On 28 January 2014, the NSW Government announced that it “has finalised landmark” coal seam gas (CSG) reforms which aim to safeguard homes and high quality farmland in New South Wales. These reforms include:
On 4 October 2013, the NSW Government introduced changes which prohibit CSG development in or under all residential areas in the State, the North West and South West Growth Centres of Sydney, and within 2km of such zones. These reforms were introduced by amendments to State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP). More details about these reforms are provided in an earlier Corrs In Brief.
Over the next few months, the NSW Government exhibited information and consulted with the public and stakeholders in relation to further exclusion zones including “future residential growth areas”, “additional rural village land” and “critical cluster land” across the State.
On 28 January 2014, the “final” CSG reforms were introduced with the commencement of State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) Amendment (Coal Seam Gas) 2014 (SEPP Amendment).
The SEPP Amendment introduces a prohibition on CSG development on or under:
The CSG exclusion zones areas covered by these reforms and the reforms introduced in October 2013 are all usefully shown on the CSG Exclusion Zones Map prepared by DPI. As a consequence of both sets of reforms, approximately 95 per cent of dwellings covered by current petroleum licences are protected from exploration and production activities.
Although all new CSG development (including pipelines) is banned within the exclusion zones, pipelines associated with CSG development are permitted within the 2km buffer zones (subject to approval).
Prior to these recent reforms, some 1.74 million hectares of BSAL was mapped in the Upper Hunter and New England North West Regions, and given legal effect by earlier amendment to the Mining SEPP. However, following public consultation of the draft mapping in October and November 2013, the NSW Government has increased the amount of BSAL across the State by approximately one million hectares. These new areas of BSAL have been given legal effect by the SEPP Amendment and amendments to the Strategic Agricultural Land Map.
The additional land identified as BSAL includes land in the Central West, Mid and Far North Coast, Southern Highlands, Western Region, South Coast and the Illawarra. For ease of reference, a consolidated Map showing BSAL across the State has been released by DPI.
If any State significant mining or CSG development is proposed on BSAL, a proponent must obtain a Gateway Certificate prior to lodging a development application. In addition, such proposals must be referred to the Commonwealth Independent Expert Scientific Committee and the NSW Minister for Primary Industries for advice on potential impacts on water resources. More details about the Gateway process and referrals are provided in an earlier Corrs In Brief.
In light of the fact that the mapping of BSAL across the State is covered by the SEPP Amendment, Strategic Regional Use Plans will no longer be implemented for the Central West, Mid and Far North Coast, Southern Highlands, Western, South Coast and the Illawarra Regions. Instead, the NSW Government proposes to prepare Regional Growth Plans (RGPs) for these areas.
RGPs will be developed in consultation with the community and stakeholders, and will comprise a comprehensive framework for managing growth and natural resources. It is clear that RGPs will have a strong focus on the protection of high quality agricultural land.
The Media Release jointly released by Andrew Stoner MP and Brad Hazzard MP states that the Government considers that these reforms have got the “balance right” and provide “clarity, consistency and confidence for the community and a variety of industries across NSW”. However, some stakeholders appear to be discontent with the recent reforms, particularly:
Some might say that the dissent amongst key stakeholders may indicate that the NSW Government has struck the right balance. Having said that, the real winners of the latest reforms appear to be those located in the metropolitan and residential areas where CSG development is prohibited.
In terms of clarity, consistency and confidence, there remains continuing uncertainty as to whether the recent reforms will stimulate the necessary investment in CSG development to prevent the looming gas shortage. Perhaps one of the greatest bars to such investment is the potential for CSG development to be stifled, even after significant investment in exploration activities, by the rezoning of adjoining land as a “residential zone” or identified as a “future residential growth area”, “additional rural village” or a CIC. As a consequence, the CSG industry is likely to have no confidence that its investment in exploration activities will be realised in the production stage many years later.
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