Northern Territory Explanatory Statements

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GEOTHERMAL ENERGY BILL 2008

23
GEOTHERMAL ENERGY BILL
SERIAL NO. 22
LEGISLATIVE ASSEMBLY OF THE
NORTHERN TERRITORY

MINISTER FOR PRIMARY INDUSTRY, FISHERIES AND RESOURCES

EXPLANATORY STATEMENT
GENERAL OUTLINE

The exploration and development of geothermal resources is not currently regulated in the Northern Territory. Geothermal energy is a clean and renewable energy source that has low greenhouse gas emissions and is created naturally from heat deep within the earth. The Geothermal Energy Bill will introduce a regulatory requirement to allow for commercial and sustainable exploration and extraction of the Territory’s geothermal energy resources. The Bill is based on the regulatory model established in the Northern Territory’s Petroleum Act, Mining Act and Mining Management Act and the Victorian Geothermal Act.
Any physical activities conducted under this act will be subject to the Environmental Assessment Act, and the Environmental Offences and Penalties Act and Regulations made under these Acts.

NOTES ON CLAUSES

PART 1 Preliminary matters

Clause 1 Short title

Sets out the short title of the Act.

Clause 2 Commencement

Is the commencement provision which will be a date affixed by the Administrator in the Northern Territory Government Gazette.
Clause 3 Object of Act

Sets out the objectives of the Bill which is to provide a right to occupy an area to explore for geothermal energy resources, develop commercial energy production and to protect the environment.

Clause 4 Definitions

Defines various terms and words used in the Bill.

Clause 5 Block

Defines the meaning of a “block” based on the graticulation of the earth’s surface for the purposes of defining areas which are held as authorities under the Act.

Clause 6 Reserved block

Provides that the Minister may reserve certain blocks and prevent persons to apply for permits to explore those blocks except under certain circumstances.

Clause 7 Land to which Act applies

Provides for the application of the Bill to all land in the Northern Territory, and defines “land of the Territory” as including certain waters off the Northern Territory coast.

Clause 8 Act does not bind Crown

Determines that this Act does not bind the Crown.

Clause 9 Ownership of geothermal energy

Provides that the Crown owns all geothermal energy and geothermal energy resources in the Northern Territory and also provides that upon extraction, geothermal energy ownership will be transferred to the authority holder as stated in the authority.

Clause 10 Application of Criminal Code

Provides that the Northern Territory Criminal Code applies to offences against this Act.

Part 2 Exploration for geothermal energy resources

This Part provides for the administration of the various geothermal titles granted pursuant to the legislation. These include exploration permits, retention licences and production leases.
Division 1 Geothermal exploration permits

This Division provides general or common administrative matters dealing with exploration permits.

Clause 11 Geothermal exploration permit

Defines the rights of a permit holder and sets a term of up to five years for a permit.

Division 2 Applications for grants of permits

Clause 12 Invitation to apply for permit for reserved block

Provides for the Minister to invite applications for previously reserved blocks and details the information required in such an application.

Clause 13 General entitlement to apply for permit

Provides that any person may apply for one or more exploration permits on unreserved land and land without an existing authority for an area up to 2000 blocks without prior Ministerial approval.

Clause 14 Priority of applications for consideration

Sets out how to prioritise competing exploration permit applications.

Clause 15 Public notice of application

Prescribes the information to be provided to the public including the requirement for notification of a geothermal authority application to the public and interested persons, and sets out how an application for a Geothermal Exploration permit will be processed by the Minister.

Clause 16 Objections, submissions and responses

Sets out the process and timetable for dealing with responses received following public notification of an application.

Clause 17 Deciding application

Provides that the Minister may make a decision whether or not to grant an exploration permit only after consideration of the prescribed matters.

Division 3 Applications for renewals of permits

Clause 18 Application for renewal

Allows an exploration permit holder to renew the permit at the end of its terms and provides for a 50 percent reduction in size of the permit.

Clause 19 Deciding application

Determines that the Minister may renew the exploration permit if all relevant conditions have been met but may set different conditions

Clause 20 Limit on renewals

Provides that a permit may be renewed for further five year terms only twice.

PART 3 Evaluation of geothermal energy resources
This Part deals with the administration of a retention licence.

Division 1 Geothermal retention licences
A Retention Licence is a form of tenure that allows an exploration permit holder, who has discovered a geothermal resource, to hold tenure for a specified period under certain conditions but does not impose a production requirement due to the uneconomic viability at that particular time.

Clause 21 Geothermal retention licence

Provides that an exploration permit holder may apply for a retention licence in the permit area, or renew a retention licence, where the holder has discovered geothermal energy or geothermal energy resources. The grant period is up to five years and conditions may be set by the Minister. The holder may conduct prescribed activities but not proceed to commercial energy production.

Division 2 Applications for grants of licences

Clause 22 Application for grant of licence

Provides that permit holders may apply for one or more retention licences over all or part of the original exploration permit and sets out the details to be included in an application for a retention licence.

Clause 23 Decision to grant licence

Provides that the Minister may grant the retention license if a potentially commercial geothermal resource exists and application criteria have been met.

Clause 24 Effect on exploration permit and permit area

Describes the ongoing effects on the original exploration permit area of the grant or refusal of a geothermal retention licence application.

Division 3 Applications for renewals of licences

Clause 25 When application for renewal of licence to be made

Determines that an application for the renewal of a geothermal retention licence must be made at least three months before the expiry of the licence.

Clause 26 Deciding application

Determines that the Minister may renew the retention licence if all relevant application criteria have been met and also if there are extenuating circumstances, but may set different conditions to the original licence grant.

Clause 27 Limit on renewals

Provides that a retention licence may not be renewed more that twice.

Division 4 Requirements for licence holders

Clause 28 Requirement for commercial viability report

Provides that if requested by the Minister a retention licence holder must provide a report about the commercial viability of the geothermal resource within 90 days or such longer period as the Minister allows.

Clause 29 Requirement to apply for production lease

Provides the Minister with power to require a retention licence holder to apply for a production lease if the Minister is satisfied that commercial production of geothermal energy should begin in a license. It sets timetables for responses to requests and provides for licence cancellation if requirements are not met.

PART 4 Production of geothermal energy

Division 1 Geothermal production leases

Clause 30 Geothermal production lease

Defines the rights of a holder of a geothermal production lease and provides for a production lease to remain in force until surrendered or cancelled. No specific term is set for a geothermal production lease.

Division 2 Applications for grants of leases

Clause 31 Entitlement to apply for lease

Provides for a person to apply for a production lease over an area where evidence has been provided that it contains a geothermal energy resource, and where it is not over a reserved area or another person’s geothermal authority. This means that a production lease can be applied for over land where there is no pre-existing geothermal authority if there are good reasons.

Sets the size and shape of a production lease by providing simply that it be large enough to enable future development and production. It does not set a maximum or minimum size of a geothermal production lease.

Clause 32 Grant of lease

Provides that the Minister must grant a production lease if the applicant has met the application conditions and further, that the Minister may grant a production lease under other circumstances where the Minister is satisfied that grant of a lease is justified.

Clause 33 Effect of grant of lease

Determines that the area of the production lease is excised from the original authority. The original authority retains its integrity with potentially revised operating conditions.

Division 3 Payment of royalties

Clause 34 Liability to pay royalty under licence

This clause allows the Minister to include a condition that the licence holder must pay a royalty.

PART 5 General provisions for geothermal authorities

Division 1 Geothermal authority applications generally

This Division sets out general principles to be applied to all geothermal authorities.

Clause 35 Making geothermal authority application

This Clause determines that authority applications must be made in the approved form along with relevant supporting documentation and that the prescribed fee must accompany the application. If the application is on Aboriginal land it must include advice that the applicant is complying with Section 19 of the Aboriginal Land Rights Act concerning access agreements.

Clause 36 Applications relating to Aboriginal land or future act

This determines that applications made on Aboriginal land or that may result in a future act within the application area are not considered until all aspects of either Aboriginal Land Rights Act or Native Title Act have been complied with.

Clause 37 Necessary criteria for geothermal authority application

Defines necessary criteria to be met and details the information required to be provided with an authority application.

Clause 38 Procedure for making and notifying decisions

Describes the procedure for the Minister in making a decision on whether to grant or refuse authorities and the requirement to ensure procedural fairness.

Clause 39 Reasons for refusing geothermal authority application

Sets out criteria that the Minister may use to refuse the grant or renewal of a geothermal authority application.

Clause 40 Continuation of geothermal authority until related
decision made

Provides that an existing geothermal authority remains in force until a pending application for another authority over the area has been determined.

Division 2 Rights under geothermal authorities

Clause 41 Rights in connection with occupation of authority
area

Sets out the rights of an authority holder when occupying an authority area. It includes use of machinery and a right to secure or fence (with Ministerial approval) all or part of the area, keeping in mind the interests of other owners and occupiers of the land.

Clause 42 Right to construct road for access to authority area

This clause provides a right of access to the authority area.

Division 3 Conditions of geothermal authorities

Clause 43 General conditions

Prescribes conditions set in the Act and Regulations that are in addition to any conditions included in the authority by the Minister, noting that conditions set in a renewed authority need not be the same as in the original authority.

Clause 44 Certain conditions extend to operator

This clause sets out the obligations of the operator to abide by conditions on the authority.

Clause 45 Condition relating to compensation for future act

This clause prescribes the reimbursement to the Territory for compensation paid by the Territory under the Native Title Act as a result of a future act.

Clause 46 Compliance with approved operations plan and Minister's requirements

Prescribes that an authority holder must comply with an approved operational plan and any Ministerial requirements, and provides for an extension of the term of an authority should it be required to meet those requirements.

Clause 47 Compliance with other laws

Prescribes that the holder of a geothermal authority and any other persons acting on their behalf must comply with any requirements under a law in force in the Territory.

Clause 48 Actions following discovery of particular
resources

Requires the holder of a geothermal authority to immediately notify the Minister should they discover during their exploration geothermal resources, and also any non-geothermal resources such as minerals, petroleum or a significant underground water resource. It further requires them to protect an aquifer from any contamination.

Clause 49 Consent required from owners of certain land

Sets conditions on a holder of an authority to seek written consent from appropriate people before conducting activity in the vicinity of a residence or developed land, a watering point, or a cemetery.

Clause 50 Consultation with holders of mining and
petroleum interests

Requires that the holder of a geothermal authority must consult with holders of mining rights or petroleum interests over the same land relating to their work program prior to conducting activities.


Clause 51 Payments of fees

Requires the holder of an authority to pay fees and rents set by regulation and, if relevant, royalties to the Crown.

Clause 52 Annual report

Provides that the holder of a geothermal authority must provide a report on geothermal activities to the Minister annually and that the form and timing of the report may be prescribed in regulations.

Division 4 Variation of conditions of geothermal authorities

Clause 53 Application to vary conditions of geothermal
authority

Provides opportunity for the holder of the geothermal authority to apply to the Minister to vary the conditions of the authority that were set in the authority by the Minister. The Minister has discretion to accede to or refuse the request by amending, suspending or waiving a condition, or varying it in any way.

Clause 54 Extension of term of permit after suspension of condition

Provides discretion to the Minister in limited circumstances to extend the term of an Authority, to give the holder time to comply with a variation of a condition that places an obligation on the holder.

Division 5 Surrender of geothermal authorities or part of geothermal authority areas

Clause 55 Application for acceptance of surrender

Provides that the holder of a geothermal authority may seek approval of the Minister to surrender all or part of the area. The application must incorporate a report about the restoration and rehabilitation of the area.

Clause 56 When Minister may accept surrender

Determines that the Minister may accept the surrender of a geothermal application only if the holder has complied with all conditions of the authority and has discharged all their financial obligations to their workforce.

Division 6 Cancellation of geothermal authorities or part of geothermal authority area

Clause 57 Decision to cancel

Provides that the Minister may cancel all or part of a geothermal authority if the holder has contravened conditions of the authority or this Act, has not used good work practices, or has not paid relevant fees or royalty. In addition it confirms that the Minister is not prevented from legally prosecuting the holder for offences.

Clause 58 Effect of cancellation of geothermal authority

Provides that the holder of the authority that has been cancelled by the Minister may not re-apply for the same area for two years from the date of cancellation. It does not prevent other persons from applying for an authority over the area.

Division 7 Security and compensation

Clause 59 Security against environmental harm

Provides power for the Minister, at any time during the term of a geothermal authority, to require the holder to lodge a security against environmental harm and to effect rehabilitation of the authority area.


Clause 60 Security for compensation payable under the NTA

Provides that the Minister may require an applicant for a geothermal authority or variation to an authority to provide a security for compensation that may be payable by the Northern Territory for the effect of the grant or variation on native title rights and interests.

Clause 61 Form and amount of security

Provides that the Minister may determine the form and the amount of the security.

Clause 62 Compensation for damage to land

This clause prescribes compensation payable as a result of damage to land caused by the authority holder’s action.

Clause 63 Compensation payable under the NTA

This clause prescribes the liability of the authority holder under the Native Title Act.

Part 6 Technical work programs and geothermal energy operations plans

Division 1 Technical work programs

Clause 64 Technical work program

Prescribes the information to be included in a technical work program that must accompany a geothermal authority application.

Clause 65 Approval of technical work program

Provides discretion for the Minister to approve the work program if prescribed conditions are satisfied.

Division 2 Geothermal operations plans

Clause 66 Geothermal operations plan

Prescribes the information required to be included in an operations plan for a geothermal authority for approval from the Minister before commencing work and at all required intervals thereafter. The operations plan must include the program management system and the environmental protection system and any other information prescribed by regulation.

Clause 67 Approval of geothermal operations plan

Provides that the Minister’s approval of the geothermal energy operations plan must be in writing and may be subject to conditions relating to environmental assessment, security and intervals when the operations plan must be reviewed. If any part of a geothermal authority area is in a protected area, the Minister must take into account the opinions of the relevant Minister to ensure that provisions of the plan are not inconsistent with any plan of management for the protected area, which includes Parks and Reserves, wilderness zones and sanctuaries.

Clause 68 Variation of geothermal operations plan

Provides that the Minister may approve variations to the operations plan for the geothermal authority area and further provides that the Minister may require the holder to vary their operations plan.

Part 7 Geothermal Authorities Register

Division 1 Registration of information relating to geothermal authorities

Clause 69 Register

Provides that the Minister must keep a Geothermal Energy Authorities Register that is available to the public during normal business hours and determines that regulations may set an inspection fee and that persons may obtain a copy or summary of extracts from the register.

Clause 70 Evidence and validity of interest in geothermal authority

Provides that an interest in a geothermal authority is only capable of being created by an instrument in writing and defines the status of such written instruments.

Clause 71 Registration of transfer of geothermal authority
interest

Provides that the Minister may register the transfer of an interest in an authority upon application from the person who claims the interest. The transfer is not effective until it is registered. The application for approval of the transfer of a geothermal authority must be signed by all the parties to the transfer and requires that if significant changes are to be made to the work program that these must be notified at this time.

Clause 72 Registration of devolution of interest

Provides that a person who acquires an interest in a geothermal authority by devolution may apply to the Minister to have their name and interest entered in the register.

Clause 73 Minister to advise of entry in register

Upon entry into the register the Minister must provide advice to relevant persons along with a copy of the document entered in the register.

Clause 74 Correction of register

Provides that if an error or omission is discovered in a register entry the Minister must on his own initiative correct the register or a person may make application to the Minister to seek a correction to the register.

Clause 75 Minister’s certificates

Provides that the Minister may, upon receipt of an application in writing and the prescribed fee, provide a certificate certifying a matter in the register and such certificate is evidence admissible in a proceeding.

Clause 76 Application of Land Title Act

Determines that the Land Title Act applies in relation to land acquired under a geothermal authority and a mortgage of a geothermal authority and defines the Minister’s authority.

Division 2 Caveats

Clause 77 Lodgement and registration of caveat

Provides that a person claiming an interest in an authority may lodge a caveat preventing dealings with an authority and it becomes effective upon entry into the register.

Clause 78 Notice of caveat and application for removal

Requires the Minister to advise the holder of an authority of the registration of a caveat and provides the holder with power to apply to the tribunal for the removal of the caveat.

Clause 79 Effect of registration of caveat on dealings

Determines the procedures to be followed by the Minister in determining a dealing with a geothermal authority that has a caveat over it.

Clause 80 Withdrawal of caveat and effect of withdrawal or lapse

Provides that a caveator may remove a caveat by notice to the Minister and that it may not be renewed except by order of the tribunal.

Part 8 Environmental protection

Division 1 Preliminary matters

Clause 81 Environmental harm

Clarifies what constitutes environmental harm.

Clause 82 Levels of environmental harm

Defines in detail the various levels of environmental harm in terms of, environmental nuisance, material environmental harm and serious environmental harm.

Division 2 Environmental obligations

Clause 83 General obligation to take care of environment

Requires that every person in a geothermal authority area has an obligation to take care of the environment.

Clause 84 Obligations generally

Requires that persons in a geothermal authority area must comply with instructions and all reasonable directions to uphold the environmental protection strategy and must not cause environmental harm.

Clause 85 Obligations of owner who has appointed operator

Requires that the holder of a geothermal authority gives operators all relevant information about the environmental protection strategy and ensures that the operator is competent and has adequate resources to maintain the environmental protection strategy.

Clause 86 Obligations of operator

Requires the operator of a geothermal authority to ensure that the environmental management structure is competent, adequately resourced and effective; and that written instructions are prominently displayed and available to the workforce.

Clause 87 Obligations of workforce

Requires the workforce in a geothermal authority to keep themselves informed of environmental instructions and procedures and to report any serious environmental accident or risk.

Clause 88 Consequence of contravention of environmental obligation

Sets the level of offence should an environmental obligation be contravened but determined that the fact of environmental harm is not in itself evidence of an environmental offence.

Division 3 Environmental offences

Defines the various terms used to assess the causes of an impact on the environment for use in assessing penalties for environmental harm.

Clause 89 Serious environmental harm – recklessness

Determines the level of offence should a person be reckless about actions resulting in serious environmental harm. Level 1.

Clause 90 Serious environmental harm - negligence

Determines the level of offence should a person be negligent about actions resulting in serious environmental harm. Level 2.


Clause 91 Material environmental harm – recklessness

Determines the level of offence should a person be reckless about actions resulting in material environmental harm. Level 2.

Clause 92 Material environmental harm – negligence

Determines the level of offence should a person be negligent about actions resulting in material environmental harm. Level 3.

Clause 93 Environmental nuisance – recklessness

Determines the level of offence should a person be reckless about actions resulting in environmental harm that results in environmental nuisance. Level 3.

Clause 94 Environmental nuisance – negligence

Determines the level of offence should a person be negligent about actions resulting in environmental harm that results in environmental nuisance. Level 4.

Division 4 Serious accidents and critical incidents

Clause 95 Operator must report serious accident or critical incident

Provides that an operator of an authority must notify the Minister of a serious accident or critical incident as soon as practicable.

Clause 96 Operator must investigate serious accident

Requires the operator of an authority to investigate a serious accident or critical incident and provide a report to the Minister within 14 days.

Clause 97 No interference with place of serious accident

Makes it an offence to intentionally interfere with a place where a serious environmental accident has occurred.

Part 9 Legal proceeding, forfeiture or claim for delivery of seized thing and miscellaneous offences

Division 1 Legal proceedings

Clause 98 Commencing proceedings

This Clause limits the period to three years within which a prosecution for an offence may be commenced and determines that prosecution must have the written approval of the Minister, or be commenced by the Attorney General or Director of Public Prosecutions.

Clause 99 Continuing offences

Provides that where a person is found guilty of an offence that continuation of the offence will incur a continuing daily fine.

Clause 100 Liability of executive officers of body corporate

This Clause sets out the liability and defences of executive officers.

Division 2 Forfeiture of and notice to claim seized thing

Clause 101 Relevant offence

This Clause prescribes the offence relating to the seized thing. ‘Thing’ referring to any item an officer reasonably believes has been, is being, or is about to be used in connection with the offence.

Clause 102 Court may order forfeiture

This Clause deals with the costs of handling and storing the ‘thing’ and its fate after court.

Clause 103 Minister may give notice to claim delivery

This Clause deals with the return of a seized thing if court action does not commence or does not order it forfeited to the Territory.

Division 3 Miscellaneous offences

Clause 104 Compliance with conditions of authority

Provides that an operator for a geothermal authority is guilty of an offence if the operator intentionally engages in conduct that will contravene the conditions of the authority.

Clause 105 No activities without authority and approved operations plan

Provides that an operator for a geothermal authority is guilty of an offence if the operator intentionally and recklessly conducts geothermal activity when there is no current authority or approved operational plan.

Clause 106 No interference with geothermal energy activities or other work

Provides that a person who intentionally interferes with legitimate geothermal activity is guilty of an offence.

Clause107 Misleading information and document

Provides that a person who intentionally and knowingly provides misleading information (as defined in the Clause) or documents to a person acting in an official capacity is guilty of an offence, unless they draw attention to the misleading aspect of the information and attempt to correct the information or documentation.

Clause 108 Impersonation

Makes it an offence to falsely represent that someone is a geothermal officer or is an authorised person.

Clause 109 Obstruction and abusive language

Makes it an offence to cause obstruction or use abusive, threatening or insulting language to an officer or person exercising powers or performing functions under this Act.

Part 10 Administration

Division 1 Minister’s powers

Clause 110 Delegation

Prescribes that the Minister may delegate any powers under this Act

Clause 111 Minister may require further information and prescribed fee

Provides that in any situation where an applicant is required to obtain the Minister’s decision that the Minister may at any time require the applicant to provide additional information and further, that the Minister may require the holder of a geothermal authority to give the Minister information about the authority.

Clause 112 Requirements to be in writing

Determines that if the Minister requires a person to give information or take an action under this Act, the requirement must be in writing.

Clause 113 Minister may extend time

Provides that if this Act specifies a time for person to take an action, the Minister may extend the time if satisfied there are circumstances to justify the extension.

Clause 114 Minister may take action if condition or requirement contravened

Provides that, if there is a requirement to take an action on a geothermal authority, subject to conditions or Ministerial direction, and it has not been taken that the Minister, or an authorised person, may enter the authority to take the action at the cost to the authority holder, or former holder as the case may be.
Clause 115 Guidelines

Provides that the Minister may publish guidelines in any relevant way relating to authorities and these may apply standards or codes or other documents.

Clause 116 Approval of forms

The Minister may approve forms to be used under this Act.

Clause 117 Release and protection of information

This Clause describes the timely release of data and the protection of commercial in-confidence information.

Division 2 Geothermal energy officers

Clause 118 Appointment of officers

Provides that the Minister may appoint appropriately qualified public sector officers to be geothermal energy officers.

Clause 119 Identity card

Geothermal energy officers will be required to carry an identity card in a prescribed format while they have the responsibility of such an officer and must produce such card upon request when purporting to exercise a power under this Act.

Clause 120 Functions of officer

Defines the functions of a geothermal energy officer

Clause 121 Powers of officer

Defines the powers of a geothermal energy officer

Division 3 Review of decisions and hearing of other matters

Clause 122 Regulations may provide for reviews and hearings

Determines that regulations may be made to provide for the Lands, Planning and Mining Tribunal or a court of competent jurisdiction review of Ministerial decisions relating to geothermal energy authorities, entry of information in the register and other relevant decisions.

Part 11 Miscellaneous matters

Clause 123 Acquisition on just terms

Provides that, should actions under this Act result in the acquisition of property that a person is entitled to compensation on just terms and that a competent court may determine such just terms.

Clause 124 Protection from liability

Provides that a person acting as an officer, a person assisting an officer or an authorised person under this Act is not civilly or criminally liable for an act done or not done in good faith while exercising their powers under this Act.

Clause 125 Regulations

Provides that the Administrator may make regulations under this Act and prescribes matters that may be dealt with by regulation.

 

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