Perhaps one of the most divisive issues plaguing our airwaves at the moment is hydraulic fracturing, or 'fracking'. Should we be concerned about the way state governments are regulating it?
Fracking is a relatively new thing on the east coast of Australia where CSG deposits are extensive, although WA have been fracking shale gas reserves for decades.
Queensland's Bowen and Surat Basins are the mother lode for CSG, making this the forefront of exploration and production. The QLD government is keen to reduce 'green tape' involved in obtaining CSG-related licences while trying to quell community concerns. So far this has had mixed success, particularly in light of reports that the applications for two of Australia's largest coal seam gas plants failed to include some pretty important information, like local environment assessment reports.
The NSW government has approached CSG development by both under- and over-legislating (we didn't think it was possible either). This has largely been the product of a reactionary policy approach that has left state environmental agencies confused about their mandate and their authority to impose remedies on offending CSG operators. For instance, earlier this year Santos contaminated an aquifer in the Pilliga State Forest with uranium. The maximum possible penalty was $1 million however the EPA only fined the energy giant $1500.
As CSG related incidents increase in NSW there are more rural communities concerned about CSG operations. This has led to the NSW government repeatedly tweaking its position on CSG. In October 2013 the government implemented an outright ban on CSG activities within 2km 'exclusion zones' around residential areas, vineyards and stud farms across the state. Earlier this year, the government announced a 6-month freeze on all new exploration licences, and increased the price of CSG exploration licences 50-fold. The government says it only wants only "responsible operators" to conduct CSG operations. But we think that this government's tough guy approach will fail if the penalty regime has no muscle.
As for the Commonwealth, the Abbott government is 'fast-tracking' environmental approvals by putting full responsibility for the approval of CSG projects into the hands of the states. Hardly seems comforting while the states struggle to agree on an answer to the CSG question. One thing is for certain though: the allure of increased state revenue, employment opportunities and long-term gas production means the states might just fake it till they make it.
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