Posted on March 27, 2012 by
Tighter controls on coal seam gas exploration
On 6 March 2012, the Minister for Planning & Infrastructure, together with the Minister for Resources and Energy, announced the release of a draft Code of Practice for Coal Seam Gas Exploration (‘the Draft Code’).
The Draft Code is part of the NSW Government’s Strategic Lands package. Under that package, Strategic Regional Land Use Plans will be released and ‘define land use priorities for different areas of land within the region. The plans will identify the best places
for agriculture, mining, CSG extraction …and all other types of land use.‘ The plans, together with the Draft Code, aim to address community concerns about environmental standards for coal seam gas exploration and safeguard high-quality agricultural land and water resources.
Requirements under the Draft Code
The Draft Code sets out a best practice framework for coal seam gas exploration companies to follow in dealing with landholders and the community.
The Draft Code contains the following guidelines:
1. A process for communicating with Landholders
- Coal Seam Gas (‘CSG’) exploration companies (‘Explorers’) should make contact with the landholders in the area where exploration activities are proposed.
- In relation to landholders who are willing to negotiate the use of their land for CSG exploration, further discussion should be followed up by the preparation of an Access Arrangement.
- An Access Arrangement is an agreement between the landholder and the Explorer which establishes the ground rules for an Explorer’s access to a property.
- Compensation arrangements are also dealt with under the Access Arrangement. Compensation relates to both the reasonable costs incurred in negotiating and making the Access Arrangement, and compensation to offset the inconvenience, noise and deprivation of part of the land.
- Further requirements of an Access Arrangement are set out under the Petroleum (Onshore) Act 1991 and the Draft Code.
- A standard Access Arrangement template is being prepared by NSW Farmers’ Association and the Australian Petroleum Production and Exploration Association.
2. Communication with the Community
- The community should be engaged at an early stage of the exploration process. The exact timing of community engagement will depend on individual circumstances.
- The Draft Code recommends that community engagement should occur before any Access Arrangements are signed.
- The Draft Code lists the qualities of ‘Good Consultation’. The list includes ‘making sure all stakeholders are aware of any real or potential impacts’ and ‘setting up channels of communication that allow…feedback.‘
- The Explorer will be required to set up a record of community engagement.
- The Explorer will also be required to publish either annual or quarterly exploration activity reports on their website, and in addition provide a copy to their relevant local Council.
- The Explorer is to give the relevant local Council, or Councils, a minimum of six (6) months notice of an intention to start an exploration program within the local Council area.
3. Protection of Water
- The NSW Government is concerned to ensure ‘that the State’s water resources are adequately protected while the State’s abundant reserves of natural gas are developed for the benefit of all.’
- In relation to the disposal of CSG water, the NSW Government is developing a Managed Aquifer Recharge Policy which will regulate the re injection of water into aquifers.
- In addition to this, Stage One of the Aquifer Interference Regulation was released in June 2011. This regulation places requirements on Explorers to obtain water access licences.
- The NSW Government is also developing standards for well construction which explorers will be obliged to follow under the Draft Code.
Exhibition and comment
The Draft Code, together with the Strategic Regional Land Use Plans already released under the NSW Governments Strategic Lands Package, have been published online and placed on public exhibition at all council chambers throughout both the New England North West and the Upper Hunter regions in addition to various public libraries in those regions.
The public exhibition period runs from 8 March 2012 to 3 May 2012.