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Coal Seam Gas: the Commonwealth's regulatory role


A recent episode of the ABC’s Q&A series in Tamworth discussed state and Commonwealth responsibility for coal seam gas and coal mining project regulation and raised the question: how is the Commonwealth involved in the regulation of coal seam gas (CSG)?

So how are CSG projects regulated?

In general, each state has its own regulation and revenue arrangements for resource projects. Both states with CSG developments (New South Wales and Queensland) have legislation governing the industry, requiring compliance with certain performance and environmental standards. The Queensland Government has developed a comprehensive regulatory framework, including an integrated program designed to manage the risks to the environment. The New South Wales (NSW) Government promotes best practice regulation through its NSW Gas Plan and a range of other policies and codes of practice. The regulatory arrangements of both states are discussed on the Commonwealth Department of Environment’s website. Land access is also regulated under state legislation (see the Parliamentary Library’s Quick Guide to Resource Development and Landholder’s Rights).

The Commonwealth Government also regulates new CSG activities through the ‘water trigger’ in the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). Under the water trigger, large coal mining and CSG developments that are likely to have a significant impact on a water resource are a matter of national environmental significance, requiring Commonwealth approval. Before the water trigger was enacted in 2013, the Commonwealth was indirectly involved in the assessment and approval of CSG projects under the EPBC Act where those projects were likely to have a significant impact on matters of national environmental significance (such as listed threatened species). In 2012, the Commonwealth Government established the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development (IESC), in response to community concern over these projects. The IESC provides advice to governments on the potential water impacts associated with CSG developments. The Commonwealth Environment Minister must now consider that advice before approving a project under the water trigger.

In short, the Commonwealth Government is involved in approving CSG projects, but that intervention is limited to considerations of impacts on water resources—and other matters of national significance.

The process for environmental assessment and approvals under the EPBC Act involves a number of stages:

  • Referral: A project proposal is ‘referred’ to the Commonwealth Environment Minister, who decides whether approval is required and the type of assessment required. The Minister can refuse the project at this stage if its impacts will be ‘clearly unacceptable’.

  • Assessment: The project proponent will then prepare the assessment which undergoes a public consultation process.

  • Approval: Based on the assessment, the minister decides whether to approve the project, and sets relevant conditions for an approved project’s operation. Almost all projects are approved with conditions.  Only a very small number of projects have been denied approval under the EPBC Act.

  • Compliance: After approval, ongoing operations are required to comply with the conditions set in the approvals stage and compliance must be demonstrated through an agreed process—typically through ongoing monitoring, reporting and inspection.

The legislation allows for a degree of ministerial discretion in relation to project conditions. However, project approvals and conditions should demonstrate the consideration of certain principles, particularly ecologically sustainable development and the precautionary principle.

Bilateral agreements—the one-stop shop

The EPBC Act provides for bilateral agreements to be made between the Commonwealth and the states, allowing the Commonwealth to accredit state assessment processes (assessment bilateral agreements) and potentially approval processes (approval bilateral agreements). This has been advertised as a ‘one-stop shop’ for environmental approvals. However, the Commonwealth cannot enter into approval bilateral agreements in relation to projects involving the water trigger. An amendment was introduced to Parliament in 2014 to remove this exception. However, the Bill lapsed before the recent election, and no approval bilateral agreements have yet been finalised. As a result, the Commonwealth Government will be involved in project approvals at least in the immediate future. Assessment bilateral agreements are in place with all states and territories.

Which CSG projects have been approved under the water trigger?

Table 1 summarises CSG projects referred under the EPBC Act. Since the water trigger commenced on 22 June 2013, four projects in Queensland have been approved by the Commonwealth Minister for the Environment. Of these projects, the common component in the approval conditions relating to the water trigger is a Water Monitoring and Management Plan. These plans, which require ongoing monitoring, early warning systems and reporting, are designed to help manage risks to water resources.

 

Table 1: Coal seam gas projects referred to the Commonwealth

Project Details

IESC Advice

Project Size

Federal Approval and Conditions

New South Wales Projects

Apex Illawarra (2011/5821)*

27 March 2012

16

bores

Approval not required.

Dart Energy (2011/6154)*

19 April 2012

2

wells

Approval not required.

Gloucester (2008/4432)*

20 December 2012

60-90

wells

Approved with conditions

11 February 2013.

12 September 2012

Narrabri (2014/7376)

Referred but IESC advice not yet requested

850

wells

No approval decision made under EPBC Act.

Queensland Gas Projects

Arrow Surat Gas (2010/5344)**

20 February 2013

6,500

wells

Approved with conditions

19 December 2013.

22 August 2013

Arrow Bowen Gas (2012/6377)**

31 July 2012

7,000

wells

Approved with conditions

27 October 2014.

24 May 2013

6,625

wells

18 July 2014

4,000

wells

Santos Future Gas Supply (2012/6357)*

31 July 2012

4,100

wells

Proposal withdrawn

6 November 2012.

Santos GLNG (2012/6615)

18 December 2014

6,100

wells

Approved with conditions

22 March 2016.

QGC Surat North (2013/7047)

10 April 2014

400

wells

Approved with conditions

17 December 2014.

Western Surat Gas Project (2015/7469)

Referred but IESC advice not yet requested

1,000

wells

Assessment ongoing.

Source: Commonwealth Government Department of Environment website.

*Projects that underwent the EPBC process prior to the water trigger, referred to the IESC.

**Projects with multiple IESC advices as a result of changes to the project or an expansion to the original project.