With a Coalition Government now in charge and looking to cut regulation and repeal legislation, there is hope within the coal seam gas (CSG) industry that it will be able to bounce back from restrictive legislation implemented by some state governments, and continue its good progress under others.
New South Wales
Proposed CSG projects in New South Wales have been hit hard in recent times, with a number of polices implemented to restrict exploration and development activities.
Earlier this year, the NSW Government finalised its CSG reforms, which have resulted in safeguards established for approximately 5.3 million hectares (ha) of home and farmland.
Applying CSG exclusion zones to critical industry clusters (CIC), residential zones, an additional seven rural villages and future growth areas in 55 councils, CSG exclusion zones now apply to 2.7 million ha in NSW.
The reforms safeguard approximately 2.8 million ha of farming land by through the independent scientific Gateway process, and CICs have been implemented for 60,000 ha of viticulture land and 254,000 hectares of equine land in the Upper Hunter, with no new CSG activity allowed in any CIC.
Former NSW Minister for Planning and Infrastructure Brad Hazzard said “We worked with the community to achieve these important reforms, which gets the balance right for the people of NSW.
“Industry can plan ahead with certainty, the rules are clear, and communities can rest easy in the knowledge that NSW has the toughest CSG controls in the country.”
No business seems to be the order of business for the Victorian Government in recent months, with the unconventional gas industry being forced to sit patiently while the parliament is locked in what can only be described as a power struggle.
Despite receiving the Gas Market Taskforce report in November 2013 – which was led by former Federal Minister Peter Reith and makes 19 recommendations to current Victorian regulation of the unconventional gas industry, including lifting the holds on fraccing and the approval of new CSG exploration licences – the Victorian Government continues to put on hold work plan approvals for onshore gas exploration in the state.
The Government has cited the need for more information, including evidence from a water study, community views and industry impacts before its moratorium on hydraulic fracturing, which currently extends to July 2015, is lifted.
Victorian Minister for Energy and Resources Russell Northe says that the Government is trying to do what is best for the community, landowners and the environment.
“The former Labor Government allocated 73 licences for CSG, shale and tight gas exploration and approved 23 fraccing operations without any community consultation,” said Mr Northe.
“In stark contrast, the Coalition Government is undertaking comprehensive community consultation alongside our moratorium on fraccing and our hold on issuing new licences for CSG exploration.”
Figures released earlier this year by the Australian Petroleum Production and Exploration Association (APPEA) show Queensland landholders have signed more than 4,500 land access agreements with gas companies since 2011.
Almost $70 billion worth of CSG-to-LNG projects are underway in the state, and APPEA Chief Operating Officer Paul Fennelly suggested the other states on Australia’s eastern seaboard should follow the example set by Queensland.
“Queensland has set a benchmark other eastern Australian states must match if they are to address supply shortfalls by safely exploring and producing local natural gas resources,” he said.
However, it hasn’t been all smooth sailing in Queensland, with the state’s Crime and Misconduct Commission (CMC) assessing complaints of official misconduct relating to the approval processes of two CSG projects.
The complaints raised three sets of allegations:
- Undue pressure was placed on departmental officers and that not enough time was allowed to assess environmental impacts of projects and to draft appropriate conditions;
- The environmental impact statement processes for the projects breached the statutory provisions relating to environmental protection; and,
- There was undue influence on decision makers, including an allegation that one of the assessment processes was corrupted.
However, the CMC found no evidence of official misconduct and determined not to take any further action.
Western Australia and Northern Territory
In early 2014 WA’s regulatory process of the unconventional gas industry came under scrutiny when the Australian Conservation Foundation made an appeal against the WA Environmental Protection Authority’s (EPA) decision not to assess Buru-Mitsubishi’s tight gas pilot exploration program in the Canning Basin.
The EPA called for a moratorium on all unconventional onshore gas extraction activities in WA until “thorough cumulative impact assessments have been conducted”.
The WA Environment Minister Albert Jacob dismissed the request, arguing that the WA Government’s approval process with regard to unconventional gas exploration and development is more than sufficient.
“The regulation of exploration drilling for unconventional gas is the responsibility of the Department of Mines and Petroleum and any proposal for unconventional gas that is likely to have a significant effect on the environment is subject to the requirements of the Environment Protection Act.”
Buru had approached the EPA for an assessment of the program, however, this was denied by the body given the project was deemed “unlikely to have a significant effect on the environment”.
WA’s natural gas from the shale and tight rock industry is currently in the early stages of exploration and evaluation with 15 exploration wells drilled since 2005 – seven of these well have been hydraulically fractured.
In addition, the WA Economic Regulation Authority (ERA) has called for an end to the domestic gas policy.
The ERA’s recommendation is part of its draft report into microeconomic reform, and claims the current policy increases reliance on subsidised gas prices, discourages efficiency and technological innovation and discourages investment in gas projects – reducing the availability of gas for future domestic and international use.
The Northern Territory has gone one step further and chosen not to adopt a gas reservation policy, which has been welcomed by former Federal Minister for Resources and Energy Gary Gray.
Mr Gray said, “I am pleased to see the Northern Territory Government taking a common sense approach to this issue. As the (former) Australian Government has repeatedly stated, gas reservation polices do not help to bring a greater supply of gas into the market as they act as a disincentive to investment.”