The use of biodiversity offsets is being considered globally as one way through which public and private enterprises can adopt a pragmatic approach to the overall goal of biodiversity conservation and protecting threatened ecosystems, while developing vital resource programs and infrastructure.

The oil and gas industry has set a blueprint for its operations through a joint Biodiversity Working Group formed by the International Petroleum Industry Environmental Conservation Association (IPIECA), and the International Association of Oil and Gas Producers (OGP). They promote a broad definition of biodiversity conservation as “a philosophy of managing the environment in a manner that does not despoil, exhaust or extinguish” from Replacing Quantity with Quality as a Goal for Global Management by Carl F. Jordan (1995). This, they say, encompasses both a utilitarian perspective, “conservation driven by the rational and prudent management of biological resources” for the greatest sustainable current and future benefits, and an ethical perspective recognising the intrinsic value of biodiversity that renders it worthy of protection, and is unconnected to the materials it supplies or services it supports.

Australian offset framework

The Australian Commonwealth Government framework for offsets as applied to projects through approval conditions was released in 2007. This means it is early days yet in terms of interpreting how offsets may come into play in the oil and gas industry. Many of the policies and programs have yet to be implemented or tested, and others are at initial discussion stage, but basic principles to emerge include the recognition of direct and indirect offset actions to compensate for the impact of development (See Table 1). Direct offsets are the preferred option; but a mixture of direct and indirect offsets can be used if this is not possible.

For national and international companies developing their own Australian policies, the situation is further complicated by the disparity between the states in the methods and decision tools used to calculate offsets. By way of example, Victoria has a complex system for calculating offset ratios based on the conservation significance of the vegetation that will be disturbed, and is specific to the Victorian climate and vegetation species. The system works on a 10-year timeframe for the estimate gains and uses the ‘habitat hectares’ method for assessing native vegetation quality. In contrast, Western Australia’s model focuses on 12 ‘offset principles’. Where a deviance from one of these principles is likely to occur, a decision on the offset ratio for cleared vegetation is made by the Department of Environment and Conservation – the minimum offset being 1:1.

State vegetation offset policies also differ in their goals: Victoria and South Australia has a policy of ‘net gain’ and New South Wales and Western Australia seek to ‘maintain or improve’, while Queensland’s policy stipulates ‘no net loss’. Companies operating in Australia also state similar objectives.

Navigating offsets

With so many offset developments brewing, it may sound like a good time for oil and gas companies to wait for offset guidelines to be firmed up. But many companies – among them oil and gas producer Origin Energy – are seeing this period as an opportunity to further develop their corporate sustainability policies from the ground up to incorporate measurable and reportable standards for biodiversity within their operations.

Origin recently commissioned ground engineering and environmental services consultants Golder Associates to assist with developing a national biodiversity management procedure and offset guideline for their national exploration and production operations, as part of Origin’s corporate sustainability journey.

Golder’s ecology specialists were charged with reviewing existing policies and guidelines at state and Commonwealth level to derive a framework for offset decision-making.

Offset decision-making

The first rule of biodiversity offsets is, paradoxically, to avoid using them wherever possible. Offsets are after all a final measure that can only offer a satisfactory alternative when all efforts to minimise or mitigate project impacts have been investigated. In this regard, offsets should only be used where there is a residual significant impact on biodiversity values. The provision of offsets should also be applied on a consistent basis between all potential activities that can significantly impact biodiversity, such as agriculture or infrastructure.

As the next stage in assessing the effectiveness of Origin’s biodiversity procedure and offset guidelines, Golder is assisting Origin with a biodiversity management plan (BMP) for the Spring Gully development near Roma, Queensland. This BMP will expand on previous work completed for project approvals and will be the cornerstone for assessing the potential for biodiversity offsets at this development. The expansion of the existing Spring Gully CSG field involves new well sites as well as infrastructure such as pipelines, roads and access tracks, and office, plant and accommodation facilities.

The potential for biodiversity offsets has been assessed using factors such as: regulatory framework, landholder issues, potential for threatened flora and fauna species occurring at the site, site location, bioregion and soil types, and areas for revegetating that have high connectivity.

Integrated biodiversity management

As understanding of the benefits of biodiversity offsets grows, Golder’s national team of ecologists expect to be spending an increased amount of time working on biodiversity offsets across a range of industries, as part of the company’s integrated environmental services approach. They work with in-house GIS specialists, for example, to ensure they have the most accurate vegetation mapping information available for potential pipeline routes prior to going into the field, to maximise the benefit of their survey time. Other consultants with extensive local experience, such as hydrologists, hydrogeologists and community consultation specialists, team up to offer clients the benefit of reduced timeframes for managing environmental impacts.

Timely consideration of biodiversity management issues will provide oil and gas companies with an opportunity to accommodate current biodiversity debates, plan for anticipated changes in prevailing legal and policy frameworks, and maintain their social license to operate.