Jurisdiction and offshore petroleum in Australia: creating symmetry between the Commonwealth and states by sharing benefits and avoiding costs

This article examines the federal legislative regime for governing offshore oil development in Australia. Adopting an evolutionary perspective, the article considers how the Australian petroleum regime has been able to avoid the ‘asymmetry of costs and benefits’ which have shut down the offshore oil leasing program on the US west coast. To this end, it is shown that the Petroleum (Submerged Lands) Act has overcome jurisdictional issues by creating a partnership between the federal and state governments, enabling both to share in the benefits of policy making. This joint decision-making structure is narrowly focused upon exploitation, though, and does not deal with environmental issues outside of its original scope. The absence of a complementary regime to fill this policy gap permits environmental costs to go unaccounted in petroleum development. This shortcoming notwithstanding, the Petroleum (Submerged Lands) Act provides a useful model by which federal/state jurisdictional limitations can be overcome. Ocean and coastal issues are currently receiving political attention in Australia, and it is timely for the cooperative governance model to be revisited and also extended to other marine policy sectors. Moreover, joint authority approaches could be considered by other federations struggling with offshore jurisdiction issues.