Australia: Conflicts over commodities – the coal seam gas balancing act

Last Updated: 14 May 2012
Article by Rebecca Hoare and Susan Rose

Introduction

Australian governments are responding to increased pressure to address land use conflicts through the introduction of new legislation and policy initiatives that seek to manage competing interests. The coal seam gas (CSG) industry illustrates the current challenges faced by government to balance the interests of agricultural landholders and other stakeholders, including petroleum and mining companies, seeking access to land 1, in the context of growing awareness and concern over environmental impacts, such as water.

Community activities to protect existing land use rights are rapidly gaining momentum, with individuals and groups joining forces to attract the attention of the media and political interests. Representing the movement is the Lock the Gate Alliance, an organisation that has staged numerous events to both raise awareness and prevent approvals for coal mining, coal seam and other unconventional gas mining projects until the physical, social, economic and environmental impacts of those industries have been fully assessed 2. Farmers and conservation groups jointly opposed to CSG projects have staged street protests and launched Court action, exemplifying just a few of the ways these concerns are being voiced.

All levels of government across Australia have taken steps aimed at addressing the concerns of interested stakeholders. The Commonwealth, New South Wales (NSW) and Queensland Governments have all introduced legislation and outlined land use policies, demonstrating the measures being taken. Further, the Standing Council on Energy and Resources (which comprises the Commonwealth, State, Territory and New Zealand Ministers responsible for energy and resources) agreed on 9 December 2011 to develop and implement a harmonised framework for coal seam gas to address key areas of community concern based on four key themes:

  1. water management;
  2. multiple land use framework;
  3. best practice standards; and
  4. co-existence.

Commonwealth Measures

Whilst primary responsibility for assessing development proposals lies with the States and Territories, the Commonwealth has also undertaken a range of measures aimed at addressing and managing the impacts of CSG development. Key measures, which have arisen from reviews of existing Commonwealth legislation and also due to political power, include:

  1. plans to amend the EPBC Act in order to strengthen strategic assessment and regional environment planning provisions generally. These measures are intended to create a shift to a preventative and proactive approach, on a larger and more effective scale 3;
  2. the introduction of the Environment Protection and Biodiversity Conservation Amendment (Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development) Bill 2012 (Cth), as part of the National Partnership Agreement on Coal Seam Gas and Large Coal Mining. Amendments proposed under the Bill include the creation of an expert committee to advise on bioregional assessments in areas of high potential impact from CSG and large coal mining developments; and
  3. The announcement of funding valued at $9.2 million for 23 natural resource management regions in NSW and Queensland to undertake an analysis of their local environment and potential impact on water resources from CSG and coal mining developments 4.

The Commonwealth is committing to tight timeframes to progress these initiatives, with bioregional assessments anticipated to commence in several regions before the end of June 20125.

Queensland Initiatives

Concern over the environmental impacts of CSG have been addressed by the Queensland Department of Environment and Resource Management (DERM) with a raft of amendments to the Environmental Protection Act 1994 (EP Act). These changes are aimed at ensuring that the environmental impacts of CSG activities are appropriately managed – particularly in relation to the storage, use and treatment of CSG water, the impacts on groundwater and the use of certain chemicals during the hydraulic fracturing (or 'fraccing') process.

In February 2011, the Queensland Government established a multi-disciplinary 'one-stop' enforcement unit which will monitor compliance with legislative requirements, investigate formal complaints from landholders and prosecute offences where required. DERM has also developed a CSG/LNG Compliance Plan, which envisages planned and unplanned audits and inspections and reviews of licensee monitoring data.

Further, the Queensland Government has recognised the importance of agriculture and the need to strike a balance between the agricultural, resource and development industries, through its Strategic Cropping Land Act 2011, which establishes Strategic Cropping Protection Areas and a Strategic Cropping Management Area, together with transitional arrangements6 for existing projects and proposed projects that are already undergoing environmental impact assessment.

The Response in New South Wales

NSW has not been immune from tensions around CSG and related activities, with the need for strategic land use planning being recognised by both major political parties.

In 2010, landholders from the Liverpool Plains region near Gunnedah successfully challenged the validity of land access arrangements granted arbitrarily to Coal Mines Australia Pty Ltd under an exploration licence for coal7. The NSW Supreme Court decision, which also questioned specific conditions under the access arrangements, raised significant concerns within the mining and oil and gas industries.

The land access provisions of the Mining Act 1992 and the Petroleum (Onshore) Act 1991 were subsequently amended8 to 'restore certainty for landholders and exploration title holders over land access arrangements'9, in response to the NSW Supreme Court decision.

Major initiatives have since been introduced by both the former NSW Labor Government10 and the current NSW Liberal –National Coalition Government11. In May 2011, the NSW Coalition Government took initial steps and introduced transitional arrangements12 under its Strategic Regional Land Use Policy. The policy, which was a key point in its 2011 election campaign, led to an immediate 60 day moratorium being placed on the granting of 'new' coal, coal seam gas, and petroleum exploration licences in NSW.

On 6 March 2012, the NSW Government took the next steps in delivering its Strategic Regional Land Use Policy, setting out in detail how it proposes to minimise land use conflicts and protect high-quality agricultural land and associated water sources in specific regions under the 'Draft New England North West Strategic Regional Land Use Plan' and 'Draft Upper Hunter Strategic Regional Land Use Plan' (Draft Land Use Plans), along with releasing a suite of related documents, which include:

  1. Draft Aquifer Interference Policy - Stage 1: NSW Government policy for the licensing and approval of aquifer interference activities;
  2. Draft Code of Practice for Coal Seam Gas Exploration;
  3. Agricultural Impact Statement Guideline; and
  4. Guideline for Community Consultation Regarding Exploration.

The Draft Land Use Plans, which propose that coal and CSG activities undertaken on, or within 2 kilometres of identified and mapped "strategic land" must pass through a ''gateway process", and have been placed on public exhibition between 8 March and 3 May 2012. The gateway process is intended to give an independent scientific panel the power to assess environmental factors and determine whether a development application can be even lodged13. Further, whilst the focus is on major mining and CSG proposals, the Draft Land Use Plans notably also seek to address impacts on supporting services such as housing and infrastructure, and to consider the overall public benefit14.

A comprehensive review of the NSW planning system is being undertaken in addition to the release of the Strategic Regional Land Use Policy initiatives 15. The NSW planning review has much broader application than just the mining and CSG projects. It remains to be seen how each of these initiatives and in particular, the Draft Land Use Plans will be integrated into the proposal for a new planning system, although it is expected that the theme of regional and strategic assessments, which is also a common theme at the Commonwealth level and across other States, will feature.

What Does the Future Hold?

Both mining and agriculture are key industries that will play an important role in Australia's future.
Addressing land use conflicts and managing the potential and actual impacts of new developments to ensure ecologically sustainable development will be a complex but important task.

Australian governments will need to be clear and transparent, and to continually assess and evaluate their responses as additional information becomes available. It will not be possible to satisfy all stakeholders on all issues and it is likely that we will see the development of further policy initiatives, legislative changes and Court action. The balancing act will not be easy.

Footnotes

1 Production of CSG has increased significantly in the past five years, with its share of total Australian gas production increasing from 3 per cent in 2003–04 to 10 per cent in 2009–10. Most CSG production is sourced from Queensland, which accounted for approximately 97 per cent of production in 2009–10. Source: 'Energy in Australia 2011' Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) dated 18 March 2011

2 Lock the Gate Alliance Inc. Constitution (Incorporated: 8th December 2010)

3 Australian Government Response to the Report of the Independent Review of the Environment Protection and Biodiversity Conservation Act 1999 dated August 2011

4 The Hon Tony Burke MP Minister for Sustainability, Environment, Water, Population and Communities 'Coal seam gas expert scientific committee legislation introduced' Media release 22 March 2012

5 The Hon Tony Burke MP Minister for Sustainability, Environment, Water, Population and Communities 'Coal seam gas expert scientific committee legislation introduced' Media release 22 March 2012

6 from 31 May 2011

7 Brown & Anor v Coal Mine Australia Pty Ltd: Alcorn & Anor v Coal Mine Australia Pty Ltd [2010] NSWSC 143

8 Mining and Petroleum Legislation Amendment (Land Access) Act 2010, which commenced on 9 June 2010.

9 Mining and Petroleum Legislation Amendment (Land Access) Bill 2010 Legislative Assembly, Agreement in Principle.

10 a Ministerial Subcommittee was established in July 2010 and in February 2011 the 'NSW Coal and Gas Strategy Scoping Paper' and 'Ministerial Terms of Reference', outlining four key initiatives to address the conflicts demonstrated in the Brown case and others, were released by the (then) NSW Labor Government.

11 leading up to election the NSW Coalition also announced a 'Strategic Regional Land Use Policy', based on a 'triple bottom line' approach, which included proposed reforms 'to mining and coal seam gas legislation to protect strategic agricultural land and associated water resources'

12 The Hon Brad Hazzard MP Minister for Planning & Infrastructure Minister assisting the Premier on Infrastructure NSW Media Release 'NSW Government adopts rigorous strategic' dated May 21, 2011

13 The Hon Brad Hazzard MP Minister for Planning & Infrastructure Minister assisting the Premier on Infrastructure NSW Media Release 'Protecting our Farmland' dated 6 March, 2012

14 Draft Upper Hunter Strategic Regional Land Use Plan, Department of Planning and Infrastructure March 2012

15 A Green Paper with recommendations for a new planning system in NSW, including the preferred structure, is currently being prepared for the Minister for Planning & Infrastructure for release in early May 2012.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Rebecca Hoare
 
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