightedinyellow).
Althoughitmustbeappreciatedthatgasfieldcompositionisacriticaldeterminantof
thesizeofanynaturalgasprocessingfacility,thePlutoandPreludefacilitiesareboth
singletrainLNGfacilitieswithannualproductioncapacityof4.3milliontonnesand3.6
milliontonnesofLNGrespectively.
Figure7.1:ThePreludefacilitydeckareainthecontextofthePlutoLNGplantfootprint.

7.16

Indiscussingevacuationproceduresandcapabilities,theMUAsMrIanBraystatedthat
therearequestionsthatwe[theMUA]donothaveanswersto.583ForMrBray,as
thingscomeonandit[thePreludeFLNGfacility]isgettingcloserandyouarestartingto
pickupthepictureoftheoperation,theremotenessoftheoperationandsomeofthe

582ibid.
583MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
7November2014,p8.

155

Chapter7
contingenciesthatshouldbeconsidered,Ithinkweareprobablycomingupwithmore
questionsthanweareanswers.584
7.17

MrStephenPrice,BranchSecretaryoftheAustralianWorkersUnion(AWU)expressed
similarconcern,questioningwhetherthecapacityexiststomanageanymajorincident
onanyofourhydrocarbonprocessingfacilities,particularlyintheeventofmultiple
incidents.585MrPricestatedthat:
ifBPblewup,wewouldstruggle,andifsomethingwentwrongatKGP
[the Karratha Gas Plant] for Woodside, the same thing. If we are
talkingaverylargequantity,multipleincidenttypeoccurrence,which
whenthesethingsexplodeisexactlywhathappens,Ithinkwewould
struggleanywhereoutofPerthtobeabletodealwiththat.Thatisone
thing:shouldsomethinghappen,forexample,wewillneedtogoand
find someone. But the second part to that is: once you do find
someone, what happens after it? What is the flowon? If there is a
majoroccurrence,whathappens?Whatdowedowhenwearetalking
asignificantnumberofcasualties?586

7.18

MrAndrewWoodhams,APPEAsDirector,SafetyandEnvironment,gavesupportto
suchconcernsinrelationtomajoraccidentevents,instatingthatrecentmajor
accidenteventstellusthatwehavenotgotprocesssafetyright.Wearetendingto
trackthatwiththingslikelossofcontainmenteventsintheoffshorespace;thatisnot
downtozerosowearenothappy.587

7.19

However,inresponsetoquestionsrelatingtoShellsresponsibilityandcapacitytodeal
withmajoraccidenteventswithmultiplecasualties,MrAndrewDoherty,General
Manager,HSSE,stated:
I can only stress again clearly that our focus is on prevention and a
multiple scenario and we are focusing on ensuring that we are
preventing the likelihood of those events happening. What we are
doingismakingsurethattheemergencyresponseprocedureswehave
inplacearethenlookingatthescenarios,whatwewouldanticipate,
and making sure that we have provision for that, and that we can
reliablysecurethesaferecoveryandtreatmentofanyonewhowould

584ibid.
585MrStephenPrice,BranchSecretary,AustralianWorkersUnion,TranscriptofEvidence,
10November2014,p9.
586ibid.
587MrAndrewWoodhams,Director,SafetyandEnvironment,AustralianPetroleumProductionand
ExplorationAssociationLimited,TranscriptofEvidence,7November2014,p10.

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Chapter7
beinjured.Thatisthepracticethatisinplacerightnowonthedrilling
rig.588

Emergencyresponseplans
7.20

Shellsubmittedthatitiscommittedtoanongoingstateofemergencypreparedness
andhasan:
emergency response framework designed to comply with standards
andregulatoryrequirementsrelevanttoAustralianoperations,which
are also aligned to Shells global standards and based on sound
emergency management principles and good industry practice. Shell
Australia has a dedicated emergency response team, which is on
standby24/7toreacttoanyincidentsasaresultofouroperations.589

7.21

7.22

Woodsidestatedthatitsemergencymanagementarrangementsarefocusedaround
prevention,preparedness,responseandrecoveryphilosophybasedonanallhazards
approach.590AccordingtoWoodside,itsemergencyandcrisismanagementframework
allowsescalationofresponseasrequiredbytheevent,withpriorityinacrisisgiven
to:

Peoplethesafetyandsecurityofourpeople;

Environmentthepreservationoftheenvironment;

Assetprotectionofourassets;

Reputationthepreservationandwherepossibleenhancementof
ourreputation;

Livelihoodprotectionofourlicencetooperate;and

Servicesmaintaincriticalbusinessfunctions.591

APPEArecognisesthatoperatorsortitleholdersarerequiredtonotonlydemonstrate
theirownabilitytorespondtolowandmediumconsequenceevents,buthowtheywill
respondtohighconsequenceevents(MAEs)nomatterhowlowtheprobability.592

588MrAndrewDoherty,GeneralManagerHSSE,ShellAustralia,TranscriptofEvidence,
12November2014,pp1011.
589SubmissionNo.9fromShellinAustralia,9August2014,p8.
590SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p16.
591ibid.
592SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociationLimited,
20August2014,p21.UndertheOPGGSERegulations,thetitleholderisresponsibleforpreparing
theEnvironmentPlanandOilPollutionEmergencyPlan,whileundertheOPGGSSRegulations,
theoperatorisresponsibleforthesafetycase.ThisreportconcernstheuseofFLNGtechnology

157

Chapter7
Emergencyeventsaregenerallyclassifiedintoahierarchyoflevelsortiers,withmost
emergencyresponseframeworksstructuredaroundthesetiers,suchthatmovingfrom
oneleveluptoanotherwilltriggeradditionalresourcingcascadingintothe
response.593
7.23

Forexample,Woodsidehasathreetieredapproachtoemergencymanagement,as
showninTable7.1below.
594

Table7.1:Woodsidesthreetieredapproachtoemergencymanagement

7.24

Responselevel

Emergencymanagementstructure
Resource
Response

Level3

Crisismanagementteam

Strategicmanagement

Level2

Incidentcoordinationcentre(s)

Operationalsupport

Level1

Emergencyresponseteam(s)

Tacticalresponse

Woodsidesubmittedthatthisthreetieredstructureisalignedandconsistentwiththe
WesternAustralianStateandCommonwealthGovernmentsemergencymanagement
protocols,includingresponselevels,resourcingandcommondefinitionstoincident
levels.Operatingfacilitiesandassetsdevelopsitespecificemergencyresponseplansto
prepareforallidentifiedrisks.595

7.25

WoodsidesMrShaunGregoryadvisedthataleveloneemergencyishandledonthe
facility;aleveltwomeansthefacilitywouldrequirehelp,whetheritbefroma
corporate,fromusinPerth,orfromKarrathaorBroome,oragovernmentagency;and
levelthreedescribesasituationwherethathelpisgoingtobesustained.596

7.26

Asnotedabove,anoperatorsdemonstrationofemergencypreparednessrequiresan
EERAandaFERA.TheEERA:

Identifi[es] the types of emergencies and fires and explosions

thatcouldariseatthefacility;

Consider[s] a range of: primary and alternate escape routes,

procedures for managing the escape and rescue, means of and
equipment for evacuation, escape and rescue, amenities and

toproduceadiscoveredpetroleumresource,ratherthanexplorationactivitiesundertakenby
titleholders.Therefore,foreaseofdiscussion,theCommitteegenerallyusesthetermoperatorin
discussingtheworkplaceandenvironmentalsafetyresponsibilitiesofFLNGprojectproponents.
See:SubmissionNo.28fromDepartmentofIndustryandScience,16April2015,p1.
593ibid.
594Basedonfigureprovidedin:SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p16.
595SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p16.
596MrShaunGregory,SeniorVicePresident,SustainabilityandTechnology,WoodsideEnergyLtd,
TranscriptofEvidence,7November2014,pp67.

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Chapter7
means of emergency communication to be provided in a
temporaryrefuge,lifesavingequipment;and

7.27

Identifi[es],asaresultofsuchconsiderations,oftechnicaland
other control measures necessary to reduce the risks associated
with emergencies to a level that is as low as reasonably
practicable.597

TheFERA:

Identifi[es]thetypesoffiresandexplosionsthatcouldariseat
thefacility;

Consider[s] a range of measures: for detecting, eliminating or

reducing the risk arising from fires and explosions, incorporation
into the facility of automatic and manual systems to detect,
control and extinguish fires and leaks or escapes of petroleum,
isolationandstoringhazardoussubstances;

Consider[s] the EERA, in so far as it relates to fires and

explosions;and

Identifi[es] , as a result of such considerations of technical and

other control measures necessary to reduce the risks associated
with fires and explosions to a level that is as low as reasonably
practicable.598

Finding40
TheOffshorePetroleumGreenhouseGasStorage(Safety)Regulations2009(Cth)
requireaprojectproponentssafetycasetoincludeanevacuation,escapeandrescue
analysis,andafireandexplosionriskanalysis.
7.28

ShellhasadvisedtheDepartmentofMinesandPetroleum(DMP)thatthePrelude
FLNGemergencyresponseplanwilldealwithatleastthefollowing:

hydrocarbonspills;

chemicalspills;

damagetowells,pipes,flowlinesandothersubsurface,surfaceor
suspendedstructures;

597SubmissionNo.20fromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,11December2014,p1.
598SubmissionNo.20fromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,11December2014,pp12.

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Chapter7

7.29

7.30

firesandexplosions;

securityissuesorterrorism;

medicalevacuation;

extremeweatherconditions;and

trafficortransportaccidents.599

BasedoninformationprovidedbyShell,DMPadvisethatthecompanysemergency
responseplanwillmeetthefollowingrequirements:

itreceivestheapprovaloftherelevantauthorities;

staffaretrainedinitsactivationandimplementation;

it is backedup by the necessary resources, equipment and

facilities;

it is known to external agencies that may be called upon to

respond;and

drillsareconductedandevaluated.600

Thefollowingchaptersdiscussparticularemergencysituationsandarrangementsthat
areinplacetomanagethem.Theyincludediscussiononwhathappensinasevere
weatherevent,anaccidentorexplosion,apersonoverboardandanoilspill.These
chaptersalsoincludediscussionofthecooperationbetweenoilandgasoperators,and
theinvolvementoffederalandstateagenciesintheeventofanoffshoreemergency.

599SubmissionNo.4fromDepartmentofMinesandPetroleum,14July2014,p5.
600ibid.

160

Chapter8
Whathappensduringacyclone?

Severeweatherevents
8.1

Generallyspeaking,therearethreemainoptionsforoffshorepetroleumvessels,rigs,
platformsetcwhenacycloneoccurs.Theycan:

movepositiontoavoidthecyclone;

reducemanninglevels,maintainingonlyaminimumcrew;or

demanorevacuatethefacility,leavingnopersonnelonboard.

8.2

GiventhatFLNGfacilitieswillbepermanentlymooredinposition,movingtoavoida
cycloneisnotanoption.Inrelationtotheremainingoptions,asnotedpreviously,Shell
andWoodsidehaveindicatedthattheirFLNGfacilitieswillnotdemanintheeventofa
cyclone;ratherpersonnelwillstayonboardthefacility.

8.3

Beforediscussingthisindetail,itisusefultoexaminethecyclonewarningsystemin
placeandthemeteorologicalinformationavailabletooperatorsthatallowthemto
makedecisionsaboutwhatactiontotaketomanageasevereweatherevent.

Cyclonewarnings
8.4

AsnotedinChapter2,FLNGfacilitiesalongwiththeirsupportvesselswillbe
mooredinstormandcyclonepronewaters.Itisthereforeessentialthatoperators
receivereliable,accurateandtimelymeteorologicalinformation.

8.5

InAustralia,theBureauofMeteorology(BoM)providesregularforecasts,warnings,
monitoringandadvicespanningtheAustralianregionandAntarcticterritory.601
AccordingtotheBoM:
thesinglemostimportantsourceofobservationsinrelationtotropical
cyclones is weather satellites. These observations provide systematic
coverage of the remote ocean areas where tropical cyclones develop
and from where other types of data are very sparse. Satellite
observations are the primary means for tracking cyclones and

601BureauofMeteorology,Aboutus,nd,np.Availableat:
http://www.bom.gov.au/inside/index.shtml?ref=hdr.Accessedon2February2015.

161

Chapter8
determining their intensity and structure. Satellite observations also
providekeydatafornumericalweatherpredictionmodels.602
8.6

Thisinformationissupplementedbyonsiteinformationgeneratedthroughsurface
observingsystems.Thisthenhelpstoconfirmfeaturesofthetropicalcyclonemore
accurately,suchastheintensityandsize,andwaveheights.603

8.7

Inrelationtoitsmarineandoceaninformation,whichisavailabletopetroleum
operatorsinAustralianwaters,theBoMprovides:

8.8

A Long Range Tropical Cyclone Outlook describing the risk of

tropicalcycloneformationforthenextthreeweeks(receivedevery
Tuesday)

A facility specific (area specific) sevenday TC [tropical cyclone]

outlookandashortrangethreedayTCoutlook

Adailyweatherforecastforeachfacility.604

ConocoPhillipssubmittedthat:
inadditiontothis,onceacyclonedevelopswereceiveaTCtrackmap
every day depicting range, bearing, speed, intensity and ETA
[estimated time of arrival] of gales to our facilities. As the cyclone
intensifies, the daily map becomes a sixhourly forecast and then
threehourlyforecast.605

8.9

EvidencetotheInquiryshowsthatindustryissatisfiedwiththequalityofinformation
providedbytheBoM.Forexample,INPEX,innotingthattheyaretiedintothecyclone
warningcentreandreceivefourreportsaday,statedthattheywerecomfortable
withtheinformationbeingreceivedandhadnotheardanycomplaintsaboutit.606
Whileacknowledgingthatyoucanneverpredictexactlybecausecycloneweather
systemsareunpredictable,ExxonMobiladvisedthattheweathermanagementand
alertsystemsareverysophisticated,andthattheyengageearlywiththerelevant
expertsaroundveryearlypredictionsaroundwhattypesofactivitytoexpect.607

602SubmissionNo.22fromBureauofMeteorology,11December2014,p2.Note:Australiadoes
notoperateanyweathersatellites,butisamemberoftheUnitedNationsWorldMeteorological
Organisation,whichcoordinatesarrangementsamongstsatelliteoperatingcountriesandother
countriesforsharingthisimportantdata.
603SubmissionNo.22fromBureauofMeteorology,11December2014,p2.
604SubmissionNo.19fromConocoPhillips,9December2014,p2.
605ibid.
606MrWilliamTownsend,GeneralManager,ExternalAffairsandJointVenture;andMrRichard
Wilson,SeniorIndustryAdviser,INPEX,TranscriptofEvidence,7November2014,p12.
607MrLukeMusgrave,VicePresident,ExxonMobil,TranscriptofEvidence,10November2014,p8.

162

Chapter8
ConocoPhillipssubmittedthatthequalityandtimingoftheBoMserviceissufficient
fordemobilisationofnoncorepersonnel.608
8.10

TheAustralianPetroleumProductionandExplorationAssociationLimited(APPEA)
advisedthatitsmembersaresatisfiedwiththecurrentadequacyofweatheralerts
fromtheBureauofMeteorology(BoM).IndustryregularlyengageswiththeBoM,
particularlyintheleaduptocycloneseason.609APPEAalsonotedthat,aswithany
riskmitigatingactivity,continuousimprovementisparamountasnewtechnologyand
innovationsinforecastingmethodsbecomeavailable.610
Finding41
Reliable,accurateandtimelymeteorologicalinformationisessentialtothesafe
operationsofalloffshorepetroleumfacilities.ThisisespeciallythecaseforFLNG
facilitieswhicharenecessarilypermanentlymooredinpositionandunabletomove
positiontoavoidanextremeweatherevent.
Finding42
OffshorepetroleumoperationsinAustralianwatersreceivemeteorologicalinformation
fromtheAustralianBureauofMeteorologyandfromotherprivateexpertservices.
Finding43
Theoffshorepetroleumindustryissatisfiedwiththequalityofmeteorological
informationitreceivesfromtheBureauofMeteorology.

Cycloneavoidanceforvessels
8.11

TheCommitteeunderstandsthatthesafestprocedureinrelationtocyclonesisto
avoidthem.Standardoperatingprocedureistostayatsea,findthesafestwater
possibleandrideitout.MrIanBray,AssistantNationalSecretary,MaritimeUnionof
Australia(MUA),explainedthat:
generally,ifitcanbeanticipated,thenormalprocedureofnavigation
would be to go around; and there are set criteria in terms of
operationalproceduresforvessels,notonlyofftheWesternAustralian
coast, but the Australian coast, in terms of how to get around a
cycloneinthesafestpossibleway.611

608SubmissionNo.19fromConocoPhillips,9December2014,p2.
609SubmissionNo.23fromAustralianPetroleumProductionandExplorationAssociationLimited,
15December2014,p4.
610ibid.
611MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
7November2011,p2.

163

Chapter8
8.12

AccordingtoCaptainVictorJustice,ChiefExecutiveOfficeroftheKimberleyPorts
Authority,primarily,whatthevesselsneedtodoistomoveoffintothesafequadrant
ofthecyclonewhichisprobablyaboutthenineoclockto12oclocksectionofthe
circle,ifyouthinkofyourwatchface.612Here,becausecyclonesinthesouthern
hemispherecurvearoundinacounterclockwisedirection,ifvesselsmovetothissafe
quadrantthatisthebestthingthattheycandobecausetheyrideitoutatsea.613

8.13

Notonlyisthisthesafestprocedure,itisalsoanefficientprocedurebecauseitallows
vesselstogetbackintopositionfairlyshortlyafterthecyclonehaspassedand
operationscancontinue.614

8.14

Forvesselstobeabletorideoutacyclonetheyneedtohavesufficientfuelsupplies.
Thismeansthatvesselsneedtocomeintoporttotopupwithfuelsotheyhave
enoughfuelonboard.615CaptainJusticeprovidedtheoperationsoftheportof
Broomeasanexampleofwhathappenswhenacycloneisoccurring:
What we do at the port of Broome is we shut down the port late,
becausewhatwedoiswetakeintoaccountthefactthatthevessels
thatareoffshore,whentheyarefinallyreleasedtheyhaveabouta20
hourpassagetogetintoBroomeitisalotlongertogetintoDarwin.
Forthemtobeabletoremainatseatheydonotknowhowlongthey
aregoingtohavetorideoutthecyclonefor,soweaccepttheminand
wetopthemupwithfuel.616

8.15

ForFLNGfacilities,thismeansthattheirfieldvesselswouldnotremainonstandby
duringextremeweathereventssuchascyclonesasitwouldbetoohazardous.617
Woodsideconfirmedthat,aswithotheroffshorefacilities,duringadverseweather
conditionsfieldvesselswilldepartatpredeterminedweatherconditions.618Shell
alsoadvisedthatitsPreludeinfieldsupportvesselswillridethestormoutandgo
whereverisbestatsea.619

612CaptainVictorJustice,ChiefExecutiveOfficer,KimberleyPortsAuthority,TranscriptofEvidence,
27November2014,p2.CaptainJusticeexplainedthatacycloneisacircularphenomenon,split
likeaverticalandahorizontalareathatdividesitupintofourquadrants.
613ibid.Seealso:MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,Transcript
ofEvidence,7November2011,p2.
614MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
7November2011,p2.
615CaptainVictorJustice,ChiefExecutiveOfficer,KimberleyPortsAuthority,TranscriptofEvidence,
27November2014,p4.
616ibid,p3.CaptainJusticealsonotedthatvesselswithpipesstackedondeckcannotrideouta
cycloneforsafetyreasons.
617ibid,p6.
618SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p19.
619MrGeraldDixon,HSSEManager,Prelude,WoodsideEnergyLtd,CommitteeBriefing,Shell
ProjectsandTechnology,Rijswijk,theNetherlands,22July2014.

164

Chapter8
Finding44
Duringacyclone,theinfieldsupportvesselsforanFLNGfacilitywillnotremainon
standby;rather,aswithallvessels,theywilltakestandardmaritimecycloneavoidance
measures.

Maintainskeletoncreworevacuate?
8.16

Itisdifficulttogeneraliseaboutwhathappensinasevereweathereventinrelationto
decisionsmadetoevacuatethefacilitytoskeletoncrewlevelsortoevacuateentirely.
Thesedecisionsdependonanumberofvariablesincluding,butnotlimitedto,the
locationofthefacility,thetypeofoperation,thelevelofriskinvolved,andthe
resourcesandtimeframeavailabletoimplementemergencyprocedures.

8.17

Clearly,though,forfacilitiessuchasfixedplatformsandFloating,Production,Storage
andOffloading(FPSO)vesselsthatarepermanentlymooredandnotabletomovetoa
saferlocationtorideoutthesevereweatherevent,untilrecentlytherehasbeentwo
optionstakenupbyoperators:eitherreducemanninglevels,maintainingonlya
minimumcrew,orevacuatethefacility,leavingnopersonnelonboard.

8.18

MrStephenPriceoftheAustralianWorkersUnion(AWU)statedthat:
containingpeoplewithinacycloneisachallengingenvironment.In
prettymucheverysituationthatwefindourselvesexposedtocyclones
we have very rigid cyclone procedures in place, 99 per cent of which
areevacuates;theyareevacuatedearly.Itisveryrarethatweactually
getcaughtwherewehavetokeeppeoplecontainedwithinsomesort
ofshelterwithinaworkplaceatthemoment.620

8.19

Thethirdoption,asadoptedbyShellforitsPreludefacility,isnottodeman.This
optionisdiscussedinaseparatesectionofthischapterbelow.

8.20

Thefollowingoutlinesthepositionadoptedbyvariousprojectoperatorsinrelationto
manninglevelsduringsevereweatherevents.

8.21

ConocoPhillipsistheoperatoroftheBayuUndanfieldintheTimorSeaapproximately
500kmfromDarwin,250kmsouthofTimorLeste.621ThisfacilityincludesaFloating,
StorageandOffloadingfacility(FSO),theLiberdade,apermanentlymoored,

620MrStephenPrice,BranchSecretary,AustralianWorkersUnion,TranscriptofEvidence,
10November2014,pp67.
621ConocoPhillips,Ourbusinessactivities.Ourprojects.BayuUndan,,nd,np.Availableat:
http://www.conocophillips.com.au/ourbusinessactivities/ourprojects/Pages/bayuundan.aspx.
Accessedon2February2015.Thisfieldincludesacentralproductionandprocessingcomplex
comprisedoftwoplatforms,anFSOfacilityandanunmannedwellhead.

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Chapter8
weathervaningfacility,248metreslongand54metreswide.622WhileConocoPhillips
basecaseinthesituationofadirecthitistoshutdowntheplatformandevacuate
theplatform,thecompanywouldproactively,preferentiallydownmanitsFSO.623
8.22

INPEXwillalsohaveapermanentlymooredFPSOoperatingonitsIchthysfieldlocated
approximately220kmofftheWesternAustraliancoastand820kmsouthwestof
Darwin.624MostofIchthyscondensatewillbetransportedtotheFPSOforoffshore
processingandstoragebeforebeingperiodicallyoffloadedtocarriersforexport.625The
IchthysFPSOwillbe336metreslongand59metreswide,andwillalsobea
permanentlymoored,weathervaningfacility.626INPEXadvisedthatintheeventofa
cyclone,our[INPEXs]planistoreducemanninglevelsbuttoremainmanned,andour
facilitiesaredesignedtoremainmannedduringcyclones.627

8.23

WoodsidesLaminariaCorallinaoilfieldsfacilityissituatedintheBonaparteBasin,
approximately550kmnorthwestofDarwin.ThisfacilityalsoincludesanFPSO,the
NorthernEndeavour,a273metreslong,50metreswidevesselpermanentlymoored,
onlocation,byaninternalturretmooringsystem.628UnlikeotherWoodsideFPSOs
suchastheCossackPioneerortheOkha,theNorthernEndeavourremainsonstation
duringacyclone.629WoodsideadvisedthattheNorthernEndeavourBasisofDesign
(BOD)wastomaintainpermanentmanningonboardduringacyclone.However,due

622OffshoreTechnology,BayuUndan,nd,np.Availableat:http://www.offshore
technology.com/projects/bayuundan/.Accessedon2February2015.
623MrMarkLeigh,TeamLeader,AssetIntegrityandProcessSafety,ConocoPhillips,Transcriptof
Evidence,10November2014,p3andp4.
624INPEX,Ourprojects.Ichthysindetail.Projectmap,nd,np.Availableat:
http://www.inpex.com.au/ourprojects/ichthyslngproject/ichthysindetail/projectmap/.
Accessedon2February2015.TheIchthysProjectconsistsofacentralprocessingfacility(CPF),a
largesemisubmersiblefloatingplatform,agasexportpipelineandanFPSO.
625INPEX,Ourprojects.Ichthysindetail.Projectfacilities.Centralprocessingfacility,nd,np.
Availableat:http://www.inpex.com.au/ourprojects/ichthyslngproject/ichthysin
detail/projectfacilities/centralprocessingfacility/.Accessedon2February2015.
626MrWilliamTownsend,GeneralManager,ExternalAffairsandJointVenture,andMrRichard
Wilson,SeniorIndustryAdvisor,INPEX,TranscriptofEvidence,7November2014,p3;INPEX,
IchthysLNGprojectlaunchesFPSOhull,nd,np.Availableat:http://www.inpex.com.au/news
media/news/ichthyslngprojectlaunchesfpsohull/.Accessedon30January2015.
627MrWilliamTownsend,GeneralManager,ExternalAffairsandJointVenture,INPEX,Transcriptof
Evidence,7November2014,p3.
628OffshoreTechnology,Laminaria,Australia,nd,np.Availableat:http://www.offshore
technology.com/projects/laminaria/.Accessedon2February2014.Seealso:Woodside,
NorthernEndeavourFloatingProductionStorageandOffloading(FPSO)facility,Woodside
ActivityUpdate,September2013.Availableat:http://www.woodside.com.au/Our
Approach/Consultation%20Activities/.Accessedon2February2014.
629MrShaunGregory,SeniorVicePresident,SustainabilityandTechnology,TranscriptofEvidence,
7November2014,p3.TheOkha,aconvertedFSO,replacedtheCossackPioneerastheFPSOfor
theNorthRankinAplatform.See:http://www.woodside.com.au/OurBusiness/NorthWest
Shelf/Projects/NorthWest/Pages/default.aspx.Accessedon3February2014.

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Chapter8
tochangesinmetoceandatathefacilitydesignwasreviewedandasubsequentcyclone
responseplanwasdeveloped.630
8.24

Woodsidealsoadvisedthat:
the plan specifies triggers for staged reduction in manning based on
tropicallow/tropicalcyclonelocationandforecastintensity.Afinalde
manningflightisplannedforwhenatropicalcyclonetrack,including
its cone of uncertainty, is forecast to pass within 100 nm [nautical
miles]ofthefacilitywithina24hourperiod.631

8.25

Itisclearfromthisstatementthatnotonlyisreliableandaccurateinformation
essential,butthetimingofthisisalsoveryimportantasitallowsstagedevacuation
processestobetriggered.AstheDepartmentofFireandEmergencyServices(DFES)
explained,aspartoftheirproactiveapproach,operatorshavealotofintelligence
comingintheyareplanningapreemptiveevacuationandatimelyevacuation.632
AccordingtoExxonMobilsMrLukeMusgrave,youusuallyhaveyourresponseplans
setupsuchthatyouaremakingdecisionsattheearliestopportunity,ratherthanatthe
latestopportunity.633

8.26

Generallyspeaking,industrydiscussedthepossibleshutdownandevacuationofa
facilityasagradualorstagedprocess.

8.27

ExxonMobilexplainedtheirprocessfordealingwithacycloneheadingtowardsits
proposedpermanentlymooredScarboroughFLNGasfollows:
Way ahead of that [a cyclone heading directly toward the FLNG] we
would do things like securing equipment, locking down crane booms
anddoingallofthosetypesofthings.Wewouldbeginprecautionary
downmanningofnonessentialpersonnel.Ifwethoughttheriskswere
arising to a certain point, we would commence shutdown and
depressurisationoftopsidesandprocessingequipmentand,depending
on the intensity, location and our assessment of the risk, we would
even begin to shut down the wells subsea and depressure the risers
anddiverseequipmentthatconnectsthevesseltotheoceanfloor.634

630SubmissionNo.15fromWoodsideEnergyLtd,1December2014,p1.
631ibid.
632MrLloydBailey,DeputyCommissioner,OperationsCommand,DepartmentofFireand
EmergencyServices,TranscriptofEvidence,19November2014,p6.
633MrLukeMusgrave,VicePresidentLNG,ExxonMobil,TranscriptofEvidence,10November2014,
p8.
634ibid,pp78.

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Chapter8
8.28

ExxonMobilthoughttheywouldprobablymaintainasmallcrewinasafehaven
somewhereonthatvesselduringthestorm.Theywouldberesponsibleforthesafety
ofthatvesselduringthestorm.635

8.29

Again,timingisanimportantfactor,withtheinitiationpointbasedonwhatwe
[ExxonMobil]thoughtwascoming,howsignificantitwasandtheprobabilitiesofthat
comingourwaytogivesufficienttimetoactivatethat.636

8.30

ConocoPhillipsadvisedthatshuttingthingsdownforadaybecauseyouhavehada
warningmightnotbethesafestoption.637Thisisbecausemachinesarehappierwhen
theyarespinning,levelsaresteadyandtemperatureshaveevenedout;thatisasafe
placetobe.638MrMarkLeighadvisedthatthetrickistohavealongenoughleadtime
tobalancethatrequirement[topossiblyshuttheplantdown]tokeeptheplantina
safecondition,withthetimeneededtodownmantheplatform.639

8.31

MrLeighalsoexplainedthatwhentheyhaveafewhundredworkersoffshorethatmay
bedoingprojectsandotherthings,theyneedtodeterminehowmanyareactually
criticaltotheoperation.640Becausenotalloffshoreworkerswouldbecritical,
ConocoPhillipswouldthen:
starttoproactivelydownmanearlyinthecyclonewarninghorizon.So
the OIMs and the folks onshore talk about it and say, Yes, we are
going to start downmanning now. You start sending helicopters in
andouttakingof[f]allofyournonessentials.641

8.32

Theconceptofsafetyindesign(asdiscussedinChapter4)wasalsoraisedinrelationto
designingFPSOstomeetparticularconditions.Forexample,indiscussingthefactthat
theNorthernEndeavourstaysonstation,Woodsidestatedthat,whileitslocation
meantthatfacilitywouldnotgetthefullimpactofacategory5cyclone,itisintegrated
intodesign,sotheengineersfromday1willlookattheoptionsofadisconnectora
stayonstationanddesignaccordinglyforwhateverisgoingtobethesafest
outcome.642Asnotedabove,partoftheNorthernEndeavoursBODwasforpermanent
manningtobemaintainedonboardduringacyclone.However,thedesignwas
reviewedfollowingchangesinthemetoceandata.

635ibid,p9.
636ibid,pp78.
637MrMarkLeigh,TeamLeader,AssetIntegrityandProcessSafety,ConocoPhillips,Transcriptof
Evidence,10November2014,p3.
638ibid.
639ibid.
640ibid.
641ibid.
642MrShaunGregory,SeniorVicePresident,SustainabilityandTechnology,TranscriptofEvidence,
7November2014,p3.

168

Chapter8
8.33

Notingthathelicopterflyingisoneoftheriskiestthingsintheoilandgasindustry,
ConocoPhillipsadvisedthatwhileitsbasecaseistoevacuatetheplatform,ifthatwas
notpossibleduetoinsufficienttimeorconditionsnotsuitableforhelicopters,they
wouldjustshutinproductionandessentiallysitthestormout.643Accordingto
MrMarkLeigh,becausetheFPSOweathervanes:
it can adopt the optimum position for wind and tide and so on, and
waves.Itisthesamething;wewouldproactively,preferentiallydown
manitbut,again,italsosurvivedthe10000yeartest.Wehavedone
theanalysisonthemooringsandthepilesandallthatstuff.Certainly
in the JPDA [Joint Petroleum Development Area], we have a system
thatwebelieveisrobust.644

8.34

ExxonMobilexplainedthatitsScarboroughFLNGwouldbedesignedtoremainatthe
Scarboroughfieldessentiallyforthelifeofthatfield.Itisdesignedtowithstandthe
mostseverestormsandweatherconditionsthatwewouldexpecttosee.645According
toMrMusgrave:
the vessel is not built not to be damaged, but it is built not to be
destructed,soontoptheremaybesomedamagetosomeequipment,
buttheintegrityofthevesselisdesignedtobemaintained.646

FLNGfacilitiesinasevereweatherevent
8.35

Aspreviouslynoted,ShellisdevelopingitsPreludefieldwithitsFLNGfacilityand
WoodsideiscurrentlyconsideringusingPreludeFLNGtechnologytodevelopitsBrowse
Basinfields.Alsoasnotedpreviously,bothShellandWoodsidehaveadvisedthat
personnelwillremainontheirFLNGfacilitiesintheeventofacyclone.Shellsubmitted
thatatalltimes,includingduringacyclone,the[Prelude]facilityremainsonlocation,
withpersonnelremainingonboard.647WoodsideconfirmedthatFLNGfacilitiesthat
arepermanentlymooredwillremainonstationwithpersonnelremainingonboard
duringcyclonicconditions.648

8.36

ConcernshavebeenraisedwiththeCommitteeinrelationtoanFLNGfacilitynotbeing
demannedduringsevereweatherevents.Forexample,MrStephenPrice,Branch
SecretaryoftheAWU,citingtheMontaraincidentasanexample,notedthatfacilities

643MrMarkLeigh,TeamLeader,AssetIntegrityandProcessSafety,ConocoPhillips,Transcriptof
Evidence,10November2014,p4.
644ibid.
645MrLukeMusgrave,VicePresidentLNG,ExxonMobil,TranscriptofEvidence,10November2014,
p7.
646ibid,p8.
647SubmissionNo.15fromShellinAustralia,submissiontoInquiryintotheEconomicImpactof
FloatingLNGonWesternAustralia,30August2013,p6.
648SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p19.

169

Chapter8
thatarebelievedtobesecurecanfailincertainconditions.649MrPricestatedthata
PreludetypeFLNGfacilityisabsolutelyenormousanditisverydifficulttotellwhata
severeweathersituationwillactuallydotoit.650Similarly,MrGlennMcLarenofthe
AustralianManufacturingWorkersUnion(AMWU)notedthatwhatishappeningoff
thecoastofWesternAustraliaisunheardofinsizeandscaleWearetoldthatitwill
withstandtheworstoftheworstthe99yearcycloneCallmecynical,butIwould
notwanttobeonthere,regardless.651
8.37

TheMUAdescribedthesituationthatoccurredwhenseveretropicalcycloneBilly
developedintheJosephBonaparteGulfontheWesternAustralian/NorthernTerritory
border.AccordingtotheMUAsAssistantNationalSecretary,MrIanBray,theCastoro
Otto,aconstructionbargewith262peopleonboard,wasworkinginthearea.652
MrBrayexplainedthatcontingenciesfailedandtherewasafailuretoevacuate.[]It
had12anchorsoutatthetime.Theyfailedtogettheanchorsupandhencethe
cycloneformedandranoverthetopofthem.653Itwasfortunatethatamongstthose
onboardwereamarinecrewwhowereabletomaintainposition,keeptheengines
goingandmakeheadwaywhenthelastanchorparted.Withoutthecontingencyofa
marinecrewonboard,theCastoroOttomayhaverunaground.654

8.38

MrStevenMcCartney,StateSecretaryoftheAMWU,alsospokeofthesituationon
boardtheCastoroOttoduringCycloneBilly.IndiscussingtheshipsCaptains
misinterpretationofthecycloneprocedure,MrMcCartneystatedthattheCaptainhad
287ofourmembersbouncingaroundthedeckonashipforfourdaysinthemiddleof
acyclonewhentheyshouldhavebeensittinginahotelwatchingitonthe
television.655AccordingtoMrMcCartney,duetodelaysinthegovernment
investigationoftheincident,thestorywassomemonthsolder,theevidencewascold

649MrStephenPrice,BranchSecretary,AustralianWorkersUnion,TranscriptofEvidence,
10November2014,p3.
650ibid.
651MrGlennMcLaren,UnionOfficial,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p5.
652MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
7November2014,p2.TropicalcycloneBillydevelopedfromalowpressuresystemthatformed
intheTimorSeaon15December2014.ThelowmovedintotheJosephBonaparteGulfon
18DecemberandintensifiedintocycloneBilly.
653MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
7November2014,p2.
654ibid.FollowingtheKarrathaSpiritandCastoroOttoincidents,NOPSAappointedanexpertpanel
toconsideranyoccupationalhealthandsafetyregulationissuesinvolvingNOPSAandAMSA.The
CastoroOttoincidentisdescribedindetailonpp12oftheexpertpanelreport.See:Bills,Kym
andAgostini,David,OffshorePetroleumSafetyRegulation.MarineIssues,June2009,
CommonwealthDepartmentofResources,EnergyandTourism,Canberra.
655MrStevenMcCartney,StateSecretary,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p5.

170

Chapter8
andgoneandsomeoftheemotionaroundtheincidenthaddisappearedandwiththat
someofthestoryandalsosomeoftheatmosphereoftheincident.656
8.39

MrBrayalsoraisedtheissueofahighlevelofdistressonboardtheCastoroOtto,
stating:
thevast,vastmajorityofthosepeople[onboard]werenottrainedin
evacuationso, jumping into lifeboats, life rafts or whatever other
lifesavingdevicestherewereanditwasleadingtoamajor amount
ofstressandfearonboardthevessel.657

8.40

CaptainJusticeoftheKimberleyPortsAuthorityexpressedconcernsinrelationtothe
possibilityofvesselsorfacilitiesexperiencingdemobilisationproblemsduetotiming
issuesandhesitancybetweentheAustralianMaritimeSafetyAuthority(AMSA)and
NOPSEMA.CaptainJusticeadvisedthathehadheardanumberofcasesofthistypeof
thinghappening,andinmanycasesithasseveralcauses.658ForCaptainJustice:
thefirstoneiscommercialityversussafety,whichisalwaysaproblem
with vessels and cyclones. The second one is the lack of clear
information flow, where the people who are in a position in, say,
Canberra to make a decision or NOPSEMA or whoever, they do not
knowthatthecycloneisdevelopingandwhereitisgoingandsoforth.
Theymaynotnecessarilybegettingtheinformationfedtothem.Ina
lot of cases it becomes almost a local call. I have not heard of that
specificincident[withtheCastoroOtto]but Ihavecertainlyheardof
many of them where the demobilisation and the evacuation at the
starthasbeenleftabitlong.659
Finding45
ThereissignificantconcerninrelationtoFLNGfacilitiesnotdemanningduring
extremeweatherevents.

8.41

Woodsiderecognisesthatadverseweatherconditionshavethepotentialtoimpact
thehealthandsafetyoftheemployeesandthepotentialtocompromisefacility
integrity.660Giventhis,thebalanceofthischapteroutlinesthemainreasonswhyShell
andWoodsideareconfidentthatitissafenottodemanFLNGfacilitiesduringasevere

656ibid,p2.
657MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
7November2014,p2.
658CaptainVictorJustice,ChiefExecutiveOfficer,KimberleyPortsAuthority,TranscriptofEvidence,
27November2014,p2.
659ibid.
660SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p19.

171

Chapter8
weatherevent.Theserelatetothesafetyindesignfeaturesofthefacilityandcompany
policiesrelatingtousingFLNGfacilitiesaccommodationareasastemporaryrefuges.
8.42

Asnotedpreviously,Preludehasbeendesignedtowithstanda1in10,000year
weatherevent.Infact,asShellsMrAndrewDohertyexplainedthephilosophythat
staffwouldalwaysremainonboard,andtheturretassembly,thehullandstorage
assemblyarepartofthedesignpremisesthatwereputinplaceattheoutsetto
ensurePreludecanwithstandthoseconditions.661

8.43

Similarly,WoodsideexplainedthatthedesignofitsBrowseBasinfacilitywillbebased
onresistingenvironmentalconditions,uptoandincludingthe10,000yearreturn
periodevent.662Intheeventofacyclone,WoodsidesFLNGfacilitywillalsoremain
manned.WoodsidefurtherstatedthatFLNGfacilitydesignhasevolvedwithdue
considerationtocyclonesurvivabilityandmaintainingasafeenvironmentforthe
workforce.663

8.44

ThesafetyindesignfeaturesofPreludewerediscussedindetailinChapter5.Inbrief,
thesizeandmassofthehull,alongwithanumberofotherhulldesignfeatures,are
designedtohelpthefacilityremainstableinsevereweatherconditions.Theseinclude
theturretmooringsystemwhichwillallowthefacilitytoweathervanetoadoptthe
optimumpositiontosuitprevailingweatherconditions.AccordingtoShell,partofits
testingattheMaritimeResearchInstituteNetherlands(MARIN)includedcomparing
theFLNGfacilityresultswiththatofFPSOs.Thistestingshowedthatthesurgemotion,
swaymotion,heavemotion,andpitchandrollfortheFLNGfacilitywerelessthanthat
forFPSOs.664

8.45

CaptainJustice,indiscussingthestrengthofthemooringsystemsofShellsFLNG
facility,stated:
IknowthatcompanieslikeShellinparticular,becauseitalsohasvast
shipping interests, is very conservative in what it does and in its
engineering design, so I would hope that it has gone through that in
somedetail.665

8.46

AsChapter5alsonoted,ShellseesitsPreludeaccommodationmoduleasacritical
elementofthefacilitysdesignsafety.Theaccommodationmoduleisthefacilitys
temporaryrefugeduringemergencyevents,includingextremeweather,andformspart

661MrAndrewDoherty,GeneralManager,HSSE,ShellinAustralia,TranscriptofEvidence,
12November2014,p5.
662SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p19.
663ibid.
664WinthropProfessorMikeEfthymiou,ShellEMIChairofOffshoreStructures,UWA,presentation
toCommitteeatMARIN,theNetherlands,22July2014.
665CaptainVictorJustice,ChiefExecutiveOfficer,KimberleyPortsAuthority,TranscriptofEvidence,
27November2014,p7.

172

Chapter8
ofthefacilitystopsides.Thetopsideloadistakenbythehullthehullisthe
foundationofthefacilityandisdesignedfortheseloadsusingtheALARPprinciple.666
8.47

Whiletheaccommodationunitsstructureisdesignedtowithstandemergencyevents,
theCommitteewasconcernedaboutwhatwouldhappeninsidethelivingquarters.For
example,CaptainJusticedescribedasituationona240,000tonneshipthatwascaught
inacycloneoffthecoastnearDampier.Theshipwasrollingsoviolentlythatallof
thefittingsinsidetheship,everythingthatwasnotwelded,brokefree.Allofthebunks,
thegalleyfittings,thetableseverythingthatwasnotweldedbrokefree.667

8.48

GivenShellsadvicethattheaccommodationunit,aspartofthetopsides,wasdesigned
towithstandthesurvivaleventwithoutdamageandbeoperableaftera10,000year
event,andinlightofCaptainJusticesexperience,theCommitteesoughtfurther
assurancefromShellthatitsaccommodationmodulewouldremainsafeforworkers.

8.49

AccordingtoShell,themodellingconductedatMARINconfirmedthatPreludes
temporaryrefugefacilitieswouldremaincomfortableandhabitable,andpreserve
thehealth,safetyandwelfareofthoseonboardduringanadverseweatherevent.668
Furthermore,thelivingquarters,whichcanaccommodateupto340people,have
directaccesstoallmeansofevacuationviahelicopter,freefalllifeboats(locatedaft)
andintegratedchutebasedliferafts.Thewallfacingtheprocessingequipmentisblast
ratedandhaspassivefireprotection.669

8.50

Inadditiontothefacilitydesign,anFLNGfacilitycannotoperatewithoutasafetycase
whichhasbeenassessedbyNOPSEMAasbeingsufficienttoreduceriskstoALARP
levels.AnFLNGfacilityssafetycaseissupportedbyanumberofproceduresand
policiesthatdemonstratehowvarioushazardsaredealtwith.BothShellandWoodside
haveadvisedtheyhavepoliciesandsystemsinplacefortheiroperationsincyclone
proneareas.

8.51

Woodsidesubmittedthatithas:
sophisticated arrangements in place to monitor and assess
storm/cyclone development, which may impact operations. Early
warningsystemsdrivewellpractisedpreparednessactivitiesacrossour
onshore and offshore assets. This capability is underpinned by a
regime of specific emergency exercises preparing our infrastructure
and people for a cyclone or severe storm. Comprehensive Emergency

666WinthropProfessorMikeEfthymiou,ShellEMIChairofOffshoreStructures,UWA,presentation
toCommitteeatMARIN,theNetherlands,22July2014.
667CaptainVictorJustice,ChiefExecutiveOfficer,KimberleyPortsAuthority,TranscriptofEvidence,
27November2014,p2.
668SubmissionNo.25fromShellinAustralia,19December2014,p4.
669SubmissionNo.9fromShellinAustralia,11August2014,p4.

173

Chapter8
ResponsePlansareinplaceforallofWoodsidefacilitiesthatmaybe
impacted.670
8.52

AccordingtoShell,itsweatherpolicysetsoutthe:
controlswhicharedocumenteddisciplinedcontrolstobeactedonby
theoffshoreinstallationmanagerwhohasthedutyandresponsibility
to keep members of the community out there safe and the facility
safe.671

8.53

MrAndresDoherty,GeneralManager,HSSEforShelladvisedthatthisdocumentedset
ofcontrols:
willguidetheoffshoreinstallationmanagerveryclearlyintheactions
that he needs to take progressively in advance of an impending
adverseweathersituationandalsobasedontheescalationthatthat
eventmayincurasitdevelopsandasitspathispredicted.672

8.54

Thisincludesaprogressiveturningdownofthefacility,areductionofactivities,
bringingstaffinsidetothesafelocationoftheaccommodation,whichisdesignedto
adverseweatherscenariosandtoultimatelystopproduction.673

8.55

TheCommitteeaskedShelltoclarifytheprocedurethatwouldbefollowedtoensure
thesafetyofthoseworkingonboardintheeventofanextremeweathereventandto
explainwhatmadethePreludelivingquarterssignificantlydifferentfromanyother
facilityinoperationinotherpartsoftheworldandintheNorthWest.

8.56

Shellexplainedthatitsshutdownphilosophyisexpectedtobeforcategories4and5
cyclonesand:
[i]ntheeventofanextremeadverseweatherconditionthetopsides
process will be turneddown or shutdown and depressurised to
mitigate the threat of pressurised hydrocarbons. This reduces the
potential escalation for fire and explosion events. In the event of
adverseweatherallpersonnelwillmusterinthemainaccommodation
module (temporary refuge) and be accounted for. They will remain
inside the accommodation for the duration of the adverse weather
event.674

670SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p19.
671MrAndrewDoherty,GeneralManager,HSSE,ShellinAustralia,TranscriptofEvidence,
12November2014,p5.
672ibid.
673ibid5.
674SubmissionNo.25fromShellinAustralia,19December2014,pp34.

174

Chapter8
8.57

Shellalsosubmittedthat:
when comparing Prelude FLNG facility motions with motions of a
typicalNorthSeaoperatedFPSO(perunitwaveheight)themotionsof
thePreludeFLNGfacilityarelowerforallwaveperiodsofequivalent
interest. Extreme FLNG facility motions at the Prelude location are
lowerthanmostextremeFPSOmotionsoperatedintheNorthSeaat
the 100 and 10,000 year conditions. Note, the North Sea operated
FPSOs considered here are permanently moored, manned and have
been operating satisfactorily over the last 15 years under the UK
offshoreoilandgassafetyregime.675

8.58

Shellsubmittedthathavingpersonnelremainonboardtomanagethedaytoday
operationsoftheFLNGfacilityduringasevereweathereventwillavoidexposureto
risksassociatedwithhelicopterandboattransferoperationsduringthose
conditions.676AccordingtoShell,personnelwilltakerefugeinthelivingquarterswhen
thewindspeedexceedsanaveragelevelof130kilometresperhour(70knots)overa
10minuteperiod,whichisthethresholdofacategory3cyclone.677

8.59

Furthermore,ShellconfirmedthatproductiononPreludewillnotberestarteduntil
theprocesssafetyintegrityoftheentireFLNGfacilityisfunctionallyassured.678Shell
alsoconfirmedthattheaccommodationmoduleisasafetycriticalelementofPrelude
asitistherethatthoseworkingonthefacilitywillseektemporaryrefugeduringan
extremeweatherevent.679AccordingtoShell,theaccommodationmodule:
shall provide protection for people in case of a hazardous event and
have the necessary command and control to organise emergency
response. The temporary refuge (accommodation module) shall be
designed to withstand the survival event without damage and be
operableaftera10,000yearevent.
Lifesupportrequirementsincludeleaktightnesstopreventsmokeand
gas ingress into the temporary refuge, while structural support
includesconsiderationofextremeandsurvivalwindloadsandextreme
andsurvivalvesselmotions.680

8.60

TheCommittee,whileacknowledgingShellsevidencethatsafetyisitsprimaryfocus,
alsoaskedthecompanytoadvisewhatdifferencestherearebetweentheALARPlevels

675ibid.
676ibid,p2.
677ibidp2.
678ibid,p4.
679ibid.
680ibid.Emphasisinoriginal.

175

Chapter8
foronshoreprocessingfacilitiessuchasthoseinKarrathaandtheALARPlevelsfor
FLNGfacilities.
8.61

ShellnotedthattheALARPoutcomeswillbedifferentforeveryproject.681Inrelation
todifferencesbetweenonshoreandFLNGfacilityALARPlevels,Shellsubmittedthat:
for an onshore LNG plant,the ALARP assessment will not include the
riskoftravellinginahelicopter.However,mostonshoreplantsreceive
gasfromanoffshoreplatformthatprocessesandcompressesthegas
toshore.Thismeansthatthoseoffshoreworkerswillhaveexposureto
helicoptertravelrisks.Theoveralloffshore/onshoreALARPneedstobe
consideredwhencomparingtoFLNG.682

8.62

ShellfurtheradvisedthatitsALARPstudiesforthePreludefacility:
determined that the levels of risk for each worker group are
comparable to other offshore oil and gas facilities. In addition, the
temporary refuges impairment frequency (a measure of the safety of
thetemporaryrefugefacility)benchmarksfavourably(i.e.isanorder
of magnitude lower) against other current offshore oil and gas
facilities.683

8.63

Afurtherissueraisedinevidencewasthepsychologicalsafetyofthoseonboardan
FLNGfacilityduringacyclone.ThisconcernwasexpressedbyMrGlennMcLarenofthe
AustralianManufacturingWorkersUnionasfollows:
Itisveryhardtoenvisageputtingmyselfinthepositionofoneofour
membersofsittinginanoffshorefacilitythatisanumberofhundreds
of kilometres away from anywhere that is remotely safe and secure
and away from the eye of potentially a very catastrophic event and
puttingmyfaithin,Ihopetheygotitright.Icannotputupmyhand
andsaythatIwantoff,becausethemomentthecycloneapproaches
within a certain radiusand that is dependent on the safety case
producedtheywillnotflyyouoff.ItisnotacaseofBarleys,Imout!
ItisYoureoutthere,goodorbad;youreridingitoutchamp,andwe
hopewegetthroughtheotherside.684

681ibid,p5.
682ibid.
683ibid.
684MrGlennMcLaren,UnionOfficial,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p10.

176

Chapter8
8.64

TheCommitteesoughtclarificationfromShellinrelationtowhat,ifany,consultationit
hadundertakenwithoilandgasworkerstodeterminethatworkerswouldbeprepared
tostayonthefacilityduringextremeweatherevents.Shellsubmitted:
Prelude FLNG personnel are engaged on cyclone manning
arrangementsfromtheearliestpointoftheirrecruitment,throughout
their onboarding to the project and in their regular mandatory
offshore training. Video footage of the simulator motions in cyclonic
weatherisakeycommunicationcomponentoftheinductionmaterial
forallonboardingsessions.
Throughtheseengagements,ourpersonnelunderstandthatitissafe
tostayontheFLNGduringallweatherconditionsandthatthedecision
tonotdemanduringacycloneisbasedonresultsfromanextensive
15 year research and development program, real model testing and
advanced4DsimulationbytheMARINinstitute,supportedbysubject
matterexpertsinShell.
In addition, Shell Prelude FLNG operations personnel with offshore
experience have witnessed firsthand the motions and support the
policy of remaining on the facility in the most severe of weather
conditions.685

8.65

WhileShellmayhavedesigneditsFLNGfacilitytostructurallywithstanda1in10,000
yearsevereweatherevent,itisessentialthatthoseworkingonthefacilityare
sufficientlytrainedinallemergencyprocedures;itisimportantthatShelldoesnot
overlookthehumanfactorandthefactthataccidentshappen.Theconfidencethatcan
beplacedinShellscapacitytogetitssafetysystemsrightiscontingentonthosewho
workonandaroundthefacility.Peoplesactionsmustbeconsistentwithcompany
safetyplans.CaptainJustice,inagreeingwiththisposition,statedthatintermsofrisk
management,Ithinkthatthereisahigherlikelihoodofanidiotatlooseratherthana
cyclone.686

8.66

Ultimately,aswithallissuesrelatingtooccupationalhealthandsafety,theoperator
mustdemonstratetoNOPSEMAthatithasreducedtheriskstoworkersmentalhealth
toalevelthatisALARP,andNOPSEMAsacceptanceofanoperatorssafetycasesignals
thatitissatisfiedthatthisisthecase.

685SubmissionNo.25fromShellinAustralia,19December2014,p5.
686CaptainVictorJustice,ChiefExecutiveOfficer,KimberleyPortsAuthority,TranscriptofEvidence,
27November2014,p7.

177

Chapter8
Finding46
TheaccommodationunitoftheproposedFLNGfacilityhasbeendesignedtoprovidea
fullyselfcontainedlifesupportenvironmentforpersonnelduringemergencyevents.
Finding47
ProponentsofFLNGfacilitiesareconfidentthatthefacilitydesignmakesnotde
manningduringextremeweathereventsthesafestcourseofaction.
Finding48
ItisessentialthatallpersonnelonanFLNGfacilityanditsinfieldsupportvessels
receivethenecessarytrainingtoensuretheyarepreparedtorespondappropriately
duringanextremeweatherevent.
Finding49
Allaspectsofhealthandsafety,includingthementalhealthofworkersduringextreme
weatherevents,mustbeincludedinthesafetycaseandassessedbytheNational
OffshorePetroleumSafetyandEnvironmentalManagementAuthority.

178

Chapter9
Whathappensiftheresanaccidentorother
emergency?

9.1

Asnoted,ShellarguesthatthedesignofthePreludeFLNGfacilityhasfocusedonthe
containmentofhazardsandincorporatesextensivemitigationandrecoverymeasures,
shouldtheyberequired.687Theseincludestrategiesformanagingfiresandexplosions,
medicalemergencies,safeescapefromahazardoussituationandfortheevacuation
andrescueofpersonnelfromoraboutthefacilityintheeventofanemergencyevent.

9.2

Thischapteroutlinesindustrystrategiesdevelopedforhandlingemergencies,suchas
firesandexplosions,emergencyandmedicalevacuationfromFLNGfacilities,search
andrescue,andtrainingrequiredtoensuretheemergencypreparednessofthosewho
workonornearanFLNGfacility.Italsooutlinestheoperatorandgovernment
responsibilitiesinrespondingtoanemergencyonornearanFLNGfacility.

Firesandexplosions
9.3

AsnotedinChapter7,anoperatorssafetycaseisrequiredtohaveafireandexplosion
riskanalysis(FERA)whichidentifiesthetypesoffiresandexplosionsthatcouldoccurat
afacility,anddetailstheconsiderationgiventothecontrolmeasurestobeinplace,the
facilitysresponseplanandthemedicalandpharmaceuticalsupplieskeptofthefacility
forsuchanemergencysituation.

9.4

Preludessafetyindesignelements,includingpassiveprotectionaimedatlimitingthe
consequencesofaccidentsassociatedwithproducingLNGatsea,wereoutlinedin
Chapter5.However,shouldafireoraleakofhazardousmaterialoccur,ShellsPrelude
FLNGresponsetoafireoraleakofhazardousmaterialwillbethesameasforanyofits
otheroffshoreinstallationsintheregion.Inthecaseofafire,thestandardresponseis
tofightthefireifsafetodoso,i.e.ifthereisasmallfireinitsincipientstagethenall
personnelaretrainedinusingportablefireextinguishers/hydrantsetc.688However,if
itisnotsafeforpersonnel,theymustallmusterinthetemporaryrefuge[the
accommodationquarters]andlettheplatformautomatedsystemsmanagethefire

687SubmissionNo.4fromDepartmentofMinesandPetroleum,14July2014,p6.Seealso:
SubmissionNo.9fromShellinAustralia,11August2014,p4.
688SubmissionNo.25fromShellinAustralia,19December2014,p6.

179

Chapter9
scenario.689Shellalsoadvisedthattherearesufficientdetectorsandactivefire
protectionsystemsdesignedtocontainforeseeablefirescenarios.690
9.5

Preludesfire,explosionandcoldspillstrategymanagesemergencysituationsthrough
thefollowingmeasures:
i.

Fireandgasdetection

ii. Automatic emergency shutdown and emergency depressurisation

(primarymeansofhazardandescalationcontrol)
iii. In the case of large cryogenic releases, overboard drainage
ensuresanyliquidsareremovedoverboard
iv. The process piping design for rundown and loading lines ensures
removalofanycollectionofhydrocarboninventoryintheprocess
systemwhenashutdownoccurs
v. Passive fire protection and cold spill protection (as an assured
secondary means of escalation prevention) on structures and
equipment which can generate escalation outside the associated
firezone
vi. Designing critical structures and equipment to withstand residual
consequences
vii. Activefireprotectionwillcoolequipmentandmanagesourcesof
specificpoolfires/smallerfires
viii. Use of fire water monitors to create water curtains to separate
port and starboard to control heat radiation, and for dedicated
areassuchasflammablechemicalstorage.691
9.6

ShellsMrGeraldDixonadvisedthatinthecaseoffire,thepriorityistocontainthefuel
source,andtheairgapsinthedesignarecritical.Preludewillalsobeequippedwith
delugeandfirehydrantequipment.ThethreeInfieldSupportVessels(ISVs)willalso
havefirefightingfacilities,withtwoISVsbeinginoperationatanyonetime.692

9.7

TheCommitteeheardconcernsinrelationtothePreludeFLNGfacilityscapacityto
manageafiresituation.Forexample,theMaritimeUnionofAustralia(MUA)

689ibid.
690ibid.
691ibid
692MrGeraldDixon,HSSEManager,Prelude,ShellinAustralia,CommitteeBriefing,
theNetherlands,22July2014.

180

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questionedthecapabilityoftheISVstoassistinallfiresituations,dependingonwhere
thefirewaslocatedandwhetherwaterwasthebestsuppressantinthatsituation.693
9.8

Again,MrBraystatedthat:
thisisnotwhereyoujuststepoutofabuildingonfire,walkintothe
street and wait for the fire brigade; this is a case of people working
remotely and needing their own resources to be able to save the
equipment in the first instance, and if that cannot be done, save
themselves. You do not have all the things you take for granted in a
shorebased operation. Everything is reliant on what you do at that
time in that situation, and if you cannot deal with it you need to be
abletogetoutofthere.694

9.9

Nevertheless,asHonKenBaston,MLC,ActingMinisterforEmergencyServicesadvised,
incidentsoccurringoffshorearedynamicinnatureandtheexpectationis:
that the onsite industry employee crews are the first and most
qualified to respond due to their specialist knowledge of the working
environmentcoupledwiththeirabilitytoquicklyisolatepipelinesand
supplies,eitherremotelyfromanoffshorelocationoronboard.695

Evacuation,escape,andrescueandrecoverystrategy
9.10

ThePreludefacilityhasanEvacuation,EscapeandRescue(EER)strategywhichincludes
twoelementsrelatingtoescapingfromhazardoussituationsonthefacility.Thefirstof
theseis:
to allow personnel on Prelude to escape safely from an area where
there is a hazardous event. Accessible means of escape are located
throughoutviaarangeofforwardandaftescaperoutes.696

9.11

Shellprovidedthefollowingdetailsinrelationtotheescaperoutesavailableon
Prelude:
On the facilitys deck and the main process deck, full length escape
routes that lead to temporary refuges are provided at both the
starboard and port side. The central alley on the process deck level
betweentheportandstarboardsidemodulesprovidesanotherescape

693MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
7November2014,p6.
694ibid,p9.
695SubmissionNo.16fromHonKenBaston,MLC,ActingMinisterforEmergencyServices,
1December2014,p2.
696SubmissionNo.9fromShellinAustralia,11August2014,p8.Emphasisinoriginal.

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Chapter9
way. There is also an alternative escape route on the starboard
mooringdeck,whichconnectsthesecondaryrefuge(forward)withthe
temporaryrefuge(aft).697
9.12

Thesecondelementintheescapestrategyis:
to provide temporary refuges in different locations (main temporary
refuge aft and secondary refuge forward) on Prelude with adequate
sizing for maximum anticipated personnel and protection for as long
asrequiredtocontrolanincidentand/oreffectacontrolledevacuation
(if necessary). Duration is one hour (which is standard for offshore
facilities).698

9.13

Shellalsoadvisedthattherearetwohelideckslocatedattheaft,nearbythe
accommodationandtemporaryrefuge.Theyarealsolocatedwellawayfromthe
processareas.699

9.14

ShellsEERstrategyforPreludeincludesthefollowingelementsinrelationto
evacuation,andrescueandrecovery:
To ensure a controlled safe evacuation from the installation with
differentmeansofevacuationatstrategiclowrisklocations.Thereare
primary, secondary and tertiary means of evacuation via helicopter,
freefall lifeboats (located aft) and integrated chutebased life rafts
respectively.
To facilitate the rescue and recovery of personnel, once evacuation
has been carried out, by external means. For example facility based
infield support vessels, acting as standby vessels, and the dedicated
searchandrescuehelicopterservicelocatedinBroome.700

Emergencyevacuation
9.15

ThissectiondiscussesthemeansofevacuationfromanFLNGfacilitybasedonShells
Preludedesign.Itdealswithevacuationduetoamajoraccidentorexplosiontypeof
event.Theissueofmedicalevacuationisdiscussedinaseparatesectionbelow.

9.16

ShellsPreludeHSSEManager,MrGeraldDixon,reiteratedthattheFLNGfacilityhad
beendesignedinaccordancewithallthesafetyassessments,shutdownand

697ibid,p4.
698ibid,p8.Emphasisinoriginal.
699ibid,p4.
700ibid,p8.Emphasisinoriginal.

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Chapter9
blowdowncriteriawiththeaspectofpeoplesafety.701Ifthereisanextreme
emergencysituation,thefacilitysOffshoreInstallationManager(OIM)decides
whethertoabandonandevacuatetheasset,makingthatdecisiononthebasisthat
peoplessafetyisparamount.702Insuchcircumstances,thefacilitywillblowdown
naturallyandthoseonboardwillbeevacuatedbyhelicopter,totallyenclosed
motorisedpropelledsurvivalcraft(TEMPSC)andISVs.703
9.17

AccordingtoShell:
evacuation by helicopter (primary arrangement) or by life boats
(secondary arrangement) or by life rafts (tertiary arrangement) and
use of the ISVs would occur if there was an emergency incident that
occurredresultinginapotentialthreattopersonnelsafety.704

9.18

Whichcombinationoftheseevacuationarrangementswouldbeusedwoulddependon
thecircumstancessurroundingtheemergencyincident,anddetailsofparticular
scenariosshouldbeincludedintheoperatorsemergencyplansandsystems.
Finding50
TherearethreemainmeansofevacuationfromanFLNGfacilitybyhelicopter,bylife
raftandbyusinginfieldsupportvessels.Theparticularmethod(s)usedduringan
emergencyeventwilldependupontheprevailingcircumstances.

9.19

TheAustralianManufacturingWorkersUnion(AMWU)expressedconcerninrelation
totheevacuationofpersonnelfromanFLNGfacility.Inparticular,theunionraisedthe
issueofevacuatingbetween150and300peopleonboardthefacility.705Accordingto
MrMcLaren,whiletherecouldbebetween150and300peopleonboardtheFLNG
facility,helicopters,dependingontheirsize,generallyonlycarryupto22people.706
Theuseofhelicoptersastheprimarymeansofevacuationalsoraisesissuesoftime,
whichiscrucialinanemergency.GiventhedistanceofthePreludefacilityfromshore,
forMrMcLaren,thisraisedthepossibilityoftheneedtohotfuel(refuellingwhilethe
enginesarerunning)thehelicoptersonthefacility,adangerousactivityinitself,one
thatrequirespeopletrainedinhelidecklandingandrefuelling.707

701MrGeraldDixon,HSSEManager,Prelude,ShellinAustralia,TranscriptofEvidence,12November
2014,p7;SubmissionNo.25fromShellinAustralia,19December2014,p4.
702MrGeraldDixon,HSSEManager,Prelude,ShellinAustralia,TranscriptofEvidence,12November
2014,p7.
703MrGeraldDixon,HSSEManager,Prelude,ShellinAustralia,TranscriptofEvidence,12November
2014,p7;SubmissionNo.25fromShellinAustralia,19December2014,p4.
704SubmissionNo.25fromShellinAustralia,19December2014,p4.
705MrGlennMcLaren,UnionOfficial,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p11.
706ibid.
707ibid,p11.

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9.20

BasedonevidenceprovidedbyINPEXinrelationtotheIchthysproject,heavycarrier
helicopterscarry19passengers,withinboundavailableseatsfromoffshoreduringde
manningoperationscalculatedtobe17.708

9.21

Shelladvisedthatitshelicopterswereabletoaccommodate20personsincluding
pilots.Shellalsoadvisedthattheoperationalcapacitycanvarysubjecttoweatherand
fuelloads,whichcanreducethenumberofpersonsonboardto14,1618.709Asthe
Preludefacilitywillhaverefuellingcapabilityonboard,thehelicopterswillhavethe
rangeandflyingairtimenecessary.710

9.22

ThisoperationallimitationwasacknowledgedbyShellsMrIanJewitt,FLNGHSSE
TeamLeader,intheNetherlands.MrJewittadvisedthatwhilethetwohelidecks
usedtobringpeopletothefacilitywouldbeusedastheprimarymeansof
evacuation,thenumberofpeoplethatcouldbeevacuatedquicklywasa
limitation.711

9.23

However,asShelladvised,inadditiontohelicopters:
there are five freefall lifeboats each with capacity of 70 people and
therefore total capacity of350 personnel. There are integrated chute
basedliferaftslocatedbothaftandforwardandlocatedonbothport
and starboard sides. The aft life rafts have a total capacity of 170
peopleoneachside.Theforwardliferaftshaveatotalcapacityof70
peopleoneachside.712

9.24

ThePreludefacilitywilloperatewiththreeISVs,twoofwhichwillbeonsiteata
time.713TheseISVs,withacapacityof85persons,wouldassistinanyevacuationfrom
thefacility.AccordingtoShell,whileinaworsecasescenarioandlifethreatening
situationtheISVscanaccommodatemore,thishasnotformedpartofitsevacuation,
escapeandrescueanalysis(EERA)arrangement.714

9.25

ThemethodfortransferringpeoplefromtheFLNGfacilitytotheISVswasaconcernfor
theAMWU.AccordingtoMrMcLaren:
In the worstcase scenario, they can get people off, but the transfer
willbeviaBillyPugh.Thereisnostairwelldownthesidethattheycan

708SubmissionNo.10fromINPEXOperationsAustraliaPtyLtd,18August2014,p11.
709SubmissionNo.27fromShellAustralia,4March2015,p2.
710ibid.TheuseofShellssearchandrescue(SAR)helicopterformedevacisdiscussedbelow.
711MrIanJewitt,FLNGHSSETeamLeader,Shell,TheHague,CommitteeBriefing,22July2014.
712SubmissionNo.25fromShellinAustralia,19December2014,p6.
713MrGlennMcLaren,UnionOfficial,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p11.
714SubmissionNo.27fromShellAustralia,4March2015,p2.

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usetojumpontheboat;itwillbeviaBillyPugh,whichisacranethat
loadspeopleontothedeckoftheoceangoingtug.715
9.26

TheAMWUsMrStevenMcCartneydescribedBillyPughasprobablythehighestrisk
methodofmovinganyoneanywhereandassomethingthatisusedasalastresort.716
Ofmajorconcernwasthetimeitwouldtaketoevacuatepeopleusingthismethod,
particularlyasitcanpickuponlytwoorthreepeopleatatime717andissodependent
ontheseastate,weatherpatternsandallthoseotherthings.718Accordingto
MrMcLaren,thismayresultinworkersbeingleftoutthereduringanadverse
event.719

9.27

Inlightoftheseconcerns,theCommitteeaskedShelliftherewereanycircumstances
inwhichpersonnelwouldbeevacuatedfromthePreludefacilityusingBillyPugh
equipment.ShelladvisedthatitdoesnotuseaBillyPughforFacilitytoVessel
evacuation.720ShellacknowledgedthattheBillyPughhasverylimitedusefortransfer
ofaninjuredormedicallysickperson.721
the Prelude FLNG facility will have a transfer system on board which
meets the company and offshore industry and regulator safety
requirements. The device on the facility is a 46 FROG crane transfer
device and meets all the requirements for safe handling of personnel
(including stretcher cases) either from Prelude to the ISV, or from an
ISVtoPrelude.722

9.28

AfurtherissueraisedwasthatoftheskillsetofpeopleontheFLNGfacilityand
whethertheywouldreceiveappropriatetraininginemergencyevacuationmethods.723
TheMUAsconcernwasthat,giventhenumberofpeopleonthefacility,therecouldbe
confusionwhich,inturn,couldleadtoeventssuchasfailuretogetthelifeboatinto
thewatersafelywithzeroinjury.724AccordingtotheMUAsAssistantNational
Secretary,MrIanBray:
aspeoplegetstressedandtimemovesandyouareworkingvery,very
fast,youneedtobeabletoworkasateam,youneedtobewelldrilled

715MrGlennMcLaren,UnionOfficial,AustralianManufacturingWorkersUnion,Transcriptof
Evidence,26November2014,p11
716ibid.
717ibid.
718ibid.
719ibid.
720SubmissionNo.27fromShellAustralia,4March2015,p2.
721ibid.
722ibid.
723MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
7November2014,p9.
724ibid.

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Chapter9
inthoseprocedurestogetalifeboatoraliferaftaway.Itisdangerous
initselfputtingalifeboatintothewater,andaddtothatthestressof
anemergencyresponseandthrowinabitofconfusion,andthatcould
be catastrophic in itself in terms of an event when people failed to
simplygetawaybecausetheydidnotknowwhattodo.725
Finding51
Concernhasbeenraisedinrelationtothecapacityandsafetyofevacuationmethods
forFLNGfacilities.
Finding52
EmergencyevacuationplanswillnotbeacceptedbytheNationalOffshorePetroleum
SafetyandEnvironmentalManagementAuthorityunlesstheyadequatelyensurethe
safetyofallthoseatrisk,regardlessoftheirlocationonthefacilityandthenumberson
board.
Finding53
AllpersonnelworkingonoraroundanFLNGfacilitymustreceiveappropriatetraining
toensuretheyareadequatelypreparedtorespondduringanemergencyevacuation.

Medicalemergenciesandevacuation
9.29

9.30

Shelldescribedtheiremergencyresponseprocedureasatieredprocess.726Similarly
WoodsidesubmittedthatitsproposedBrowsedevelopmentmedicalplanningisa
tieredmedicalresponsesystembasedonitsMedicalexternalsupportguidelines,
which,inturn,arebasedontheOilandGasProducersManaginghealthforfield
operationsinoilandgasactivities(theOGP/IPIECAGuidelines).727Woodsides
MrShaunGregorystatedthatWoodsidesprincipleistodeliverhighqualityhealth
care.728Hefurtherstatedthatthecompanyisfullycommittedtothehealthand
welfareofallemployeesthat[are]outthere.Thatisoneofourcorevalues.729
TheOGP/IPIECAguidelinesstatethatmedicalemergencyresponseplans(MERPs)
shouldbesitespecificandrequirethefollowingresourcesnecessaryforthemtobe
successfullyimplemented:

effectivemeansofcommunications;

725ibid.
726MrAndrewDoherty,GeneralManager,ShellinAustralia,TranscriptofEvidence,12November
2014,p8.
727SubmissionNo.15fromWoodsideEnergyLtd,1December2014,p2.
728MrShaunGregory,SeniorVicePresident,SustainabilityandTechnology,WoodsideEnergyLtd,
TranscriptofEvidence,7November2014,p10.
729ibid,pp1011.

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9.31

first responders and trained competent healthcare professionals,

e.g.doctors,nurses,paramedics,emergencymedicaltechnicians;

adequatemeansoftransportation(ground,water,air);and

adequate medical structures (primary, secondary and tertiary

healthcareunits).730

InrelationtofirstrespondersandmedicalstaffonboardanFLNGfacility,the
OGP/IPIECAguidelinesdescriberequiredhealthcarepersonnelasrangingfromfirstaid
officersthroughtomedicalspecialistsrequiredforcomplexmedicalconditions.The
OGP/IPIECAguidelinesdividefirstrespondersandmedicalpersonnelintofivelevels,as
outlinedinTable9.1below.Table9.1alsoprovidestherecommendedresponsetimes
forprimarytreatmentandforgettingcasualtiestosecondaryandtertiaryhealthcare
units(HCUs).
731

Table9.1:Levelsoffirstresponderandhealthcareprofessionals

Level

Treatmentprovided

Responsetime

Level1:Basic

Firstlinefirstaidtreatmentprovidedbybasic
firstaiders.

<4minutes

Level2:Advanced

Firstlinefirstaidtreatmentprovidedby
advancedfirstaiders.

<20minutes

Treatmentprovidedbyprofessionalswith
specialisedtraininginemergencycare.Level3
Level3:Healthcare staffusuallyworkinthefieldtomanage
professionals
medicalemergencieswithremotesupport
fromotherhigherlevelhealthcare
professionals.

<20minutes

Emergencyandprimarycareprovidedinthe
Level4:Healthcare facilitysprimaryHCUbyregisteredand
professionals
licensedhealthcareprofessionalssuchas
doctorsandnurses.

<1hour

Diagnosisandtreatmentofcomplexmedical
Level5:Healthcare conditionsatasecondaryHCU(hospital)or
professionals
tertiaryhealthcareunit(criticalcarecentre)
bymedicalspecialists.

<6hours

730InternationalAssociationofOil&GasProducers,andTheGlobalOilandGasIndustryAssociation
forEnvironmentalandSocialIssues,Managinghealthforfieldoperationsinoilandgasactivities.
Aguideformanagersandsupervisorsintheoilandgasindustry,OGP/IPIECA,London,October
2011,p5.Availableat:http://www.ogp.org.uk/pubs/343.pdf.Accessedon16February2015.
731ibid,pp67.

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Chapter9
9.32

Workinginconjunctionwiththefirstrespondersandhealthcareprofessionalsthat
formpartofafacilitysMERP,facilitiesmustalsoprovideadequatetransportationfor
theevacuationofpersonnel,includingtheuseofspecialistproviderswhere
necessary.732

9.33

Operatorsmustalsohaveadequatemedicalstructuresinplace,includingappropriate
primary,secondaryandtertiaryHCUs.Thesethreetiers,astheywouldapplyto
offshoreoperations,aredescribedinTable9.2below:
733

Table9.2:Medicalemergencystructure

Tier

PrimaryHCU

Facility

Functions

Onsite

Provideprimarycarefortheentireworkforceon
board,including:
Emergencyresponseandresuscitation;and
AssistinpatienttransfertosecondaryHCUif
required.

SecondaryHCU

Hospital

TertiaryHCU

9.34

Major
hospitalor
criticalcare
unit

Manageinpatientmedicalandsurgicalcases;
Emergencyresuscitationandstabalisationof
patientstopreparethemfortransferto
tertiaryHCU;and
AssistinpatienttransfertoTertiaryHCU.

Providetreatmentforcriticalconditionsthat
cannotbemetbyfirstandsecondtierHCUs.Such
conditionsinclude,forexample,cardiacarrest,
severeburns,oncology,organfailure,highrisk
pregnancy,majorpsychosesandcomplextropical
diseases.

Theseguidelinesseemtogenerallyalignwiththehandlingofcasualtypatientsoutlined
bytheWesternAustralianDepartmentofHealth(DoH).TheDepartmentsubmitted
that:
typically, critical and multiple casualty patients are stabilised to the
nearest available health facility, and then transferred to the most
appropriate facility, usually the Regional Resource Centre or a major
Perthhospitalifrequired,dependingonthelevelofcareprovided.734

732ibid,p7.
733ibid.
734SubmissionNo.24fromDepartmentofHealth,19December2014,p1.

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Chapter9
9.35

Furthermore,theDoHstatedthatconsiderations,suchastheavailabilityofsurgical
intervention,highdependencyorIntensiveCarerequirements,andthenatureof
ongoingpatientcarearetakenintoaccountwhenmakingthesedecisions.735
Finding54
Offshorepetroleumoperatorsmedicalresponseandmedicalevacuationprocedures
aregenerallyatieredprocess,frombasicfirstaidprovisiononsitethroughto
evacuationfordiagnosisandtreatmentofcomplexmedicalconditions.

9.36

Withtheaboveinformationasbackgroundmaterial,thebalanceofthissectionofthe
reportdiscussesthemedicalresponseprovisionsofShellandWoodsidefortheirFLNG
facilities.

9.37

AccordingtoShell,thecompanyensuresithasthecapabilitytotreatpotentially
injuredpeoplebothonthefacilityitself,[]withparamedicsandclinicalfacilitieson
board.736Furthermore,escalationwouldrequireacasualtytobemedevacedfromthe
facility,firsttoBroomehospital,thentoeitherDarwinorPerthiffurtherescalation
occurs.737MrAndrewDohertyexplainedthatitisamedicallygoverneddecisionasto
wherethosefacilitiescanbesttreatthecase,boththefacilitiesandourownmedical
practitioners.738

9.38

Woodsidealsostateditsprincipleisdeliveryofhighqualityhealthcare.739Woodsides
MrRoryOConnorexplainedthatthemedicaltreatmentataWoodsidefacilityisjust
thefirstpartofthemedicalcare,withWoodsidehavingthecapacitytoescalate
medicalcareasneeded.740MrOConnoradvisedthatWoodsidelooks:
at the wholeintegration from a point of injury or point of significant
seriousillnesstohowwegettheindividualtothatdefinitivecare.We
look at each of the locations with the timings and the infrastructure
and the support which is needed, so it would be dependent on that
outcome.741

9.39

Inrelationtoonboardmedicalresourcing,Shelladvisedthatitanticipatedhaving
paramediccapabilitycombinedwiththemedicalfacilitiesthathavealreadybe[en]built
intotheaccommodation.Inadditionisparamediccapabilityontheinfieldsupport

735ibid.
736MrAndrewDoherty,GeneralManager,HSSE,ShellinAustralia,TranscriptofEvidence,
12November2014,p8.
737ibid.
738ibid.
739MrRoryOConnor,SeniorManager,Health,WoodsideEnergyLtd,TranscriptofEvidence,
7November2014,p10.
740ibid,p11.
741ibid.

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Chapter9
vessels.742ThedecisiontohaveparamediccapabilityonboardisbasedonShellsown
experienceandthatdemonstratedelsewhereintheworldsuchastheGulfofMexico
andtheNorthSeatobeagoodpracticeformanagingemergencyresponsecasesin
remotelocations.743InrelationtoPrelude,Shelladvisedthatthereisthecapability,in
combinationwiththeparamedics,tostabilisepatientsinsuchawaythattheycanthen
beappropriatelymedivaced.744
9.40

MrOConnoralsoadvisedthatWoodsidewouldapplyitscurrentphilosophytoits
FLNGfacilities,butitwouldbeunderstoodinthecontextoftheproposedBrowse
development.745AtthetimeofthisInquiryWoodsidewasnotabletocategoricallysay
whatthemanningwouldlooklike,butassuredtheCommitteethatittakesallthe
considerationsoftheparticulardevelopmentwiththeexperiencethatwehavenow
fromtheexistingoffshoreassets.746

9.41

WhileWoodsidewasnotabletoadvisewhatlevelofmedicalstaffingwouldbeonits
BrowseFLNGfacilities,itdidsaythatiswaslookingattherequirementsinaccordance
withthenumberofstaffonthefacilityataparticulartime.AccordingtoMrOConnor:
ifyouarelookingoutfor300individualsormoreonafacilityandthe
intensityofthecampaign,youmightlookatmoremedicalstaff.You
maylookatdayshifts,nightshifts,forinstance.Intheactualplanning
stage,thosearetheconsiderationsthatweputforward.747

9.42

Woodsidealsoadvisedthatitwasusedtolookingafterlargenumbersofpeopleonits
facilities.CitingitsGoodwinAoffshoreplatformasanexample,MrGregorystatedthat
thenumbersthatwouldbeonanFLNGfacilityisnotsomethingthatweareunfamiliar
with;itisthesamethings,wescaleupthemedicalsupportaspartofthatplanning.748

9.43

Shellstatedthatinadditiontoonboardparamediccapabilityandasupervisortrained
uptofirstaidlevel,Preludewillhave:
thefacilitythroughthemedicair,tocallupadoctororthatleveltogo
outonthesearchandrescuehelicoptersothatwayyouactuallytake
additional medical support out with you, so should a casualty of

742MrAndrewDoherty,GeneralManager,HSSE,ShellinAustralia,TranscriptofEvidence,
12November2014,p8.
743ibid,p9.
744ibid,p9.
745MrRoryOConnor,SeniorManager,Health,WoodsideEnergyLtd,TranscriptofEvidence,
7November2014,p11.
746ibid.
747ibid.
748MrShaunGregory,SeniorVicePresident,SustainabilityandTechnology,WoodsideEnergyLtd,
TranscriptofEvidence,7November2014,p11.

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Chapter9
medivac have to come off the asset, you are not leaving the asset
withoutanymedicalcover.749
Finding55
ThenumberandcapabilityofmedicalstaffonboardanFLNGfacilitymustbe
appropriatetothatparticularfacility.
9.44

9.45

MrDohertyadvisedthatoncepatientswerestabilisedtheycouldbemedevacedto
Broomefortreatmentatthelocalhospital.IfBroomeHospitalwasnotabletoassist,
ShellismakingprovisionforfurthertransfertoeitherDarwinorthePerthhospitals.750
ShellsPreludefacilityhastwohelidecks,withthehelicoptersbasedinBroome.751Shell
alsohasasearchandrescuehelicopterbasedinBroomeand,attheirNovember2014
hearing,advisedthatthehelicopterhadbeenoperationalfornearlytwomonths.752

9.46

AccordingtotheKimberleyPortsAuthority,Shellshelicopter,anEC225SAR,provides
safetyandemergencyresponsesupporttotheFLNGfacility,alongwithpilots,
paramedics,engineersandcrew.753TheKimberleyPortsAuthorityfurtheradvisedthat
Shellshelicopterserviceisonstandby24hoursadayandabletorespondwithin15
minutesduringdaylighthoursand30minutesatnight.Theaircrafthasarangeof300
nauticalmilesfromtheBroomeairport.754

9.47

AccordingtotheAustralianPetroleumProductionandExplorationAssociation(APPEA),
foroilandgasfacilitiesinWesternAustralia,thedifficultandhazardousenvironments
inwhichtheindustryspersonnelareexposedisfurthercomplicatedbythedistances
bothoffshoreandonshorefromprimaryhealthcarefacilities.755

9.48

Clearly,asMrWoodhams,APPEAsDirector,SafetyandEnvironment,stated,the
earlierthewarningyouget,thebetter.Itistruethatthefurtheryougooffshore,of
course,thelongerittakesthehelicopterstogetthere,whichiswhattendstodrive

749MrGeraldDixon,HSSEManager,Prelude,ShellinAustralia,TranscriptofEvidence,12November
2014,p8.Seealso:MrAndrewDoherty,GeneralManager,HSSE,ShellinAustralia,Transcriptof
Evidence,12November2014,p8.
750MrAndrewDoherty,GeneralManager,HSSE,ShellinAustralia,TranscriptofEvidence,
12November2014,pp910.
751SubmissionNo.25fromShellinAustralia,19December2014,p6.
752MrGeraldDixon,HSSEManager,Prelude,ShellinAustralia,TranscriptofEvidence,12November
2014,p12.
753SubmissionNo.3fromKimberleyPortsAuthority,11July2014,p4.
754ibid.
755SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociationLimited,
20August2014,p30.

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Chapter9
neighbouringactivitiestocooperate.756Theissueofcooperationbetweenoperatorsis
discussedfurtherbelow,andinChapter10.
9.49

AccordingtoAPPEA,tofacilitaterapidaccessfromthese[remoteWesternAustralian]
locationstoPortHedland,PerthorDarwinhospitals,someoilandgascompanieshave
formedanaeromedicalevacuationservicecalledtheWestAustraliaResourcesAero
MedicalEvacuation(WARAME).757Apache,BHPBilliton,Chevron,Santos,Shell,
VermilionandWoodsidearethecurrentWARAMEmembers.

9.50

ThetenderdocumentationforthisservicestatedthatWARAMEservicesinclude:

9.51

Clinical Coordinationofilland/orinjuredpersonnelfromvarious
WARAME Member operating sites within Western Australia and
Timor Sea to designated medical facilities within Western
Australia,DarwinorAdelaide;

TheClinicalCoordinationtoincludetheAeroMedicalEvacuation
ofilland/orinjuredpersonnelfromapprovedaerodromesutilized
by WARAME Members operating within and near Australian
territorytodesignatedmedicalfacilities;

ClinicalServicesatvariousWARAMEMemberoperatingsites;and

ClinicalCareofsickand/orinjuredpersonnel(includingthesupply
ofappropriateclinicalequipment);
(a) DuringAeroMedicalEvacuation;and
(b) AtvariousWARAMEMemberoperatingsites.758

Woodsideconfirmedthattheadditionalaviationsupportnecessaryforremotemedical
emergenciesisprovidedbyWARAMEandthatthisiswellestablishedpracticeforthe
NorthWestShelf.759WoodsidealsoadvisedthatplanningfortheproposedBrowse
FLNGDevelopmentassumesWoodsidewillcontinueWARAMEserviceandwillbeused
totransferinjuredpersonneltoPerthorDarwinhospital.760

756MrAndrewWoodhams,Director,SafetyandEnvironment,AustralianPetroleumProductionand
ExplorationAssociationLimited,TranscriptofEvidence,7November2014,p11.
757SubmissionNo.11fromAustralianPetroleumProductionandExplorationAssociationLimited,
20August2014,p30.
758AustralianPetroleumProduction&ExplorationAssociationLimited,Tender:WestAustralia
resourcesaeromedicalevacuation(WARAME)services,2014.Availableat:
http://www.tendersonline.com.au/TenderDetails.aspx?uid=cctol344362.Accessedon
12February2015.
759SubmissionNo.15fromWoodsideEnergyLtd,1December2014,p2.
760ibid.

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Chapter9
Finding56
Tohelpovercomethedifficultiesassociatedwithmedicalevacuationsinremoteand
hazardousregionsinWesternAustralia,someoilandgascompanieshaveformedan
aeromedicalservicenamedtheWesternAustraliaResourcesAeroMedicalEvacuation.
Finding57
Emergencymedicalevacuationsfromoilandgasfacilitiesinthenorthwest,including
FLNGfacilities,willbetothenearestcapablefacility,mostlikelyPerthorDarwin.

Rescueandrecoveryinternationalresponsibilities
9.52

AustraliasNationalSearch&RescueManual(theManual),publishedandmaintained
bytheAustralianMaritimeSafetyAuthority(AMSA),definessearchandrescue(SAR)as
beingthesearchforandprovisionoflifesavingassistancetopeopleindistressand
imminentdangeroflossoflife.761TheManualfurtherexplainsthat:
Australian SAR arrangements are intended to complement other
emergency services (police, fire, ambulance) in circumstances where
those services are unable to operate effectively. Such circumstances
could include, for example, remote area operations, rescues at sea,
and the need for specialist SAR facilities not normally available to
emergencyservices.762

9.53

AssignatorytotheChicagoConventiononInternationalCivilAviation(1944),the
InternationalConventionfortheSafetyofLifeatSea(1975),theInternational
ConventiononMaritimeSearchandRescue(1979)andtheUnitedNationsConvention
ontheLawoftheSea(1982),AustraliaisresponsibleforSARoveranareathatis
comprisedoftheAustraliancontinentandtheEastIndian,SouthwestPacificand
Southernoceans,aswellastheAustralianAntarcticterritories.Intotal,thisisaregion
ofapproximately52.8millionsquarekilometresoraboutonetenthoftheEarth's
surface.763

9.54

Specifically,asasignatoryoftheChicagoConventiononInternationalCivilAviation,
Australiaisrequiredtoprovidesuchmeasuresofassistancetoaircraftindistress,in
theSARareasundertheirjurisdiction,asispracticable.764Inaddition,theInternational

761AustralianMaritimeSafetyAuthority,NationalSearch&RescueManual,June2014,p1.
Availableat:http://natsar.amsa.gov.au/documents/NATSAR
Manual/Australian%20National%20SAR%20Manual%20June%202014%20FINAL.pdf.Accessedon
18February2015.
762ibid.
763AustralianMaritimeSafetyAuthority,ArrangementsinAustralia.Availableat:
https://www.amsa.gov.au/searchandrescue/sarinaustralia/arrangementsinaustralia/.
Accessedon18February2015.
764SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p23.

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Chapter9
ConventionfortheSafetyofLifeatSearequiresAustraliatoensurethatarrangements
aremadeforcoastwatchingandfortherescueofpersonsindistressatseaaroundits
coasts.765Inparticular,thesearrangementsmustinclude:
theestablishment,operationandmaintenanceofsuchmaritimesafety
facilitiesasaredeemedpracticableandnecessaryhavingregardtothe
density of the seagoing traffic and the navigational dangers, and
should, so far as possible, afford adequate means of locating and
rescuingsuchpersons.766
9.55

TheInternationalConventiononMaritimeSearchandRescuefurtherrequiresAustralia
toparticipateinthedevelopmentofsearchandrescueservicestoensurethat
assistanceisrenderedtoanypersonindistressatsea.767Finally,theUnitedNations
ConventionontheLawoftheSeastatesthateverycoastalstate:
shall promote the establishment, operation and maintenance of an
adequateandeffectivesearchandrescueserviceregardingsafetyon
and over the sea and, where circumstances so require, by way of
mutualregionalarrangementscooperatewithneighbouringStatesfor
thispurpose.768

9.56

Noneoftheserequirementsprescribeexactlywhatisrequiredofsignatorycountries
becausesearchandrescueinresponsetoadistresssituationcantakemanydifferent
formsdependingontheextentandcomplexityoftheincident,aswellastheresources
thatareavailable.Inpractice,theManualnotesthatdedicatedSARassetsarelimited
inAustraliaandothergovernment,privateandcommercialassetsmaybediverted
fromtheirprimaryfunctionbycharter,arrangementandrequest.769Asaconsequence
ofthisdivergencestrategy:
many SAR operations are conducted jointly by Commonwealth and
State/Territoryauthorities.Itis,therefore,essentialthattheavailable
resources and operational techniques are standardised and
coordinatedacrosstheAustralianregion.770

765ibid.
766ibid.
767ibid.
768ibid.
769AustralianMaritimeSafetyAuthority,NationalSearch&RescueManual,June2014,p1.
Availableat:http://natsar.amsa.gov.au/documents/NATSAR
Manual/Australian%20National%20SAR%20Manual%20June%202014%20FINAL.pdf.Accessedon
18February2015.
770ibid.

194

Chapter9
9.57

AMSAisAustraliasnationalSARauthority,withthepoliceserviceofeachstateand
territorybeingresponsiblefortheareawithintheirjurisdiction.771Thismeansthat
AMSAistheresponsibleSARauthorityforthevastmajorityofAustraliasoffshore
petroleumindustryactivitiesastheyoccurmainlyinCommonwealthwaters.

9.58

APPEAexplainedthattheoilandgasindustry,asoneofmanyindustriesoperatingin
themarineenvironment,assistsAMSAwhenrequestedtoperformSARactivities.772
Furthermore,asoneoftheprimaryindustriesoperatingwithinAustraliasmaritime
territories,AMSAhasitselfimplementedanumberofitsownSARinitiatives.According
toAPPEA,whiletheseinitiativesareprimarilyfocusedonsupportingindustry
personnel,theindustrytakesseriouslyitssupportforassistingothermaritime
personnelwhorequireassistance.773

SearchandrescuebytheAustralianpetroleumindustry
9.59

Regulatoryapprovalforanyproposedoffshorepetroleumactivityiscontingentupon
theacceptanceofanassociatedsafetycaseand,becausetheseactivitiesinvolve
workerstransitingbetweenandworkingonoffshorefacilities,theavailabilityof
adequateSARcapabilitymustformpartofanysafetycase.Thiswasexplainedbythe
GeneralManagerofSafetyandIntegrityattheNationalOffshorePetroleumSafetyand
EnvironmentalAuthority(NOPSEMA),MrGavinGuyan,whomadeitclearthat:
theregulationsdefinesafetycasecontentandtheyspecificallyinclude
a requirement to address emergency evacuation. They address
emergencypreparednessandtheyalsoaddressmedicalfacilities.The
safetycasemustaddressallthethings.774

9.60

Inmeetingthisrequirement,Australiasoffshorepetroleumindustryhasimplemented
anumberofformalandinformalSARcollaborativearrangements,agoodexampleof
whichistherecentprovisionbyShellAustraliaofadedicatedsearchandrescue
helicopterservicetosupporttheoffshoreoilandgasindustryintheBrowsebasin.775

771TheDepartmentofDefencealsoservesasasearchandrescueauthorityatanationallevel,and
isavailabletosupporttheeffortsofanyauthoritybyformalrequest.
772SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p23.
773ibid.
774MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAssociation,TranscriptofEvidence,12November2014,p9.
775SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p29.

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Chapter9
9.61

WhenShellsSARhelicopter:
is not required for oil and gas activities, Shell advises that it may be
tasked by authorities such as WAPOL to assist with medevac and
searchandrescueneedsintheregion.776

9.62

ThereisapaucityofavailableSARinfrastructurealongtheKimberleycoastline.This
washighlightedbytheMUAsMrBray,whoexplainedthattheUnion:
have long held a view that Western Australia, through the resource
boom, grew exponentially in [some remote] areas [such as the
Kimberley]. One of the concerns we always had was the emergency
responsecapabilitieswerenotkeepingupwiththepace.[]WAgrew
up very quickly in remote areas and I do not think that we
responded.777

9.63

ThissituationmakesShellsSARhelicopteranecessarycomponentofthePrelude
project.Equally,theavailabilityofthishelicopterenhancestheSARcapabilitiesinand
aroundBroome,andalongtheKimberleycoastlineingeneral.Assuch,thishelicopter
standsasaclearexampleofhowalocalcommunitycanbenefitfromthedevelopment
ofnearbypetroleumresources.

9.64

InessencethesafetycaserequirementforSARplacestheonusonindustrytoensure
thatadequateemergencyresponsecapabilityexistsinremotelocationspriorto
petroleumactivitiesbeingundertaken.Thus,whenaskedtoprovidefurtherdetailsof
theinvestmentinitsPreludehelicopterservice,Shellmadeitclearthattherewouldbe
capacityforitshelicopterfacilitiestoservetheneedsofindustryasawhole.According
toShellsMrGeraldDixon,althoughthehelicopteriscurrentlyShelldedicated,Shell
arelookingatotheroperatorstocomeinand,obviously,sharethatfacility.778This
wasconfirmedbyPreludeCommercialManager,MrIanGrose,whoexplainedthat
Shellspolicyistowelcomewhereverwecansynergiesbetweenoilandgasoperators
andothersintheregionbecauseitmakesmoresense.779

9.65

MrNigelWilson,SeniorIndustryAdviseratINPEX,alsoconfirmedthattheIchthys
projectwouldrelyuponthishelicopterservice,explainingthatINPEXisdiscussinga

776SubmissionNo.3fromKimberleyPortsAuthority,11July2014,p4.
777MrIanBray,AssistantNationalSecretary,MaritimeUnionofAustralia,TranscriptofEvidence,
7November2014,p7.
778MrGeraldDixon,HSSEManager,Prelude,ShellinAustralia,TranscriptofEvidence,12November
2014,p12.
779MrIanGrose,CommercialManager,Prelude,ShellinAustralia,TranscriptofEvidence,
12November2014,p12.

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Chapter9
formalagreementwithShell,andthatShell,theindustryandourselvesareinvolvedin
thesearchandrescuehelicopter.780
9.66

Furthermore,ShellsGeneralManagerofHealth,Safety,SecurityandEnvironment,
MrAndrewDohery,alsomadeitclearthatthecapabilityofthehelicopterservice
wouldbecomplementedby:
infield support vessels supplied out of Broome and an allweather
dedicatedsearchandrescuehelicopterlocatedinBroome.InPerth,to
backuptheemergencyresponseservices,wehavea24/7emergency
responsemanagementteamthatisequippedtosupporttheoffshore
facilityandengagewithagenciesonshorewhererequired.781

9.67

ThepracticalrealityofsharedSARserviceswasoutlinedbyMrMarkLeighof
ConocoPhillips,whoexplainedthatthefirstresponsetomanoverboard,forexample,
wouldbeyourstandbyvesselsandthingsyouhaveinthefield.782Onthispoint,
MrLeighprovidedcontexttothebenefitofsharedemergencyresponsecapacity,
statingthat:
the more operations there are in an area, in this context the safer it
gets. You have got more assets you could mobilise; more standby
vessels,moresupplyvesselsgoinginandout.Thereareactuallymore
helicopters in the area and so on. The first response to somebody
getting in the water is essentially local help. Ideally, your standby
vesselandthenpotentiallyotherassetsaswell.783

9.68

SharedSARcapabilitywasoneofthekeyreasonswhytherewerenosignificanthuman
consequencesassociatedwiththe2009Montaraoilspill.Despitebeingan
environmentaldisaster,workersontheMontaraplatformweresafelyrescuedinthe
immediateaftermathofthatincidentbyvesselsinvolvedinotherpetroleumindustry
activitiesintheareaatthetime.ThiswasexplainedbytheWABranchSecretaryofthe
AWU,MrStephenPrice,asfollows:
Montara [was] probably the closest thing we have had to a
catastrophicfailureofanyofthesefacilities,andthatinitselfbeinga
fixed platform, I suppose it was fortunate that there was some
construction work going on, because the only thing that saved [the

780MrNigelWilson,SeniorIndustryAdviser,INPEX,TranscriptofEvidence,7November2014,
pp89.
781MrAndrewDoherty,GeneralManager,HSSE,ShellinAustralia,TranscriptofEvidence,
12November2014,p3.
782MrMarkLeigh,TeamLeader,AssetIntegrityandProcessSafety,ConocoPhillips,Transcriptof
Evidence,10November2014,p8.
783ibid.

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Chapter9
workerson]Montarawasthattherewasconstructionworkgoingon
not too far away, and there were vessels in the areapipelaying
vesselsandeverythingassociatedwithitandtheywereabletogeta
quick response to it. It may have been a completely different story if
thecircumstancesweredifferentthere.784
Finding58
Anadequateandavailablesearchandrescuecapabilityisaregulatoryrequirementfor
alloffshorepetroleumfacilities,includingFLNGfacilities.Thesearchandrescue
capabilityrequirementsforanFLNGfacilityarenecessarilydictatedbyinternational
bestpracticeandthefacilitysparticularlocationandriskcharacteristics.
Finding59
Resourcecompanieshaveinvestedinsearchandrescueequipmentandservices,which
hashelpedaddressthepaucityofsearchandrescueinfrastructurealongtheKimberley
coastline.
Finding60
Onewayinwhichoffshoreoilandgasoperatorshavedischargedtheregulatory
requirementsforsearchandrescuecapabilityistocollaborateinprovidingtheirsearch
andrescuefacilitiesand,thus,enhanceeachindividualoperationscapability.

Theneedforcoordination
9.69

WithindustryandgovernmentbothmakingresourcesavailabletoSARauthoritiesat
bothnationalandstatelevels,itiscriticallyimportantthatthespecificrolesand
contributionsofbothindustryandgovernmentareclearlydefined.TheManual
characterisesAustraliasSARarrangementsasbeingcomprisedoftwolevelsof
responseandnotesthat:
itiscommonforanumberofSARAuthoritiestocontributetooneSAR
operation.ThereforeitisvitalthatoneSARAuthorityisresponsiblefor
theoverallcoordinationoftheSARoperationandtheotherAuthorities
involved will cooperate to produce the best response possible within
availableresources.785

9.70

Inthefirstinstance,however,itmustbeappreciatedthatthesafetyofworkersatany
offshorepetroleumfacilityistheresponsibilityoftheoperator.Thisfactisemphasised

784MrStephenPrice,BranchSecretary,AustralianWorkersUnion,TranscriptofEvidence,
10November2014,p9.
785AustralianMaritimeSafetyAuthority,NationalSearch&RescueManual,June2014,p31.
Availableat:http://natsar.amsa.gov.au/documents/NATSAR
Manual/Australian%20National%20SAR%20Manual%20June%202014%20FINAL.pdf.Accessedon
18February2015.

198

Chapter9
bytheWAPolice,whosubmittedthatinmostinstances,theoperatorofanFLNG
facilitywouldeffectively:
assume the role of Controlling Agency for an emergency, having
immediate responsibility for the response, supported by the relevant
Port Authority. This is where emergency response planning, including
emergencyevacuationandmanoverboardproceduresthattheyhave
inplacearecritical.Iftheselocalarrangementsarewellthoughtout
thedemandsforexternalassistancearelikelytobelimitedtowherea
significant emergency has occurred, for example where this has
impactedontheseresourcestotheextentthattheyareinoperable.786
9.71

Itisindeedlikelythatmanyemergencysituationsinvolvingoffshorepetroleum
facilitiesforexample,inamanoverboardsituationcanandshouldbeimmediately
addressedbytheoperatorwithouthavingtocalluponexternalassistance.Formore
severeemergencysituations,however,governmentassistancemaybeofparamount
importance.Inareasofstatejurisdiction,theEmergencyManagementAct2005(WA),
inconjunctionwiththeEmergencyManagementRegulations2006(WA),establishes
theCommissioneroftheWAPoliceastheHazardManagementAgencyresponsiblefor
SAR.787Inconfirmingthisresponsibility,theWAPoliceexplainthat,withregardto
emergencymanagementinthemaritimeenvironment,theirdutiesonlyextendtoa
distanceofthreenauticalmilesseawardoftheTerritorialSeaBoundary(TSB).788
Beyondthatwhichistosayforthevastmajorityofthemaritimeenvironmentfor
whichAustraliahasinternationalSARresponsibilitytheresponsibleSARauthorityis
AMSA.

9.72

AccordingtotheWAPolice,AMSAundertakesitscoordinatingfunctionformaritime
SARthroughtheJointRescueCoordinationCentre(JRCC)Australia.789Furthermore,
theWAPoliceadvisedthatanInterGovernmentalAgreementonNationalSAR
ResponseArrangementsstipulatesthatallSARauthoritiesshouldprovidesuch
assistanceorfacilitiesasmayreasonablyberequestedbytheSARAuthoritywith
overallcoordinationofaSARoperation.790

9.73

TurningtotheissueofFLNGoperations,theWAPoliceexplainedthatthescaleofany
responsetoanemergencyinrelationtoaFLNGfacilityfromWAPoliceasaresponse
agency/SARAuthority,aswithanypoliceoperation,willbedeterminedbythespecific
incidentandlocation.791ForanSARoperationinvolvingafacilitylocatedbeyond

786SubmissionNo.26fromWAPolice,5February2015,p5.
787SubmissionNo.8fromWoodside,8August2014,p19.
788SubmissionNo.26fromWAPolice,5February2015,p2.
789ibid,p4.
790ibid.
791ibid,p5.

199

Chapter9
coastalwaters,theWAPoliceadvisedthattheState[emergencymanagement]
arrangementssetoutinWestplansdonotapply.792AsitisunlikelythatanFLNG
facilitywilloperateinstatewaters,ifSARwasrequiredinrespectofanFLNGfacilityit
wouldbecoordinatedatanationallevelwithWAPoliceand/orotherresponse
agencies,suchasDoTand/orDFES,providingassistance.793WAPolicefurtherclarified
thatthisarrangementwouldnotprecludeStateagenciesundertakingtheinitial
responsetoacallforassistancepriortoamoreappropriatestructurebeing
implemented.794
9.74

ThelikelyrolefortheWAPoliceunderanationallycoordinatedSAReffortinwaters
offtheWAcoastwouldbetocoordinatesurfaceassetssuchasoceanvesselsthrough
theWaterPoliceCoordinationCentrebasedinNorthFremantle,[and]staffed24/7by
civilianradio/calltakersandpoliceofficerswhoarenationallytrainedSARMission
Controllers.795TheWAPolicealsoadvisedthatfourWaterPolicevesselsandfive
aircraftareavailableforSARduties.796TheseareoutlinedinTable9.3below.
Finding61
Assafetyistheresponsibilityofanoffshorefacilitysoperator,intheeventofan
emergencytheoperatoristheControlAgency.
Finding62
Insevereemergencysituationsonoffshorepetroleumfacilities,includingFLNG
facilities,governmentassistancewouldberequired.InCommonwealthwaters,this
assistancewouldbecoordinatedbytheAustralianMaritimeSafetyAuthority;instate
watersitwouldbecoordinatedbyWesternAustraliaPolice.

792ibid.
793ibid.
794ibid.
795ibid,p8.
796ibid,p8.

200

Chapter9
797

Table9.3:WAPolicevehiclesavailableforSARduties

Watervessels
Delphinus:22metres,basedinDampier,accommodatesskipper,engineerand6crew,
12000litrefueltank,maximumspeed26knots,saferangeofoperation760nautical
miles.
CygnetV:18metres,basedinNorthFremantle,accommodates4crew,6000litretank,
maximumspeed30knots,saferangeofoperation480nauticalmiles.
TW152:10metres,basedinNorthFremantle,accommodates8crew,700litrefuel
tank,maximumspeed46knots,saferangeofoperationwithin20nauticalmilesofa
coastradiostation.
TW154:8.5metres,basedinNorthFremantle,accommodates8crew,500litrefuel
tank,maximumspeed46knots,saferangeofoperationwithin20nauticalmilesofa
coastradiostation.
Aircraft
Polair61:RotaryAirWingHelicopterVHWAH,7seat,withfacilitiesincluding250kg
winch,nightvisiongoggles,thermalimaging(FUR),rangeof230nm(425km)andspeed
120knots(222km/hr).
Polair62:RotaryAirWingHelicopterVHWPX,9seats,facilitiesincluding250kgwinch,
nightvisiongoggles,FUR,rangeof350nm(648km)andspeedof120knots(222km/hr).
PilatusPC12(x2):FixedWingAircraftVHWPE(atJandakothangar,8passengers)&
WHWPY(atKarrathahangar,9passengers),canflyupto35,000ftsoavoidingall
weatheractivity,range2000nm(3704km),speed250knots(463km/hr).Estimated
traveltimeJandakottoKarratha3hrs.
GippslandAeronauticsGASAirvan:FixedAirWingAircraft(VHWPF),range575nm
(1064km),speed115knots(212km/hr).
9.75

Othergovernmentagenciescanbe,andoftenare,alsotaskedtoassistinSARactivities.
InoutliningassetsthatmaybeofuseinanSARcontext,theKimberleyPortsAuthority
submittedthatwithitsregionalshipAutomatedIdentificationSystem,whichisableto
locateandtrackvesselswelloffshore,itcouldprovideAMSAandWAPOLincident
commanderswiththepositionofashipcasualtyandasuggestedinitialcourseheading
fortheemergencyresponsehelicoptertotake.798Furthermore,theBroomeport:
is also capable of operating as a local maritime emergency response
centre with the usual command centre accessories inclusive of
whiteboards,tabards,forms,plansandcommunicationsystems.799

797ibid.
798SubmissionNo.3fromKimberleyPortsAuthority,11July2014,p4.
799ibid.

201

Chapter9
9.76

Similarly,theAssistantCommissionerofDFES,MrGaryGifford,advisedthat,ifneeded,
theWAPolicewouldbeableto:
use DFES volunteer marine rescue and they can also use a cray boat
out in Dongara. If they use the volunteer marine rescuers, they are
usingatrainedcapableasset,whichtheyhavevisibilityandawareness
of. Our volunteer marine rescuers also have legislation through the
FESAacttoperformrescuesatsea.Theyalsohavetoacertainextent
theirownautonomytorespond,butbasicallywithanotificationtothe
policethatthereisasearchandrescuegoingon.800

9.77

Industryassetswouldalsobemadeavailabletothecoordinatingauthorityduringan
SARevent.Woodsidesubmittedthatcollaborativeendeavoursbetweenindustryand
government,suchaslocalcommitteerepresentation,jointexercisesandthelinkages
throughincidentmanagementsystemsallenableanintegratedapproachtosearchand
rescueevents.801Inordertoensurethatthiscollaborationisefficient,Woodside
explainedthatitspersonnel:
directly engage with the Western Australian State Government
emergency management framework including Local Emergency
Management Committees, District Emergency Management
Committees and the State Emergency Management Committee.
Woodsidevaluestheongoingengagementwithlawenforcement,fire
and emergency services, Border Protection Command and the
Australian Defence Force who are regular participants in all levels of
exercisinganddrills.802

9.78

Woodsidealsoadvisedthatindustryworkinggroupsregularlymeettodiscuss
emergingissuesandpotentialsynergiesintheBroomeregion,andthatAustralias
petroleumindustryassessessearchandrescuecapabilityforeachoperatingareato
ensurethatthereisahighprospectofrecoveringpersonnelfromthewaterwithinsea
survivaltimes.803Indeed,thehistoricdevelopmentoftheNorthWestShelfproject,
andthewayinwhichindustryhasdevelopedSARcapabilitythatisappropriatefor
supportingpetroleumactivitiesintheCarnarvonBasin,providessomeinsightintothe
waythatindustryispreparingfortheinevitableexpansionofpetroleumactivities
withintheBrowseBasin.

800MrGaryGifford,AssistantCommissioner,OperationsCapability,DepartmentofFireand
EmergencyServices,TranscriptofEvidence,19November2014,pp45.
801SubmissionNo.8fromWoodside,8August2014,p19.
802ibid,p18.
803ibid,p19.

202

Chapter9
9.79

Woodsideexplainedthat,toensurethatemergencyresponsecapabilitiesinanarea
areappropriate:
a range of control measures is assessed in each location and for the
North West Shelf this has resulted in a number of sharing
arrangements with other operators within the area, for example the
Western Australian Resources Aero Medical Evacuation (WARAME)
service.Thisserviceprovidesamedicallyequippedjetwiththeaimof
providing a 24hour oncall service to the oil and gas industry in the
region.804

9.80

APPEAexplainedthattheWesternAustralianResourcesAeroMedicalEvacuation
(WARAME)serviceexiststoprovidea24houroncallaeromedicalevacuationservice
totheoilandgasindustryinWA.805Theservice,whichisbasedinKarrathaand
operatesafullymedicallyequippedaircraft,iscurrentlybeingexpandedtoeventually
alsocovertheactivitiesthatwilloccurintheBrowseBasin.806AccordingtoAPPEA,
WARAMEwasestablishedsothatthepetroleumindustrycouldavoiddrawingon
governmentresourcesbylimitingthepotentialimpactonemergencyservicesshould
medicalevacuationberequired.807Similartothewayinwhichpetroleumindustry
assetsareabletobeusedtoassistAMSAortheWAPoliceduringanSARevent,inthe
eventofanemergencymedicalcaseinthecommunity,theRoyalFlyingDoctorService
orlocalmedicalagenciescanrequestuseoftheWARAMEservicebasedonclinical
need.808

Trainingforemergencypreparedness
Emergencyresponseexercises
9.81

Onemethodthatoilandgascompaniesusetoenhancetheiremergencypreparedness
istoconductregularemergencyresponseexercises.AccordingtoWoodside,their
regionalresponseteamsincludepersonneltrainedinincidentmanagement,oilspill,
firefighting,communications,aviation,marineandlogistics,andregularexercisesare
conductedtoensurecompetenciesareadequateforabroadrangeofscenariosthat
mayaffectonefacility,severalfacilitiesorrequiremultiplepointsofindustryand
governmentcoordination.809

9.82

ForMrShaunGregory,WoodsidesSeniorVicePresident,Sustainabilityand
Technology,exercisingemergencyresponseisthebestmeansofcontinuous

804ibid,p19.
805SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p30.
806ibid.
807ibid.
808ibid.
809SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p17.

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Chapter9
improvement.Todemonstrate,MrGregorygavetheexampleofarecentoilspill
exercisewhich:
includedtheDepartmentofTransportinourlevel3arrangementsboth
inPerthandinExmouth,andthereweresomeimprovementsinterms
oftheirunderstandingofwhatweweredoingandourunderstanding
ofwhattheyweredoing.That,tome,whenwegettoFLNG,istheway
forwardwewillexerciseandwewillfindthosegapsandwewillclose
them.810
9.83

Similarly,Shellsubmittedthatexercisesareconductedtoallowthosewhowillrespond
toanemergencytopracticetheirrolesandresponsibilitiesandremainfamiliarwith
specificresponseplans.811AccordingtoShell:
major exercises and regular stakeholder engagement with
government, regulators, contractors and other key service providers
ensure integration between organisations, familiarisation and
communication requirements. Further Shell global and regional
exercises test and refine Shells ability to respond to incidents across
multipleregionsandbusinessunits.812

9.84

Whilegovernmentinvolvementinemergencyresponseexercisesisdiscussedin
Chapter2,itisusefulheretoacknowledgethatgovernmentagenciesareinvolvedin
MajorAccidentEvent(MAE)exercises.Forexample,becauseofitsproximitytotheoil
andgassupplychaininthenorthwestofthestate,theKimberleyPortsAuthorityis
invitedtoparticipateinoffshoreoperatorssafetytraining,drillsandexercises.813The
KimberleyPortsAuthoritysubmittedthat:
majorsafetyincidentexercisesaregenerallyconductedfromindividual
company crisis management centres, and KPA has contributed to
several of these exercises by both physically deploying equipment on
platformsupplyvessels,andparticipatingbytelephonewiththecrisis
managementcentre.814

810MrShaunGregory,SeniorVicePresident,SustainabilityandTechnology,WoodsideEnergyLtd,
TranscriptofEvidence,7November2014,p7.
811SubmissionNo.9fromShellinAustralia,11August2014,p8.
812ibid.
813SubmissionNo.3fromKimberleyPortsAuthority,11July2014,p4.
814ibid.

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Chapter9
9.85

TheDepartmentofTransport(DoT)advisedthatitwashostingtheJune2015National
Planexercisewhichwillinvolveanoffshorepetroleumincidentoffthecoastof
Exmouth,mostlikelyinvolvingafictionalFLNGfacilitywithacoastalimpact.815

9.86

WAPolicealsoadvisedthatitsCriticalInfrastructureUnithaswitnessedand
participatedinanumberofEMexerciseswithoilandgasowner/operatorsandhave
foundtheseexercisestobeofauniformhighquality.816Furthermore,accordingtoWA
Police:
while outcomes varied, even those with outcomes which were
substandard, were used as a basis to improve in the future, with
lessons identified communicated to those who needed to know to
ensurebetteroutcomesinthefuture.817

9.87

WAPoliceseesafetycultureandaneedtoveryregularlyexerciseemergency
managementare"businessasusual"tooilandgasoperators.818
Finding63
Regularcollaborativeexerciseswhichallowpersonneltopractisetheirrolesarea
criticalcomponentofanFLNGfacilityssearchandrescuepreparedness.

9.88

Asthechaptersonemergencyresponsestosevereweatherevents,lossof
containment,accidentsandoilspillsdemonstrate,itisessentialthatthosewhowillbe
workingonornearanFLNGfacilityreceiveappropriatetrainingtothenecessarylevel
ofproficiency.Whilegoodpoliciesandprocedures,togetherwithacompanywide
robustsafetyculture,areextremelyimportant,withoutappropriatelytrainedstaff
thosepoliciesandprocedureswillbeineffectiveatbest.Notonlymuststaffbetrained
inparticularemergencysituationresponses,theymustalsobefullyawareofhowa
facilityssafetysystemoperatesandwhattheirparticularroleis.

9.89

Woodsidesubmittedthatitsemergencyandcrisismanagementpersonnelundertake
ongoingcompetencybasedtrainingandacrisismanagementcapabilitydevelopment
program.819Thisweeklyonshoreandoffshorefacilitytrainingandregularteam
trainingculminatesinquarterlypanWoodsideexercisestotestpreparedness,
performanceandidentifyopportunitiesforimprovement.820

815MrRaymondBuchholz,GeneralManager,MarineSafety,DepartmentofTransport,Transcriptof
Evidence,19November2014,pp34.
816SubmissionNo.26fromWesternAustraliaPolice,2February2015,p5
817ibid.
818ibid.
819SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p17.
820ibid.

205

Chapter9
9.90

ShellacknowledgestheneedtoensurethatallstaffworkingonitsFLNGfacilities
understandhowthesafetysystemswork,whattheirroleisandhowweworktogether
tomakeitasafeoperation.821InrelationtoPrelude,Shelladvisedthatsomeofthe
recruitedoperatorsareundertaking:
core FLNG training so that when they join us, they come up to the
same level of understanding of the hazards and how to manage and
then going on to Geoje and helping with precommissioning so they
becomeintimatelyinvolvedwiththeFLNGfacilityandhowitworks.822

9.91

ThisFLNGoperatortrainingistakingplaceattheAustralianCentreforEnergyand
ProcessTraining(ACEPT)inHenderson.ACEPTadvisedthattheFoundationTraining
ProgramisaneightweekcoursethatincludesPreludeFLNGfundamentaldesignand
operatingprinciples,togetherwithShellsHSSErequirements.823AccordingtoACEPT,
theprogramisdesignedtoensuretechnicianscanmovebeyondroutineoperationand
maintenanceanddealwiththenovelsituationsthatoperateduringcommissioningina
safeandefficientway.824

9.92

ACEPTsFLNGtrainingprogramconsistsofthreemainstreams,eachwithseveral
topics,assetoutinTable9.4below.
825

Table9.4:FLNGFoundationProgram

Stream

Units/Topics

1. NationallyRecognisedUnitsof
Competency

WorkingSafelyatHeights

FirstAid

Pretreatment

LNGSimulatorexercises

FireWaterSystems

ChemicalHandlingandHazard
CommunicationControllingStatic
Electricity

GasTesting

GasFreeingorPurging

SimpleLifting/RiggingandSlinging

2. AwarenessandIntroductiontoFLNG
andthePreludeFacility

3. ShellStandardFrontLineBarrier
Management(FLBM)Competencies
(ShellsGlobalHSSEStandards)

821MrIanGrose,CommercialManager,Prelude,ShellinAustralia,TranscriptofEvidence,
12November2014,p3.
822ibid.
823SubmissionNo.18fromAustralianCentreforEnergyandProcessTraining,ChallengerInstituteof
Technology,8December2014,p1.
824ibid.
825ibid,pp12.

206

Chapter9
9.93

Eightyninetechnicians,includingproduction,instrumentelectricalandmechanical
technicians,havebeentrainedtodateandafurther27aretobetrainedbytheendof
March2015.826

Knowledgesharing
9.94

Theoilandgasindustryalsoarguesthatsharinginformationispartofitsemergency
preventionandmanagementstrategies.ForWoodside,thisinformationsharingoccurs
withintheorganisationandwithothergroups.AccordingtoWoodside,itsinternal
EmergencyManagementSteeringGroupsharesemergencymanagementrisktrends
andlearnings,providesadviceonimprovementopportunitiesandpromotes
standardisationandconsistencyacrossthecompany.827Woodsidefurthersubmitted
thatitparticipatesinanumberofformalandinformalgroupsestablishedatlocal,
stateandnationallevelsinAustraliawhichprovideplatformsforcommunicationand
sharingofstrategicemergencyadviceandlearnings.828

9.95

APPEAadvisedthatitsmembersinvolvedinFLNGprojectssharesafetylessonsand
environmentallessonswiththeirpeers.829APPEAalsoadvisedthatithasacommittee
ofhealthandsafetyofficersthatmeetsquarterlyandprovidesameansbywhich
members:
share highpotential events, lessons learnt, and then they will talk
aboutthemwiththeChathamHouserules.Thatformsalinkofbetter
understanding about those specific events, but it also joins mutual
interests together that say, Ive got a problem like that, and those
guys then speak to each other directly out of that committee
process.830

9.96

AccordingtoMrAndrewWoodhams,Director,SafetyandEnvironment,APPEA,the
industryisgoodatbenchmarkingwitheachotherandlearningoffeachotherwhen
theyseegoodpractice,thusmakingthepracticeofthewholeindustrybetter.831

9.97

APPEAalsoadvisedthatithadintroducedin2009arequirementformembersto
reporthighpotentialincidents.FromthisinformationAPPEAdistributesanonymised
highpotentialincidentalertstotheoilandgasindustrysothatlessonscanbelearned
fromtheseincidents.APPEAsubmitthatthisreportingandalertprogramisnowwell
establishedwithwidedisseminationofinformation,rootcausesandlessonslearned.It

826ibid,p1.
827SubmissionNo.8fromWoodsideEnergyLtd,8August2014,p17.
828ibid.
829MrAndrewWoodhams,Director,SafetyandEnvironment,AustralianPetroleumProductand
ExplorationAssociationLimited,TranscriptofEvidence,7November2014,p9.
830ibid,p5.
831ibid,P9.

207

Chapter9
coversincidentscapableofcausingfatalitiesoramajoraccidentevent.832
Furthermore,inconjunctionwiththeInternationalAssociationofOilandGas
Producers,APPEAsalertsarealsoincludedontheinternationaldatabase,allowing
sharingofinformationonaninternationalbasis.
9.98

Asat19February2015,atotalof166incidentalertshadbeenpublishedonAPPEAs
HiPoAlertsdatabase.AnexampleofanAPPEAHiPoAlertisprovidedatAppendix
Eight.

9.99

Whileacknowledgingthatitisapparentlytruetosaythattherearenonewincidents,
MrWoodhamsstatedthat:
the important thing is to keep it prevalent in peoples minds so that
they take the nuggets away and then go and check their operations
andmakesurethatthosesimilaritemsarebeingwellmanaged.Itisa
goodsharingprocess.833
Finding64
Itisessentialthatthepetroleumindustrycontinuestoshareinformationonsafety
lessonslearnedandonsafetyincidents.
Finding65
Whilesafetycasesandenvironmentalplansnecessarilycontainproprietary
information,thehighpotentialeventsummariespublishedontheAustralian
PetroleumProductandExplorationAssociationswebsiteneednotcontainproprietary
information.
Finding66
Highpotentialeventsummariescouldusefullybemadeavailabletoregulatorsandto
governmentagencies.Forexample,itwouldassisttheWesternAustralianGovernment
inthepreparationofWestplans.

Operatorsascontrolauthorities
9.100

Therearetwomainreasonswhythedevelopmentandsharingofemergency
managementresourcesbyoperatorsisappropriate.First,arrangementsofthisnature
simplyreflectthebroadregulatoryrequirementsthattheentityresponsiblefor
creatingariskisalsoresponsibleforguardingagainstit.Thishasbeendiscussedin
detailinChapters4and6.

832SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p8.
833MrAndrewWoodhams,Director,SafetyandEnvironment,AustralianPetroleumProductand
ExplorationAssociationLimited,TranscriptofEvidence,7November2014,p11.

208

Chapter9
9.101

MrGuyanofNOPSEMAfurtherexplainedthatanoperatorwouldneedtodemonstrate
thatresourceswereavailabletoimplementanemergencyresponseplan,andthatas
suchtheplanbecameacontrolforanyNOPSEMAinspection.Onthispoint,MrGuyan
confirmedthatNOPSEMA:
can,andoftendo,inspectagainstthatcontrol.Weviewthatasbeing
a mitigation measure. It is after the fact of whatever the event is to
mitigate any further harm to people, so we can test against that
control, and often do. I am not sure if you are going to onshore
resourcesintermsofhospitalcapability,butthesafetycaseingeneral
and in this area in particular, requires that there be performance
standards in relation to safety controls. For example, a performance
standard might specify a particular time to get a casualty to an
appropriate level of medical care. It might specify time to recover a
man overboard, so once a fast rescue craft has recovered them and
hastheminthemedicalfacilities.Theperformancestandardsarekey
totheeffectivenessofallofthecontrols.Thosearespecified,soona
facilitybyfacilitybasis,ofcourse,thatchanges.834

9.102

Giventheonusontheoperatortobepreparedforemergencysituations,industry
collaborationinmakingemergencyresourcescommonlyavailablerepresentsan
efficientwayforpetroleumcompaniesinAustraliatodischargethisduty.Industryhas
developedacooperativeapproachsuchthatifonecompanyhasaproblem,another
companywillactuallyassistthem,notonlybecauseitisintheinterestsofeveryoneto
doagoodjob,butitisactuallyagoodwaytogetexperienceaswell.835

9.103

Thismeansthatifaresourceslatedfordevelopmentissoremoteastorenderany
existingSARcapabilityinadequate,theproposedoperatorwillhavetorectifythis
situation(generallythroughinstallingappropriateSARinfrastructure)beforeany
developmentisabletoproceed.Itisforthisreasonthat,asWoodsidesubmitted,while
itisimportantforGovernmentandindustrytocontinuetoworktogethertoconsider
necessaryresponserequirementsandpossiblegapsandareasthatcanbeimproved,
thepresentsituationissuchthat:
therehasnotbeenanimmediateneedforadditionalFederalorState
government emergency response resources or infrastructure to
supportFLNGprojects.836

834MrGavinGuyan,GeneralManager,SafetyandIntegrity,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAssociation,TranscriptofEvidence,12November2014,p10.
835MrRaymondBuchholz,GeneralManager,MarineSafety,DepartmentofTransport,Transcriptof
Evidence,19November2014,p5.
836SubmissionNo.15fromWoodside,1December2014,p3.

209

Chapter9
9.104

Thesecondreasonwhyitisappropriateforoperatorstodevelopandshareemergency
responseresourcesisthat,largelybecausetheyareinthebestpositiontoprovidethe
initialresponse,operatorsarethedesignatedcontrolagenciesforemergency
situations.AstheDoTsGeneralManagerofMarineSafety,MrRaymondBuchholz,
explained,whiletheDoThasjurisdictionalauthorityresponsibility,itisvery
important:
the control agency is in place, because they are the people who are
best placed to actually provide an initial response and then the
resourcestocontinuethatresponse.Thatiswhy,forexample,Shellor
Woodsidearepinnedwithbeingthecontrolagency.Itisexpectedas
partoftheseplansthattheyhaveadequatetraining,equipmentand
procedures in place. They are the first on the scene; they deal with
it.837

9.105

TheDoTsroleistooversightthatresponseinstatewatersandensurethatan
adequateresponseisprovided,andprovidingasmuchassistanceasispossible.838
MrBuchholzfurtherexplainedthatwhileitisreallyimportantthattheDepartmentof
Transportistheleadagencyforrespondingtooilspillpollutioninstatewaters,that
doesnotmeanthatthereexistsanarmyofpeoplewaitingtobedeployedtoanyspot
inthestate.839

9.106

MrBuchholzalsoadvisedthatinthecaseofverylargeincidents,particularlyasneither
governmentnorindustryhassufficientresourcestomanageitbythemselvesa
collaborativeapproachtoemergencyresponsehasdeveloped.840Accordingto
MrBuchholz:
whilst NOPSEMA would be the jurisdictional authority, they are very
muchgettingsupportinstantlyfromthenationalresponseteam,from
AMSA, from ourselves. There is a whole collegial approach to that
arrangement.841
Finding67
Asneitherindustrynorgovernmenthasthecapacitytomanagehighconsequence
offshoreincidentsalone,acollaborativeapproachtoemergencyresponsehas
developed.

837MrRaymondBuchholz,GeneralManager,MarineSafety,DepartmentofTransport,Transcriptof
Evidence,19November2014,p6.
838ibid.
839ibid.
840ibid,p5.SeealsoMrGavinGuyan,ActingChiefExecutiveOfficer,NationalOffshorePetroleum
SafetyandEnvironmentalManagementAuthority,TranscriptofEvidence,7April2015,pp36.
841ibid.

210

Chapter9
9.107

Forthisreason,wheneveritcan,theDoTtakestheopportunitytosenditsstaffto
otherjurisdictionstolearnfromtheirexperienceswithpetroleumindustry
emergencies.Forexample,andreflectingthecommunityspiritofemergencyresponse,
DoTstaffweresenttoNewZealandintheRenaincidentofOctober2011.842

9.108

NOPSEMAnotedthatitisnotanemergencyorpollutionresponseagency;rather,in
theeventofanoffshoreincident,NOPSEMAsroleincludesmonitoringtheduty
holder'sresponsetotheemergency,investigatingthecausesoftheincidentandtaking
appropriateenforcementactiontosecurecomplianceasnecessary.843

9.109

NOPSEMAadvisedthattheprincipalformalarrangementforgovernmentcoordination
ofasignificantoffshorepetroleumincidentistheAustralianGovernmentCrisis
ManagementFramework,whichidentifiestheFederalDepartmentofIndustryled
OffshorePetroleumIncidentCoordinationCommittee(OPICC).844

9.110

AccordingtotheDepartmentofIndustry,theOPICCsrolesandresponsibilitiesare:

providingleadershipandstrategiccoordinationinresponsetoan
incident;

developing and communicating a common operating picture on

behalfoftheAustralianGovernment;

reporting to relevant Ministers and governments on the conduct

andassociatedrisksofemergencyandresponseoperations;

developingandimplementingawholeofgovernmentapproachto
mediamanagementinresponsetotheincident;

developingandimplementingawholeofgovernmentapproachto
communityengagementinresponsetotheincident;and

842ibid.On5October2011,theMVRenaranagroundontheAstrolabeReeflocatedoffthenorth
eastcoastofNewZealand.Ofitsloadof1,368containers,eightcontainedhazardousmaterials.
Itwasalsocarrying1,700tonnesofheavyfueloiland200tonnesofmarinedieseloil.Thiswas
describedasNewZealandsworstmaritimeenvironmentaldisaster.See:
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10758195.Accessedon
20February2015.
843SubmissionNo.20fromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,11December2014,p3.Seealso:MrGavinGuyan,ActingChiefExecutiveOfficer,
NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Transcriptof
Evidence,7April2015,p3.
844ibid.TheOPICCwasestablishedinresponsetotheReportoftheMontaraCommissionofInquiry.

211

Chapter9

9.111

providingsupporttotheControlAgencyasrequired.845

TheDepartmentofIndustrynotesthattheOPICCisnotamechanismthroughwhichto
deployCommonwealthresourcesfortheoperationalresponseasthatis,inthefirst
instance,theoffshorepetroleumtitleholdersresponsibilitywhichiscoordinatedin
accordancewiththeirOilPollutionEmergencyPlanandotherregulatory
instruments.846OPICCisalsonotresponsibleforincidentcontrolorimplementing
operationalresponsearrangementsasthesearealsotheresponsibilityofthecontrol
agency.847
Finding68
NeithertheNationalOffshorePetroleumSafetyandEnvironmentalManagement
AuthoritynortheOffshorePetroleumIncidentCoordinationCommitteeareemergency
orpollutionresponseagencies.Theresponsibilityforemergencyandpollution
responselieswiththefacilitysoperator.

845DepartmentofIndustryandScience,OffshorePetroleumIncidentCoordinationFramework,nd,
np.Availableat:http://www.industry.gov.au/resource/UpstreamPetroleum/Pages/Offshore
PetroleumIncidentCoordinationFramework.aspx.Accessedon20February2015.
846ibid.
847ibid.

212

Chapter10
Whathappensiftheresalossofcontainment?

Oilpollution
10.1

Environmentaldamagecausedbyanunplannedreleaseofpetroleumatseaisan
inherentriskofanyoffshorepetroleumactivity.Whilethemagnitudeofthedamage
dependsonarangeofdifferentfactors,ifpetroleumisspilledinamarineenvironment
thepotentialconsequencesforfish,birdsandotherfaunaintheareacanbe
devastating.Theimpactonmarinevegetationisalsooftensevere.Furthermore,the
volatilityofpetroleumcancreateasafetyhazard.Putsimply,petroleumpollutioncan
havecatastrophicconsequencesifitisnotimmediatelyandadequatelyaddressed.

10.2

ItisforthisreasonthattheOffshorePetroleumandGreenhouseGasStorage
(Environment)Regulations2009(OPGGSERegulations)stipulate,atr14(8),thatevery
EnvironmentPlanmustincludeanOilPollutionEmergencyPlanthatspecifiesthe
proponentscapacityandstrategyfordealingwithanoilpollutionevent.848Thismeans
thatnooffshorepetroleumactivitycanoccurinAustraliawithouttheproponent
satisfyingtheNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority(NOPSEMA)thattheyareproperlypreparedtorespondquicklyandlimit
damagetotheenvironmentifoilpollutionoccurs.

10.3

Thisrequirementthusplacestheonusforrespondingto,anddealingwith,oilpollution
onthecompanythatcausedit.AccordingtotheAustralianPetroleumProductionand
ExplorationAssociation(APPEA),thisarrangementinwhichthepetroleum
titleholderisresponsibletoactastheCombatAgencyintheeventofapetroleum
spillrepresentsamajorregulatorychangeimplementedintheaftermathofthe
MontaraandMacondodisastersin2009and2010.849Insubmittingthatthesedisasters
(bothofwhicharedescribedinChapter1)providedmanyvaluablelessonsandledtoa
significantcollectiveresponsebytheAustralianupstreampetroleumindustry,APPEA
explainedthatasaresultofbothMontaraandMacondo,industryhasfocussedits
collectiveleadershiponexpandingandstrengtheningitscapacityandpreparednessto
respondtomajorincidents.850

848OffshorePetroleumandGreenhouseGasStorage(Environment)Regulations2009(Cth).
849SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p21.
850ibid.

213

Chapter10
Finding69
Astheriskofoilpollutionisinherenttoanypetroleumfacility,robustregulationand
managementpracticesarecritical.Itisessentialthatindustryandgovernmenthavea
strongfocusontheregulationandmanagementofoilpollutionriskandoccurrences.
10.4

Oilpollutioncausedbyoffshorepetroleumactivityrepresentswhatisoftenreferredto
withinthepetroleumindustryasalowprobability,highconsequenceevent.Inorder
toensurethatindividualpetroleumcompaniesinAustraliaareabletorespondtosuch
anevent,theindustryasawholemaintainsasuiteofresourcesforcommonusewhen
necessary.APPEAexplainedthatbecausenoonetitleholderoroperatorcanpossibly
continuouslyholdtheemergencyresponsecapacityforsuchanevent:
thepetroleumindustry,regionally,nationallyandinternationally,has
developed a series of mutual aid arrangements (both between
companies,andbetweenindustryandgovernments)thatallowforthe
cascadingofadditionalresourcesintoanemergencyresponse.851

10.5

APPEAcitedinitiativessuchastheSubseaFirstResponseToolkit,mutualaid
arrangementsfordrillingofreliefwells,andinternationalcollaborationindeveloping
advancedwellcappingsolutionsasexamplesofsucharrangements.852Toappreciate
howthesearrangementswouldaidtheresponsetoanoffshoreoilspillpollutionevent,
itisusefultoconsiderthestrategiesthatexistforrespondingtoanunplannedrelease
ofpetroleumatthewellhead,beforeturningtoconsiderhowoilspillpollutiononthe
oceanssurfaceistreated.

SubseaFirstResponse
10.6

Oneofthegreatchallengesfacedbypetroleumproducersisthefactthatreservoir
characteristicscanvarymarkedlyfromfieldtofieldwhilesomefieldscanbeunder
immensepressure,forexample,othersmayrequirepressurisationintheproduction
process.Sophisticatedwellinfrastructureisthususedinordertoregulatetheflowof
rawpetroleumfromareservoir.Thisinfrastructurecanalsobeusedtostemtheflow
ofpetroleumentirelyifrequired.

10.7

Fromtimetotime,however,thisinfrastructurecansufferalossofintegrity,leadingto
whatisreferredtoasalossofcontainment.853Whenthisoccursonasubseawell,

851ibid.UndertheOPGGSERegulations,thetitleholderisresponsibleforpreparingtheEnvironment
PlanandOilPollutionEmergencyPlan,whileundertheOPGGSSRegulations,theoperatoris
responsibleforthesafetycase.ThisreportconcernstheuseofFLNGtechnologytoproducea
discoveredpetroleumresource,ratherthanexplorationactivitiesundertakenbytitleholders.
Therefore,foreaseofdiscussion,theCommitteegenerallyusesthetermoperatorindiscussing
theworkplaceandenvironmentalsafetyresponsibilitiesofFLNGprojectproponents.See:
SubmissionNo.28fromDepartmentofIndustryandScience,16April2015,p1.
852ibid.
853ibid,p25.

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Chapter10
petroleumisreleasedintotheocean,causingoilpollutionanddemandingarapid
responsefromtheoperator.APPEAexplainedthat:
in theevent of any loss of well containment incident,one of the first
steps involved in any response is to survey the well site, attempt
intervention on the existing well integrity systems, such as the Blow
Out Preventer (BOP) or Xmas tree, and if necessary, prepare the site
forthepossibledeploymentofacappingstack.854
10.8

Whiletheequipmentrequiredforthisinterventioniscomplexandexpensive,
stemmingtheflowofpetroleumintotheoceandemandsthatthisequipmentbe
readilyavailableforrapiddeployment.Interventionatacompromisedwellheadis
oftenreferredtoassourcecontrolandisanextremelyimportantcomponentofany
oilspillresponsestrategy.Clearly,theeliminationofahydrocarbonspillatsourcewill
alwaysresultinlowerimpactthananattempttorecoverthehydrocarbononceithas
beenreleasedtotheenvironment.855

10.9

InAustralia,APPEAmembershavejointlyinvestedinasuiteoffirstresponse
interventionequipmentknownastheSubseaFirstResponseToolkit(SFRT).APPEA
submittedthattheinvestmentofmanymillionsofdollarsbytheAustralianpetroleum
industryintoprocuringandmaintainingtheSFRTensuresthat:
incidentresponsetimesinAustralianwatersareminimisedbylocating
this equipment in Australia and ensuring it is kept in a state of
operational readiness at all times through the Australian Marine Oil
SpillCentre.856
Finding70
Intheeventofalossofcontainmentatthewellhead,theresponseneedstoinclude
targetedsubseasourcecontrol.

10.10

TheSFRTconsistsbroadlyofthetoolsrequiredtopreparethewellforthesource
control.857Sourcecontrolcaninvolvebothcapping,whereinasophisticatedcapping
structureisfittedoveradamagedsubseawelltosealoffthewellandstopany
petroleumflow,and/orcontainmentwhichinvolvesthecaptureandcollectionof
petroleumfromadamagedwell.858APPEAexplainedthatitisimportantto
differentiatebetweencappingandcontainment,becausewhere[c]apingstopsflow,
containmentcaptures[it],andasaresult[t]heequipmentrequirementsfora

854ibid,p26.
855ibid,p25.
856ibid,p26.
857ibid.
858ibid,p25.

215

Chapter10
containmentsystemmaybeconsiderablymorecomplexthanthoseforcappingthe
well.859Inbothcases,theaimistopreventoilspillpollutionfromoccurring.
860

Figure10.1:Acappingstack.

10.11

InexplainingthepresentsituationinAustralia,APPEAhighlightsthefactthateach
titleholderproposingtodrillanoffshorewellinAustralianwatersisresponsiblefor
developingsourcecontrolstrategies.861Shouldacappingstackcontingencybe
required,titleholders:
will lay out the requirement for a capping stack contingency [and]
explainthemechanismithasinplaceforsecuringtheuseofacapping
stackinatimelymannershouldalossofcontainmentoccur.862

10.12

APPEAcitedarrangementsinplaceforaccesstocappingstackinfrastructureas
anotherexampleofindustrycollaborationbecause,althoughsomemaintainanin
housecappingstackandothershavenegotiatedacommercialarrangementfor

859ibid.
860TheTimesPicayune,OilspillcontainmentsystemistestedintheGulfofMexico,24July2012.
Availableat:http://www.nola.com/news/gulfoil
spill/index.ssf/2012/07/oil_spill_containment_system_i.html.Accessedon12February2015.
861SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p25.
862ibid.

216

Chapter10
cappingstackaccess,manyofAustraliaspetroleumproducershaveinsteadjoinedthe
globalOilSpillResponseLimited/SubseaWellResponseProject.863Describingitasa
jointinitiativebetweenseveralmajoroilandgascompanies,APPEAexplainedthatthe
OilSpillResponseLimited/SubseaWellResponseProjecthas:
developed four capping stack systems, with one system delivered to
Singapore,enablingtheindustrytocapmostsubseaoilwellsinwater
depthsupto3000maroundtheworld,aswellasprovidingflexibility
forvariouscontingencies.864
Finding71
TheoffshorepetroleumindustrysSubseaFirstResponseToolkitisdesignedtoaddress
apetroleumspillatitssource.
10.13

Thisinterventionsystemisstoredandmaintainedbytheindustryownedglobal
cooperativeOilSpillResponseLimitedandisavailabletooperatorsthrough
subscriptionandasupplementaryagreement.865Similarly,equipmentthatisneededin
mountinganemergencyresponse,suchasvessels,remoteoperatedvehiclesand
drillingunits,aremadeavailablewithminimalresponsetimeifanemergency[is]
declared.866AsAPPEAexplained,whilstthisequipmentremainstheresponsibilityof
individualtitleholders,theavailabilityofthisequipmentisassuredthroughanindustry
mutualaidagreementfacilitatedbyAPPEAandsignedbyAustralianoffshore
operators.867

10.14

Furtherpracticaldetailsofthesubsearesponseandsourcecontrolarrangementsin
AustraliawasalsoprovidedbyWoodsidesSeniorVicePresident,Sustainabilityand
Technology,MrShaunGregory,whoexplainedthattherearethreelayersofoilspill
responseprotocols,withthefirstbeing:
theimmediate,orwhatisonboard[which]wouldbedefinitelyinstock
locally [with each specific operator]. The next step would be the
subsea first respond toolkit. For that, we are a part of an industry
body, but that is an Australian industry body. Currently that is pre
staged, ready to go in Fremantle, and that is a kit that is needed to
clearthesubseainfrastructureandthedamagethatisthere.Thenext
tierisacappingstackfacility,andwearepartofaglobalcommunity,
where currently that for us is based in Aberdeen, and that would be

863ibid.
864ibid.
865ibid.
866ibid,p26.
867ibid.

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Chapter10
mobilisedoncetheseafloorwasreadyforthattobeinstalled.Sothey
arethethreetiers.868
10.15

Itisimportanttonotethatthedesignofvariouspiecesofsourcecontrolinfrastructure
hasbeenheavilyinformedbythelogisticalchallengesassociatedwithremoteoffshore
operations.Whenaskedaboutthedifficultyoftransportinglargepiecesofequipment
toanemergencysite,MrGregoryexplainedthatthekitismademodularforair
transportandregionalinfrastructure,soitisabletogettoExmouth,forexample.869
MrGregoryalsoexplained,however,thattheneedforthemultitieredresponsemodel
wasafunctionofthedifficultyoftransportingsomeofthemorecomplexpiecesof
interventionequipment,notingthatthecappingstackfacilityissortofasevenday
timeframe;thefirstfewdaysisthesubseafirstresponsetoolkit,whichiswhythatis
prestagedinFremantle.870

Dealingwithoilspillpollution
10.16

Dependingonitscomposition,petroleumthatisspilledatseahasthepotentialto
becomeaveryharmfulpollutant.WiththeOPGGSERegulationsestablishingeach
petroleumcompanyastheCombatAgencyresponsibleforcleaningupanyoilspill
pollutioncausedthroughtheiractivities,animportantfacetofanyOilPollution
EmergencyPlanisadetailedstrategyforcleaningupanyoilspillpollutionthatdoes
occur.

10.17

Therearefourbroadmethodsoftreatingoilspillpollution,withfactorssuchas
location,petroleumcomposition,accessibilityandmetoceanconditionsbearingupon
anydecisionastowhichmethodismostappropriateforagivensetofcircumstances.

Naturalbiodegradation:themostbasicmethodfortreatingspilledpetroleumisto
letnaturetakeitscourse.Ifpetroleumisspilledinalocationwheredamageis
unlikelytooccur,andparticularlyifthepetroleuminquestionislight,itissaid
thatthebestmethodistoleaveittodispersebynaturalmeans[becausethe]
combinationofwind,sun,currentandwaveactionwillrapidlydisperseand
evaporatemostoils.871

Containmentandcollection:insomecircumstances,itmaybepossibletocontain
spilledpetroleumwithboomsandcollectitfromthewatersurfaceusingskimmer
equipment.872Thesebooms,whichvaryfrominflatableneoprenetubestosolid,

868MrShaunGregory,SeniorVicePresident,SustainabilityandTechnology,Woodside,Transcriptof
Evidence,7November2014,p6.
869ibid.
870ibid.
871TheUniversityofDelaware,Howdoyoucleanupanoilspill?,2004.Availableat:
http://www.ceoe.udel.edu/oilspill/cleanup.html.Accessedon11February2015.
872ibid.

218

Chapter10
butbuoyantmaterial,canalsobeusedtopreventaslickofspilledpetroleumfrom
reachinganecologicallysensitivearea.873Thismethod,however,islesseffective
whendeployedinhighwindsandhighseas.874
Figure10.2:FloatingboomsinvariousconfigurationsattheAMOSCwarehouseinFremantle.

Figure10.3:OilspillskimmingdevicesattheAMOSCwarehouseinFremantle.

Theuseofchemicaldispersants:perhapsthemostcommonlyusedmethodisto
breakupaslickofspilledpetroleumandtherebyspeeditsnaturalbiodegradation
usingchemicaldispersants.Ordinarily,oilandwatermoleculeswillnotmix,which

873ibid.
874ibid.

219

Chapter10
meansthatspilledpetroleumhasatendencytoformlargeslicksonwaterand
breakdownveryslowly.Dispersantactstoseparatetheseslicksbyallowing
petroleummoleculestoemulsifywithseawater.Whenpetroleumisbrokendown
intosmallerdroplets,theprocessofnaturaldegradationismuchmorerapid.
Thoughmosteffectivewhenusedwithinanhourortwooftheinitialspill,
dispersantsarenotalwaysanappropriatefortreatingoilspillpollution,because
dispersingoilthroughthewatercolumncanaffectmarineorganismslikedeep
watercoralsandseagrass.875

Theuseofbiologicalagents:thebiodegradationprocesscanalsobeenhancedby
theintroductionofcertainbiologicalagents(suchascertaintypesofbacteriaand
othermicroorganisms),whichcanbreakdownspilledpetroleumintolessharmful
substanceslikefattyacidsandcarbondioxide.876

Finding72
Intheeventofoilpollution,thedeploymentoftheappropriateresourcesisas
importantasthespeedofresponse.Itisimportantthattherightmethodoftreatment
foraparticularspillisappliedinthemostefficientmanner.
10.18

Justasalossofcontainmentfromasubseawellrequiresarapidresponse,thespeed
withwhichaCombatAgencyrespondstoapetroleumspilliscriticalinlimiting
environmentaldamage.Thisisparticularlytruewhenchemicaldispersantsaretobe
used.Itis,therefore,importantthatdispersantsareavailableforrapiddeploymentin
theeventofapetroleumspill.InprovidingdetailsofWoodsidespetroleumspill
responsemodel,MrGregoryexplainedthatthearrangementsthatareinplacefor
dealingwithspilledpetroleumaresimilartothoseinplaceforsourcecontrol:
individualpetroleumcompanieswilltypicallymaintainaninhouseinventoryof
equipmentsuitableforimmediateresponse,onlyseekingassistancefromlocaland
ultimatelyglobalpartnersifasituationescalates.877AccordingtoMrGregory,inthe
eventofanpetroleumspill:
ifyouweretousedispersant,thesameearlydispersantisprestaged.
ThenexttierispartofanAustraliancommunityengagement,whichis
what we work with, and OSRL [Oil Spill Response Limited] is our
internationalbodyforifweneedlongtermsupplyofdispersant.Sowe
tieritaccordingtothedemandandrequirement.878

875ibid.
876ibid.
877MrShaunGregory,SeniorVicePresident,SustainabilityandTechnology,Woodside,Transcriptof
Evidence,7November2014,pp56.
878ibid.

220

Chapter10
10.19

MrGregorysexplanationofthesearrangementsreflectsthefactthatadequately
dealingwithapetroleumspillcanveryeasilyrequirearesponseeffortthatisbeyond
thecapacityofanyonecompany.APPEAmadeitclearthat,inrecognitionofthisfact,
oilandgascompanieshaveoveranumberofyearsdevelopedcooperative
arrangementsprovidingformutualaid,bothinAustraliaandglobally.879Accordingto
APPEA,withinAustralia:
these mutual aid arrangements are brought together under the
AustralianMarineOilSpillPlan(AMOSPlan).TheAMOSPlanembraces
the:

response and training activities of AMOSC [Australian Marine Oil

SpillCentre];and

company to company mutual assistance arrangements

administeredbyAMOSC.

Under the AMOSPlan, designated oil spill response resources of

individual companies are made available to other companies and to
theNationalPlanunderservicecontractagreementsadministeredby
AMOSC.TheAMOSPlanisactivatedbyacompanywhentheresponse
to an oil spill incident is regarded by the company as requiring
resourcesbeyondthoseofthecompanyitself.880
10.20

TheAustralianMarineOilSpillCentre(AMOSC)wasestablishedin1991andisanot
forprofitcompany,financedbynineparticipatingoilcompaniesandothersubscriber
companies,andoperatestheAustralianoilindustrysmajoroilspillresponse
facilities.881AMOSChas14permanentstaffmembersandisalsoabletodrawuponthe
skillsofafurther84employeesofvariousmembercompanies.AMOSCworkstoensure
thatrapidpetroleumspillresponsecapacityexistsinAustraliabyprovidinga24houra
dayspillresponsecapability.882Todothisitmaintainsastockpileofoilresponse
equipment[including]oilspilldispersantandcontainment,recovery,cleaning,
absorbentandcommunicationsequipment.883Aprimarystockpileofthisequipmentis
maintainedinGeelong,Victoria;twosecondarystockpilesaremaintainedinFremantle
andExmouth,andasupplementarystockpileismaintainedinBroome.Amongthe
variousresourcesmaintainedbytheAMOSCisastockpileof500cubicmetresof

879SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p27.
880ibid,pp2728.
881ibid,p27.
882ibid.
883ibid.

221

Chapter10
dispersantthatissuitableforuseaspartofthesourcecontrolsystem,andwas
procuredaspartoftheSFRTinitiative.884AccordingtoAPPEA:
the substantial equipment stockpile located in Fremantle supports
Western Australian based training and operations. In addition,
selected AMOSC equipment is also available under short term hire
arrangementstorequiredlocations,tocovertemporaryrequirements
forequipment.885
Figure10.4:AstockpileofdispersantattheAMOSCwarehouseinFremantle.

10.21

DuringaCommitteevisittoAMOSCsHamiltonHillfacility,whichformspartofits
Fremantlestockpile,AMOSCstressedtheimportanceofdrillsandexercisestooilspill
responsepreparedness.AccordingtoAMOSC,exercisingiscrucialasithelpstotestnot
onlythecompetenciesofstaff,butalsotheresilienceandoperationalstatusof
equipment.Forexample,AMOSChasrecentlyrunadrillforaNorthWestShelf
operatorwhichinvolvedmobilisinganaircraftfromPerthtoalightairstripinthe
Pilbarawithinthetimerequirementsforresponseandalsocoordinatingtheexercise
forthefourparticipatingcompanies.AMOSCalsodescribedanexercisethatrevealed
thatsomeoftheequipmentwaspastitscertificationdateandneededtobe

884ibid,p26.
885ibid,p27.

222

Chapter10
replaced.886Clearly,duringanemergencyAMOSCwouldworkwiththeequipmentit
hastohand.However,exercisesprovideavaluablemeansofensuringequipmentis
operationalwhenitismostneeded.
10.22

Whileitisclearlytheproponentsdecisionastohowoftentheyexercise,the
Committeeseesgreatvalueinthesetypesofdrills.Furthermore,giventhatthePrelude
facilitywillbethefirstFLNGfacilitytooperateofftheAustraliancoast,anFLNGbased
exercisewouldbeofsignificantbenefitasalearningexercise.TheCommitteesviewis
thataPreludebasedexercisewouldinvolveoperators,CommonwealthandWestern
AustralianGovernmentagencies,AMOSCandotherstakeholders.

10.23

AMOSCalsooffersvariousnationalandinternationaltrainingpackagestostaffwithin
Australiaspetroleumindustry,anditsresponsecapabilitiesareconstantlyreviewed
andupgradedAPPEAcitedtherecentacquisitionofanOiledWildlifeResponse
MobileFacilityasanexampleofanequipmentupgrade,andtherecruitmentofan
OiledWildlifeResponseExpertasanexampleofanadditiontoitsspecialised
personnel.887Furthermore,AMOSCworksnotonlyincollaborationwithitsmembers,
butalsowithanumberofofficialresponsepartners,suchastheAustralianMaritime
SafetyAuthority(AMSA)andtheWADepartmentofTransport(DoT).Itistherefore
usefultoconsidertherolesandresponsibilitiesofsuchgovernmententitiesinthe
eventofanoilspill.
Figure10.5:AnOiledWildlifeResponseMobileFacilityattheAMOSCwarehouseinFremantle.

Finding73
Todischargetheirregulatoryresponsibilityinrelationtomarinepetroleumspills,a
numberofoilcompaniesformedtheAustralianMarineOilSpillCentre,whichallows
forthepoolingofresourcestorespondtolossofcontainmentevents.

886AustralianMarineOilSpillCentre,CommitteeBriefing,25February,2015.
887ibid.

223

Chapter10
Finding74
TheAustralianMarineOilSpillCentrehasasuiteofoilpollutionresponseresource
stockpilesstrategicallylocatedaroundWesternAustralia.
Finding75
TheAustralianMarineOilSpillCentreoffersoilspillresponsetrainingpackages,and
workscollaborativelywithindustryandgovernmentagenciestohelpstaffdevelopthe
practicalskillsandknowledgetoallowthemtoresponseappropriatelyintheeventof
marineoilpollution.
Finding76
Emergencyresponseexercisessuchasthoseconductedandcoordinatedbythe
AustralianMarineOilSpillCentreareofsignificantbenefittotheoffshorepetroleum
industryasitallowsthecompetenciesofstaffandtheoperationalstatusofequipment
tobetestedandmaintained.
Finding77
AnFLNGbasedexerciseinvolvingallrelevantstakeholdersshouldtakeplaceoncethe
Preludefacilityisoperational.
Recommendation1
TheWesternAustralianGovernmentencouragetheCommonwealthGovernment,Shell
andotherstakeholderstoconductanemergencyresponseexercisebasedonthe
Preludefacilityassoonaspossiblefollowingitscommissioning.

Theroleofgovernment
10.24

Theroleplayedbyvariousgovernmentagenciesintheeventofoilspillpollution
occurringinAustralianwatersdependsprimarilyuponwhetherthewatersinquestion
isinanareaofstateorCommonwealthjurisdiction.InWesternAustraliasstate
waters,emergencymanagementiscoveredundertheEmergencyManagementAct
2005andtheEmergencyManagementRegulations2006,withstateemergency
managementplans,knownasWestplans,beingpreparedbytheStateEmergency
ManagementCommittee.888

10.25

Atotalof27Westplansaremaintainedbyvariousstategovernmentagencies;these
Westplanssetouttherolesandresponsibilitiesofgovernmentagenciesinrelationto
preventionandmitigation,preparedness,responseandrecovery.889Oftheseplans,
theWestplanMarineOilPollution(WestplanMOP)andtheWestplanMarine
TransportEmergency(WestplanMTE)plansbothofwhicharepreparedand

888SubmissionNo.2fromtheDepartmentofTransport,11July2014,p2.
889ibid

224

Chapter10
maintainedbyDoTrelatetomaritimeemergencies.BothoftheseWestplansare
lengthydocumentsthatsetouttheemergencymanagementarrangementsthatarein
placeforeachtypeofincident,beforedetailingthestrategiesforpreventionand
mitigation,andthepreparednessandresponseproceduresthatwouldfollowwere
suchanincidenttooccur.
10.26

TheDoTexplainedthatifwhilstinCommonwealthwaters[apetroleumvesselor
facility]sufferseitheraMaritimeTransportEmergency(MTE)orMarineOilPollution
(MOP)incidentthesituationwouldbecontrolledbytheCommonwealththroughthe
AustralianMaritimeSafetyAuthority.890If,however,apetroleumvesselorfacility
weretosuffereitheranMTEorMOPincidentwhilemovingthroughstatewaters,the
situationwouldbecontrolledbyDoTMarineSafetyasjurisdictionalauthority.891
APPEAfurtherexplainedthat:
theWApetroleumindustryworkscloselywiththeWADepartmentof
Transport in developing increased mutual aid capacity (through the
AMOSPlan) and involving the Department in key oil spill response
initiatives.892

10.27

ApetroleumspillinCommonwealthwaterswouldfallunderthejurisdictionalauthority
ofAMSA.InareasofCommonwealthjurisdiction,theNationalPlanforMaritime
EnvironmentalEmergenciessetsoutnationalarrangements,policiesandprinciplesfor
themanagementofmaritimeenvironmentalemergencies.893APPEAexplainedthat
thisplanisadministeredbytheCouncilofTransportandInfrastructureunderthe
CouncilofAustralianGovernmentsandismanagedbyAMSA.APPEAfurthersubmitted
that[t]heAustralianpetroleumindustrystaysstronglycommittedtotheNationalPlan,
andhasastrongandactiverelationshipwithAMSA.894

10.28

ThejurisdictionaldivisionofresponsibilitieswasfurtheremphasisedbytheDoTs
GeneralManagerofMarineSafety,MrRaymondBuchholz,whoconfirmedthat,in
accordancewiththeNationalPlanforMaritimeEnvironmentalEmergencies,
NOPSEMAisthejurisdictionalauthorityforanenvironmentalincidentinvolving[a
petroleumfacility]incommonwealthwaters,andthepetroleumtitleholderwouldbe
thecontrolagency.895MrBuchholzfurtherexplainedthatthesameplanestablishes
theDoTasthejurisdictionalauthorityforanenvironmentalincidentinvolvingsucha
facilityinstatewaters,withtheresponsiblepetroleumcompanyagainbeingthe

890ibid.
891ibid.
892SubmissionNo.11fromtheAustralianPetroleumProductionandExplorationAssociation,
18August2014,p28.
893ibid.
894ibid.
895MrRaymondBuchholz,GeneralManager,MarineSafety,DepartmentofTransport,Transcriptof
Evidence,19November2014,p2.

225

Chapter10
responsiblecontrolagency.896AsMrBuchholzputit,whetheritisincommonwealth
watersorinstatewaters,effectively,thepetroleumtitleholderwouldbeconsidered
thecontrolagencyforthatincident.897
10.29

MrBuchholzalsoprovidedsomeinsightintohowanemergencyresponsewouldbe
managedintheeventthatspilledpetroleumweretocrossfromCommonwealthinto
statewaters:AccordingtoMrBuchholz:
ifanoilspillcrossesfromcommonwealthwatersintostatewaters,the
jurisdictionalauthorityfortherecoveryofthatoilwouldbenegotiated
between NOPSEMA and the Department of Transport The control
agency in that instance would remain with the spill source unless
otherwise determined by the jurisdictional authority. In other words,
thejurisdictionalauthorityhastheabilityatanytimetosay,Wedont
believe youre doing a good job; therefore, were going to take that
responsibilityoffyou,butindoingso,ithastothennominateanew
control agency, which I am sure the public would expect would be
doingabetterjobthanwhattheyhadbeendoing.898

TherealityofFLNGpetroleumproducts
10.30

Afinalcriticalelementindeterminingtheextentofanyenvironmentaldamagecaused
byapetroleumspillandthustheacceptablelevelofpreparednessisthespecific
compositionofthepetroleumproductthatcouldpotentiallybereleased.Inabroad
sense,heavierhydrocarbonssuchascrudeoilaremuchmoreenvironmentally
damagingifspilledatseathanlighterhydrocarbons,primarilybecauselighter
hydrocarbonsbiodegrademuchmorereadily.

10.31

ItmustberecognisedthatFLNGtechnologywillbeusedtodevelopnaturalgas
resources,thespillageofwhichpresentsmuchlessofanenvironmentalriskthanisthe
caseforheavierpetroleumproductslikeoil.Bywayofexample,ShellsPreludeproject
willbeusedtoproducenaturalgashydrocarbonsinthreeliquefiedforms:LNG,LPG
andcondensate.

10.32

AccordingtoWoodside,anypotentialspillimpactassessmentforanFLNGproject
shouldprimarilyfocusonthecondensatecomponent,becauseLNGboilsoff
extremelyrapidlyatambienttemperatureandthereforepresentslimited
environmentalrisk.899WoodsidesviewwasconfirmedbythePrincipleScientific

896ibid.
897ibid.
898ibid.
899SubmissionNo.8fromWoodside,8August2014,p12.

226

Chapter10
OfficeroftheDepartmentofFireandEmergencyServices(DFES),DrJeffreyDavis,who
explainedthat,ifspilled,LNGbeingcryogenic,willboil.900AccordingtoDrDavis:
[i]nitially,when[LNG]iscold,itsdensitywillstayatwaterlevelAsit
warmsuptoconsiderablybelowroomtemperatureitgetslessdense
thanair,sotheLNG,intermsofaspill,isnotamajorissueinthatit
will raise and disperse [into the atmosphere]. It is a significant
greenhousegas,soitisanenvironmentalissuefromthatperspective,
butintermsofcreatingacloudofgas,itisnotsomuchofanissue.901
10.33

ItshouldalsobenotedthatLNGconsistsprimarilyofmethanewhich,asDrDavis
described,isasignificantgreenhousegas.902Specifically,overa100yearperiod,a
methaneemissionwillhaveabout34timesthegreenhouseeffectasanemissionofthe
samemassofcarbondioxide.AspillofLNGwillnot,however,havethesameeffecton
amarineecosystemaswouldaspillofaheavierhydrocarbon.

10.34

DrDavisalsoexplainedthataspillofLPGorcondensatewouldsimilarlybeunlikelyto
causesignificantenvironmentalharm:
LPG,beingpropanemainlywithbutane,isdenserthanair.Ifthatwere
to spill and hit the surface, there would be a gas cloud that would
dispersefrompotentiallyliquidLPGonthesurfacesthatis,boiling
and you would get a cloud of propane butane on the surface of the
water With the condensate, it depends very much on what the
condensateis,whichisdependentontheprocessCondensatescan
be very light, sort of like a petroltype product, right through to a
heavyfueloilalmostsortofacondensate.Giventhat[thePrelude
project will] produce lighter hydrocarbons, it is likely to be more a
lighter fraction. From an environmental perspective, that may be
advantageousinthatitmightmorereadilyevaporate,forexample,in
a spill rather than going onshore and causing onshore issues with
wildlifeandthecoastandthatsortofthing.903

10.35

InrelationtowhetheracloudofLPGintheprocessofevaporatinganddispersing
wouldpresentasignificantsafetyrisk,DrDavisexplainedthattheriskofspilled
petroleumignitingwoulddependontheexistenceofanyignitionsourcessuchas
electricalequipmentthatisnotprotected,anypointwherepiecesofsteelmaybang

900DrJeffreyDavis,PrincipalScientificOfficer,DepartmentofFireandEmergencyServices,
TranscriptofEvidence,19November2014,p8.
901ibid.
902ibid.
903ibid.

227

Chapter10
togetherorruboneachotherorthosesortsofthing.904DrDavisalsonoted,however,
thatanysuchriskwouldlikelybeextremelylow,because:
[i]n the whole design of these vessels, in much the same way as say
afueltankerthatbunkersfuelfordeliveryfromSingaporetoAustralia
or Royal Australian Navy vessels that transfer fuel at sea to other
vessels,thereisanawfullotofeffortputintomakingsurethatthere
arenoignitionsourcestheresothatintheworstcasethatyouhave
significantspillandanignitablecloud,thathopefullyitisallgoingthe
way it is supposed to be going. They are usually very stringent with
that sort of thing on those sorts of vessels and those facilities that
therearenoignitionsources.Itgoesdowntotheclothingthatpeople
arewearingtheyarenotallowedtowearanythingotherthanwhat
is issued because it may generate static if they have something else.
Thatgoes to underwear and everything that people are wearing
radios, torches, everything on the vessel including not just the fixed
stuffbutalltheportablethingsthatpeoplemayormaynotbringon
boardwiththemandhowtheyarecontrolled.905
10.36

BasedonevidenceprovidedbyShell,theCommitteesdiscussionswithShelland
othersintheNetherlandsandGoeje,itisclearthatShellhasmadeconsiderable
investmenttoensurethatitsPreludefacility,likeanynewpetroleumfacility,hasbeen
designedtomeetcurrentworldsbestpracticeenvironmentalstandards.Thisviewis
alsosupportedbythefactthatShellmustsatisfytheenvironmentalregulatory
requirementsforAustraliasoffshorepetroleumindustrybeforePreludecanbe
commissioned.

10.37

Itisequallytrue,however,thatthethreatofoilspillpollutionwillalwaysexist
wheneverpetroleumproductsareproduced.ThiswasnotedbyMrBuchholz,who
observedthat:
therealityinthesethings[is]thatyouarenevergoingtohaveenough
capability to completely respond and ensure there is absolutely no
impact;itisjustverydifficulttoachieveinthatscenario.Ifyoulookat
alltheoilspillincidentsaroundtheworldthereisalwaysanimpact
andthatimpactisalwaystragicandnotgoodfortheenvironmentit
isalmostimpossibleto100percentgatekeepthat.Youcanbejustas
906

plannedandreadyasyoucantotryanddobestyoucan.

904ibid,pp89.
905ibid.
906MrRaymondBuchholz,GeneralManager,MarineSafety,DepartmentofTransport,Transcriptof
Evidence,19November2014,p9.

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Chapter10
10.38

This,ofcourse,reinforcestheneedforNOPSEMAtoperformtheirregulatoryfunction
mosteffectivelyandforoperatorstoensuretheyhavenotonlytheappropriate
policiesandproceduresinplaceandworkingwell,butthatthesafetycultureisstrong
andwelldeveloped,notonlyonboardtheirFLNGfacilities,butthroughouttheentire
organisation.

229

Chapter11
Infrastructure:Whoseresponsibilityisit?

Introduction
11.1

ThisInquiryaimedtoclarifytherolesandresponsibilitiesofFLNGprojectproponents
andoperators,andtheCommonwealthandstategovernmentsinrelationtoproviding
forthesafetyofthosewhoworkon,orinsupportof,anFLNGfacility,protectingthe
environmentandensuringtheemergencyresponsepreparednessofindustryand
governmentinthecaseofamajoraccidentevent.Chapters1to10havedescribedthe
Australianregulatoryregimefortheoffshorepetroleumindustryandoutlinedtheways
inwhichindustryaimstoprotectworkersafetyandtheenvironment.

11.2

Oneissueyettobeaddressediswhoseresponsibilityitistoprovidetheinfrastructure
thatisnecessarytothesafeoperationsofanFLNGfacility.Afterbrieflyoutliningthe
valueofWesternAustraliaspetroleumproductionandnotingtheparticularvalueof
theNorthWestShelfLNGproject,thischapterdiscussesthematurityoftheindustryin
theNorthernCarnarvonBasinand,thus,theavailabilityofinfrastructuretothosewho
wishtodevelopafieldinthatregion.ThosewishingtodevelopfieldsofftheKimberley
coast,arelativelynewregionofoffshorepetroleumdevelopment,faceaverydifferent
situation.Furthermore,whenoffshorepetroleumresourcesaredevelopedmorefully,
therewillbemultipleFLNGfacilitiesoperatinginthearea,eachwithitsown
proponents,operator,safetycasesandenvironmentplans.Thiswillcreateitsown
complexityacrossarangeofservicesandinstalledinfrastructure.

11.3

Thischapterdiscussesthesafetyrelatedinfrastructureavailableforprojectsinthe
BrowseBasin,payingparticularattentiontohospital,airportandportinfrastructure.
Thelackofsuitableinfrastructureraisesthequestionofwhoseresponsibilityitisto
providethenecessarysafetyrelatedinfrastructure.UnderAustraliasobjectivebased
regulatoryregime,itcouldbearguedthatanycostrelatingtoaprojectmustbeborne
bytheprojectproponent.Thisview,though,doesnotconsiderthepotentiallynegative
consequencesastrictadherencetoanobjectivebasedphilosophymighthaveonstate
development.Thesemattersarealsodiscussedbelow.

11.4

ThroughoutthisInquiryitbecameapparentthatthereisanincrementalapproachto
safetyonaprojectbyprojectbasis,ratherthananoverallapproach.Thereisnolead
agencyresponsibleforcoordinatingstrategicdevelopmentofnecessarysafetyrelated

231

Chapter11
infrastructureandservices,particularlythosenecessarytomeetlikelyfuture
requirements.
Finding78
Thereisnoleadagencyresponsibleforcoordinatingstrategicdevelopmentof
necessarysafetyrelatedinfrastructureandservices,particularlythosenecessaryto
meetlikelyfuturerequirements.
Recommendation2
TheWesternAustralianGovernmentplaceontheCOAGagendatheneedforalead
agencyforthecoordinationofnecessarysafetyrelatedinfrastructureandservices.
11.5

ThischapteralsosuggeststhatFLNGfacilitieswillprovideachallengetoNOPSEMAas
theexpertregulatorandcallsonprojectproponentsandoperatorstobeparticularly
candidinsharinginformationwithNOPSEMAinrelationtotheirFLNGfacilities.

ValueofthepetroleumindustrytoWesternAustralia
11.6

11.7

ThepetroleumindustryisenormouslyimportanttotheWesternAustralianeconomy.
Forthe20132014financialyear,thevalueoftheWesternAustralianpetroleum
industrysproductionwas$26.5billionormorethan10percentofthegrossstate
product.907Ofcourse,thevalueofpetroleumproductionaloneonlytellspartofthe
storyasactivitiesassociatedwiththisproductionhavelongbeenasignificantstimulant
forthewiderstateeconomy.Thoughitisdifficulttopreciselymeasuretheextentof
thiseffect,a2009reportbyACILTasmanrevealedthatbetween1989and2009the
NorthWestShelfLNGprojecthadcontributed:

over$70billiontoAustraliasgrossdomesticproduct(GDP);

over$40billioninincreasedhouseholdconsumption;and

approximately$0.9billionperannumtoStateandlocalgovernmentrevenue.908

Furthermore,incombinationwiththeeconomicactivitythathasbeendrivenbythe
ongoingdevelopmentoftheGorgon,Wheatstone,IchthysandPreludeprojects,itis
clearthatpetroleumresourcedevelopmentwillremainfundamentaltotheongoing
prosperityofthisstateforsometime.

907DepartmentofMinesandPetroleum,Mineralandpetroleumindustryreview.Availableat:
http://www.dmp.wa.gov.au/1525.aspx#1596.Accessedon25March2015.Accordingtothe
mostrecentdatareleasedbytheAustralianBureauofStatistics,WesternAustraliasgrossstate
productforthefinancialyearending30June2014wasintheorderof$256billion.
908ACILTasman,Nationbuilder:howtheNorthWestShelfprojecthasdriveneconomic
transformationinAustralia,20October2009.Availableat:http://www.woodside.com.au/Our
Business/NorthWestShelf/Documents/NWSVACILTasmanreportOct2009.pdf.Accessedon
25March2015.Notethatthesefiguresarecalculatedin2009terms.

232

Chapter11

TheNorthernCarnarvonBasin
11.8

11.9

PetroleumproductioninWesternAustraliahashistoricallydrawnalmostexclusivelyon
thesignificantresourceslocatedintheNorthernCarnarvonBasin,whichcoversan
offshoreareaofapproximately535,000squarekilometrestothenorthofthePilbara
coastline.909GeoscienceAustraliadescribestheNorthernCarnarvonBasinas
Australiasmostprolifichydrocarbonproducingbasin,somethingthatisunderscored
bythefactthattheBasinisestimatedtocontainsome22.2billionbarrelsofoil
equivalentofresources.910informationcompiledbytheAustralianPetroleum
ProductionandExplorationAssociation(APPEA)for2012andthefirstquarterof2013
indicatesthattherewereatotalof15productionareasintheNorthernCarnarvon
Basin:

theNorthWestShelfLNGJointVentureanddevelopmentprojects,whichare
locatedmostlyonthenorthernRankinPlatform(anddrawupontheNorthRankin,
Cossack,Wanaea,LambertandHermesfields);

thePlutoLNGprojectontheRankinPlatform/ExmouthPlateau(whichdrawsupon
thePlutoandXenafields);

theDevilCreek,Mutineer/Exeter,StagandWandooprojectsintheDampierSub
basin,andtheFletcher/FinucaneprojectintheBeagleSubbasin;

theBarrow,ThevenardandVaranusislandsprojects,andthethenrecently
decommissionedWoollybuttprojectintheBarrowSubbasin;and

theEnfield,Pyrenees,Macedon,StybarrowandVincent/VanGoghprojectsinthe
ExmouthSubbasin.911

TheNorthernCarnarvonBasin,thatis,isaspaceofsignificantpetroleumindustry
activity.TheBasinandtheconcentrationofpetroleumindustryactivitywithinitare
illustratedatFigures11.1and11.2below.

909GeoscienceAustralia,RegionalgeologyoftheNorthernCarnarvonBasin,2014,p1.Availableat:
http://www.petroleumacreage.gov.au/files/files/2014/documents/regional
geology/Regional_GeologyNorthern_Carnarvon.pdf.Accessedon25March2014.
910ibidp9.
911ibid,p13.

233

Chapter11
Figure11.1:StructuralelementsoftheNorthernCarnarvonBasinandadjacentbasinsshowingthelocationsof
912
regionalseismicsectionsandpetroleumaccumulations

Figure11.2:Petroleumproductionfacilities,petroleumfieldsandcurrentandproposedinfrastructureinthe
913
NorthernCarnarvonBasin

912ibid,p25.
913ibid,p26.

234

Chapter11
11.10

EventhoughtheNorthernCarnarvonBasinhaseffectivelybeenthehomeofWestern
Australiaspetroleumindustrysincethelate1970s,vastquantitiesofpetroleuminthe
Basinarestilltobedeveloped.Indeed,whentheGorgonandWheatstoneLNGprojects
beginproducingLNGsomethingthatisscheduledtooccurby2016petroleum
productionfromNorthernCarnarvonBasinwillessentiallydouble.914Itseemshighly
likely,therefore,thatthisoffshoreareawillremainthecentrepointofWestern
Australiaspetroleumindustryforsometime.

11.11

Fromtheperspectiveofsafety,thelevelofpetroleumindustryactivityintheNorthern
CarnarvonBasincoupledwiththepropensityofindustryproponentstocollaboratein
theimplementationofsafetyinfrastructurehasseentheestablishmentofsignificant
safetyandemergencyresponseresourcesbetweenOnslowandKarrathaalongthe
Pilbaracoastline.Furthermore,thelonghistoryofactivityinthisoffshoreregionhas
vastlyenhancedtheknowledgeandunderstandingpossessedbybothoperatorsand
regulatorsregardingtheprevailingmetoceanconditionsandspecificchallenges
associatedwiththisoperatingenvironment.ThoughtheNorthernCarnarvonBasinis
mostcertainlyaremotelocation,theactualquantityofoffshorefacilitiesoperatingin
theareaisalsoanaidtoanyemergencyresponsesituation.

11.12

Thismeansthatthechallengesassociatedwithundertakingpetroleumindustryactivity
intheNorthernCarnarvonBasinarewellunderstoodandthattherearesignificant
resourcesintheareaforrespondingtoanemergencysituation.However,itdoesnot
meanthattheseactivitiesarecompletelysafe.Offshorepetroleumindustryactivities
necessarilyoccurindynamicandchallengingenvironmentsafactclearlyillustratedin
March2015whenTropicalCycloneOlwynpassedthroughtheNorthernCarnarvon
Basin.

TropicalCycloneOlwyn
11.13

OnFriday13March2015,TropicalCycloneOlwyn(Olwyn),havingdevelopedoffthe
Kimberleycoast,travelledsouthandcrossedpartsofWesternAustraliasPilbara
coastline.915Thecyclonebroughtdestructivewindgustsofupto140km/hand,asit
approachedthecoast,Olwynstrengthenedtoacategorythreesystem.

11.14

Figure11.3illustratestheareainwhichOlwyndeveloped,anditspathsouththrough
theNorthernCarnarvonBasinandacrossthemidwestcoast.AsFigure11.3shows,the
pointatwhichOlwyndevelopedintoacategorythreecycloneisveryneartoanumber
ofthefieldsillustratedinFigure11.2.ThisincludesboththePlutofield,whichfeedsthe

914Combined,theGorgonandWheatstoneLNGplantswillhavethecapacitytoproducesome
24.5milliontonnesofLNGannually.Atpresent,theexistingPlutoandNorthWestShelfLNG
plantshaveacombinedannualproductioncapacityofabout21milliontonnesofLNG.
915Emery,Kate,Boyham,AidenandBrown,Natalie,'Devastated:Drivercritical,townisbatteredin
Olwynpath',TheWestAustralian,16March2015,p1.

235

Chapter11
PlutoLNGplantatDampier,andthenearbyIagofield,whichwillfeedtheWheatstone
plantatOnslow.
916

Figure11.3:ThepathtakenbyTropicalCycloneOlwyn,1015March2015

11.15

PriortotheformationofOlwyn,Chevronhadbeenconductingadrillingcampaignon
theIagofieldtoprepareitforproductionfortheWheatstoneplant.Tothisend,
ChevronhadengagedtheservicesofoffshoredrillingcompanyAtwoodOceanics,and
thesemisubmersibleAtwoodOspreydrillingrighadbeendeployedabovetheIago
field.917

11.16

AsOlwynformed,workersonboardtheAtwoodOspreywereevacuatedandthe
drillingrigsecured.918AtwoodandChevronarereportedtohaveballastedtherigin
accordancewithstandardcycloneprocedures.919Intheaftermathofthecyclone,
however,itbecameapparentthattheseprecautionshadbeeninsufficient.On
17March2015AtwoodOceanicsconfirmedthatOlwynhadcausedtheAtwoodOsprey
to[part]severalmooringlinesand[drift]aboutthreenauticalmilesfromitsoriginal

916ABCNews,CycloneOlwyn:StormlashescoastalcommunitiesinWAsMidWest;downgradedto
categoryone,14March2015.Availableat:http://www.abc.net.au/news/20150313/cyclone
warningissuedformidandsouthernwa/6315826.Accessedon19March2015.
917Klinger,Peter,'ChevroncountsOlwynstollonOsprey',TheWestAustralian,16March2015,
p46.
918ibid.
919Klinger,Peter,'Ospreydriftraisesoil,gasquestions',TheWestAustralian,21March2015,p101.

236

Chapter11
position.920Itseemsthatnoonewasinjuredand,basedonthelatestassessments,
therewasnomeasurableenvironmentaldamage.921
11.17

Despitetherebeingnoreportedinjuriesormeasurableenvironmentaldamage,the
AtwoodOspreyincidentforcedWoodsidetostoptheflowofgasfromthePlutofield
andshutdownproductiononthePlutoLNGplant.Thisactionwastakenasa
precautionagainstthedrillingrigdraggingitsremainingmooringsacrossthenearby
Plutogaspipeline,potentiallydamagingit.Ultimatelynodamagewascausedtothe
Plutogaspipeline,buttheincidentnonethelessprovedextremelycostly.Theneedto
shutdownthePlutoplantreportedlycostWoodsidetensofmillionsinlost
revenue.922

11.18

TheNorthernCarnarvonBasinisamaturepetroleumdevelopmentareaandoperators
wouldhavesignificantknowledgeofboththeoperatingrisksandthesafetyand
emergencyresponseinfrastructureinthearea.Theevacuationofthecrewfromthe
AtwoodOspreyandtheballastingoftherighelptodemonstratethis.Nevertheless,
anddespitethematurityoftheindustryinthisarea,theAtwoodOspreyincident
illustratesthattherisksassociatedwithoffshorepetroleumactivitycanneverbe
totallyeliminated.Accidentscan,anddo,happen.

11.19

Asnotedabove,assessmentsdidnotrevealanyevidenceofmeasurableenvironmental
damageresultingfromthisincident.923Thismaywellhavebeenthecase,butinlightof
reportsthatthedriftingdrillingrigbreachedthe500metreexclusionzonearoundthe
PlutoLNGplantpipeline,924theincidentclearlyhadthepotentialtocausesignificant
environmentaldamage.925

TheBrowseBasin
11.20

Itisalsoimportanttorecognisethat,notwithstandingitsimmenseremainingreserves,
theresourcesintheNorthernCarnarvonBasinarefinite.IftheWesternAustralian

920Wainwright,Dale,OlwynblastsAtwoodrig,TradeWinds,17March2015.Availableat:
http://www.tradewindsnews.com/casualties/356202/olwynblastsatwoodrig.Accessedon
25March2015.
921Klinger,Peter,'Ospreydriftraisesoil,gasquestions',TheWestAustralian,21March2015,p101.
922'RampantrigknocksoutPluto',TheFinancialReview,17March2015,p1.
923Klinger,Peter,'ChevroncountsOlwynstollonOsprey',TheWestAustralian,16March2015,
p46;MacdonaldSmith,Angela'WoodsideshutsPlutoasrigcomesadrift',TheFinancialReview,
17March2015,p17;Klinger,Peter,'Ospreydriftraisesoil,gasquestions',TheWestAustralian,
21March2015,p101.
924MacdonaldSmith,Angela,'WoodsidePetroleumtorestartPlutoLNGasrigdraggedclearafter
TropicalCycloneOlwyn',TheSydneyMorningHerald,18March2015.Availableat:
http://www.smh.com.au/business/woodsidepetroleumsettorestartplutolngasrigdragged
clearaftertropicalcycloneolwyn201503171m1evx.html.Accessedon25March2015.
925TheCommitteenotesthattheAtwoodOspreyincidentis,inApril2015,thesubjectof
investigationbyNOSPEMA.Informationonthisinvestigationcanbefoundinthetranscriptof
evidencegivenbyNOPSEMArepresentativestotheCommitteeon7April2015.

237

Chapter11
economyistocontinuetobenefitlongtermfrompetroleumindustryactivity,newand
undevelopedpetroleumresourceswillhavetobedeveloped.Fortunately,theBrowse
BasinthestructuralbasintotheimmediatenorthoftheNorthernCarnarvonBasin
holdsvastpetroleumresources.
11.21

11.22

TheBrowseBasin,whichcoversanareaofapproximately140,000squarekilometresof
oceanoffthenorthwestoftheKimberleycoastline,isdescribedasoneoftherichest
hydrocarbonbearingbasinsinAustralia.926Itisknowntocontainseverallargegas
accumulations,fourofwhicharecurrentlyproposedfordevelopmentasLNG
projects.927Specifically,theseare:

theIchthysprojectinJanuary2012,INPEXtookapositivefinalinvestment
decision(FID)todeveloptheIchthysfield,andwillprocessgasoffshorebefore
pipingittoDarwinviaan889kilometrepipelinetoliquefactionplant.TheINPEX
Darwinplantwillhavethecapacitytoproduce8.4milliontonnesperannum
(mtpa)ofLNGforexport.TheIchthysprojectisexpectedtobeginproductionby
theendof2016.

thePreludeprojectinMay2011,ShelltookapositiveFIDtodevelopthePrelude
andnearbyConcertogasfieldsusingthe3.6mtpaPreludeFLNGfacility.

theBrowseprojectWoodsidehasheldretentionleasesovertheTorosa,
BrecknockandCalliancefieldssincethefirstgaswasdiscoveredintheBrowse
basinin1971.Thesefieldshavelongbeenslatedfordevelopment.

theCruxprojectShellwasissuedwithafiveyearretentionleasefortheCruxfield
inFebruary2013.928

Thesefourresourcesareestimatedtocontainreservesintheorderof34trillioncubic
feet(Tcf)ofnaturalgasandafurther1,200millionbarrelsofliquidpetroleum
resourcesconservatively,atotalofapproximately7billionbarrelsofoilequivalent.929
Furthermore,theBrowseBasinisalsohometoalargenumberofothersignificantgas
discoveries,includingtheAbalone,Adele,Argus,BassettWest,Boreas,Burnside,

926GeoscienceAustralia,RegionalgeologyoftheBrowseBasin,2014,p1andp6.Availableat:
http://www.petroleumacreage.gov.au/files/files/2014/documents/regional
geology/Regional_GeologyBrowse.pdf.Accessedon25March2015.
927ibid,p1.
928ibid.
929ibidp9.ThisdocumentestimatestheIchthysfieldtocontainanestimated12.8Tcfofnatural
gas,thePreludeandConcertofieldsanestimatedcombined3Tcf,theBrecknock,Callianceand
Torosafieldsanestimated15.9Tcf,andtheCruxfieldanestimated2.2Tcf.Atapproximately
5,700cubicfeetofnaturalgasperbarrelofoilequivalent,34Tcfwouldequatetoaround6
billionbarrelsofoilequivalent.Condensatecontainsapproximately94percentoftheenergyin
onestandardbarrelofoil,so1,200millionbarrelsofcondensatewouldbeapproximatelyequal
to1.1billionbarrelsofoilequivalent.

238

Chapter11
Columba,Crown,EchucaShoals,Kronos,Marabou,Mimia,Poseidon,Proteusand
ZephyrosfieldsintheCaswellSubbasinandtheHippolyte,LibraandOctansinthe
HeywoodGrabenSubbasin.GasresourceshavealsobeendiscoveredatPsepotuson
theLevequeShelf,andatCaspar,Cornea,Focus,Gwydion,MaculaandStirruponthe
YampiShelf.930TheBrowseBasinisillustratedatFigure11.4below.
Figure11.4:StructuralelementsoftheBrowseBasinandadjacentbasinsshowingthelocationsofregional
931
seismicsectionsandpetroleumaccumulations

930GeoscienceAustralia,RegionalgeologyoftheBrowseBasin,2014,p1.Availableat:
http://www.petroleumacreage.gov.au/files/files/2014/documents/regional
geology/Regional_GeologyBrowse.pdf.Accessedon25March2015.
931ibid,p15.

239

Chapter11
11.23

TheBonaparteBasinwhichliestotheimmediatenortheastoftheBrowseBasinis
anotherpromisingpetroleumresourcecontaininganestimated10Tcfofundeveloped
gas.ThedevelopmentofpetroleumresourcesinboththeBrowseandBonaparte
Basins,whilenotnecessarilyimminent,isultimatelyinevitable.Theresourcesinthe
BrowseandBonaparteBasinsareillustratedatFigure11.5below.
Figure11.5:Petroleumproductionfacilities,petroleumfields,andcurrentandproposedpipelineinfrastructure
932
intheBonaparteandBrowseBasins

11.24

Whenitdoesoccur,thedevelopmentoftheBrowseandBonaparteBasinresources
willbecomplexanddifficult.This,inlargepart,isduetotheremotenessofthese
resourcesandthelackofsupportinfrastructureinthevicinity.Inparticular,asthis
Inquiryhasmadeclear,adequatesafetyandemergencyresponseinfrastructureisa
criticalcomponentofanyproposedoffshorepetroleumdevelopment.

OnshoreinfrastructureintheKimberley
11.25

Asnotedabove,theoffshorepetroleumindustryhasbeendevelopingtheoilandgas
resourcesintheCarnarvonBasinoffthePilbaracoastforaconsiderabletime.Gashas
traditionallybeenprocessedonshoreinthePilbara,andtheregionspetroleum
industryservicedfromthere.Infact,thePilbararegionisdominatedbytheminingand
petroleumindustries,producingapproximately95percentofAustraliasironore
exports,70percentofAustraliasnaturalgasand85percentofthecountryscrudeoil

932ibid,p16.

240

Chapter11
andcondensate.933GiventheextentofindustrialdevelopmentinthePilbara,the
regionhasdevelopedconsiderableprocessingandsupportinfrastructureinandaround
themajorcitiesandtowns,includingPortHedland,Karratha,NewmanandDampier.934
ThisincludesportsatPortHedland,DampierandCapeLambert,withanewdeepwater
portcurrentlyunderconstructionatAnketell.935Oneimportantconsequenceofthisis
thatanyproponentofanewdevelopmentinthePilbararegioncanhaveboth
knowledgeof,andconfidencein,theinfrastructureandsupportservicesavailablefor
theproposedproject.
11.26

ThesamecannotbesaidfortheKimberleyregion,particularlysincethesetbacktothe
developmentoftheproposedJamesPricePointprecinctduetoWoodsidesdecision
nottodevelopitsBrowseBasinreservesonshore.Itshouldalsobenoted,onceagain,
thatShellssupplybaseforitsPreludefacilityislocatedinDarwin.

11.27

TheCommitteeintendstoincludeamoreindepthdiscussionoftheissueof
infrastructureanditsimportantroleinstatedevelopmentinasubsequentreporton
thepotentialopportunitiesforWesternAustralianindustryarisingfromthe
developmentofFLNGfacilities.Nevertheless,thisreportintoFLNGsafetyrelated
mattersmustconsiderthemainsafetyrelatedpublicinfrastructureavailableto,or
utilisedby,theoffshorepetroleumindustryoperatinginoradjacenttothePilbara
region.

11.28

EvidencetothisInquiry,particularlythatgatheredbytheCommitteeduringits
investigativetraveltoBroomeandDerby,suggeststherearethreemainsafetyrelated
onshoreinfrastructurerequirementsforFLNGfacilitiesoperatingofftheWestern
AustralianKimberleycoast.Theseareappropriatemedicalfacilities,airport
infrastructureinastrategiclocation(s)andaccesstoportfacilitiesthatcan
accommodateinfieldsupportvessels,particularlyinemergencysituations.Itshould
alsobenoted,onceagain,thatwhilethefollowingcentresontherequirementsforthe
Preludefacility,thereisanexpectationthatovertimetherewillbeseveralFLNG
facilitiesoperatingintheBrowseBasin.

Hospitalinfrastructure
11.29

AstheonshoremedicalfacilitynearesttotheBrowseBasin,BroomeHospital
potentiallyhasanimportantroletoplayinsupportingFLNGfacilities.AsChapter9
outlined,theoffshorepetroleumindustrygenerallyhasathreetieredmedical

933PilbaraDevelopmentCommission,Pilbararegionaleconomy,nd,np.Availableat:
http://www.pdc.wa.gov.au/industry/.Accessedon20March2015.Therearealsootherminerals
resourcesdevelopedinthePilbara,plusanumberofotherindustriessuchasmanufacturing,
tourism,sheepandcattle,fishingandaquaculture.
934ibid.
935CityofKarratha,Anketellportandrailontrackwithinfrastructureagreement,12September
2014,np.Availableat:http://karratha.wa.gov.au/blog/anketellportandrailtrack
infrastructureagreement.Accessedon20March2015.

241

Chapter11
responsesystem.BasedoninformationprovidedtotheCommitteeduringits
investigativetraveltoBroome,theBroomeRegionalHealthCampus(BroomeHospital)
wouldbeclassifiedasprovidingLevel5healthcareprofessionalsinaSecondaryHealth
CareUnit(HCU).Inbrief,thismeansthattheBroomeHospitalisabletodiagnoseand
treatcomplexmedicalconditions,manageinpatientmedicalandsurgicalcases,
resuscitateandstabilisepatientsinpreparationfortransfertoaTertiaryHCUandassist
inanysuchtransfer.936
11.30

Chapter9alsonotedthatinjuredworkerswhoneedtertiarycareatamajorhospitalor
criticalcareunitwouldbemedevacedtoPerthorDarwinhospitals,eitherstraightfrom
theLombadinaAirportorfromBroomeHospital.

11.31

BroomeHospitalhasundergonesignificantdevelopmentrecentlyanditsemergency
departmentiscurrentlybeingupgraded.TheCommitteewasimpressedwiththe
professionalismofthestaffandtheircommitmenttoprovidingaveryhighstandardof
healthcaretotheBroomeandsurroundingcommunities.Thisviewwasreinforcedby
theKimberleyDevelopmentCommissionsviewofthehealthservicesprovidedbythe
hospitalasexcellent.937StaffattheBroomeHospitalbriefedtheCommitteeonthe
statesemergencyresponsecapacityfortheregion.

11.32

InlinewithWAsStateemergencymanagementplanforhealth(WestplanHealth),and
throughitsobligationsundertheEmergencyManagementAct2005(WA),the
DepartmentofHealth(DoH)isacombatagencychargedwithmanagingthehealthand
medicalaspectsofanemergency.938WestplanHealthoutlinestheproceduresinvolved
intheactivationoftheDoHsresponsetoamajorincident.OneoftheDoHs
obligationsunderWestplanHealthistocoordinatethemanagementofcasualties.

11.33

AswellasWestplanHealth,therearehealthdisasterplansforregionalareas,withthe
localoperationalmanagement,preparationandassessmentofvictimsinamajor
emergencytobemanagedundertheappropriateplan.939Inlinewiththeescalationor
progressiveresponseoutlinedintheWestplanHealth,ifthecapabilitiesofaregionare
notabletohandleanemergency,supportwillbeprovidedbytheactivationofthe
WestplanHealth.940TheDisasterPreparednessManagementUnitisabletotrackan
emergencysituationthroughWebEOC,acrisisinformationmanagementsystemthat
allowsincidentinformationtobesharedwithintheDepartmentandwithother

936RefertoTables9.1and9.2inChapter9.
937KimberleyDevelopmentCommission,CommitteeBriefing,6March2015.
938DisasterPreparednessandManagementUnit,Stateemergencymanagementplanforhealth,
DepartmentofHealth,Perth,4December2012,pp89.
939ibid,p28.
940ibid.

242

Chapter11
emergencyserviceagencies,andoperationscentrestafftoimproveresponse
coordination.941
11.34

StaffattheBroomeHospitalexplainedtheregionsemergencyresponsecapacityusing
asanexamplethe2009explosiononboardanasylumseekervesselonAshmore
Reef.942Thevessel,carrying45asylumseekersandtwocrew,hadbeeninterceptedby
theAustralianDefenceForce(ADF),andnineADFpersonnelwereonboardatthetime
oftheexplosion.Theexplosionresultedinthreedeathsandtwomissing(presumed
dead)fromthevessel,withmultiplecasualtiesincludingseriousburns.943

11.35

TheADFevacuationwassupportedbyWesternAustralian,NorthernTerritoryand
CommonwealthGovernmentagencies.HMASChildersandHMASAlbanyrecovered
survivorsfromthewateranddeliveredthemtotheFrontPuffin,anFPSOoperatingin
theBonaparteBasin.AmedicaltriagefacilitywasestablishedontheFrontPuffinandat
MungalaluTruscottAirbase(Truscott).Highprioritypatientsweretransferredfromthe
FPSOtoTruscottbyhelicoptersoperatedbyCHCHelicopter.944

11.36

Broomewasthehubhospitalforthestateresponsetothatincident.Twomedical
nursingteamsfromBroomeHospitalweresenttoTruscottandthentotheFPSOto
beginemergencycareproceduressuchasinsertingIVlines.TheCommittee
understandsthattherewasaconsiderableissueinrelationtothetransportof
casualtiesfromtheFrontPuffinasonlyarelativelysmallhelicopter,oneabletocarry
oneortwopatientsatatime,wasabletolandontheFPSO.Alargerhelicopterwas
availablebutitwasnotabletolandontheFPSO.Itisworthnotingthatwhenall
casualtieswereevacuatedandthemedicalstaffreturnedtoTruscotttherewasnot
transportavailabletotakethembacktoBroome.Overall,BroomeHospitalstaffwere
awayfromBroomeforthreedays.945

11.37

ToassistwiththisincidentRoyalPerthHospitalhadsentequipmentandstaff,including
burnsteamsandsurgeons.946BroomeHospitalwaswellpreparedtodealwiththe
casualties.However,thedecisionwasmadetouseamilitaryplanetoairliftpatientsto

941DepartmentofHealth,WebEOC,nd,np.Availableat:
http://ww2.health.wa.gov.au/Corporate/Articles/U_Z/WebEOC.Accessedon24March2015.
942AshmoreReefislocatedapproximately320kmoffthenorthwestcoastofAustraliaand144km
southoftheIndonesianislandofRote.
943AlShawi,M,Read,DandMustapha,A,MasscasualtiesandburnsattheRoyalDarwinHospital:
20022010,inTheinternetjournalofsurgery,Vol.28,No.2,p1;andWhatreallyhappened
whenasylumseekersboatexploded',SydneyMorningHerald,NationalOnline,24April2009.
Availableat:http://www.smh.com.au/national/whatreallyhappenedwhenasylumseekers
boatexploded20090423ah1y.html.Accessedon24March2015.
944Whatreallyhappenedwhenasylumseekersboatexploded',SydneyMorningHerald,National
Online,24April2009.Availableat:http://www.smh.com.au/national/whatreallyhappened
whenasylumseekersboatexploded20090423ah1y.html.Accessedon24March2015.
945BroomeHealthCampus,CommitteeBriefing,5March2015.
946AstoreofmedicalemergencyequipmentisheldintheDisasterPreparednessandManagement
warehouseinPerth.

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Chapter11
specialistfacilitiesinDarwin,PerthandBrisbane.947WhiletheCommitteeisnotaware
ofthetotalnumberofthoseevacuatedtoPerth,RoyalPerthHospitaltreated23burns
victims.TheDepartmentofHealthdescribedthisincidentasthemostlogistically
challengingincidentinWAdisasterhistory.948
11.38

Whilethisincidentrelatestoanexplosiononavesselatsea,theemergencyisnot
dissimilartothatwhichmightoccuronanFLNGfacility;thatis,anexplosionresulting
inmultipleinjuries,includingseriousburns,andrequiringthemedevacofcasualtiesto
onshoremedicalfacilitiesforassessment,treatmentand,wherenecessary,evacuation
tootherfacilities.

11.39

BroomeHospitalscapacitytomanageanemergencyis,understandably,dependent
uponthenumberofcasualties,thetypesofinjuries,thelocationandtheresources
available.Factorssuchasthesewilldeterminewhatresponseisrequired.Indiscussing
theBroomeHospitalspreparednesstorespondtoanFLNGfacilitymedicalemergency,
hospitalstaffexplainedthattheycanincreasetheircapacityifrequired.Thisinvolves
increasingtheresourcesathandby,forexample,callinginextrastaffandclearing
beds.TeamscanalsobebroughtinfromotherhospitalssuchasPortHedlandand
Perth.BroomeHospitalisalsosupportedbyinfrastructuresuchasairportsatBroome
andDerby,andcancharteraircraftwhenrequired.Thisallowsthemtosyphonpatients
throughparticularairfieldswhenlogisticsareatriskofbeingoverwhelmed.949

11.40

WhenconsideringtheneedformedicalfacilitiestomeettheneedsofFLNGfacilities
operatingofftheKimberleycoastthereareanumberoffactorstoconsider.Firstisthe
decisionofoperatorstomedevachighprioritypatientsfromLombadinatoPerthor
Darwin,usingBroomeHospitalformoreminorinjuries.Second,whiletheresultsof
majoroffshoreincidentsareoftencatastrophic,theirfrequencyisrelativelylow.Third,
equipmentandmedicalstaffcanbedespatchedfromPerthandarriveinBroome
withinthreehours.Fourth,underAustraliasobjectivebasedregulatoryregime,itis
theresponsibilityoftheoperatortoensurethatithasaccesstothenecessary
infrastructure.

11.41

Inlightofthesefactors,andparticularlygivenrelativelylowincidenceofmajor
accidentevents,thestaffatBroomeHospitalsuggestedtherewasnotalotthat
governmentcoulddoforthehospitaltoenhancetheregionsFLNGmedicalemergency

947TwentyonepatientswereevacuatedtoRoyalDarwinHospital,17ofthesewithsevereburns.
See:AlShawi,M,Read,DandMustapha,A,MasscasualtiesandburnsattheRoyalDarwin
Hospital:20022010,inTheinternetjournalofsurgery,Vol.28,No.2,p1.
948DisasterPreparednessManagementUnit,Healthdisastermanagement,Newsletter,vol.16,
September2009,p8.Availableat:
http://www.public.health.wa.gov.au/cproot/3730/2/Health%20Disaster%20Manager_Issue16_S
ep%202009.pdf.Accessedon24March2015.
949BroomeHealthCampus,CommitteeBriefing,5March2015.

244

Chapter11
responsecapacity.Formedicalstaffworkingintheregion,therearefarmorepressing
healthproblemsforpeopleintheKimberleyrequiringgovernmentfunding.950

Airfieldinfrastructure
11.42

LombadinaAirportissituatedontheDampierPeninsularapproximately200kmnorth
ofBroome.AccordingtotheBroomeInternationalAirport(BIA),whichmanagesand
operatestheairportonbehalfoftheDjarindjinCorporation,LombadinaAirportisthe
onlyallweather,SealedandPilotActivatedRunwayLightingairportontheDampier
Peninsular.951Thismeansthatnotonlyisitanimportantassettothecommunitiesin
theregion,theairportisimportanttotheoilandgasindustry,providing[a]strategic
refuellingfacilityfortheiroffshoreoperationsinBrowseBasin.952

11.43

InrelationtotheuseofLombadinaAirportinanoffshoreemergencyresponse,itskey
featuresincludeadedicatedhelicopterapron,adedicatedJetA1refuellingfacilityfor
largehelicoptersonlyandtwotransportablebuildingsforusebytheoilandgas
industry.953

11.44

DuringtheCommitteesinvestigatetraveltoBroome,twomainissueswereraisedin
relationtotheuseofLombadinaAirportduringanoffshoreemergencyevent.Thefirst
oftheseisallyearaccessontheCapeLevequeRoad,theonlyroadaccesstothe
airportandcommunitiesintheregion.TheShireofBroomeadvisedthat88kminthe
middleofthis220kmroadisunsealed.Thismakesitvulnerabletofloodingduringthe
wetseason,withtheroadoftenclosedforbetweenseventotendaysatatime.

11.45

AccordingtotheShireofBroome,theroadneedstoberelocatedtohighergroundand
sealed.AprogramwasdevelopedbythestategovernmenttoprovideMainRoadsWA
withfundingtoallow15kmperyeartobesealed.However,theprominenceofthe
environmentalaspectsassociatedwiththeproposedJamesPricePointdevelopment
ledtotheCommonwealthDepartmentoftheEnvironmentrequiringparticular
mitigationmeasuresforthepotentialimpactofmovingtheroadtohigherground.
Combinedwithlandtenureandheritageissues,thisrequirementdelayedtheproject
foraconsiderabletime.Whilefundinghadbeenprovidedinforwardestimates,itwas
reallocated.Somethreeyearson,MainRoadsWAarenowabletosatisfythe
Commonwealthrequirements.However,theissueoffundingremains.TheShireof
BroomeadvisedthattheMinisterisawareofthesituationandthattheShiresnumber

950ibid.
951BroomeInternationalAirport,Heliport,Lombadina,nd,np.Availableat:
http://www.broomeair.com.au/biaheliport/lombadina/.Accessedon25March2015.
952ibid.
953ibid.

245

Chapter11
onepriorityistheCapeLevequeRoad,buthasstatedthatfundinginthecurrent
economicsituationisdifficult.954
11.46

ItisimportanttonoteconcernsraisedinrelationtothesealingoftheCapeLeveque
Road.Whileacknowledgingthattheroadisacommunityandsafetyaccessroad,the
KimberleyDevelopmentCommissionadvisedthatsealingtheroadwillresultin
increasedvisitornumberstotheregion,whichwillhavesignificantimpacts,both
positiveandnegative,onthelocalcommunities.Giventhis,workneedstobeginto
preparecommunitiesthroughprovidinginfrastructureandeducationandtrainingfor
localemployment,forexample.955

11.47

NotonlydoCapeLevequeRoadclosuresinthewetseasonposeriskstothehealthand
safetyofthecommunitiesintheregion,theyalsopresentsariskthoseworkinginthe
offshorepetroleumindustryoperatingintheBrowseBasin.AsnotedinChapter9,
LombadinaAirportwillplayakeyroleintheevacuationofmedicalcasualtiesfrom
FLNGfacilitiesoperatingintheBrowseBasin.LombadinaAirportisalsousedbyINPEX
torefuelhelicoptersusedforitsIchthysprojectand,accordingtotheShireofBroome,
theairportrefuelsfourhelicoptersatonce.956Clearly,LombadinaAirportisan
importantlogisticsbaseforthearea,onethatcouldbeimprovedbyreliable,allyear
roadaccess.

11.48

Asecond,andrelated,safetyissueforLombadinaAirportistheavailabilityoffuelfor
helicopters.Concernwasexpressedthatthefueldumpattheairportmaynothave
sufficientfueltomeetemergencyrequirements,particularlyiffueldeliveryisdelayed
duetotankersnotbeingabletousetheCapeLevequeRoad.Thisisexacerbatedbythe
periodduringwhichtheroadmaybeclosedduetofloodingcoincidingwiththecyclone
season,whichiswhenoffshoresevereweathereventsareprevalent.957Concernwas
alsoexpressedthatbecauseofthehighqualityoffuelrequiredforhelicopters,fuel
sittingintheairporttanksmaydeteriorateovertime.Anadditionalissueraisedwas
that,whilethefuelsupplymaybesufficientintermsofqualityandquantitytomanage
oneevent,ifseveraleventsoccurtogetherorinsequence,astheycanincycloneprone
regions,thesituationwouldbedifficulttomanage.Safetyisclearlycontingenton
adequatefuelsupplies.958

11.49

TheDepartmentofStateDevelopment(DSD),however,advisedthatBIAisoftheview
thatthefueltanksatDjarindjinareofsubstantialsizetonegatetherisk.959The
Committeealsoraisedtheaboveconcernsrelatingtohelicopterfuelavailabilityand

954ShireofBroome,CommitteeBriefing,6March2015.
955KimberleyDevelopmentCommission,CommitteeBriefing,6March2015
956ShireofBroome,CommitteeBriefing,6March2015.
957ibid.
958ibid.
959MsJennessGardner,ExecutiveDirector,Browse,DepartmentofStateDevelopment,Transcript
ofEvidence,12March2015,p9.

246

Chapter11
qualitywithBIA.Inrelationtothecapacityofthefueltanks,BIAadvisedthatthe
originaltwofueltanksatLombadinaAirporthadacombinedcapacityof57,000litres,
oneholding22,000litresandtheother35,000litres.960
11.50

In2013,thesystemwasupgradedandanew55,000litretankwasinstalled,bringing
thetotalairportfuelcapacitytoapproximately110,000litres.Throughdaily
measurement,thetanklevelsaremonitoredandwhentheamountoffuelheld
approaches65,000litres,anorderforapproximately36,000litresisplacedfordelivery
atonetime.Todate,themaximumnumberofhelicoptersusingLombadinaAirportin
anyonemonthhasbeen90.Witheachusingapproximately1,000litresperflight,as
BIAadvised,thereisalwaysapprox3weeksfuelavailability.961

11.51

BIAalsoadvisedthatitssubsidiary,PeninsularAirportManagementServices,is
currentlynegotiatingwithoilcompaniestodevelopanewfuelstorageanddispensing
processthatwillseestoragedoubletoapprox200,000ltwithin12months.962

11.52

Inrelationtomaintainingthequalityofthefuel,BIAstatedthatstandardandbest
practiceandtechniqueswithJetA1transportandstorage(JIG4)arethatwhenfuelis
notbeingusedregularly,circulationofthefuelwillkeepthiswithinspecifications.963
BIAalsoadvisedthattherewasaperiodofapprox6months,backinlate2011early
2012,wheretherewasnoactivityatLombadina,andnorefuellingtookplaceatthe
Airport.964Furthermore,asampleofthestoredJetA1wassenttotheBPRefineryin
Kwinanaandwastestedandmetallthenecessaryspecifications.965

11.53

BIAacknowledgedthattherearetimesduringwhichCapeLevequeRoadisimpassable
inthewetseason.However,BIAassuredtheCommitteethat:
with enough capacity storage at Djarindjin/Lombadina Airport, very
closemonitoringofthefuellevelsinrelationtoavailableullagewithin
thetanksonsite,therehasbeennoperiodwheretheAirporthasnot
hadenoughquantitiesorqualityoffuelforexpectedoperationsduring
thepast5years.966

960MrRodneyEvans,OperationsManager,BroomeInternationalAirportandDjarindjinAirport,
BroomeInternationalAirport,ElectronicMail,26March2015.MrEvansadvisedthata
110,000lt[fueltank]wasprovidedbyathirdpartyin2010,howeveritwasneverabletobeused
duetoitnotmeetingaviationstandards.
961MrRodneyEvans,OperationsManager,BroomeInternationalAirportandDjarindjinAirport,
BroomeInternationalAirport,ElectronicMail,26March2015.
962ibid.
963ibid.
964ibid.
965ibid.
966ibid.Ullageistheamountofemptyspaceinthetank.

247

Chapter11
11.54

Infact,fuelhasalwaysbeenavailableallyearround.967

11.55

Nevertheless,BIAagreedthatwhilstnotcriticaltothelevelofoperations,thesealing
oftheCapeLevequeroadwillonlyincreasetheavailabilityoffuelsuppliesduringthe
wetseasons.968

11.56

InrelationtotheuseofLombadinaAirportaspartofanoffshoreoperations
emergencyresponse,BIAadvisedthatthatairportisrarelyusedformedivac
operationsasmedivacflightsareextremelylowinnumbers.969Furthermore,cyclone
demanningandupmanningisnotconsideredanemergencyevent.Itisconsidered
normaloperationsalbeitataheightenedlevelofactivity.970

11.57

Whilethismaybethecasetodate,considerationwillneedtobegiventotheimpactof
theinitialPreludefacilityandsubsequentFLNGoperationsintheregion.

11.58

TheCommitteediscussedtheissueoflimitedaccessonCapeLevequeRoadwithDSD.
MrStephenWood,DSDsDirectorGeneral,agreedthat,forthepurposesoffuel
dumpsandthelike,thatroadwillbeinaccessibleincertainconditions.971Whenasked
whatcouldbedoneinrelationtoCapeLevequeRoad,MrWoodstatedthat:
itisnotamatterofwhatStateDevelopmentwilldoaboutthat;thatis
a matter for the project proponent to make sure they have got the
logisticschainrightforthepurposesoftheirfuelservicing.972

11.59

Theissueofproponentresponsibilitytoprovideorupgradeinfrastructureisdiscussed
furtherbelow.
Finding79
Projectproponentsareresponsibleforthedevelopmentofallinfrastructure,including
supportinfrastructure,necessaryforthesafeoperationoftheirfacilities.
Finding80
RelocatingandsealingtheunsealedsectionofCapeLevequeRoadwillensuretheall
yearavailabilityoffuelsuppliestoLombadinaAirportandlocalcommunities.

967ibid.
968ibid.
969ibid.
970ibid.
971MrStephenWood,DirectorGeneral,Browse,DepartmentofStateDevelopment,Transcriptof
Evidence,12March2015,p9.
972ibid.

248

Chapter11
PortInfrastructure
11.60

Whiletherearetwoports,namelyBroomeandDampierports,operatingintheregion
adjacenttotheKimberleycoastlineand,thus,theBrowseBasin,asBroomeporthas
beennominatedbyShellandWoodsidetosupporttheirBrowseBasinoperations,the
followingdiscussionislimitedtothatport.TheCommitteeacknowledgesthe
importanceofbothBroomeandDampierportstotheeconomicdevelopmentofthe
stateandintendstoincludefurtherdiscussionofportinfrastructureinitssecond
reportontheeconomicimpactofFLNGontheWesternAustralianeconomy.

11.61

AccordingtotheKimberleyPortsAuthority,BroomePortisthelargestdeepwater
accessportservingtheKimberleyregionandisopentoshippingona24hourbasis
sevendaysaweek.973Therearethreeberthsintheport:theouterberthis331
metreslongandtwoinnerberthsare170metresand96metresrespectively.974While
thedepthoftheportvaries,themaximumdraftofavesselitcanaccommodateis
9.1metres.975Theportisalsosubjectto10metretides,withstrongtidesexperienced
acrosstheentrancechannelandatberth.976

11.62

Apartfromprovidingsupplybasefacilitiesforoffshoredevelopments,portsplayan
importantsafetyrolefortheoffshorepetroleumindustry.Dependingontheir
characteristics,theycanprovidecyclonemoorings,asafehaveninbadweatherand
bunkeringfacilitiestoallowvesselstorefuelandthenmanoeuvreawayfromthe
storm.

11.63

Thethreeinfieldsupportvessels(ISVs)thatwillsupportthePreludefacilityonrotation
willbebasedinBroome.These42metreISVsareunderstoodtohavea7.91metre
draft.977Thismeansthat,becauseofthemaximumdraftandtidalissuesinBroome
port,theISVswillnotbeabletoaccesstheport365daysperyear.Forexample,inthe
eventofa10metretide,anISVmaydropbelowtheberth.TheKimberleyPort
AuthorityadvisedthatitisworkinghardwithShelltodevelopasystemwherebythey
cansupporttheISVs338daysperyear.978Thisisaparticularlyimportantissue.As
discussedinChapter8,intheeventofamajorstorm,theISVssafestcourseofactionis
tomoveawayfromthestorm.Todothis,theymayneedtotraveltoBroometorefuel.
Itisessentialthattherisksassociatedwithanyreducedaccesstotheportarereduced
tolevelsthatareaslowasreasonablypracticable(ALARP).

973KimberleyPortAuthority,AboutBroomeport,nd,np.Availableat:
http://www.broomeport.wa.gov.au/aboutbroomeportauthority.Accessedon20March2015.
974ibid.
975ibid.
976ibid;andKimberleyPortAuthority,CommitteeBriefing,4March2015.
977ShellAustraliaPtyLtd,ShellawardsinfieldsupportvesselcontractforPreludeFLNG,Media
Release,12February2014.Availableat:https://www.shell.com.au/aboutshell/media
centre/newsandmediareleases/2014/isvcontractawardedprelude12022014.html.Accessed
on27March2015;andKimberleyPortAuthority,Committeebriefing,4March2015.
978KimberleyPortAuthority,CommitteeBriefing,4March2015.

249

Chapter11
11.64

KimberleyPortAuthorityadvisedthatcyclonemooringsinBroomearerestrictedto
35metres.ThispresentsaproblemforthePreludeISVsastheyare42metreslong.
While,ideally,theISVswouldbeatseaduringacyclone,andparticularlyasWyndham
iscurrentlythenextclosestsafehavenalongthatsectionofthecoastwithroadaccess,
anISVmayneedtoseekcyclonerefugeinBroomeport.TheKimberleyPortAuthority
advisedthattheyarecurrentlyindiscussionswithShellinrelationtowheresomesafe
havensorcyclonemooringsmaybesituated.979TheKimberleyPortAuthorityalso
acknowledgedthattheLombadinaareanearCapeLevequeisthebestavailableinthe
regionandthatthisareawillbeusedbyShell.

11.65

Nevertheless,andparticularlygiventherelianceontheLombadinaareabyoperators
suchasShell,theKimberleyPortAuthorityexpressedconcernaboutthecurrent
accuracyofthehydrographicinformationavailable.980

11.66

Itisuseful,heretooutlinethemeansbywhichmarinersareabletohaveconfidencein
marinechartsandthesurveyinformationtheycontain,namelyZonesofConfidence
(ZOC).ZOCareachartingstandardormethodofencodingdataqualityinformation
andclassifybathymetricdataandwhenincludedonchartsprovidemarinerswiththe
levelofconfidenceplacedinitbythenationalchartingauthority.981Accordingtothe
AustralianMaritimeSafetyAuthority(AMSA),alllargerscaleAUSchartscarryaZone
ofConfidence(ZOC)diagramwhichenablesthemarinertoassessthelimitationofthe
hydrographicdatafromwhichthechartwascompiledandthedegreeofriskassociated
withnavigatinginaparticulararea.982Table11.1belowliststhesixZOCandoutlines
thefeaturedetectioncriteriaorsearchrequirementforeachzone.

979ibid.
980ibid.Ahydrographicsurveyidentifiesenvironmentalfactorssuchaschangesinwaterdepths,
sanddrift,tidalstreamsetc.
981InternationalHydrographicOrganisation,ManualonHydrography,PublicationIHOM13,
InternationalHydrographicBureau,Monaco,May2005,p200.Bathymetricdataisthatwhich
measuresthesubmarinetopographythedepthsandshapesofunderwaterterrainortheland
thatliesunderwaterandprovidesafoundationforhydrography.See:NationalOceanicand
AtmosphericAdministration,Oceanfacts.Whatisbathymetry?,UnitedStatesDepartmentof
Commerce,nd,np.Availableat:http://oceanservice.noaa.gov/facts/bathymetry.html.Accessed
on30March2015.
982AustralianMaritimeSafetyAuthority,MarineNotice18/2012,SoundNavigationalPractices,
AMSAFileNo.2012/1841,2012,np.Availableat:
https://apps.amsa.gov.au/MOReview/Attachment/ShowAttachment/296.Accessedon30March
2015.

250

Chapter11
983

Table11.1:ZOCFeaturedetectioncriteria

11.67

11.68

ZOC

Position
Accuracy

DepthAccuracy

Searchrequirement

ZOCA1

5m

=0.50m+1%d

ZOCA2

20m

=1.00m+2%d

Fullareasearchundertaken,allsignificant
seafloorfeaturesdetectedandhavehad
theirdepthsmeasured.

ZOCB

50m

=1.00m+2%d

Fullareasearchnotachieved,uncharted
featureshazardoustonavigationmay
exist.

ZOCC

500m

=2.00m+5%d

Fullsearchareanotachieved,depth
anomaliesmaybeexpected.

ZOCD

Worsethan
ZOCC

Worsethan
ZOCC

Fullareasearchnotachieved,largedepth
anomaliesmaybeexpected.

ZOCU

Unassessed

Qualityofbathymetricdatayettobe
assessed.

TheRoyalAustralianNavys(RANs)AustralianHydrographicService(AHS)chartsthe
Lombadina/CapeLevequearea.984AHSchartsarenotbasedsolelyonRANsurveys,but
fromarangeofsources.985TheLombadina/CapeLevequeareaappearstohavebeen
lastsurveyedinthe1960s,andmuchofthecharteddataarisesfrominformationthat
isolderthanthat.986
AccordingtoAHS,andasthemapatFigure11.6shows,whileotherareasintheregion
haveahigherconfidencelevel,theLombadina/CapeLevequeareaisregardedas
havingaconfidenceratingofZOCCwhichmeansthatthepositionalaccuracyis+/
500Mandthedepthaccuracyis=2m+5%depth.987UndertheadoptedZOCsystem,
thisratingmeansthatdepthanomaliesmaybeexpected.988

983InternationalHydrographicOrganisation,ManualonHydrography,PublicationIHOM13,
InternationalHydrographicBureau,Monaco,May2005,p201;andZoneofConfidenceDiagram,
ChartAUS733.
984AustralianHydrographicService,RoyalAustralianNavy,DepartmentofDefenceElectronicMail,
30March2015.TheAHSadvisedthatthebestdetailofthisareaappearsonchartAUS733
(1:150,000scale)andtheareaappearsonseveralotherchartsinlessdetail.
985AustralianHydrographicService,RoyalAustralianNavy,DepartmentofDefenceElectronicMail,
30March2015.
986ibid.
987ibid.
988ibid.

251

Chapter11
Figure11.6:Zoneofconfidence(ZOC)diagram

11.69

TheCommitteeisnotawareofwhenthenextsurveyoftheLombadina/CapeLeveque
areawilloccurand,giventheextentofAustraliascoastline,theAHSwouldnot
resurveyallareasasamatterofcourse.Giventhatitistheresponsibilityofthe
operatortoensurethattherisksassociatedwithitsdevelopmenthasbeenreducedto
ALARP,theCommitteeexpectsthatShellandWoodside(perhapsincollaboration)
wouldneedtoundertakeasurveyoftheLombadina/CapeLevequeareatoincrease
theconfidencelevel.
Finding81
ThereisanapparentpaucityofhydrographicinformationfortheLombadina/Cape
Levequearea.

Infrastructureistheresponsibilityoftheprojectproponent/operator
11.70

ThisInquiryhasdemonstratedthatthedevelopmentofanyoffshorepetroleum
resourceiscontingentuponNOPSEMAacceptingthattheproponentwilltake
appropriatemeasurestomitigateprojectrisk.Inrelationtoproposeddevelopments
withintheNorthernCarnarvonBasin,thisburdenhasbeenreducedbythelonghistory
ofpetroleumindustryactivitiesinthatregionandtheassociatedestablishmentof
significantsafetyandemergencyresponseresourcesinkeystrategiclocations.The

252

Chapter11
samecannotbesaid,however,fortheBrowseBasin.Havingonlyrecentlybecomea
spaceofcommittedpetroleumindustryactivity,theBrowseBasinisnotyetendowed
withsimilaronshoreoroffshoreinfrastructure.
11.71

Becausethesafetycaseandenvironmentplanrequirementsofanypetroleum
developmentproposalplacestheonusondeveloperstoensurethatappropriatesafety
infrastructureisavailable,aproposaltodevelopBrowseBasinresources,ineffect,
requirestheproponenttoaddressanyexistingdeficiencies.Thelackofonshore
infrastructurealongtheKimberleycoast,therefore,hasrequiredShellandINPEXto
makesubstantialinvestmentsintheinfrastructuredirectlyrequiredfortheirrespective
PreludeandIchthysprojects.Intime,thisinfrastructureshouldbecomecommon
infrastructureabletosupportoffshoreoperationsintheregiongenerally.Shells
dedicatedsearchandrescuehelicopterbasedinBroomeprovidesanexampleofnew
infrastructurethatcanbeavailabletoothersintheregion.

11.72

Thegradualdevelopmentbyoperatorsofoffshoreandonshoresupportinfrastructure
inandaroundtheBrowseBasinclearlyreflectsthephilosophyunderpinningobjective
basedregulationthatthedutyofmanagingariskshouldliewiththecreatorofthe
risk.

11.73

ThisisalsothepositionadoptedbyDSDinrelationtotheprovisionofinfrastructureby
theState.Forexample,duringahearingDSDacknowledgedtheaccessissuerelatingto
theCapeLevequeRoadbetweenBroomeandtheLombadinaAirport,which,asnoted
above,willbeusedtofacilitateairtransfersbetweenthePreludefacilityandthe
mainland.Asnotedabove,DSDspositionisthattheconditionoftheroadisamatter
fortheprojectproponent.989

11.74

AccordingtoMrWood,anyworkonthatroadisaprojectproponentcost:990
Whyshouldgovernmentbeputtingtheirhandsinthepocketforwhat
isactuallyapartoftheirlogisticschain?991

11.75

Similarly,indiscussingpossibledevelopmentoftheBroomePort,MrWoodargued
that:
iftherearesomeadditionalfacilitiesthatarerequiredforaparticular
proponent, why should that facility not be accommodated by the
proponent, rather than built by government in the hope that the

989MrStephenWood,DirectorGeneral,DepartmentofStateDevelopment,TranscriptofEvidence,
12March2015,p9.
990ibid.
991ibid.

253

Chapter11
proponent will have a development and contract to that particular
portforthatparticulardevelopment?992
11.76

Whilethispositionreflectstheobjectivebasedregulationphilosophy,itraisesa
numberofissuesinrelationtopotentialstatedevelopment.

Infrastructureandstatedevelopment
11.77

First,requiringindividualpetroleumcompaniestoaddressthepresentlackof
appropriatesafetyinfrastructureintheKimberleyregionwouldaddtotheoverall
projectcostandmayactasanimpedimenttothedevelopmentofindividualresource
projectsintheBrowseBasin.However,giventheoverallcostsandreturnsofsuch
majordevelopments,newsafetyinfrastructureorupgradesofexistinginfrastructureis
unlikelytostopadevelopmentfromproceeding.Asearchandrescuehelicopteroran
upgradeofaregionalmedicalfacilitywouldrepresentarelativelyminorproportionof
theoverallprojectcost.TheCommitteeacknowledges,though,thattheneedfora
projectproponenttoprovideforacompletelynewsupplybaseandagasprocessing
hubintheKimberleyregion,forexample,particularlyforthefirstprojectinthearea,
maywellbeabarriertolocaldevelopment.993

11.78

Second,holdingpetroleumprojectproponentstotallyresponsiblefortheinfrastructure
requiredforthedevelopmentoftheindustryeffectivelydelegatesdecisionsrelatingto
WesternAustraliasstatedevelopmenttothedirectorsandshareholdersofpetroleum
companies.Asaresult,notonlydoestheStaterelinquishthepowertodirecthowthe
developmentshouldoccur,theStatesopportunitytoharnesspetroleumindustry
activityasastimulustogeneraleconomicdevelopmentismarkedlyreduced.Thishas
alreadyoccurredinrelationtoboththePreludeandIchthysprojects.

11.79

Third,thepetroleumresourcesintheBrowseBasinarelargelylocatedin
Commonwealthwaters.Becauseofthis,andincombinationwithwaythatthe
regulatoryregimefunctions,theWesternAustralianGovernmentcouldquite
appropriatelyallowproponentsofoffshoreprojectstofundanddevelopinfrastructure
asrequiredalongtheKimberleycoastline.However,andparticularlyinlightofthe
currentstatusoftheJamesPricePointdevelopment,thisrepresentsareactive,rather
thanproactive,approachtostatedevelopment.Thisapproachriskspetroleumprojects
beingservicedoutofDarwinorperhapsSingapore,asituationclearlynotinWestern
Australiasbestinterests.

992ibid,p11.
993Thisdecisionrequiredtheconstructionofan889kilometre,US$1.6billionsubseapipeline.ICN
Gateway,Ichthysgasexportpipeline.Availableat:
http://gateway.icn.org.au/project/3028/ichthysgasexportpipeline.Accessedon30March
2015.

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Chapter11
11.80

TheCommitteeraisedwithDSDtheissueofwhatworkwasbeingdonebytheStatein
relationtoprovidinginfrastructure,particularlythatimpactingonthesafetyof
offshoredevelopments.Inresponsetothequestionofwhetherbarrierstothe
developmentoftheBrowseBasinhadbeenidentified,theDirectorGeneralofDSD,
MrStephenWood,advisedthatdiscussionsbetweenDSDandBrowseBasin
titleholdershadnotbeenfruitful:
Atthisstage,forBrowseitisdifficult[forDSD]toanswerthatquestion
anditisdifficultforthemtoanswerthatquestion.Wehavehadquite
alotofdetaileddiscussionwiththemonthisandwehavealsohadour
own assessments which I think [] I mentioned last time in terms of
whatwethinkmightworkormightnotwork,butthedifficultyisyou
are at the very early phase of that project. Once you define your
requirement, how you translate that into sort of something that is a
buildoracommercialpropositionisanotherissue.Inadditiontothat,
whether the actual product launches at all, of course, is part of the
assessmentatthemoment.Itisverydifficulttoanswerthatquestion
withanysortofspecificsatthemoment.994

11.81

However,astheCommitteenoted,thePreludeprojectcouldhardlybedescribedas
beingattheveryearlyphaseandveryspecificinformationastowhatelsemightbe
requiredforthatprojectshouldbeavailable.Inresponse,MrWoodstated:
WouldIhavelikedthePreludeinformationsooner?Yes.DoIhopeIget
itthismonth?Yes.Hopefully,Igetitinastatethatwecanbemuch
cleareraboutsomeofthethingsthatyouarelikewiseinterestedin.995

11.82

Inrelationtoairtransportinfrastructure,DSDadvisedthatitwasstillintheprocessof
determiningwhatmightberequired.Furthermore,whenquestionedontheStates
overarchingstrategyforBrowseBasindevelopment,MrWoodwasnoncommittal,
explainingthatwhileDSDwasintheprocessofbuildingsuchastrategy,therewasstill
someworktobedoneinthisarea.AccordingtoMrWood:
whattheexactlevelofactivityisthatcanjustifiablybegarnered,even
in the Kimberley or broader, is what we are trying to do at the
moment. Out of that, we have done some work to say, Yeah, okay
welllookatwhatsactuallyavailable;whoholdstheleases;whatlevel
ofactivitydoesthattolerate;doesithaveaproperliftandthosesorts
of things. Yes, we have got some views on that, but until we get a
betterdefinitionprojectwisethatwouldmarry,youcannotmatchthat

994MrStephenWood,DirectorGeneral,DepartmentofStateDevelopment,TranscriptofEvidence,
12March2015,p3.
995ibid.

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Chapter11
with what we think about location. For any location, of course, also
you have got to treat questions about native title; you have got to
treatquestionsoftimelinessbecauseittakesalongtimetodealwith
thenativetitleissues.996
11.83

ItseemsthatDSDhaveadoptedawaitandseeapproachtoBrowseBasin
developmentanapproachthattheCommitteeregardsasinappropriatefortwo
reasons.First,theBrowseBasinresourceswillultimatelybedeveloped,whetherthat
bebyFLNGtechnologyormoreconventionalonshoreprocessing.Second,and
perhapsmoreimportantly,thisapproachhasleftDSDinapositionwhereitisunableto
provideusefultimelyinsightintothedevelopmentintentionsofproponents.

11.84

OtherevidencegivenbyMrWood,however,demonstratesthatDSDhasagood
understandingofmanyoftheissuesthatarecriticallyimportanttofuture
development.Asindicatedabove,DSDareawareoftheconditionoftheCapeLeveque
RoadbetweenBroomeandtheLombadinaAirportandoftheproposedupgradesto
facilitiesatBroomeport,bothofwhichcouldbeconsideredascriticalstrategic
facilitiesforthefuturedevelopmentofBrowseBasinresources.GivenDSDsposition
onthesefacilities,asdescribedabove,theCommitteecanonlyassumethatthe
approachtakenbyDSDhasbeendeliberate.

11.85

TheCommitteecanappreciatethelogicofDSDsapproach.Nonetheless,the
CommitteesviewisthatatleastpartofDSDsroleshouldbetodeterminewhere
governmentmightusefullycontributetomajorprojectsthatwouldfacilitatestate
development.Whileitisnottheroleofgovernmenttofundtheinfrastructure
requirementsofprivateindustry,governmentdoeshavearoleinmanagingthestates
economicdevelopmentanditwouldbeasignificantmissedopportunitynottoharness
thedevelopmentoftheBrowseBasinresourcesinthisway.

11.86

Theimportantissueoftheroleofinfrastructureinstatedevelopmentwillbediscussed
furtherintheCommitteesreportonopportunitiesthatmayarisefromFLNG
developments.

FLNGpresentsachallengetotheexpertregulatormodel
11.87

Oneoftherecurringthemesthroughoutthisreportisthatwhiletheoffshore
petroleumindustryischargedwiththeresponsibilityofensuringthesafetyofits
operations,theroleplayedbytheregulatorinthisobjectivebasedmodeliscritical.
UnderAustraliasregulatoryregime,NOPSEMAnecessarilytakesontheroleof'expert
regulator'.ThisreliesonNOPSEMAbeingabletoproperlyprobeandassesssubmitted
safetycasesandenvironmentplansbeforedecidingwhetherornottoacceptthem.

996ibid,p12.

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Chapter11
Furthermore,NOPSEMA'sinspectionregimeiscriticaltotheprocessofthe'continuous
improvement'thatissofundamentaltothesafetycaseandenvironmentplanmodel.
11.88

InrelationtoFLNGfacilities,ShellsPreludewillbeoneoftheworld'sfirstandcertainly
thefirsttooperateinAustralianwaters.Asmentionedpreviously,whilesomeargue
thatFLNGisanevolutionofFPSOtechnologyandothersarguethatitisrevolutionary
technology,FLNGfacilitiesaredifferentfromthosecurrentlyoperatinganywherein
theworld.Furthermore,PreludewillbeanchoredintheBrowseBasin,arelativelynew
regionforpetroleumdevelopment.ThismeansthatNOPSEMAisreviewingsafety
casesandenvironmentplansfornewtechnologyindifferentenvironments.

11.89

AsdiscussedinChapter4,NOPSEMAhasbeengrantedexemptionsinrelationtopublic
servicesalarylevelstoallowittorecruitandretainexperiencedprofessionals.This
allowsagoodlevelofreassurancethatNOPSEMAwillhavethetechnicalexpertiseto
undertakeitsassessment,monitoringandinspectionfunctions.

11.90

WhatwaslessclearisthelevelofexpertiseNOPSEMAwillhaveinrelationtothelocal
knowledgeuponwhichmanyaspectsofsafetycasesandenvironmentplansarebased.
Forexample,asthischapterhasdiscussed,thereareparticularconcernssurrounding
theconditionoftheCapeLevequeRoadandonthecapacityofthecoastlinetoservice
FLNGfacilitiesasrequired.ItisnotclearhowNOPSEMAwillhavesufficientlocal
knowledgetoallowittoassessanoperatorssafetycasethatreliesonISVandrescue
helicopteraccesstoLombadina,forexample.

11.91

NOPSEMAadvisedthatnotalldetailsofasafetycaseareverified.Theinformation
providedbyproponentsistakenatfacevalue;thatis,itistakenasfact,withthose
factsbeingverifiedandtestedthroughtheprogramofinspections.NOPSEMAargues
thatthisisappropriategiventheyareregulatingamatureandsophisticatedindustry
and,therefore,theyneedtohavealevelofconfidenceintheinformationprovided.

11.92

Infurtherexplainingthatassessingthecapacityofonshoreinfrastructuresuchas
hospitalsandroadsisnotwithinNOPSEMAsremit,MrGuyanprovidedspecific
insightintothesafetycaseverificationprocess.997IninformingtheCommitteethat
NOPSEMAwilllookatandconsider[eachsafetycase]intermsofclaimsmadebythe
operator,MrGuyanexplainedthat:
if there is an assumptionlet us say it is four hours from time of
incident to hospital treatment, that would be something that we can
approachfromthepointofviewof:haveyoutestedyouremergency
response plan arrangements? So it is a matter of inspection, rather
than assessment and safety case. So, to an extent, yes, we will take

997MrGavinGuyan,ActingChiefExecutiveOfficer,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,TranscriptofEvidence,7April2015,p18.

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Chapter11
that description of the emergency response plan as written and as
committed. It becomes legal binding as part of the safety case that
thesearrangementsareviableandthenbyinspectionwecantest,and
in this sort of arena then we would potentially be asking questions
around:Whatlevelofdrillsandexerciseshaveyouundertaken?How
have you tested the functionality of these emergency response plan
arrangements?Thatishowweareapproachingit.Certainly,nodoubt,
NOPSEMA does not inspect onshore hospital facilities or, indeed, the
conditionofroadsonshore.998
11.93

Inscrutinisingasafetycase,NOPSEMAadvisedthatthereareanumberofchecksand
balanceswithintheschemethatinvolvecertifyingauthoritiesagreeingthat[the
submitted]designistonormalindustrystandardsandengineeringspecifications.999
Todischargethisfunction,NOPSEMAmaintainsanappropriatelevelofinhouse
engineeringexpertise.1000

11.94

ItisclearthatShell,itself,willcontinuetolearnfromthecommissioningand
subsequentoperationofthePreludefacility.ItisthereforecriticalthatNOPSEMAisin
apositiontoalsolearnthoselessons.OnlythenwillNOPSEMAquicklybecomeexpert
inregulatingFLNGtechnology.TheexpectationisthatNOPSEMAwillconduct
numerousthoroughinspectionsofthePreludefacility,includingitssupport
infrastructure,onceitisoperational.ThiswillensurethatNOPSEMAcanproperly
developitsunderstandingofthetechnology.ItissimilarlyexpectedthatShellwillbe
verycandidinsharingitsknowledgeandunderstandingofFLNGwithNOPSEMA.

Emergencyresponsecommand
11.95

OneoftheCommitteestermsofreferencewastoinquireintotherolesand
responsibilitiesofstateandfederalgovernmentsinrelationtoFLNGemergency
situations.Whilevariousaspectsofthistermofreferencehavebeendiscussed
throughoutthereport,thisimportantissuedeservesfurtherconsideration,particularly
becauseitappearstobeacomplexand,attimes,confusingissue.

11.96

Someofthisconfusionpossiblyrelatestothelanguageusedinthegoverning
legislation,regulations,policies,guidelinesandplans,whichcontainaraftoftermsthat
aredefinedinveryspecificways.Forexample,therearecontrolagencies,combat
agencies,supportagenciesandincidentcontrollers,tonameafew.Theseterms
notwithstanding,itisimportanttoclarifywho,intheeventofanoffshorepetroleum
facilityincident,isincommand;thatis,whohasoverallcontrolandthemandated

998ibid,p17.
999ibid,p7.
1000ibid.

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responsibilitytodeterminewhenanincidentwilltransitionfromonelevelofresponse
toanother.
11.97

Whocontrolsorcoordinatestheresponsetoanoffshoreemergencydependsonthe
severityandtypeofincident.Whilealloffshoreincidentsoraccidentsareserious,
somehavefarmoresevereconsequencesthanothers.Forrelativelyminorincidents,
andinaccordancewithAustraliasregulatoryregime,theoperatormustbecapableof
managing,includingcoordinatingandcontrolling,thatincidentusingitsownresources,
capacitiesandprocesses.Ineffect,thismeansthattheoperator,ascontrolauthority,is
incommand.

11.98

Therearetimes,though,whenanincidentisescalatedandanoperatormayrequest
theassistanceofothers,includingmultiplegovernmentagencies.Asituationmayalso
arisewhereNOPSEMA,inmonitoringtheincident,decidestoissueadirectiontoan
operatortotakeparticularaction.NOPSEMAsauthoritytoissueadirectiontoa
registeredtitleholderisprovidedunders574(2)oftheOPGGSAct,whiles574(3)
providesthatNOPSEMAisabletodirectpartiesotherthanthetitleholder.1001

11.99

ThiswasexplainedbyMrGavinGuyan,NOPSEMAsGeneralManager,Safetyand
Integrity,who,indiscussingtheAuthoritysabilitytointerveneinanincidentresponse,
statedthat:
there are powers in the act that allow NOPSEMA to intervene by
making directions to an operator or a titleholder to do a number of
things,buttheydohavetorelatetohealthandsafetyordamageto
the environment, the potential thereof. So there is that option for
NOPSEMAtointervene.Beforewewouldconsiderdoingthat,itwould
have to be a case that NOPSEMA would have to be convinced that,
indeed,thetitleholderoroperatorwasnotactinginaccordancewith
theplanandreasonablecontingencyarrangements,ormanagingthe
risktothehealthandsafetyofpeopleordamagetotheenvironment
appropriately.1002

11.100

Inanysituationinvolvingthedeploymentofresourcesfrommultiplesources,suchas
oneormoreoperators,privateindustryandgovernmentagencies,thecommand

1001MrGavinGuyan,ActingChiefExecutiveOfficer,NationalOffshorePetroleumSafetyand
EnvironmentalManagementAuthority,Letter,15April2015.Seealso:SubmissionNo.28,
SubmissionfromDepartmentofIndustryandScience,16April2015,p3.Thissubmissionalso
explainstheMinistersgeneralpowertogivedirectiontoapetroleumtitleholder.
1002MrGavinGuyan,ActingChiefExecutiveOfficerandGeneralManager,SafetyandIntegrity,
NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Transcriptof
Evidence,7April2015,p5.

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Chapter11
structureiscritical.Appropriateemergencyresponse,includingcommand,canmeana
majoremergencydoesnotdevelopintoacatastrophicdisaster.1003
11.101

APPEAsunderstandingofsuchsituationsisthat:
the Operator will plan to maintain primary responsibility (combat
agency)foritspetroleumoperationsthroughoutanylevelofresponse.
External stakeholders with expertise in specific tactical emergency
responsecapability,forexample,searchandrescue,oilspill,terrorism,
will be asked to plan and work with the Operator and will maintain
responsibility for those specific activities during any response, but
undertheoverallcontroloftheOperator.1004

11.102

ThefollowingoutlinestheroleoftheOffshorePetroleumIncidentCoordination
Committee(OPICC)andtheNationalplanformaritimeenvironmentalemergencies(the
NationalPlan),andconsiderstheirrelationshiptooffshorefacilityoperators
emergencyresponseresponsibilities.

11.103

Chapters2and9introducedtheOPICCestablishedaccordingtotheOffshore
PetroleumIncidentCoordinationFramework(theFramework)anditsrolein
providingleadershipandstrategiccoordinationtoanincident.Chapter9alsonoted
thatOPICCisnotadeploymentagencyasdeploymentofresourcesistheoperators
responsibility,onethatiscoordinatedinaccordancewiththeirNOPSEMAaccepted
emergencyresponseplans.OPICCisalsonotresponsibleforincidentcontrolasthisis
theresponsibilityofthecontrolagency,anddoesnotassumeanyaspectofthe
CombatAgencyroleasdesignatedundertheNationalPlan.1005

11.104

OPICCspurposeistoeffectivelycoordinateAustralianGovernmenteffortsand
resources,andcommunicatetothepublicandaffectedstakeholdersallmatters

1003TheAustralianEmergencyManagementArrangementsdefineacatastrophicdisasterasan
extremehazardeventthataffectsoneormorecommunities,resultinginwidespread,
devastating,economic,health,socialandenvironmentalconsequences,andthatexceedsthe
capabilityofexistingstateandterritoryemergencyanddisastermanagementarrangements.An
eventcouldbeofsuddenimpactorsustainedimpactoveranextendedtimeframe.See:
Australianemergencymanagementarrangements,TheAttorneyGeneralsDepartment,
CommonwealthofAustralia,2009,p17.
1004MrAdamWelch,SeniorPolicyAdvisorWesternRegion,AustralianPetroleumProductionand
ExplorationAssociation,ElectronicMail,14April2014,p1.
1005MrMartinSquire,GeneralManager,OffshoreResourcesBranch,ResourcesDivision,
DepartmentofResources,EnergyandTourism,Theoffshorepetroleumregime,presentationat
theOffshorePetroleumForum,Cairns,8April2013,np.Availableat:
http://www.nopsema.gov.au/assets/Presentations/PresentationOffshorePetroleumForum8
April2013webversion.pdf.Accessedon9April2015;andSubmissionNo.28,Submissionfrom
DepartmentofIndustryandScience,16April2015,p2.

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Chapter11
relevanttoasignificantoffshorepetroleumincidentinCommonwealthwaters.1006The
DepartmentofIndustryandScience(DoIS)advisedthattheOPICCskeyfunctionsare:
toprovidesituationalawareness,advicetoministers,coordinatepublic
information and enable whole of government strategic collaboration
to resolve conflicts and identify gaps in support of crisis response
activities.1007
11.105

DoISfurtheradvisedthat:
this includes facilitating interaction and communication as required
withthetitleholder/operator,stateandterritorygovernmentagencies,
the offshore petroleum industry, foreign governments, other
stakeholdersandthepublic.1008

11.106

NOPSEMAandAMSAarekeymembersoftheOPICC.

11.107

TheFramework,whichestablishestheOPICC,isintendedtointerfacewithother
emergencyincidentresponse/coordinationframeworks,1009includingtheNational
Plan.1010Chapter10,indiscussingoilspillresponse,notedthattheNationalplanfor
maritimeenvironmentalemergencies(theNationalPlan)setsoutthearrangementsfor
themanagementofmaritimeenvironmentalemergencies.AMSAhasjurisdictional
authorityundertheNationalPlan.1011Nevertheless,asNOPSEMAsubmitted:
titleholders are responsible for setting out the arrangements and
capability that will be in place, for the duration of the activity, to
ensure implementation of control measures necessary for a timely
response to an oil spill. Typically, this will include a tiered capability
which draws upon titleholder, industry association and government
resources.1012

1006SubmissionNo.20fromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,11December2014,p2;andSubmissionNo.28,SubmissionfromDepartmentof
IndustryandScience,16April2015,p3.Seealso:DepartmentofIndustryandScience,Offshore
petroleumincidentcoordinationframework,nd,np.Availableat:
http://www.industry.gov.au/resource/UpstreamPetroleum/Pages/OffshorePetroleumIncident
CoordinationFramework.aspx.Accessedon20February2015.
1007SubmissionNo.28,SubmissionfromDepartmentofIndustryandScience,16April2015,p2.
1008ibid.
1009DepartmentofIndustryandScience,OffshorePetroleumIncidentCoordinationFramework,nd,
np.Availableat:http://www.industry.gov.au/resource/UpstreamPetroleum/Pages/Offshore
PetroleumIncidentCoordinationFramework.aspx.Accessedon20February2015.
1010ibid.
1011AustralianMaritimeSafetyAuthority,Nationalplanformaritimeenvironmentalemergencies,
CommonwealthofAustralia,Canberra,1973,p27.
1012SubmissionNo.20fromNationalOffshorePetroleumSafetyandEnvironmentalManagement
Authority,11December2014,p2.

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11.108

TheNationalPlanappliestopotentialandactualpollutionoftheseaorharmtothe
marineenvironmentbyoilorhazardousandnoxioussubstance,originatingfrom
[sourcesorsituationsincluding]oilorhazardousandnoxioussubstancepollution
incidentsfromoffshorepetroleumactivities.1013Thetermoffshorepetroleum
activitiesisnotdefinedintheNationalPlan,butitdoesnotethatNOPSEMAisthe
primaryregulatorforoffshorepetroleumactivitiesintheCommonwealthmarine
area,andthatenvironmentalplanrequirementsareoutlinedintheOffshore
PetroleumandGreenhouseGasStorage(Environment)Regulations2009(OPGGSE
Regulations).1014NOPSEMA,though,isnotaresponderorcombatagency,ora
coordinatorofincidentresponseactivities.

11.109

AccordingtoAMSA,theNationalPlan:
consistsofarangeoflegalandadministrativearrangementswhichare
applied through a tiered management structure []. International
conventions and domestic legislation provide the legal context
[whichis]underpinnedbynationalpoliciesandimplementedthrough
jurisdictionalandlocalcontingencyplans.1015

11.110

OneoftheprinciplesoftheNationalPlanistoprovideasingleintegratedresponse
arrangement.1016AccordingtotheNationalPlan,themanagementofmaritime
environmentalemergenciesisthesharedresponsibilityofalllevelsofgovernment,
industryandbusiness,thenongovernmentsectorandthecommunity.1017Thisis
achievedthroughfosteringcooperativerelationship(s);thecommitmentofall
stakeholderstocollaborationacrossalllevelsofgovernment,industrystakeholdersand
thecommunity;andconsultativedecisionmakingandsharedresponsibilities.1018

11.111

TheNationalPlanalsorecognisesthat'majororcatastrophicmaritimeenvironmental
emergencieshavethepotentialtosignificantlyimpactonthenationalinterestsof
Australia.1019Suchmajorincidents,whichwillgenerallybeofalargescaleandrequire
thecoordinationofnationalandinternationallevelinterests,mayincludesituations
where:

the incident exceeds the capability of the nominated Control

Agency[or]

1013AustralianMaritimeSafetyAuthority,NationalPlanforMaritimeEnvironmentalEmergencies,
CommonwealthofAustralia,Canberra,1973,p13.
1014ibid,p22.
1015ibid,p16.
1016ibid,p11.
1017ibid.
1018ibid.
1019ibid,p30.

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Chapter11

11.112

NOPSEMAortheresponsibleCommonwealthminister,duetothe
titleholders' failure to fulfil their spill response obligations, is
requiredtoact.1020

Furthermore,suchincidentsmayrequireextraordinarystrategiccoordinationacross
governmentsandstakeholdersfortheireffectivemanagement.1021Accordingtothe
NationalPlan,majorincidentcoordinationofstakeholdersisprovidedthroughthe
applicationoffourcoreconcepts:

Strategicleadership

CoordinationacrossAustralianjurisdictionsandsectors

Coordinationwithinternationalgovernments

Processes for the orderly transfer of Control Agency

responsibility.1022

11.113

ForsituationsnotcoveredintheNationalPlan,theCommonwealthsModel
arrangementsforleadershipduringemergenciesofnationalconsequence(theModel
Arrangements)wouldapply.1023TheModelArrangements,whichshowshowAustralian
governmentsworktogethertocoordinatemajorincidents,specificallyapplyto
incidentsthatrequirecoordinationofnationallevelpolicy,strategyandpublic
messagingorinterjurisdictionalassistance,wheresuchassistanceandcoordinationis
notaddressedbyexistingarrangements.1024TheNationalPlanisintendedtobe
consistentwiththeModelArrangements,whichwillbeappliedwherethe
coordinationprocessesoutlinedwithin[section2.4oftheNationalPlan]require
additionalsupporttomanagecoordinationissues.1025

11.114

Asmaritimeenvironmentalemergenciescaninvolvetwoormorejurisdictions,the
NationalPlanincludesaGuidelineonthecoordinationofmultiplejurisdictionincidents,
whichprovidesfortheestablishmentofanincidentcoordinationprocessandthe
determinationofaleadjurisdiction,ifappropriate.1026TheNationalPlanalso

1020ibid.
1021ibid.Emphasisadded.
1022ibid.
1023ibid.TheModelarrangementsforleadershipduringemergenciesofnationalconsequenceare
partoftheAustralianEmergencyManagementArrangements.MALDENCwasendorsedbyCOAG
on3July2008.
1024ibid,p31.
1025ibid.
1026ibid,p32.

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Chapter11
includesGuidelinesonthechangeofcontrolagencytofacilitatetheorderlyescalation
fromlocalresponseoperationstoincidentsrequiringinternationalassistance.1027
11.115

BecausetheNationalPlanfallsunderthejurisdictionofAMSA,itisAMSAs
responsibilitytocoordinatethenationalarrangementsinsupportofaControl
Agencysresponseoperation,includingthedeploymentofequipmentstockpiles,
dispersantcapabilityandtheNationalResponseTeam,andprovidingsupportservices,
andtechnicalandotheradvice.1028AnAMSAofficer,knownastheMaritimeEmergency
ResponseCommander(theMERCOM),ispersonallyresponsibleforcoordinatingand
managingseriousmaritimeincidents.1029UndertheProtectionoftheSea(Powersof
Intervention)Act1981(Cth)theMERCOMisauthorisedtointerveneinamaritime
incidentintheExclusiveEconomicZone(EEZ),whenpollutionisoccurring,orislikely
tooccur.1030

11.116

Asnoted,theOPICCprovidesstrategicleadershipandstrategiccoordinationin
responsetoasignificantoffshorepetroleumincident,whiletheNationalPlanrelatesto
maritimeenvironmentalemergencies.WhilethereisnoNationalPlanequivalentfor
significantoffshorepetroleumincidentsnotinvolvingtheenvironmentaldamage,as
notedthroughoutthisreport,noFLNGfacilitycanoperatewithoutapprovedsafety
casesandenvironmentplans,whichincludeemergencyresponseandoilpollution
emergencyplans.Thesedocumentsalsoincludedetailsofcooperativearrangements
betweentitleholders,operatorsandgovernmentsforsituationswhengovernment
assistanceisrequired.Inexplainingthisrequirement,DoISadvisedthat:
AMSAhasanumberofmemorandumsofunderstanding(MOUs)with
offshore petroleum operators in relation tooil spill preparedness and
response. It is anticipated new MOUs may be agreed with any new
upstreamoperations,forexampleFLNGfacilityactivities.1031

11.117

APPEAalsoadvisedthateveryfacilitysafetycase:
outlinestheemergencyresponsearrangements(includingforexample,
chainofcommand,tieredandscaledresponses,accesstoequipment,
capabilities, competencies, MOUs etc) that will be in place for that

1027ibid.
1028ibid,p62.
1029AustralianMaritimeSafetyAuthority,Nationalmaritimeemergencyresponsearrangements,nd,
np.Availableat:http://www.safety4sea.com/nationalmaritimeemergencyresponse
arrangement18229.Accessedon9April2015.
1030TheMERCOMcanalsointerveneinincidentsonthe'HighSeas'toprotectAustraliasinterests
whenthereisgraveandimminentdangerofpollution.AustralianMaritimeSafetyAuthority,
Nationalmaritimeemergencyresponsearrangements,nd,np.Availableat:
http://www.safety4sea.com/nationalmaritimeemergencyresponsearrangement18229.
Accessedon9April2015.
1031SubmissionNo.28,SubmissionfromDepartmentofIndustryandScience,16April2015,p1.

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Chapter11
facilitytobeabletorespond,mitigateandrecoverfromthefullrange
of potential major accident events that have been identified for that
specificfacilityandfortheactivitiesundertakenatornearthatfacility
andenvironment.1032
11.118

Furthermore,APPEAmadeitclearthatindustryexpertiseiscriticalinanyemergency
response.AccordingtoAPPEA:
where a government decides that it needs to take over an incident,
experience suggests (ref Deepwater Horizon) that there will still be a
need for support from relevant industry experts to assist with the
response. This would include relevant Operator staff, most likely
throughtheOperatorsdefinedemergencyresponsestructure.1033

11.119

Nevertheless,becausesafetycasedetailsaregenerallyconfidential,thequestionasto
whoisresponsibleforcommandinasignificantemergencysituation(particularly
wheremultiplefacilitiesand/oroperatorsareinvolved)isnoteasytoanswer.This
questionisdiscussedfurtherbelow.

Theneedforclarity
11.120

ThisInquiryhasrevealedalevelofconfusioninrelationtotheemergencyresponse
arrangementsinplaceforAustraliasoffshorepetroleumindustryactivities.For
example,inJuly2014,theDepartmentofMinesandPetroleum(DMP)advisedthatan
incidentonanFLNGfacilityinCommonwealthwaterswouldfallunderNOPSEMAs
jurisdiction.DMPsubmittedthatintheeventofanemergencyinvolvingthePrelude
facility,NOPSEMAinconjunctionwithShellandPreludemanagementandteam
membersisresponsiblefortheeffectivemanagementofanyemergency
situation.1034TheDepartmentclearlycontemplatesnotonlythatNOPSEMAwould
manageanoffshoreemergency,butthatitsmanagementwouldincludecoordination
andcontrolresponsibilities.

11.121

Indiscussinggovernmentoversightofcollaborativeemergencyresponse
arrangements,MrRaymondBuchholz,theDepartmentofTransports(DoTs)General
Manager,MarineSafety,describedNOPSEMAasthejurisdictionalauthoritythat
wouldbegettingsupportinstantlyfromthenationalresponseteam,fromAMSAand
fromourselves[DoT].1035Furthermore,indiscussingjurisdictionalresponsibilitiesfor
petroleumspillsinCommonwealthwaters,MrBuccholznotedthatAMSAmanagesthe

1032MrAdamWelch,SeniorPolicyAdvisorWesternRegion,AustralianPetroleumProductionand
ExplorationAssociation,ElectronicMail,14April2014,p1.
1033ibid.
1034SubmissionNo.4fromDepartmentofMinesandPetroleum,14July2014,p6.
1035MrRaymondBuchholz,GeneralManager,MarineSafety,DepartmentofTransport,Transcriptof
Evidence,19November2014,p6.

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NationalPlan,butstatedthatunderthatPlanNOPSEMAisthejurisdictionalauthority
foranenvironmentalincidentinvolving[apetroleumfacility]incommonwealth
waters.1036MrBuccholzalsostatedthatifanoilspillcrossesfromCommonwealthto
statewaters,NOPSEMAandDoTwouldnegotiatejurisdictionalauthority.1037
11.122

11.123

Inaddition,Session10oftheApril2013OffshorePetroleumForum,SpillPreparedness
andResponse,includedthefollowinginalistofgeneralareasofagreementthatwere
reached:

ThereareareasoftheNationalarrangementsthatneedclarifying.

There are areas of the National arrangements that can be

strengthened.1038

Duringthisforumsession,NOPSEMAalsonotedthefollowingemergingissuesand
priorities:

Consultationrequirements

Jurisdictionalboundaries

Clarityinrolesandresponsibilities

Clarificationofcontrol

Transferofcontrolandintervention

Governmentinterventionandtriggers.1039

11.124

Thesecomments,togetherwiththeviewsexpressedbyDMPandDoTinrelationto
NOPSEMAsroleinanemergency,demonstratethatalevelofconfusionexistsabout
NOPSEMAsactualrole.Thisconfusionneedstobeaddressedsothatagenciesand
otherstakeholdersarebetterinformedofthearrangementsthatareinplace.

11.125

TheCommitteeacceptsthatoffshorepetroleumindustrystakeholders,bethey
industryorgovernmentagencies,maintainapredominantfocusuponpreventing
incidentsfromoccurring.Whilethisfocusisessential,itisequallyimportantthat
emergencyresponsearrangementsareclearandthatanappropriatecommand
structureisnotonlyinplace,butiswellknownthroughoutallrelevantstakeholder

1036ibid,p2.
1037ibid,p2.
1038NationalOffshorePetroleumSafetyandEnvironmentalManagementAuthority,Session10:Key
prioritiesandimplementation,presentationattheOffshorePetroleumForum,Cairns,8April
2013,np.Availableat:http://www.nopsema.gov.au/assets/Presentations/Presentation
OffshorePetroleumForum8April2013webversion.pdf.Accessedon9April2015.
1039ibid.

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Chapter11
organisations.Thiswillbecomeincreasinglyimportantasthelevelofoffshore
petroleumactivity,includingFLNGactivity,increasesofftheWesternAustraliancoast.
11.126

TheCommitteesunderstandingisthatCommonwealthpolicyfocusesontheresponse
toamajormaritimeenvironmentalemergencyinCommonwealthwaters,andthat
undertheNationalPlan,AMSAisresponsibleforthecontrolandcoordinationofa
governmentassistedresponse.Italsoseemsthatiftheemergencyisescalatedtoa
majorhazardorcatastrophe,theAustralianEmergencyManagementArrangements
couldbecalledupon,withstateandfederalgovernmentstakingontheirrespective
rolesandresponsibilitiesasoutlinedindocumentssuchastheModel
Arrangements.1040

11.127

Itisagainimportanttorecognisethatthereisnostatutoryresponseagencyfor
offshorepetroleumsafetyincidents.1041Anoperatorisresponsibleforthesafety
emergencyresponseforitsfacility,andmaintainsthatresponsibilitythroughalllevels
ofemergency.Indiscussingthepossibleneedforastatutoryresponseagencyfor
safetyemergencies,APPEAexplainedthatthiswouldbefundamentallyin
contradictiontothesafetycasebasedregulatoryregimeapplyingtooffshore
petroleumfacilities.1042

11.128

ForAPPEA,andparticularlybecausetheonusisonoperatorstohavethefulland
demonstratedtechnicalskills,capabilities,experienceandcompetencytoidentifyand
reduceriskstoALARPlevels,theestablishmentofgovernmentoperatedorganisations
andassets(eitherfederalorstate)torespondtooilandgassafetyincidentswouldshift
theresponsibilityawayfromtheoperatorwhoshouldbebestplacedtoknowthe
specificrisksandthefacilityandactivities.1043

11.129

AccordingtoAPPEA:
where government has found it appropriate to invest in combat
agencies (AMSA, BPC, emergency services etc.), the investment has
been deemed justified because the industries involved and risks to
Australia are not all adequately managed through such a risk based,

1040AccordingtotheAustralianemergencymanagementarrangements,twodefiningfeaturesofa
catastrophicdisasterarethatitwill:notbepossibletoimmediatelymeettheneedsofthose
requiringassistancewithintheexistingcapabilityofanindividualstateorterritory,ornationally;
[anditwill]takeaconsiderabletimefromwhichtorecover.SeeAustralianemergency
managementarrangements,TheAttorneyGeneralsDepartment,CommonwealthofAustralia,
2009,p17.TheCommitteesoughtconfirmationofitsinterpretationoftheseemergency
responseprovisionsfromtheDepartmentofIndustry.Atthetimethisreportwastabledthe
Departmentsresponsehadnotbeenreceived.
1041MrAdamWelch,SeniorPolicyAdvisorWesternRegion,AustralianPetroleumProductionand
ExplorationAssociation,ElectronicMail,14April2014,p1.
1042ibid.
1043ibid.

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Chapter11
robustandrigorousregulatoryregimeasthesafetycaseandneedto
be managed and reduced for an appropriate cost. The existence of
these agencies for reasons not solely related to the oil and gas
industry,thencreatesaneedforOperatorresponseplanstointeractin
ordertorealiseALARPriskmanagementoutcomes.1044
11.130

Itisclearthatindividualtitleholdersandoperatorsareresponsibleforhumanand
environmentalsafetyunderthetermsoftheirindividualenvironmentalandsafety
emergencyresponseplans.Thesedocumentsaddresstheriskprofileofindividual
facilities,includingthedetailsofanythirdpartyagreementsforassistedemergency
responses.Assafetycasesarenotpublicdocuments,thecommandandcoordination
arrangementsinplaceforrespondingtoamajorincidentaregenerallyunknown.

11.131

ThissituationdiffersfromthatinNorwaywherethereisafargreaterlevelof
transparencyinrelationtooffshorepetroleumindustryactivity.

11.132

ItwasalsonotcleartotheCommitteewhatcommandstructurewouldbeinplacefor
anincidentthatrequiredbothsafetyandenvironmentalresponses.TheCommittee
soughtadvicefromDoISinrelationtocommandresponsibilitiesforacombined
emergencyeventandwhethertherewouldbetwoseparateresponsesoraconcurrent
process.DoISadvisedthat:
in the event of a significant offshore incident that involved both a
safety issue and an environmental emergency, these would be
managed as separate incidents. The operator of the facility is
responsible for implementing the response plan []. Simultaneously,
the titleholder [] is responsible for activating its Oil Pollution
EmergencyPlan[].1045

11.133

DoISfurtheradvisedthat:
the Australian Government promotes an all hazards, all agencies
approachtocrisismanagement,whichreflectsthemultifacetednature
any incident is likely to have. It is likely that the operator and the
titleholderwouldbecommunicatingandpotentiallycoordinatingtheir
responsestotheincident.Bothwouldalsolikelybeliaisingwithother
State/Commonwealth agencies as the incident unfolds. The OPICC is
designed to coordinate the wholeofgovernment strategic approach

1044ibid.
1045MrDamienTregear,AssistantManager,Environment,SafetyandSecurity,OffshoreResources
Branch,DepartmentofIndustryandScience,ElectronicMail,17April2015,p1.

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Chapter11
and assist and liaise with the relevant Control Agency where
Commonwealthresourcesarebeingdeployed.1046

Theneedforaregionalemergencyresponsecommand
11.134

WhiletheaboveprovidesalevelofreassurancetotheCommittee,theissueof
emergencyresponsecommandneedstobeconsideredinthecontextoftheoverall
developmentofoffshorepetroleumresourcesinaregion.Anumberofagencies
contributetotheassessmentandacceptanceofindividualsafetycasesand
environmentplans.However,theseplansareforindividualfacilitiesandaddressan
individualtitleholderoroperatorscapacitytorespondtoanemergency.

11.135

Atpresent,FLNGisthepreferredtechnologyofanumberoftitleholdersforthe
developmentoftheirpetroleumleases.GiventhepotentialoperationofmultipleFLNG
facilitiesofftheWesternAustraliancoastintheBrowseBasin,thequestionof
commandmustberegardedasanessentialelementinstrategicsafetyplanningforthe
region.However,intheassessmentprocessesconsiderationisapparentlynotgivento
theneedtodeveloparegionalplanforemergencyresponse;thatis,thereisno
overarchingbodythatconsidersfirst,theaggregateeffectofmultipleFLNGoperations
onsupportingandenablingsafetyinfrastructureorsecond,thecomplexityof
concurrentmultipleFLNGoperations.

11.136

Environmentalandsafetyemergencyresponseplansforeachoffshorefacilityare
providedtoNOPSEMAascomponentsofindividualSafetyCasesandEnvironment
Plans.Asnotedabove,thesearenotpublicdocuments.Itseemsunlikelythat
emergencyresponseplanswouldcontainproprietaryorconfidentialinformationand
operatorsgenerallyseemwillingtocooperateinrelationtosafetymatters.As
ConocoPhillipsMrMarkLeighputit,therearenosecretsinsafety.1047Anincreased
transparencyforthedetailsofafacilitysemergencyresponsearrangementswould
enhancetheabilityofthosepreparingdocumentationforNOPSEMAassessmentbetter
understandthetypesofarrangementsthatarepossible,andthechainofcommand
responsibilitiesforsafetyandenvironmentalemergencies.Itwouldalsohelpstate
agenciessuchasDMPandDoTbetterunderstandthearrangementsinplace,and
contributetothedevelopmentofaregionalapproachtoemergencyresponse.

1046ibid.
1047MrMarkLeigh,TeamLeader,AssetIntegrityandprocessSafety,ConocoPhillips,Transcriptof
Evidence,10November2014,p4.

269

Chapter11
Finding82
Thereisalackoftransparencyinrelationtotheemergencyresponseplaninformation
providedbyoperatorsintheirsafetycases.
Recommendation3
TheWesternAustralianGovernmentplaceontheCOAGagendatheneedforincreased
transparencyfromtheNationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthorityinrelationtoemergencyresponseplaninformation.
Finding83
Thereisalackofcertaintysurroundingthecommandstructureinplaceforamajor
emergencyincidentatanoffshorepetroleumfacility,particularlyanincidentrequiring
bothasafetyandenvironmentalemergencyresponse.
Recommendation4
TheWesternAustralianGovernmentplaceontheCOAGagendatheneedtodevelopa
programtoeducatestakeholdersinrelationtotheemergencyresponseresponsibilities
ofgovernmentagencies.
Finding84
TheaggregateeffectofmultipleFLNGoperationsonsafetyinfrastructureandthe
complexityofanemergencyresponseinvolvingconcurrentmultipleFLNGoperationsis
currentlynotbeingconsideredbygovernment.
Recommendation5
TheWesternAustralianGovernmentplaceontheCOAGagendatheneedforaregional
planforoffshoreemergencyresponse,onethatconsiderstheaggregateeffectof
multipleFLNGoperationsonsafetyinfrastructureandthecomplexityofanemergency
responseinvolvingconcurrentmultipleFLNGoperations.

MRIANBLAYNEY,MLA
CHAIRMAN

270

AppendixOne
InquiryTermsofReference
On15May2014,theEconomicsandIndustryStandingCommitteeannouncedthatit
willinquireintoandreportonsafetyrelatedmattersrelatingtoFLNGprojectsin
AustralianwatersofftheWesternAustraliancoast.TheCommitteewillinvestigate:

themeasurestakenbyprojectproponentstoensurethesafetyofworkerson
FLNGfacilities,particularlyinrelationtoextremeweathereventsand
emergencyevacuationpreparedness;

theadequacyofWesternAustraliasemergencycapacityandpreparednessto
respondtoasafetyorenvironmentalincidentinvolvingFLNG;and

theroleandresponsibilitiesofthestateandfederalgovernmentsinrelationto
FLNGemergencysituations.

271

AppendixTwo
Committeesfunctionsandpowers
ThefunctionsoftheCommitteearetoreviewandreporttotheAssemblyon:
a) theoutcomesandadministrationofthedepartmentswithintheCommittees
portfolioresponsibilities;
b) annualreportsofgovernmentdepartmentslaidontheTableoftheHouse;
c) theadequacyoflegislationandregulationswithinitsjurisdiction;and
d) anymattersreferredtoitbytheAssemblyincludingabill,motion,petition,
voteorexpenditure,otherfinancialmatter,reportorpaper.
AtthecommencementofeachParliamentandasoftenthereafterastheSpeaker
considersnecessary,theSpeakerwilldetermineandtableascheduleshowingthe
portfolioresponsibilitiesforeachcommittee.Annualreportsofgovernment
departmentsandauthoritiestabledintheAssemblywillstandreferredtotherelevant
committeeforanyinquirythecommitteemaymake.
Wheneveracommitteereceivesordeterminesforitselffreshoramendedtermsof
reference,thecommitteewillforwardthemtoeachstandingandselectcommitteeof
theAssemblyandJointCommitteeoftheAssemblyandCouncil.TheSpeakerwill
announcethemtotheAssemblyatthenextopportunityandarrangeforthemtobe
placedonthenoticeboardsoftheAssembly.

273

AppendixThree
Submissionsreceived
Publishedsubmissionsareavailableat:www.parliament.wa.gov.au/eisc/flngsafety

Name

Position

Organisation

MrLukeMusgrave

VicePresidentLNG

MobilAustraliaResources
CompanyPtyLtd

MrReeceWaldock

DirectorGeneral

DepartmentofTransport

CaptVicJustice

ChiefExecutiveOfficer

KimberleyPortsAuthority

MrShaneDaniel

CriticalRisk

DepartmentofMinesand
Petroleum

MsJanetHann

ProjectDevelopment
Manager

GDFSuezBonapartePty
Ltd

MsGailMcGowan

DirectorGeneral

DepartmentofPlanning

MrStephenWood

DirectorGeneral

DepartmentofState
Development

MrRogerMartin

VicePresidentCorporate
Affairs

WoodsideEnergyLtd

MsLaurenGorton

CommunicationsAdvisor

ShellDevelopment
(Australia)PtyLtd

10

MrBillTownsend

GeneralManager
ExternalAffairsandJoint
Venture

INPEXOperations
AustraliaPtyLtd

11

MrAdamWelch

SeniorPolicyAdvisor
WesternRegion

AustralianPetroleum
Production&Exploration
AssociationLimited

12

MrToddCreeger

President

ConocoPhillipsAustralia
PtyLtd

13

MrLarryhand

NationalPolicyand
StrategyCoordinator

MaritimeUnionof
Australia

14

MrRichardSellers

DirectorGeneral

DepartmentofMinesand
Petroleum

15

MrRogerMartin

VicePresidentCorporate
Affairs

WoodsideEnergyLtd

275

AppendixThree

Name

Position

Organisation

16

HonKenBaston

A/MinisterforEmergency WesternAustralian
Services
Government

17

MrCraigDonaldson
APM

ActingAssistant
Commissioner,Traffic
andEmergencyResponse

WesternAustraliaPolice

18

MrGregGuppy

Director,Schoolof
AppliedEngineeringand
ACEPT

AustralianCentrefor
EnergyandProcess
Training,Challenger
InstituteofTechnology

19

MrMichaelMarren

ExternalRelations
Advisor

ConocoPhillipsAustralia
PtyLtd

20

MrStuartSmith

ChiefExecutiveOfficer

NationalOffshore
PetroleumSafetyand
Environmental
ManagementAgency

21

MrBradGroves

ActingChiefExecutive
Officer

AustralianMaritime
SafetyAuthority

22

MrMikeBergin

RegionalDirector
(WesternAustralia)

BureauofMeteorology

23

MrStedmanEllis

ChiefOperatingOfficer
WesternRegion

AustralianPetroleum
Production&Exploration
AssociationLimited

24

ProfBryantStokes

A/DirectorGeneral

DepartmentofHealth

25

MrDamianDoherty

GeneralManagerHSSEW
&SP

ShellAustraliaPtyLtd

26

MrNAnticichAPM

AssistantCommissioner,
TrafficandEmergency
Services

WesternAustraliaPolice

27

MrJohnDagostino

GovernmentRelations
Advisor(Australia)

ShellDevelopment
(Australia)PtyLtd

28

MrBruceWilson

HeadofDivision,
Resources

DepartmentofIndustry
andScience

276

AppendixFour
Hearings
Publishedtranscriptsareavailableat:www.parliament.wa.gov.au/eisc/flngsafety
Date

7November2014

Name

Position

MrRichardSellers

DirectorGeneral

MrSimonRidge

ExecutiveDirector,
RSD/Chief
DangerousGoods
Officer

MrRossStidolph

Director,Petroleum
Safety

MrShaunGregory

SeniorVice
President,
Sustainabilityand
Technology

7November2014

Organisation

Departmentof
Minesand
Petroleum

WoodsideEnergy
Ltd

MrBrianHaggerty

VicePresident,
Technology

MrRoryOConnor

SeniorManager,
Health

MrIanBray

AssistantNational
Secretary

MaritimeUnionof
Australia

MrWilliam
Townsend

GeneralManager,
ExternAffairsand
JointVenture

INPEX

MrNigelWilson

SeniorIndustry
Adviser

MrStedmanEllis

ChiefOperating
Officer

MrAndrew
Woodhams

Director,Safetyand

Environment

10November2014

MrMarkLeigh

TeamLeader,Asset
Integrityand
ProcessSafety

ConocoPhillips

10November2014

MrStephenPrice

BranchSecretary

AustralianWorkers
Union

7November2014

7November2014

7November2014

277

APPEA

AppendixFour
Date

Name

Position

10November2014

MrLukeMusgrave

VicePresident,LNG ExxonMobil

12November2014

MrStuartSmith

ChiefExecutive
Officer

MrGavinGuyan

MrCameronGrebe

12November2014

19November2014

19November2014

26November2014

26November2014

Organisation

NationalOffshore
PetroleumSafety
GeneralManager,
andEnvironmental
SafetyandIntegrity
Management
Authority
GeneralManager,
Environment

MrAndrew
Doherty

GeneralManager,
HSSE

MrIanGrose

Commercial
Manager,Prelude

MrGeraldDixon

HSSEManager,
Prelude

MrLloydBailey

Deputy
Commissioner,
Operations
Command

MrGaryGifford

Assistant
Commissioner,
Operations
Capability

DrJeffreyDavis

PrincipalScientific
Officer

MrPeterJones

FireOfficer

MrRaymond
Buchholz

GeneralManager,
MarineSafety

MrStevenWenban

WARegional
HarbourMaster

MrSteven
McCartney

StateSecretary

MrGlennMcLaren

UnionOfficial

Australian
Manufacturing
WorkersUnion

MrRussellStringer

ActingRegional
Directorfor
WesternAustralia

Bureauof
Meteorology

MrAndrewBurton

Meteorologist

278

ShellAustralia

DepartmentofFire
andEmergency
Services,examined:

Departmentof
Transport

AppendixFour
Date

27November2014

12March2015

7April2015

Name

Position

MrBradleySantos

ActingRegional
Manager,Severe
WeatherServices

MrsCarolineCrow

ClientRelations
Manager,
Commercial
WeatherServices

CaptVicJustice

ChiefExecutive
Officer

MrStephenWood

DirectorGeneral

MsNickyCusworth

DeputyDirector
General,Strategic
Policy

MsJenness
Gardner

ExecutiveDirector,
Browse

MrGavinGuyan

ActingCEOand
GeneralManager,
SafetyandIntegrity

MrMatthewSmith

ActingHeadof
Division,
Environment

MrJeremyDunster

Manager,
Assessmentand
Inspection,Vessel
Facilities

279

Organisation

KimberleyPorts
Authority

Departmentof
StateDevelopment

NationalOffshore
PetroleumSafety
andEnvironmental
Management
Authority

AppendixFive
Briefings
Date

21July2014

21July2014

Name

Position

MrRoelvandeLint

Head,Department
ofOperations/
DeputyInspector
GeneralofMines

Organisation

StateSupervisionof
Mines,Ministryof
EconomicAffairs,
Agriculture&
Innovation,The
Hague,the
Netherlands

IrRPHVanElsen

Head,Department
ofEngineering

IngJDR(Hans)Weenink

DeputyHead,
Departmentof
Operations

JM(Jan)vanHerk

Head,Department
ofGeoEngineering

MrJeroenZanting

PlantManager

IrOlafWaals

Manager,Offshore

IrJosvanDoorn

Manager,Nautical
CentreMSCN

MrBruceSteenson

GeneralManager,
Programs&
Innovation

MrGerryDixon

HSEManager,
Prelude

MrJohnDagostino

Government
RelationsAdvisor
(Australia)

MsCatherineAitken

CXPTBusiness
Manager,Projects
&Technology(the
Netherlands)

WinthropProfessor
MikeEfthymiou

ShellEMIChairof
TheUniversityof
OffshoreStructures WesternAustralia

22July2014

281

GATETerminal,
Rotterdam,the
Netherlands
MaritimeResearch
Institute(MARIN),
theNetherlands

Shell

AppendixFive
Date

22July2014

Name

Position

MrRobKretzers

ExecutiveVice
President,Projects

MrBruceSteenson

GeneralManager,
Programs&
Innovation

MrIanJewitt

FLNGHSSETeam
Leader

MrSimonDurkin

VicePresident,
UserInterface
Safety,
Environment&
SocialPerformance

Shell

MsWindaEvers

Manager,Learning
Excellence

MrGerryDixon

HSEManager,
Prelude

MrJohnDagostino

Government
RelationsAdvisor
(Australia)

MsCatherineAitken

CXPTBusiness
Manager,Projects
&Technology(the
Netherlands)

WinthropProfessor
MikeEfthymiou

ShellEMIChairof
TheUniversityof
OffshoreStructures WesternAustralia

MrJohannesKjde

DeputyDirector
General&Director
ofStrategy,
Communication&
International
Relations

MrArneHolhjem

Director,
Technology&
Environment

MrHkonSkretting

RegionalDirector
Arctic,Australia,
Azerbaijan,Canada, INTSOK
China,Russiaand
Kazakhstan

23July2014

23July2014

Organisation

282

Norwegian
Petroleum
Directorate

AppendixFive
Date

Name

Position

MrNarveOma

PrincipalEngineer,
StructuralIntegrity

MrThorGunnarDahle

PrincipalEngineer
&SpecialAdvisor

MrKjellMariusAuflem

Supervision
Coordinator,Statoil
Shelfbased
activities

24July2014

MrToreJacobson

KeyAccount
Manager

NorSeaGroup

25July2014

MrOweHagesther

ChiefExecutive
Officer

NCESubsea

25July2014

MrAreNordahl

AreaSales
Manager,Asia&
Pacific

OneSubsea

MrBillMurray

ChiefExecutive

MrAlanJohnstone

ManagingDirector,
Brownfield&Asset
Management,
Europe,AMEC
FosterWheeler

23July2014

28July2014

28July2014

28July2014

MrSandyClark

Director,SRM&
Business
Development,
AMECFoster
Wheeler

MrLiamSmyth

Membership
Director

MrJulienMass

InternationalTrade
TeamLeader

MrJamesBream

Research&Policy
Director

MsRachelElliott

PolicyExecutive

MrTonyHetherington

HeadofEnergy
Division,
Operations

283

Organisation

PetroleumSafety
AuthorityNorway

Offshore
Contractors
Association

Aberdeen&
GrampianChamber
ofCommerce

UnitedKingdom
Health&Safety
Executive

AppendixFive
Date

28July2014

29July2014

Name

Position

MrPeterBrown

HeadofMajor
HazardsPolicy,
Hazardous
Installations
Directorate

MrJimStancliffe

HMPrincipal
Inspector,Energy
Division,Gas&
Pipelines

MrStuartRussell

SeniorTrade&
Investment
Manager

MrDavidRennie

Scottish
InternationalSector
Development
Head,Oil&Gas
International

MrRobinWatson

ChiefExecutive
Officer,Wood
GroupPSN

MrStevenWayman

ChiefExecutive
Officer,Wood
GroupKenny

CrGeorgeAdam

LordProvost

CrJennyLiang

CouncilLeader

CrWillieYoung

Convenor,Finance,
Policy&Resources

MsRitaStephen

Economic&
Business
Development
Manager

DrNicolasEllison

SeniorInternational
Trade&Investment
Executive

MrRobertPaterson

Director,Health,
Safety&
EmploymentIssues

29July2014

29July2014

29July2014
MrKenCruickshank

Operations
Manager

284

Organisation

Governmentof
WesternAustralia,
LondonOffice

WoodGroup

AberdeenCity
Council

Oil&GasUK

AppendixFive
Date

Name

Position

Organisation

26August
2014

MrSongBayChung

GeneralManager,
TongyeongLNG
Terminal

KOGAS

MrChrisGunner

Presidentand
CountryChair
(RepublicofKorea)

MrEvangelosKoukoulis

DeputyProject
Director,Prelude

MrCharlesSaunders

BusinessAdvisor

MrScottBaker

PreludeTechnical
HSSELead

MsJiWonOh

Headof
Government
Relations(Republic
ofKorea)

MrHuwJones

GlobalConstruction
Manager

MrGerryDixon

HSSEManager,
Prelude

MrJohnDagostino

Government
RelationsAdvisor
(Australia)

MrNickQuinn

GeneralManager

MrPhillipStarkins

Managerof
Preparedness

MrDaleJolly

SeniorTechnical
Officer

MrNathanYoung

SeniorTechnical
Officer

3March2015

MrPaulRyan

Upstream
Communications
andGovernment
RelationsManager

MrGerryDixon

HSSEManager,
Prelude

MrIanGrose

Commercial
Manager,Prelude

27August
2014

25February
2015

285

Shell

AustralianMarine
OilSpillCentre
(AMOSC)

ShellinAustralia

AppendixFive
Date

Name

Position

Organisation

4March2015

MrTerryOConnor

ChiefExecutive
Officer

DarwinPort
Corporation

MrCharlesKleiman

DeputyChief
ExecutiveOfficer

CaptainVikasBangia

Harbourmaster

MrScottBrawls

A/Operations
Manager

MsJulieHollingworth

Coordinatorof
Nursingand
Midwifery

DrSuePhillips

SeniorMedical
Officer

MsCarmenMorgan

RegionalNurse
Director

MrRobertAmm

ClinicalNurse
Manager
Emergency
Department

MrPaulRyan

Upstream
Communications
andGovernment
RelationsManager

MrGerryDixon

HSSEManager,
Prelude

MrIanGrose

Commercial
Manager,Prelude

MrJamieMcAlindon

AviationSupervisor,
Upstream
International

MrRobWilkinson

BroomeOperations
Supervisor,UIZ
Logistics

MrShaneCyr

BaseManager,
Broome

CHCHelicopter
Services

MrPhillipStarkins

DeputyGeneral
Manager

AustralianMarine
OilSpillCentre

4March2015

5March2015

5March2015

5March2015

286

KimberleyPorts
Authority

BroomeHospital

ShellDevelopment
(Australia)PtyLtd

AppendixFive
Date

Name

Position

Organisation
(AMOSC)

MrPhilLeigh

Emergency
Responseand
Training
Coordinator,Shell
Australia

MrGraemeCampbell

ShirePresident

MrKenDonohoe

ChiefExecutive
Officer

6March2015

MrTimothyBray

Director,Regional
Planningand
Projects

MsAnnaJohnson

6March2015

7March2015

7March2015

ShireofBroome

Kimberley
Development
Manager,Research, Commission
Analysisand
Economics

MsElsiaArcher

President

MrRossSullivan

DeputyPresident

MrStephenGash

ChiefExecutive
Officer

MrStuartMilne

President

MrPaulWhite

VicePresident

287

ShireofDerbyWest
Kimberley

DerbyChamberof
Commerce

AppendixSix
Glossary
ACEPT

AustralianCentreforEnergyProcessTraining

ALARP

Aslowasreasonablypracticable

ADF

AustralianDefenceForce

AGCMF

AustralianGovernmentCrisisManagementFramework

AMOSC

AustralianMarineOilSpillCentrePtyLtd

AMSA

AustralianMaritimeSafetyAuthority

AMSAAct

AustralianMaritimeSafetyAuthorityAct1990(Cth)

ANAO

AustralianNationalAuditOffice

AOPSCReview

AustralianOffshorePetroleumSafetyCaseReview

APPEA

AustralianPetroleumProductionandExploration
Association

AWU

TheAustralianWorkersUnion

AMWU

AustralianManufacturingWorkersUnion

APPEA

AustralianPetroleumproductionandExploration
Association

BIA

BroomeInternationalAirport

BOD

Basisofdesign

BoM

BureauofMeteorology

BroomeHospital

BroomeRegionalHealthCampus

CPU

Centralprocessingunit

CSIRO

CommonwealthScientificandIndustrialResearch
Organisation

DFES

DepartmentofFireandEmergencyServices

DMP

DepartmentofMinesandPetroleum

DoH

DepartmentofHealth

DoIS

DepartmentofIndustryandScience

DSD

DepartmentofStateDevelopment

DSMS

Divingsafetymanagementsystem

DoT

DepartmentofTransport

289

AppendixSix
EER

Evacuation,escapeandrescue

EERA

Evacuation,escapeandrescueanalysis

EESC

Earlyengagementsafetycase

EEZ

ExclusiveEconomicZone

EPBCAct

EnvironmentalProtectionandBiodiversityAct1999(Cth)

ETA

Estimatedtimeofarrival

FEED

Frontendengineeringdesign

FERA

Fireandexplosionriskanalysis

FID

Finalinvestmentdecision

FLNG

Floatingliquefiednaturalgas

FPSO

Floatingproduction,storageandoffloading

theFramework

OffshorePetroleumIncidentCoordinationFramework

FSA

FormalSafetyAssessment

GRSN

GlobalResponseSupportNetwork

HCU

Healthcareunits

HSE

HealthandSafetyExecutive,UnitedKingdom

HSSE

Health,Safety,SecurityandEnvironment

IPIECA

GlobalOilandGasIndustryAssociationforEnvironmental
andSocialIssues(formerlytheInternationalPetroleum
IndustryEnvironmentalConservationAssociation)

ISV

Infieldsupportvessel

km/h

Kilometresperhour

LNG

Liquefiednaturalgas

MAE

MajorAccidentEvent

theManual

NationalSearch&RescueManual

MARIN

MaritimeResearchInstituteNetherlands

MERPS

Medicalemergencyresponseplans

MLA

MemberoftheLegislativeAssemblyoftheParliamentof
WesternAustralia

MLC

MemberoftheLegislativeCounciloftheParliamentof
WesternAustralia

MOP

MarineOilPollution

MTE

MarineTransportEmergency

290

AppendixSix
MUA

MaritimeUnionofAustralia

NationalPlan

NationalPlantoCombatthePollutionoftheSeabyOiland
OtherNoxiousandHazardousSubstances

NCS

NorwegianContinentalShelf

NOPSA

NationalOffshorePetroleumSafetyAuthority(superseded
byNOPSEMA)

NOPSEMA

NationalOffshorePetroleumSafetyandEnvironmental
ManagementAuthority

NOPTA

NationalOffshorePetroleumTitlesAdministrator(Cth)

NT

NorthernTerritory

NTDoR

NorthernTerritoryDepartmentofResources

OGP

OilandGasProducers

OGP/IPIECAGuidelines

OilandGasProducersManaginghealthforfield
operationsinoilandgasactivities

OHS

Occupationalhealthandsafety

OIM

OffshoreInstallationManager

OIMS

OperationsIntegrityManagementSystem

OPGGSAct

OffshorePetroleumGreenhouseGasStorageAct2006(Cth)

OPGGSERegulations

OffshorePetroleumGreenhouseGasStorage
(Environment)Regulations2009(Cth)

OPGGSSRegulations

OffshorePetroleumGreenhouseGasStorage(Safety)
Regulations2009(Cth)

OPEP

OilPollutionEmergencyPlan

OPICC

OffshorePetroleumIncidentCoordinationCommittee

OPSLAct

OffshorePetroleum(SubmergedLands)Act1967(WA)

OPSLRegulations

OffshorePetroleum(SubmergedLands)Regulations1996
(WA)

OSRL

OilSpillResponseLtd

PETRONAS

PetroliamNasionalBerhad

RAN

RoyalAustralianNavy

SAR

Searchandrescue

SFRT

SubseaFirstResponseToolkit

SMS

Safetymanagementsystem

SOPEP

ShipboardOilPollutionEmergencyPlan

291

AppendixSix
SP

Socialperformance

Tcf

Trillioncubicfeet

Truscott

MungalaluTruscottAirbase

TSB

TerritorialSeaBaseline

UNCLOS

UnitedNationsConventionontheLawoftheSea

WARAME

WesternAustralianResourcesMedicalEvacuation

WestplanHealth

Stateemergencymanagementplanforhealth

WOMP

Welloperationsmanagementplan

ZOC

ZonesofConfidence

292

AppendixSeven
BrowseFLNGDevelopmentMajorAccidentEventsSummary

293

AppendixEight
ExampleofaHighPotentialIncidentAlert

295