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New South Wales CSG regulations bring certainty for miners, but not communities

In NSW the last 12 months has seen a quantum leap in the government focus on coal seam gas (CSG). In December 2010 the then-Labor NSW state government introduced a moratorium on gas well fracking. They…

Under the new regulations, exploration at Pilliga would still have gone ahead. Kate Ausburn

In NSW the last 12 months has seen a quantum leap in the government focus on coal seam gas (CSG).

In December 2010 the then-Labor NSW state government introduced a moratorium on gas well fracking. They also told the NSW Office of Water to regulate the water impacts of gas exploration, which to that time had been the sole domain of the Mineral Resources Section of the Department of Industry and Investment.

Since 2010 the Federal Government has used the Environment Protection and Biodiversity Conservation Act to regulate operational CSG projects in Queensland, but since NSW only has only one operational field, the Camden project, it has had little impact in NSW.

In late 2011, in a deal with Tony Windsor as part of the carbon trading scheme, the Federal Government introduced the National Partnership Agreement for the Regulation of Coal Seam Gas (NPACSG). This provides national oversight of CSG projects in areas where the Federal Government has (limited) regulatory authority under the constitution. Most regulatory authority resides with the state government.

Finally two week ago the NSW announced draft guidelines for a GATEWAY approval process for CSG projects. NPACSG and GATEWAY are works in progress, and they overlap and interact. These initiatives also apply to coal mining projects, but here I will focus on CSG.

GATEWAY won’t do a better job of judging cumulative impacts than the existing process. AAP

Both NPACSG and GATEWAY establish independent science panels assessing the environmental impacts of CSG projects. The exact membership and role of these panels is still unclear. But it is unquestionably true that more independent research is needed on the long term impacts of CSG water extraction, both the potential depressurisation of the aquifers adjacent to the coal seams exploited, and the disposal options for the saline water pumped out of the coal seams during gas production.

NPACSG will facilitate more cumulative impact studies. This is undoubtedly good. Any process that assesses or approves on a project-by-project basis will struggle with the issue of cumulative impact because it is only concerned with the incremental impact of that one project. GATEWAY is focussed on a project basis, so is no better than existing approval processes for cumulative impacts.

The major flaw with the NPACSG and GATEWAY initiatives is that they aren’t triggered until a project is proposed and put before the independent panels for assessment. Thus it does not cover exploration impacts, which are a state responsibility. This is an important distinction for CSG.

There are two stages to CSG exploration. The first stage involves drilling core holes to retrieve samples of rock for testing. This is relatively low risk and has been a standard part of mining exploration for many decades.

The second stage, however, is specific to CSG and involves drilling pilot wells and testing them for gas flow. These pilot wells are essentially identical to the wells used for CSG production because they are testing the economic potential of the gas field. The water in the well is pumped out in the same way as a production well, and the wells operate for periods up to six months.

If it’s anticipated fracking will be necessary for any subsequent production scheme, the pilot well will be fracked, just like a production well. Thus potential fracking damage may occur before any NPACSG or GATEWAY science approval process is triggered.

For instance, the Pillaga gas field, established by Eastern Star Gas in the Pillaga State Forest in northern NSW (and now owned by Santos), has had numerous environmental problems. Yet it operates under an exploration licence, not a development approval. Despite the demonstrated environmental issues at Pillaga the new regulatory initiatives would have never been triggered and a NPACSG or GATEWAY assessment never required.

GATEWAY envisages an independent panel to assess the project. This is a step forward because the public in NSW are somewhat cynical about the motives and scientific rigour of the standard environmental approval process. Though the details are not spelled out, it appears it might be akin to a permanent Planning and Assessment Commission (PAC).

These PACs involved a small number of independent scientific experts examining all data and evidence, and typically their project brief was quite broad ranging. The previous NSW government set up a number of PACs to look at specific aspects of projects. For instance, it was a water-focussed PAC that recommended the Bickham open cut coal mine proposal in the Upper Hunter be rejected on the basis of the impacts on the headwaters of the Pages River. The NSW government subsequently rejected the Bickham open cut publically referring to the PAC recommendation.

Miners will be able to find out more quickly if their projects are approved. Jeremy Buckingham

However, Bickham highlights a defect in making a scientific assessment only in response to a project proposal. The Bickham proponents have recently indicated that they will shortly propose a revised project, an underground mine this time, which will no doubt trigger the whole water impact debate all over again.

This is not the certainty for residents and existing industries (in this case thoroughbred studs) that the government is selling as a benefit for GATEWAY. There appears nothing to stop a proponent repeatedly proposing revised projects until one passes the GATEWAY, either on merit or by just wearing the committee down.

The community is looking for a process that scientifically assesses an area as either suitable or not suitable for mining or CSG, and draws a line around any exclusion zones, once and for all time. This would allow the studs to make long-term investments with certainty.

The only certainty GATEWAY seems to provide is for the mining and CSG industry. It will allow them to easily and quickly assess whether their project will be allowed to go ahead. While they will still need to do the normal environmental reports required for the subsequent development application, it would be a brave government department that would contradict a prior independent scientific assessment.

Ultimately both NPACSG and GATEWAY will improve the science base and provide a better understanding of mining and CSG impacts. However, they don’t address many of the community concerns about long-term certainty for lifestyle and investment. Consequently, neither are a panacea for what the community see as a flawed and biased mining and CSG approval process.

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7 Comments sorted by

  1. Bernie Masters

    environmental consultant at FIA Technology Pty Ltd, B K Masters and Associates

    If the author's strongest criticisms of the CSG industry's 'numerous environmental problems' are as described in a media statement from The Wilderness Society which talks about the possible impacts from a new CSG proposal, then it's difficult to take his concerns about the industry too seriously.
    Can I suggest he provides more detail about the actual harm done to the environment from CSG extraction rather than just rely on the undoubted existence of largely unspecified community concerns as the foundation for his call for more regulations?

    1. Garry Willgoose

      Professor at University of Newcastle

      In reply to Bernie Masters

      The "numerous environmental problems" comment was specifically to do with the Pillaga operation, not the CSG industry in general. I was at a CSG water forum 2 weeks ago with Santos people and they publicly acknowledged that there are water problems at Pillaga. NSW Office of Water is currently involved in an investigation there which is at yet incomplete. Pillaga is an example of a operation that would not have gone through the GATEWAY process as it is currently proposed. The same is true of all CSG exploration projects.

      Re the examples of actual harm from CSG. The article was about how the new regulations might alleviate (both community and technical) concerns about landuse and environmental conflicts from possible CSG activities, not a laundry list of activities gone wrong. That would be an article(s) for another day.

    2. Peter Evans


      In reply to Bernie Masters

      I agree the enviromental problems are not spelt out but that is not the purpose of the article as I see it. The issue it touches on is the community perception of problems and the community anger that this has aroused. I see this issue as a big one for state governments especially NSW and Qld. If rural communities continue to have these perceptions and don't consider them addressed by state actions the backlash could be powerful. On the other hand if gas companies see the state as too intrusive it could jeapordise this investment and employment. It will be interesting to see Clive Palmer's application for a coal associated project in Qld put on hold by the new govt as a result of enviromental problems such as those touched on here.

    3. Bernie Masters

      environmental consultant at FIA Technology Pty Ltd, B K Masters and Associates

      In reply to Garry Willgoose

      Garry, thanks for the further comments. I'm WA based and we don't have much of a CSG industry to speak of over here, so the community and technical concerns you refer to are not as clear to me as they might be. However, your article had a link to The Wilderness Society webpage dated July 2011 which talks about a proposal to extract CSG from beneath the Pillaga forest. Your article would have had more value for me if it had provided links to information about actual impacts from operating CSG activities.

    4. Jane Rawson

      Editor, Energy & Environment at The Conversation

      In reply to Bernie Masters

      Bernie, I was editor for this piece and I should say that I added that link to show an example of some concerns people have had over Pilliga; perhaps it wasn't the best illustration available. This article from the SMH has quite a nice summary of the concerns there

    5. Bernie Masters

      environmental consultant at FIA Technology Pty Ltd, B K Masters and Associates

      In reply to Jane Rawson

      Thanks for the comment and links, Jane. My reason for being so concerned about perceived versus real impacts dates back to the 1980s when the NSW Land and Environment Court with former Whitlam minister Jim McClelland as the judge presiding had to deal with the case of Coastal Residents Against Pollution (you can work out the acronym!) who were opposing a sewage outfall project. The judge rejected the community's arguments because (and I'm paraphrasing here) 'the opponents were trying to have accepted…

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  2. wilma western

    logged in via email

    Time for Victoria to catch up with other Eastern states on this. The Liberal speaker of the Legislative Assembly has conme out in opposition to a gas exploration licence for Bass Coast Shire and parts of South Gippsland Shire. However the Baillieu government seems to be indolent on certain pressing issues and very prompt on other so- called election promises such as allowing cattle grazing in the Alpine National Park, draconian restrictions on windfarms ,pay rises for police but not nurses(until industrial action forced the issue) etc. It now looks as if they might allocate more brown coal to would-be entrepreneurs whose big promises of developments in the Latrobe Valley have twice failed to gain business investment ...