❓ A parliamentary question raises concerns about the financial and environmental risks associated with the 'Valhalla' fracking project in the Kimberley, specifically questioning the adequacy of due diligence regarding the complex corporate structure of Black Mountain. The Minister's response provides assurances that the regulatory system is capable of managing the project.
AnsweredQoN 486Legislative Council
QuestionView source ↗
(1) Is the Minister aware that the ‘Valhalla’ fracking proposal on EP371 in the Kimberley, which is currently being assessed by the Environmental Protection Agency (EPA), involves nine interconnected companies created by the Texas-based owners of Black Mountain, including the registered proponent Bennett Resources Pty Ltd? (2) Under the Government’s proposed new financial assurance requirements relating to onshore unconventional petroleum operations and companies, which of the nine Black Mountain companies involved in the 'Valhalla' project would be legally responsible for providing financial assurances? (3) Under the Government’s proposed new environmental penalties policy relating to onshore unconventional petroleum operations and companies, which of the nine Black Mountain companies involved in the 'Valhalla' project would be liable for breaches of environmental conditions and actual environmental harm? (4) Has any legal and financial due diligence or risk assessment been conducted by the Department of Mines, Industry Regulation and Safety (DMIRS) to ensure that the company identified in (2) will have the financial capability to meet this assurance: (a) if no to (4), why not? (5) Has any legal and financial due diligence or risk assessment been conducted by DMIRS to ensure that the company identified in (2) above will be legally obliged to meet any financial assurance obligations, if a legal objection is raised by any Black Mountain entity: (a) if no to (5), why not? (6) Has any legal and financial due diligence or risk assessment been conducted by DMIRS to determine which of the nine Black Mountain companies involved in the 'Valhalla' project will be responsible for paying any royalties for oil or gas from EP371, should production take place: (a) if no to (6), why not? (7) Is the Minister concerned that Black Mountain may use the multi-company corporate structure it has created around the 'Valhalla' project to avoid or evade any financial liabilities or legal obligations, including directions notices, non-compliance penalties and royalty payments: (a) if no to (7), why not? (8) Given the complicated corporate structure Black Mountain has created around its 'Valhalla' project, is the Minister confident that the Western Australian fracking regulatory system is capable of regulating this project and any future petroleum production on the company’s lease? (9) How many and which of the following Black Mountain companies involved in the Valhalla project have held meetings with DMIRS: (a) Black Mountain Oil and Gas (Texas); (b) Black Mountain Canning LLC; (c) Black Mountain Canning Royalty Co LLC; (d) Black Mountain Land Company LP; (e) Black Mountain Energy Ltd; (f) Black Mountain Energy LLC; (g) Black Mountain Exploration Australia Pty Ltd; (h) Black Mountain Exploration Pty Ltd; and (i) Bennett Resources Pty Ltd?
AnswerView source ↗
Answered
15 March 2022
Responded by
Minister for Regional Development representing the Minister for Mines and Petroleum
Response time
6 days
(1) The Environmental Protection Authority has decided to assess the Valhalla Gas Exploration and Appraisal Program referred to it by Bennett Resources Pty Ltd.
(2) The registered titleholder.
(3) As with all similar projects, the project will be subject to a number of different approvals and licensing requirements. The obligations to comply with conditions of approval rests with the person(s) or companies that are ultimately granted the licence or approval. With respect to environmental harm offences, the person or company liable will be the person or company found under the Environmental Protection Act 1986 to be responsible for the offence.
(4) Yes
(a) Not applicable
(5) Yes
(a) Not applicable
(6) Yes.
(a) Not applicable
(7) I do not intend to speculate on the motives behind the company structures adopted for individual projects. The Government has strong legislation that regulates resource projects in Western Australia. The current WA petroleum financial assurance regime has existing insurance arrangements that cover operational risks, consistent with the Commonwealth and other Australian jurisdictions.
(a) Not applicable
(8) Yes.
(9) Two.
(h) Black Mountain Exploration Pty Ltd; and
(i) Bennett Resources Pty Ltd.
(2) The registered titleholder.
(3) As with all similar projects, the project will be subject to a number of different approvals and licensing requirements. The obligations to comply with conditions of approval rests with the person(s) or companies that are ultimately granted the licence or approval. With respect to environmental harm offences, the person or company liable will be the person or company found under the Environmental Protection Act 1986 to be responsible for the offence.
(4) Yes
(a) Not applicable
(5) Yes
(a) Not applicable
(6) Yes.
(a) Not applicable
(7) I do not intend to speculate on the motives behind the company structures adopted for individual projects. The Government has strong legislation that regulates resource projects in Western Australia. The current WA petroleum financial assurance regime has existing insurance arrangements that cover operational risks, consistent with the Commonwealth and other Australian jurisdictions.
(a) Not applicable
(8) Yes.
(9) Two.
(h) Black Mountain Exploration Pty Ltd; and
(i) Bennett Resources Pty Ltd.
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