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Economics Legislation Committee
National Offshore Petroleum Safety and Environmental Management Authority

National Offshore Petroleum Safety and Environmental Management Authority


CHAIR: I welcome the representatives of NOPSEMA and thank you for being so patient and waiting. You're our last guests for the evening. Do you have an opening statement for the committee?

Mr Smith : Only to say thanks for the opportunity to speak tonight. We've had a few issues in the media of late and this will be a good opportunity to address some of those, I expect. I will also flag that I'm currently suffering from some bronchitis, so my colleagues are probably going to do more talking than I will. But, fortunately, they're very competent, and between the three of us we hope to be able to answer everything you have.

Senator STORER: I'm interested in the approval that NOPSEMA gave to the Norwegian subsidiary PGS in January this year for seismic testing in the Great Australian Bight. I think it's well documented that southern right whales and their calves migrate through the area NOPSEMA approved for seismic blasting through September, October and November 2019. I have been told that there's evidence that there was one mother-and-calf pair that were not strong enough to leave for their long journey south until December, verified by the South Australian Whale Centre sighting log. That's outside the September to November period that was set for seismic testing. Did the recent conditional approval for seismic testing in the Great Australian Bight given to PGS take into account migration routes of southern right whales?

Mr Smith : I'll get Mr Grebe to address that one. He is the head of the environment division.

Mr Grebe : Thank you, Senator, for the question. The short answer is yes, we did answer the impacts on a full range of relevant marine fauna at that time of year and that location, including southern right whales. It was part of the assessment decision-making and also drove part of the conditions that were being established that you mentioned that were attached to the approval.

Senator STORER: The conditions were that seismic blasting is between September and November 2019 and possibly again from September to November 2020—is that right?

Mr Grebe : Seismic surveys, or blasting—in ancient history, dynamite was actually a technique used, but thankfully that was well and truly phased out. These days seismic testing uses compressed air released to generate an air bubble to create a popping sound which sends acoustic energy into the sea bed. I wouldn't call it blasting. But yes, during that period, the environmental impact assessment that was conducted for the survey considered the impact of the sound from the acoustic array over the whole survey area using sound modelling and predicting potential impacts on sound using relevant available science. It was shown to not have a significant impact on the ability of the southern right whales that you mentioned, for example, as a species to migrate.

Senator STORER: So the seismic testing is approved for September to November 2019 or outside of that period?

Mr Grebe : Only within that period in 2019 or 2020. It's approved to be conducted across those months in both or either of those years. However, particularly in the latter part of both those periods, there is the potential for the commencement of upwelling, which is nutrients coming from deeper cold waters welling up, and that is what attracts feeding blue whales and pygmy blue whales later on in the year and the aggregations of tuna. So the conditions predominantly relate to ensuring that the survey wouldn't continue in those periods should there be critical life activities. It's a biologically important area identified in the blue whale recovery plan, for example. The survey wouldn't continue regardless of the fact that the potential for seismic was included in the environment plan in those later periods with the conditions, and the arrangements in the environment plan would prevent the company from continuing to operate.

Senator STORER: Are you aware that the Australian government agreed to the UN Convention on Migratory Species noise EIA guidelines in October 2017?

Mr Grebe : Yes.

Senator STORER: Are you aware that that makes it clear that independent review of seismic survey environmental impact assessment should be required?

Mr Grebe : Yes.

Senator STORER: Did NOPSEMA require PGS to conduct an independent review into the veracity of scientific evidence on seismic impacts?

Mr Grebe : The Australian government arrangements are that—and this is quite common—the proponent conducts the environmental impact assessment. We achieve the independent review of those impact assessments by NOPSEMA, which the government has established to independently regulate the offshore petroleum industry. We do conduct that independent review. That's our role. We don't prepare the environmental impact assessment report. We do review it with subject matter expertise—

Senator STORER: So the independent review is NOPSEMA?

Mr Grebe : Yes. There's not an independent review of the independent review.

Senator STORER: Yes, but the independent review is not independent of you.

Mr Grebe : We are the independent review. We are not part of the proponent; we are completely separate from the proponent.

Senator STORER: But the independent review is not another body—it's not someone else.

Mr Grebe : We are the body that is the independent review.

Senator STORER: It's just interesting. You're the independent review but you are the body that will provide the approval as well.

Mr Grebe : We don't have any role in conducting seismic surveys, releasing exploration permits or promoting oil and gas development. We're purely considering whether the environmental impact of the survey, for example, if it's a seismic survey, could be conducted without unacceptable impacts.

Senator STORER: So you're independent of government, and that's why you can do it?

Mr Smith : If I could just add: that's partly why NOPSEMA has been established as an independent statutory authority, whereas other elements of the offshore petroleum regime, like NOPTA, are part of the department.

Mr Grebe : The thing that wasn't clear, probably, in terms of decision-making, which is a bit unusual as to other regulators, is that all of the powers to decide to approve or reject environmental approvals or safety approvals in the legislation have been provided to NOPSEMA, as the authority.

Senator STORER: Yes, that's right.

Mr Grebe : So the minister doesn't have any role, and we don't communicate with the minister or the department on our decision-making.

Senator STORER: That's one way to look at the independence of NOPSEMA.

Mr Grebe : I'm not sure you can make it any more independent!

Senator STORER: What I mean is: it's one way to look at the decision-making process regarding that. You're making the point that it's independent of the minister, so there's validity in that. Other people would put that, if the minister was involved, there would be further assessment undertaken beyond NOPSEMA's viewpoint. But I don't have a question for you on that.

Senator Canavan: That's really a policy matter, I suppose. The parliament has established this arrangement, which Stuart and his team are dutifully exercising.

Senator STORER: Yes. It seems appropriate that, in a region of such ecological significance as the Great Australian Bight, broad and deep consideration of peer-reviewed scientific evidence as to seismic testing should be required. To what extent did NOPSEMA consider the impact of seismic testing on zooplankton and, in particular, krill?

Mr Grebe : The environmental impact assessment—sorry; NOPSEMA's decision-making, starting with that, and our assessment process, consider, certainly, the applicant's environmental impact assessment, which does include and rely on environmental research that has been conducted, and they apply that in the environmental impact assessment process. We also have our own sources of research and knowledge and expertise that we stay abreast of through participating in conferences and engaging with the research community. But, in individual assessment processes, both of those sources of information are used to inform decision-making, and, in this particular example—you brought up zooplankton—primary productivity was a key matter that was of concern to stakeholders, and we reported that, in the key matters report that we published, supporting the publication of the full environment plan that the proponent had submitted, where we explained how the research on zooplankton—I'm assuming you're referring to recent research done by the University of Tasmania by McCauley a couple of years ago in Tasmania, but also subsequent research from the CSIRO—

Senator STORER: Yes.

Mr Grebe : and also other researchers' commentary about that zooplankton—

Senator STORER: Yes. That is my question: did you consider scientific evidence which has shown that widely-used marine seismic survey operations negatively impact zooplankton? Did you consider that?

Mr Grebe : Definitely. If some people have been claiming, as we've seen in the media, that seismic surveys don't harm the marine environment in any way, that's incorrect. Certainly we take into account the fact that zooplankton can be affected by seismic, and that's taken into account in decision-making. Zooplankton is highly reproductive in large amounts and has a relatively high mortality rate.

Senator STORER: You did refer to McCauley, and that's one article I have, from Nature Ecology & Evolution, and the abstract notes that it presents 'evidence that suggests seismic surveys cause significant mortality to zooplankton populations'. Would you—

Mr Grebe : The abstract does say that. So we do take that into account, but also other research and information, and—particularly important—applying it to a particular circumstance and understanding how observations from that study, plus other information, can be used to infer the impacts in the particular application. So we don't look at research in isolation. We always ensure that it takes into account the particular location, the environmental setting and the nature of the survey.

Senator STORER: As McCauley stated:

There is a significant and unacknowledged potential for ocean ecosystem function and productivity to be negatively impacted by present seismic technology.

Yet, despite that, you were able, in your assessment, to—

Mr Grebe : That's not an impact assessment, that's a summary of conclusions of what one research activity produced. The Australian government's CSIRO published a study applying the results of that to a typical seismic survey, bearing in mind that the research in Tasmania was not using a full-scale seismic air gun array or water depths where a seismic survey is typically conducted. So they took the information out of that research and applied it to a typical seismic survey—the example they used there was in the north-west—and concluded that zooplankton levels would recover to normal in three to four days, even if you applied the assumptions out of the McCauley research. The paper that CSIRO published on that also goes to the question of whether the results are realistic and could be expected through oddities, like the fact that there is no change in the level of zooplankton mortality no matter what the distance from the exposure point.

So it's taking the most significantly extreme data points around the effects of seismic on zooplankton that have been produced worldwide—and it's not the only study. But taking that extreme conclusion applied in an assessment impact model is what we have to decide things on, and that study shows that there aren't significant impacts anywhere near in the longer term.

Senator STORER: I'll now turn to the decisions regarding Equinor. How would you characterise the extent to which NOPSEMA has provided advice, assistance or support to Equinor in its efforts to develop and obtain approval for its proposed Great Australian Bight drilling environment plan—what advice, assistance or support?

Mr Grebe : NOPSEMA was established under the Offshore Petroleum Greenhouse Gas Storage Act. We have a range of functions under that act that generate the regulatory activities that we do. One important part of those functions is to provide advice on the range of regulatory responsibilities we have, including environmental management law. Clearly, we publish policies about how we go about providing that advice—which is publishing guidance and also assisting proponents and the general public or community in understanding how the environmental management requirements work under our legislation, along with better practices and good practice examples.

In your specific case there of Equinor: like all other title holders, we have met, certainly, to provide them with advice on the requirements—

Senator STORER: That's another question I have: how many meetings would you say that NOPSEMA has had with Equinor?

Mr Grebe : I'd have to take the exact number of meetings on notice.

Senator STORER: That's okay.

Mr Grebe : Generally, we have meetings with title holders from three or four, up to—sometimes—20 times in the space of two years. That's not unusual.

Senator STORER: Yes. Have you had any meetings take place overseas—that is, in Norway? Any meetings?

Mr Smith : I can answer that one, Senator. I've had one meeting in Norway. I was over there for another activity related to our work. I was in Stavanger, and sought a meeting with them to convey some of the concerns that had been raised in Australia and to make sure that they were aware of what issues were likely to arise if they wished to proceed with an environment plan.

Senator STORER: Thank you—

Mr Smith : Could I add that one of our functions is, of course, providing advice. We've recorded close to 800 liaison meetings in the last year with various parties across all the activities we have. So it's not unusual; in fact, that's a very active way that we seek to advise the parties so that they can provide and meet the compliance we're requesting.

Senator STORER: Okay.

Senator Canavan: Likewise, Senator, the discussion has reminded me that the government, or myself as minister, have provided a statement of expectations to NOPSEMA where, in part, we outlined that one of their roles is to ensure that they communicate appropriately the obligations from a safety and environmental perspective, not only to the industry but also to title holders and those with big production licenses.

CHAIR: I'm conscious of time. Perhaps we could come back to you, Senator, or are there any you could put on notice?

Senator STORER: I could move through them quickly.

CHAIR: Very quickly.

Senator STORER: Okay. The voluntary public comment period has been established by Equinor, but uses NOPSEMA's online forms. Is it a normal process that you go to Equinor's site and it takes you to NOPSEMA's site for the public comment? Is that correct? Is that a normal process?

Mr Smith : The whole process is new. To date, there isn't a requirement for companies to undertake a public comment period. The government has indicated that that's going to be introduced in the not too distant future and Equinor has volunteered to operate in that manner anyway. So, in effect, they're the first company to undergo this approach, which we are expecting then to become the norm.

Mr Grebe : But the process of the regulator being the body that provides the portal or the submission home, if you like, for public comments is normal, and it will be the way that the new regulations operate when they commence, we understand.

Senator STORER: Will the public comments collected for the Equinor public comment be made public?

Mr Grebe : Yes.

Senator STORER: All public comments?

Mr Grebe : NOPSEMA was requested by Equinor to consider whether we could provide the facility to assist in receiving the public comments. Their feedback was that that was what stakeholders were wanting. They wanted to tell the regulator, not the company, what they thought of their draft environment plan—

Senator STORER: Will they be made public—

Mr Grebe : and we agreed with that on the basis that it would be aligned with the future legislation, which requires the proponent to prepare a report on public comment, but also that we provide a report at the end of the assessment process on how we took public comments into account.

Senator STORER: A report, but it won't be published—

Mr Grebe : If people request information remains confidential, we can't commit to make all comments public. But the intention, as it is with other environmental approval systems, is that the summary of the comments and the nature of the comments received will be published—yes.

Senator STORER: How long does it take typically for NOPSEMA to review environmental plans that, for example, support applications to drill for oil in the Great Australian Bight?

Mr Grebe : We have a statutory time frame to make a decision on a submission within 30 calendar days.

Senator STORER: Review and environmental plan, within 30 days?

Mr Grebe : Yes. We have a 30-day statutory time frame. We have the ability to extend that time frame for particular circumstances, including complex assessments, which we do from time to time. There are recent examples of that with the PGS Duntroon seismic survey in the Great Australian Bight—

Senator STORER: Would you say that 30 days for public comment on an environmental plan is sufficient?

Mr Grebe : It depends on the nature and scale of the environment plan—

Senator STORER: The public comment ones.

Mr Grebe : We set the time based on the complexity assessment. If there is a more complex assessment, we take the time necessary to make a thorough assessment.

Senator STORER: The public comment period—

Senator Canavan: I think it's important just to clarify the process.

Mr Smith : A couple of things there: to put it into context, the public comment period comes after the company has already undertaken all of the consultation requirements that they have to complete for the environment plan process anyway. So, it's in addition to that. And if we are not satisfied when they submit their environment plan that they've actually taken on board all of the relevant issues and addressed them, then we won't grant approval.

Senator STORER: I'm trying to understand whether restricting public comment to a 30-day period is useful really for the public to have enough time to work through this very significant environmental plan. As you know, it's hundreds of pages long. Is giving the public 30 days enough, given that you may well take a lot longer yourself.

Mr Grebe : We decided on 30 days, based on the fact that the exposure draft of the regulations to amend the environment regulations that operate now—and introduce a period of public comment for exploration environment plans—is at the moment drafted to be 30 days. Those regulations haven't passed but that's the benchmark we have used. It's also aligned with the 20 business days that are in place for referrals under the EPBC Act, where there can be similar amounts of information.

Senator PATRICK: I'd like to table something, just to help guide us through this line of questioning that I've got, and it's really just to help the witnesses as well. Once they've got it, the minister might want to have a look at this. I've got two pages of pictures which come from the acoustics book. The third page is an acoustic model that I generated this afternoon on Excel, just using basic acoustic theory, so it's first order but it's designed to illustrate a point. I've read the PGS submission quite extensively. I can see they've got a seismic survey configuration where they've got an acoustic source—that's got a source level of 256 dB, which is quite high—which they operate at seven metres. Obviously, that transmits sound outward. The first pictures are not quite accurate but are designed to show how typically, when sound is transmitted through the ocean, it is transmitted spherically. Basically, every time it doubles its range it loses about 6 dB. If you go to the third page, in the first column is the range in metres and in the second column is what's happening with spherical spreading. Are you with me, Mr Grebe?

Mr Grebe : Yes.

Senator PATRICK: Okay. So we can see that, in a circumstance where you've got spherical spreading and a source level of 256 dB to start with, by the time you've gone 4,000 metres the source level will have dropped to about 184 dB. That's about the level where a dolphin will start to suffer hearing injury. The bottom line is that at anything outside 4,000 yards it becomes less of a problem for a dolphin—so a reasonable distance away.

If I look at the second page, that shows a different situation where the sound velocity profile, which is basically the speed of sound as a function of depth, has trapped the sound in a surface duct and the sound is travelling. Basically, because it's trapped, it doesn't lose as much energy as a function of range. The formula for that normally is 10 log the range, and there's a factor taken in for the height. That's the third column in my little model here. You can see that, if I go out with cylindrical spreading, the sound will actually travel about 256 kilometres before it drops below 185 dB.

The point of that exercise is to show you that the amount of attenuation in the sound varies significantly depending on the sound velocity profile. I know this because I've operated in submarines and we used this extensively to try to either hide or get very long detection ranges. So it's a really key factor in sound propagation that you use an accurate sound velocity profile. I think I've provided the sound velocity profiles that have been used by PGS in the PGS submission, on pages D3 and D4. There's a significant problem here that I'm going to put to you, and I'm giving you the opportunity to respond. These sound velocity profiles have basically been taken from US data, which I have no problem with. There are a number of different sound velocity profiles, and in fact the black one, for May, is the worst. That's the one that most likely will cause some level of cylindrical spreading, and indeed the study suggests that they've used the May one because of that situation. So it's a worst case based on these four diagrams.

Mr Grebe : Yes.

Senator PATRICK: The problem is that this is a mean over the month. Unfortunately, sound velocity profiles change. The Navy will measure it every eight hours because it changes significantly. Using a mean over a period of a month, even though you have picked the worst mean, actually does not cover off on the day-to-day events that occur in the ocean. So you are going to have a situation where the worst case in May may well be significantly worse than the mean. That means that if the acoustic modelling has been done using the sound velocity profiles as indicated in the study then you have grossly underestimated all of the possibilities that could occur. So if you happen to be a whale, dolphin or sea lion and you are out in the ocean on a day that that's worse than the mean then the propagation models that are presented in your study are not accurate and could cause harm.

Mr Grebe : Thanks for the detailed question. The point to clarify perhaps is that it's not our study. It's the study, as you pointed out, of PGS. We have assessed the study. I'm definitely not going to get time to explain all the answers, but we can commit to providing more detailed answers on notice. There are a couple of points to note. You have to be careful in taking simple models to estimate and calculate propagation of sound. Having the experience you have, you would appreciate that. There are two points which taking a simplified approach overlooks. One is how you model the sound source itself, using a simple single-point sound source. In fact, surveys are designed so that sound doesn't come out all ways—

Senator PATRICK: I've had a look. It's in one of the annexes. It shows the pattern of a transmit array. It's quite omnidirectional. It doesn't just transmit downwards.

Mr Grebe : But it is higher than the vertical plain, so you can't overlook that. The second element is that a simple spherical and cylindrical model is insufficient, particularly for assessing sound from seismic conducted over a larger space in time, and propagation transmission losses—

Senator PATRICK: On the transmission losses, this source basically has a photofrequency range of zero to 210 hertz. Transmission losses at those very low frequencies are so insignificant they are almost not used. When you get up to 200 kilohertz, it makes a really big difference. But down really low, from memory, it's about 0.03 dB per thousand metres. It's insignificant. So I accept these are first order models, but you can see the difference between a standard situation and a spherical spreading and a cylindrical spreading situation of something like 200 kilometres in distance. They are the fundamental physics. I can assure you that models, whilst they are better, won't vary too much either side of that. They are the fundamentals—six dB per doubling of range for spherical spreading and three dB losses per doubling of range in cylindrical spreading.

Mr Grebe : The modelling conducted by JASCO, which is an independent contractor with extensive global experience in modelling—

Senator PATRICK: Don't rely on the presentation. I'm actually after a technical answer to a very technical question. I'm saying this is quite a significant error in the modelling that's been used. You cannot use a mean. Go and talk to them—

Mr Grebe : I haven't addressed the mean point yet. The seismic survey's not been conducted in May—

Senator PATRICK: It doesn't matter. The point is all you have used is a mean. Using the mean is absolutely the wrong technique to use. You need to use the worst case because, when you're conducting the seismic testing over several months, you are sure to have, in those several months, a very strong surface duct. I can almost guarantee you that from my experience operating in the Great Australian Bight—

Mr Grebe : In those months, are you talking about?

Senator PATRICK: Well, in submarines. But I can assure you, it changes from day to day.

Mr Grebe : I appreciate that it changes day to day. But the survey isn't being conducted in May; it's being conducted in September-October and through November. I appreciate there's change, but the potential for that big a change in sound speed profiles in those months, even using—

Senator PATRICK: You're under oath, and I think you're guessing.

Mr Grebe : I can take on notice a commitment to respond in detail—

Senator PATRICK: It might be a better idea to do that, because, quite seriously, I'm very familiar in this space. I used to teach this stuff.

Mr Grebe : I appreciate that.

Senator PATRICK: Following on from that, do you know where the peak for the transmission frequency is? It's clearly a broadband source. What's the peak frequency for transmission?

Mr Grebe : For the source? The peak sound pressure level?

Senator PATRICK: Yes. It will have a frequency range. At each different frequency it will have a different source level, and it will have a peak at a particular source level—at some particular frequency will be where the peak of the energy is.

Mr Grebe : It's complicated in the array, but, in any case, the peak SPL across all frequencies is 255 pascals.

Senator PATRICK: No, it will not work like that. You will not build a transducer, even if it's by broadband, that has a constant source level across a wide frequency range. There's also another rule that says the depth of the sound channel must be 10 times the wavelength before it takes advantage of the surface duct. If you've done the analysis at 100 kilohertz but there's a huge spread—the transducers are likely to go up several thousand kilohertz—the model will show that it doesn't transmit very far at that peak, but there will be other frequencies where it will be coupled into the surface duct and it will transmit a long way.

Mr Grebe : I didn't bring a bioacoustician, so I'm going to defer to my earlier offer of taking a detailed answer on notice.

Mr Smith : As you indicated, these are very technical, detailed questions which we are more than happy to take on notice. Mr Grebe is head of the environment division, but he's not an expert on seismology. He wasn't part of the assessment team for that project either. If we can take it back, we'll provide you with an answer.

Senator PATRICK: I'm happy to have a conversation with you offline provided that the outcome of that conversation becomes public. I'm saying that I think there is a serious mistake that's being made acoustically here that doesn't take into account the worst case scenario. The worst case could occur on any day, and that could cause damage to any number of marine mammals. I've just got a couple more questions—

CHAIR: Senator Patrick, sorry, I think Senator Ketter's got to have a go, so if we can—

Senator PATRICK: I'm not prepared to put them on notice—I'm just letting you know that—so we'll end up with a spillover day if you can't get back to me.

Senator KETTER: I'm entitled to ask some questions as well.

Senator PATRICK: I understand that.

Senator KETTER: Mr Smith, I'd like to give you the opportunity to respond to some of the media issues that you highlighted, but, firstly, in a general sense and very briefly, what's the importance of the safety case to the types of facilities that you regulate?

Mr Smith : The safety case is of key importance because it's the document that spells out how safety is going to be managed on the facility. It sets out all of the relevant risks and how the company proposes to address them.

Senator KETTER: The Prelude FLNG platform has been in the media recently. What are the possible economic, environmental and personal safety risks associated with safety noncompliance on something like the Prelude platform?

Mr Smith : There are a very broad range of risks. I'll ask Mr O'Keeffe, as head of safety, to run through them.

Senator KETTER: Let's start with personal safety. Please be as brief as you can, Mr O'Keeffe. If I can get back to Senator Patrick I will, but I do have some questions to get through.

Mr O'Keeffe : Personal safety, of course, is vital, but the starting point is the prevention of major accident events, which provides the overall envelope for the identification and management of those risks. That goes all the way from the very native hydrocarbons on there and the risks associated with them, all the way through to the slips, trips and falls of the workers on the platform. So it's all-encompassing, and it starts at the outside and works in.

Senator KETTER: But in terms of the risks, for example, with personal safety, is there the potential for fatal injuries to occur?

Mr O'Keeffe : I think with the nature of the industry it is inherent that there are risks and they need to be managed. An individual falling down the stairs can lead to a fatality. So the answer is, yes, all the risks need to be identified and managed.

Senator KETTER: Environmental risks?

Mr O'Keeffe : Yes. Loss of containment is generally linked to safety in a facility like that; if you maintain safety, then you're more likely to contain the loss of containment spills.

Senator KETTER: Then, economically, if production is halted as a result of a safety noncompliance—

Mr O'Keeffe : It's not something we'd look at, but, inevitably, if the facility is shutdown then we can expect there'd be some economic loss, but we don't pay attention to that.

Senator KETTER: So is noncompliance to a safety case likely to increase the risk of these potential eventualities?

Mr O'Keeffe : Eventualities in terms of safety to people or economic loss?

Senator KETTER: Yes, well, across those three categories?

Mr O'Keeffe : Yes, of course.

Senator KETTER: Thank you. When did NOPSEMA review and approve the safety case for Prelude?

Mr O'Keeffe : It was before my time, but I believe we engaged with Shell on the Prelude projects seven or eight years ago in the form of early engagement. That was taken from right at the beginning and then there was a series of progressive safety cases which worked through the drilling of the wells, the construction, the installation through to production. So there'll be a series of them each time there's a revision put in place, which looks at the next level of operation, the next level of risks and the appropriate means to manage them. That comes to us as a revision. We review it. When we believe that the overall case for safety has been made, that the risk will be managed, we will then accept it and then the operator can perform the activities within the safety case.

Senator KETTER: The Prelude arrived on site in July 2017. I take it the safety case would have been finalised prior to that date.

Mr O'Keeffe : There's finalisation in respect of each aspect of it. At that time there would have been the construction installation safety case, and then later on there'll be the ones that would have been revised in reflection of taking hydrocarbons on board. So, yes—appropriate time, appropriate safety case.

Senator KETTER: Are there mandatory courses, qualifications or industry experience required for NOPSEMA inspectors or assessors to review safety cases?

Mr O'Keeffe : We employ people who are highly experienced in certain areas. In one particular case, there may be someone who's got particular experience in electrical work. Others are ship's mates, people with college degrees, university degrees and a mixture of formal education and direct experience. Yes, that's the case.

Senator KETTER: Okay. I'm looking for the particular qualification. Is it the electrical equipment in hazardous areas certificate IV?

Mr O'Keeffe : We have three of our people who are specialists in electrical work which would cover EEHA, electrical equipment for hazardous areas.

Senator KETTER: Do you have any electrical engineers performing these functions?

Mr O'Keeffe : We have three people who are qualified experienced electrical people, yes.

Senator KETTER: What do you mean, 'electrical people'?

Mr O'Keeffe : I need to take on notice the precise qualifications in that respect.

Senator KETTER: If you could, thank you. When NOPSEMA reviewed the safety case for Prelude, did the organisation have suitably qualified inspectors to review the electrical equipment in hazardous areas?

Mr O'Keeffe : We look at a range of risks, of which electrical equipment is one, as well as, generally, process safety, marine safety and structural integrity. We've got a mix of people. My team has about 35 people with ages somewhere between 40 and 65 years of age. They're all highly experienced people, working in a variety of areas. We do it on a team basis. If we need skills we will go and recruit them as appropriate, and we've been through that recently in refreshing our team due to some retirements.

Mr Smith : And if we think there are any gaps in our expertise we can also use consultants, and we have done that on occasions.

Senator KETTER: But my question is: when you reviewed the safety case for Prelude, did you have people that were suitably qualified in those areas?

Mr O'Keeffe : Yes, all \ our people would have been appropriately qualified to look at the thing in its entirety.

Senator KETTER: With a minimum certificate IV in EEHA work?

Mr O'Keeffe : As I said, I would need to take that specific one on notice.

Senator KETTER: All right. In December 2018, leading up to the wells being opened and gas flowing to Prelude, did NOPSEMA receive any specific information about safety concerns from employees or safety experts working on the project and, if so, what was the nature of their concerns?

Mr O'Keeffe : We receive input from employees or workers on different facilities at different times. Yes, we did receive information from the Prelude facility workers out there, and we looked into those. Sometimes they relate to working conditions. Sometimes they relate to specific things. I don't recall the specifics of that, but we treat each one of those as a complaint and we look into it. We include it as a part of our inspection routine and we go and have a look at each one of those, whether it's on the Prelude or, indeed, any other facility.

Senator KETTER: So, there was more than one complaint?

Mr O'Keeffe : Again, I'd take that on notice. I'm aware of one specifically, and there may have been others.

Mr Smith : Can I also add that, when we conduct inspections, we always start and finish with a meeting with the health and safety representatives, and they are likely to have raised issues, if they have concerns, during those meetings. Those meetings are confidential from management to protect the workers if necessary and provide them with that opportunity to raise issues directly with the regulator.

Senator KETTER: So that was a confidential issue that was raised? Okay. And you're going to take on notice how many complaints were received.

Mr O'Keeffe : Yes.

Mr Smith : Yes.

Senator KETTER: What specific actions, if any, did NOPSEMA take to ensure that the Prelude was compliant with the safety case in August 2018?

Mr O'Keeffe : We have an extensive program of inspection where we review both onshore and offshore. We go through the entire management systems, with specific areas of focus. We look at each one. So, when the vessel first came in, we'd have looked at mooring, structural issues and initial commissioning issues. As they worked through towards bringing hydrocarbons onto the facility, we will have changed our focus into that area as well. So we tailor it according to the risk at that time. Both that facility and the INPEX facility have been going through parallel commissioning, and both of those have had a high level of attention from us in the last 18 months.

Senator KETTER: Did NOPSEMA send a suitably qualified electrical inspector to the Prelude in December to check electrical compliance?

Mr O'Keeffe : Again, I'll need to take that one specifically on notice. But we do have three electrically qualified people in our team who have been involved with this and other facilities.

Senator KETTER: So you'll take that on notice for me. What were the specific actions that INPEX undertook to comply with directions from NOPSEMA?

Mr Smith : To be clear, before you answer, the term 'direction' is a specific enforcement tool. We have a general direction. So I just want to clarify whether you mean that particular direction or are talking broadly about issues we may have had with INPEX.

Senator KETTER: Let's go broad, but I'd also like to know: were there any directions that you issued as well?

Mr O'Keeffe : I will start broad. We don't direct them to do anything. They offer to do things within the safety case they accept. We expect them to do that. If you view that as direction, well, yes, it is. The specifics of it are that on 3 August we issued a direction to INPEX. It was in relation to identified issues in the quality assurance and the installation of certain electrical equipment on the facilities. They had a program in place to address those issues. On 2 August, one of our inspectors identified that there were deficiencies in the labelling of equipment, which in turn led to uncertainties in respect of which equipment had been assessed and which had not, and we issued a direction to them, as a very broad issue, requiring them to ensure that all equipment was tested and suitable before being put into service for hydrocarbons. It was a very specific direction. It required a very specific thing over a very broad level of activity. I believe there's something like 45,000 pieces of electrical equipment out there, so we didn't want to target one. We targeted everything, and they complied with that. I think it was in October that we closed that one. We were satisfied they'd addressed those issues correctly.

Mr Smith : We have issued improvement notices to INPEX as well. I'm not sure whether you want us to run through those as well.

Senator KETTER: Was that a result of them not undertaking to comply with directions?

Mr Smith : No, that was prior to the direction. It was for other issues we had in regard to safety.

Mr O'Keeffe : An improvement notice typically is in relation to a specific issue. There were two electricians who made a mistake and cut the wrong cable. Luckily it wasn't energised at the time. In our view, it was a control of work issue—there were deficiencies in the control of work that needed to improve. So we issued an improvement notice and that brought INPEX's direct attention to that very specific issue, to address that in relation to the control of work.

CHAIR: Senator Ketter, it is 11 o'clock. Are there any questions at all that you could put on notice to NOPSEMA?

Senator KETTER: I'll put some on notice, but I probably need at least another five minutes or so. Which NOPSEMA directives did INPEX not undertake to comply with?

Mr O'Keeffe : INPEX have never not—if that's the right way around.

Senator KETTER: Did NOPSEMA authorise any divergence variation to the originally approved safety case for Prelude in 2018? If so, was this reviewed by a suitably qualified electrical inspector?

Mr O'Keeffe : As I mentioned earlier, the safety cases go under a series of revisions, depending upon the frame they're at. At each stage, we have a fully qualified team assess that in respect of the safety case as it stands. I don't have direct knowledge, but, if that included variations to the electrical work, we will have put qualified electrical people on there to assess it.

Senator KETTER: There's a concern that INPEX were not complying with the safety case and there is a concern that there was a variation to the safety case to facilitate that.

Mr O'Keeffe : No. There has been no variation to the safety case to allow a party to not comply with their commitments.

Senator KETTER: Does NOPSEMA believe that Prelude was complying with the safety case at all times?

Mr O'Keeffe : Compliance is something we expect. Sometimes you do get performance standards which aren't met temporarily. Let's say there are three fire pumps and one of them, for whatever reason, goes down. We'd expect them to adjust their operation to manage that additional risk and then get the fire pump back up again. So, broadly, yes, we believe the risk will be managed within that and we expect them to do that at all times.

Senator KETTER: Did NOPSEMA consider that Prelude was fully complying with the safety case when it commenced gas flow in December 2018?

Mr O'Keeffe : We had no reason to think it wasn't.

Senator KETTER: Is it the case that, in the lead-up to gas flowing, NOPSEMA asked INPEX to hold off until everything was fixed before commencing the gas flow?

Mr O'Keeffe : On 19 June, we were made aware of certain deficiencies in some of the electrical equipment. We met with INPEX on a number of occasions to understand what that was and we expected them not to introduce gas until they'd satisfied us that the work was done.

Senator KETTER: But is it correct that INPEX didn't fix the issues that you'd raised and NOPSEMA then issued a direction post the gas flow?

Mr O'Keeffe : We were satisfied that they had a program in place to manage the risks. On 2 August, when we, through our own inspectors, identified that a lighting circuit had been incorrectly labelled, it raised a flag for us as being a new risk. We had no reason to think that they weren't complying with their obligations at that point and a new risk emerged on 2 August. We acted on 3 August and we required them from that point forward to make sure that that additional risk was being managed.

Senator KETTER: But, if you considered that Prelude was not fully complying with the safety case when it commenced the gas flow in December 2018, why didn't NOPSEMA direct Shell to not allow gas to flow until you'd inspected the platform?

Mr O'Keeffe : Senator, excuse me. I've talked about the INPEX facility in respect of the direction. We had no reason to believe that the Shell Prelude facility was non-compliant and I still have no reason to think that it was not compliant.

Senator KETTER: On 21 October 2018, in incident ID 5651, there was a fire on Prelude in the oxygen storage facility. Most offshore HSRs and employees would consider this a significant incident. NOPSEMA decided no major investigation was required. Given that Prelude had LNG on board and over 200 employees in close proximity, what type of incident would warrant a major investigation by NOPSEMA?

Mr O'Keeffe : If it goes to the incident itself, I was made aware of that. I understand it related to an oxygen bottle. I believe it was a seal on it. It led to a small fire that was quickly extinguished. We were alerted immediately. I think I myself went to Shell that afternoon, with one of our inspectors, to understand immediately what had happened there. We were satisfied that the incident was isolated and had been contained, but we did take that view by visiting them immediately on that occasion, and on one another occasion where there was the potential for a fire, to find out how they were responding to it, and part of that was testing. We were satisfied that they had the situation under control, it was isolated, and we didn't believe that that warranted a major investigation.

Senator KETTER: My question then is: what type of incident would warrant a major investigation, if that didn't?

Mr O'Keeffe : Anything where we felt that the risk gap was not being managed, or an unexpected risk had come out that led to an incident. We have got a set of guidelines, but we've also got judgement that allows us to go and look at things that otherwise would not fit the guidelines.

Senator KETTER: Okay. Thank you very much.

Senator PATRICK: Very quickly, Mr Grebe—if you don't know the answers, just say so and you can take them on notice—will the survey vessel be taking a sound velocity profile on at least a daily basis?

Mr Grebe : I'll take it on notice to confirm it's in the environment plan, but most seismic surveys take sound velocity profiles regularly, because they need to to ensure that the data they receive is properly analysed and calibrated.

Senator PATRICK: Normally, they're transmitting down, and the sound velocity profile doesn't affect sound travelling directly downwards, and that's what I'm most interested in. Thank you for taking that on notice. The streamer that follows behind the vessel clearly is a receiver.

Mr Grebe : Streamers, yes—there's more than one.

Senator PATRICK: Yes, streamers—they're receivers?

Mr Grebe : Yes.

Senator PATRICK: Are they capable of passive processing such that they can detect the presence of noises that are made by whales, dolphins and other marine life?

Mr Grebe : I don't believe the technology proposed for passive acoustic monitoring uses in-streamer microphones in this particular instance. That technology is being developed, although that application of passive acoustic monitoring technology is being implemented in some places. I'd have to take on notice if it's—

Senator PATRICK: I can tell you the technology is there. I spent many decades—

Mr Grebe : The technology is there. Putting it into a streamer is new.

Senator PATRICK: Okay. An alternative is putting a sonar buoy over the side with a sonar buoy processor. I can assure you they can also listen for whales. I know your plan talks about visual spotting, and that's clearly a good thing, but it seems to neglect the fact that it is actually very easy to detect marine mammals at long distances using a passive receiver.

Mr Grebe : Yes. I think passive acoustic monitoring is an important control, particularly for species that surface less often, blue whales particularly, which are relevant.

Senator PATRICK: So you say it's important, but you're not aware of—

Mr Grebe : I'll have to take on notice how it's described—

Senator PATRICK: What worries about me about the decision-making process you've gone through is that you're not aware of some of these things.

Mr Grebe : It's a document of about 1,500 pages with appendices, and I'm not—

Senator PATRICK: No, you made a decision on the basis—

Mr Grebe : Not myself, no. I wasn't the decision-maker.

Senator PATRICK: Okay. Well, someone has made a decision on the basis of the document. I've read most of it, and I can't see any passive receiving, hence my question. That's me done. Thank you very much, Chair.

CHAIR: There being no further questions at this time, the Economics Legislation Committee's consideration of the Industry, Innovation and Science portfolio's additional estimates will conclude. I thank Minister Canavan; officers of the Department of Industry, Innovation and Science; and all witnesses who have given evidence to the committee today. Thank you also very much to Hansard for your patience this evening, to Broadcasting and also to the secretariat. I declare the hearing adjourned.

Committee adjourned at 23:09