Gas and dash fear: WA taxpayers could be forced to foot the bill for another Kimberley clean-up
A petroleum company’s attempts to offload stricken oil and gas infrastructure on an environmentally sensitive peninsula within the National Heritage-listed King Sound for a fraction of the value it was estimated to be worth should ring alarm bells for the WA Cook Government.
Environs Kimberley and Lock the Gate Alliance say the situation highlights the risks the fracking industry poses to the unique Kimberley region.
Deteriorated and inaccessible by vehicle: the causeway to the Point Torment well site. Photo: supplied.
Rey Resources is attempting to offload its Kimberley-based assets and 100%-owned subsidiary Gulliver Productions to an overseas company called China Guoxin Investment Holdings, after writing down the value of its assets from nearly $5 million to about $400,000. In response to this announcement, the ASX sent a series of questions to Rey probing the company's financial situation was sufficient to warrant its continued listing and expressing uncertainty over “the group’s ability to continue as a going concern.”
Documents obtained by Environs Kimberley under Freedom of Information reveal that in 2021, the three King Sound gas wells were a mess, with oil staining on the ground and wellhead corrosion, among 44 possible breaches departmental officials identified. It is unclear what, if any, remediation work Rey has undertaken since inspection.
Environs Kimberley and Lock the Gate Alliance fears there is a significant risk that if Rey Resources successfully offloads its assets, they will be abandoned and the hefty rehabilitation bill will fall to the WA taxpayer, as has recently occurred with New Standard Energy and Advent Energy projects in the Kimberley. The stranding of these wells resulted in multi-million cleanup bills and potentially “profound” ecological damage.
Rey Resources' cleared drill pad at Point Torment. Photo: supplied.
Shortly before announcing this planned “disposal” deal to the ASX, Rey Resources also lodged a state petroleum exploration application to clear grid lines more than 3000 km long for seismic testing across a 5058 km2 tenement near Derby and south east of its existing wells in the Kimberley. Under current WA rules, these tenements are able to be fracked, should Rey apply to do so. This tenement is included in the proposed offload deal.
Environs Kimberley recently wrote to the Foreign Investment Review Board, urging it to reject Rey’s attempts to offload its subsidiary and Kimberley assets. This followed letters to WA Mines and Petroleum Minister David Michael expressing concerns over the company's plans.
Environs Kimberley Executive Director Martin Pritchard said, “It was a reckless decision to allow drilling for oil and gas in the mangrove lined flats of King Sound in the first place. The cost of cleaning up the mess left behind in this remote and sensitive location will run to millions of dollars.
“The Department of Mines and Petroleum has let the drill sites deteriorate to the point where one of them is now inaccessible by vehicle and they’ve had to chopper in staff to investigate.
“The department seems to let these oil and gas companies get away with poor management without consequences. The Petroleum Minister David Michael needs to take charge of the situation to make sure taxpayers aren't footing the clean-up bill for another oil and gas company.
“It’s really clear that fracking in these areas would be an absolute disaster when the government departments can’t manage three wells and make companies accountable for poor practices.”
The Stokes Bay well site. Photo: supplied.
Lock the Gate WA Coordinator Claire McKinnon said, “No oil and gas company should ever have been given permission to drill in an area as environmentally significant as the National Heritage listed King Sound.
“Rey must be forced to fund the decommissioning and closure of all the wells on its tenements. The WA taxpayer must not be left to once again pick up the clean up bill for an oil and gas company.
“This concerning situation shows why it’s so important that the Cook Government ban fracking in the Kimberley.
“The high cost of unconventional gas extraction means it’s likely that if a fracking company was able to get a project going in the Kimberley, it would result in the drilling of many hundreds if not thousands of wells.
“This sorry situation shows the Cook Government is not up to the task of adequately regulating a mere three conventional wells, let alone thousands of frack wells”.
Darkest day in the 50 year history of WA environmental laws
The Environmental Protection Act Amendment Bill 2024 introduced into WA Parliament today will compromise the independence of the Environment Protection Authority and exacerbate WA’s climate and nature crises.
“The Premier’s assertion that reforms are needed due to ‘green tape strangling development’ is disingenuous in the extreme. Delays have come about due to the lack of resources and staff in the EPA and the WA government should take responsibility for that.”
“This is the darkest day in the 50 year history of environmental laws in WA,” said Environs Kimberley Director of Strategy Martin Pritchard.
“Increasing the EPA Board from 5 to 9 to stack it with mining, oil and gas and property development interests does not pass the pub test; we need environmentally-focused people whose primary interest is protecting the environment, not facilitating its destruction.”
“We understand that the government will also issue the EPA with what it calls ‘Statements of Expectation’, effectively directing the EPA to follow the government's priorities. This undermines the independence of our most important environment watchdog.”
“Removing the community’s right to appeal an EPA decision not to assess a project is a retrograde, anti-democratic step to appease industry and only benefits big business.”
The government’s changes will effectively strip the EPA of its independence at a time when we need to strengthen WA’s nature laws to defend nature and the places we love because of the unfolding climate change and extinction crisis.
“The Environmental Protection Act Amendment Bill 2024 is the Cook Labor government caving in to the mining, oil and gas and real estate industries instead of looking after WA’s nature which has a spiralling number of threatened species getting closer to extinction.”
Places like the Kimberley’s National Heritage-listed Martuwarra Fitzroy River and animals like threatened Bilbys, threatened turtles and whales, and the critically endangered Freshwater Sawfish are already at severe risk of extinction and need more protection, not less.
“We need a stronger EPA and environment laws. What is currently being proposed is exactly what Liberal Premier Colin Barnett wanted and we can’t believe the Labor Government is willing to gut our environmental laws to fast track damaging projects which will supercharge the multiple environmental crises we are facing.”