Dishing the dirt on Santos' Queensland oil spill

IN MAY oil spilled from a well in south-west Queensland owned by Australian oil and gas company Santos.

In what may be the state's third largest spill, more than 250,000 litres of oil flowed from the well into the surrounding environment.

While Santos has plugged the well and cleaned the area, the state government monitored the spill via satellite. So, when it comes to oil spills, who is responsible for regulation?

The spill itself is not a particularly huge amount of oil, but it is significant for the potential effects on both the local and wider environment. The leak occurred in the Channel Country, where rain flows over the country like ribbons rather than rivers, and eventually flows into Australia's inland icon, Lake Eyre.

For Santos and the migratory birds that use Lake Eyre as a breeding ground, it was fortunate there were no rains or floods at the time of the spill. Santos claims now that all of the contaminated soil has been removed to a bioremediation area.

Arguably the most important issue that arises out of the Santos incident is that of well integrity and well control. Well integrity involves maintaining control of a well so it doesn't leak. Loss of control was the cause of BP's Deepwater Horizon spill in the Gulf of Mexico and the Montara oil spill off the coast of Western Australia.

Well control is at the heart of preventing environmental harm, but it's not assessed as part of the environmental plan. Instead, it's assessed as part of well management. The environment plan and the well operations management plan are treated as two separate systems. And this is the heart of the regulatory problem.

So, what's the difference?

Environmental management tries to reduce the impact of any activity to as low as reasonably practicable, whereas well management utilises a minimum standard of good oilfield practice according to what other companies are doing to maintain well control and integrity.

Environment and safety might be regulated to the max, but well integrity is regulated to the minimum. And it's this that causes oil spills when it goes wrong.

Jurisdictions such as Norway integrate the two systems to ensure that the assessment of the activity occurs as one integrated assessment, to a maximum standard. Unless and until this occurs, this oil spill conundrum will continue.

Santos has responded to the spill in a manner that is consistent with a spill-response plan - stop the source of the oil spill, and remove the oil that flowed over the surface. The ABC reports a team of US specialists were brought in to help out, and the spill was contained within six days.

But the fact it took six days for US specialists to contain the leak indicates a lack of local response capability that must be investigated and addressed. Whether Santos' response was adequate will be confirmed when the company's report into the incident is released in two weeks.

In the meantime the oil spill brings to the fore the larger issue of the government response to the spill itself. If this incident had involved the injury or death of a person, government inspectors are required to immediately attend the site of the incident and investigate. Such investigations could lead to remedial action or prosecution.

According to media reports no government personnel have attended this incident. Since it is an environmental issue, the spill is handled by the company. While the government has said it used satellite data to monitor the area and verify Santos' reporting of the incident, the spill highlights the weaknesses of the present regulatory framework to respond to environmental issues.

The regulator, whoever it is, needs to look beyond the immediate effects of the incident to what could have been.

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