Regnan submission to the Senate Select Committee on Unconventional Gas Mining


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14 March 2016

Senate Select Committee on Unconventional Gas Mining
Attn: Committee Secretary
PO Box 6100
Parliament House
Canberra ACT 2600

gasmining.sen@aph.gov.au

Regnan submission to the Senate Select Committee on Unconventional Gas Mining

Thank you for the opportunity to submit our views on the implications of unconventional gas sector to the Senate Select Committee on Unconventional Gas Mining (‘the Committee’). Our submission is made on behalf of the institutional investors Regnan represents – investors with more than $82 billion invested in S&P/ASX200 companies at 31 December 2015 (~5.5% of this index). These institutions include Advance Asset Management; Commonwealth Superannuation Corporation; BT Investment Management; Catholic Super; First State Super; HESTA Super Fund; Vanguard Investments Australia; VicSuper; and the Victorian Funds Management Corporation.

We recognise significant investment potential for unconventional gas and note that rapid growth elevates environmental, social and governance (ESG) risk given the numerous technical, regulatory and stakeholder issues. It is in the interests of investors, and others, that the risks and issues associated with unconventional gas are addressed early to limit potentially negative impacts. This would be assisted by a national approach to unconventional gas that harmonises federal and state/territory government legislation, regulations and policies.

In light of these concerns, as well as concerns about oil and liquids, Regnan developed a paper, “Unconventional oil and gas best practice ESG risk management principles and recommendations” which we commend to the Committee’s attention. The principles and recommendations are based on Regnan’s analysis of current research, investor initiatives in both Australia and overseas and dialogue with companies involved in unconventional oil and gas (UOG) activities in Australia.

Whilst the document focuses on UOG company practices it offers important insights into the key risks, possible mitigants, residual risk and the potential role for Government. Specifically Regnan makes the following recommendations:

  • Extend the Committee’s scope to include oil and liquids
  • Differentiate between UOG sources and extraction processes when considering policy and regulatory safeguards e.g. shale, CSG etc.
  • Set minimum performance standards at a level to maintain the reputation of the industry
  • Mandate the Government to take the lead in assessing cumulative and regional risk
  • Use the precautionary principle in developing industry standards, particularly in the issues of aquifer connectivity and fugitive methane emissions
  • Resource regulators to ensure sufficient skills and capacity to effectively oversee the UOG industry

Should you have any questions in relation to this submission, please contact Katrina Myers on (03) 9982 6407 or Alison Ewings on (02) 9299 6799.

Yours sincerely,

Amanda Wilson
Managing Director
Regnan – Governance Research & Engagement

 

Attachment: Regnan's Unconventional oil and gas best practice ESG risk management principles and recommendations 1.0

 

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