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Bill introduced on the impacts of coal seam gas-induced land subsidence

A new bill, the Mineral and Energy Resources and Other Legislation Amendment Bill 2024, was introduced into the Queensland Parliament on 18 April 2024. If passed, it will effect substantial changes to resources legislation in Queensland and have significant implications for coal seam gas operations in relation to land subsidence effects.

A substantial portion of the bill relates to introducing a regime that will determine whether agricultural land (including land outside the area of a petroleum tenure) has or may be affected by subsidence caused by coal seam gas drilling. Then, if it has been affected, the bill discusses how it would require the responsible tenure holder to enter into an agreement with the owner and occupier of the land relating to subsidence management and compensation for subsidence effects.

In many respects, the existing regime under chapter 3 of the Water Act relating to managing the impacts of resource activities on water bores will be replicated.

Amendment of Mineral and Energy Resources (Common Provisions) Act

The bill introduces a new Chapter 5A into the Mineral and Energy Resources (Common Provisions) Act 2014 (MERCPA). It intends to deal with the management of subsidence of land either within or outside a petroleum tenure (Authority to Prospect (ATP) or Petroleum Lease (PL)) caused by coal seam gas (CSG) drilling.

The Minister may by gazette notice declare a part of Queensland to be a subsidence management area.

Subsidence activities

If such a declaration is made, the Office of Groundwater Impact Assessment (OGIA) must prepare and give a proposed subsidence impact report for that area to the Chief Executive of the Department of Resources, which is subject to approval by the Chief Executive.

The report may identify petroleum tenure holders as responsible holders for undertaking various types of studies or assessments in the area relating to subsidence impacts subsidence activities). Alternatively, the Chief Executive of the Department of Resources can direct a petroleum tenure holder to undertake subsidence activities.

Subsidence activities which a petroleum tenure holder may be required by a report or direction to undertake are:

  • land monitoring; being the ongoing monitoring of land to obtain information about changes due CSG-induced subsidence;

  • baseline data collection; being the collection of information about the land before subsidence occurred; and

  • farm field assessment; being an assessment of:

    • the CSG- induced subsidence that has happened or is predicted to happen on the land;

    • the susceptibility of uses of, or farming practices on, the land to changes because of the CSG-induced subsidence; and

    • the impacts of the actual or predicted CSG-induced subsidence on the ability to undertake, or the productivity, of agricultural activities on the land.

The petroleum tenure holder will also be required to have an independent, suitably qualified farm field auditor undertake an audit of the farm field assessment.

Production from a petroleum well under an ATP or PL which is wholly or partly within or under the affected agricultural land may not commence until certain steps are taken or conditions met. This restriction will not apply to already producing wells.

Subsidence management plan and compensation agreement

A farm field assessment may result in the petroleum tenure holder having to enter into a subsidence management plan with each owner and occupier of the affected land (landholder).

The plan may be determined through similar steps and mechanisms to those that apply for reaching or determining a conduct and compensation agreement.

A subsidence management plan can be incorporated into a conduct and compensation agreement.

In addition, there will be a statutory liability on a petroleum tenure holder to compensate an owner or occupier of agricultural land in a subsidence management area. This would be for any cost, damage or loss including consequential loss, incurred because of the impacts or predicted impacts of CSG- induced subsidence happening and the petroleum tenure holder entering the land to undertake any subsidence activity.

The petroleum tenure holder may negotiate a subsidence compensation agreement with the landholder that addresses this compensation liability.

A similar process that applies for negotiating a conduct and compensation agreement will apply where agreement cannot be reached on the terms of a subsidence management plan or subsidence compensation agreement with reference to ADR, statutory arbitration (in the case of a subsidence compensation agreement), or the Land Court.

The landholder may also opt out of entering into such an agreement.

The petroleum tenure holder must give notice to the Registrar of Titles of the existence of a subsidence management plan, subsidence opt out agreement or subsidence compensation agreement (subsidence instrument) in respect of freehold land or land under the Land Act.

A subsidence instrument or a decision of the Land Court or arbitrator on a subsidence compensation matter is binding on the parties, their successors and assigns.

Critical consequence direction

The Minister will have power to direct a petroleum tenure holder to take certain measures to prevent or ameliorate significant subsidence impacts that have or are likely to occur where a subsidence management plan measure has failed or is ineffective.

Land access

To facilitate the undertaking of subsidence activities, subsidence measures under a subsidence management plan and actions directed by the Minister, the Chief Executive may authorise the relevant petroleum tenure holder to enter private land outside the area of the petroleum tenure.

Next steps

The Parliamentary Clean Economy Jobs, Resources and Transport Committee is considering the bill, alongside ongoing public consultation, and will table its report on 7 June 2024.


Authors

CARELESS paul highres SMALL
Paul Careless

Special Counsel


Tags

Energy and Natural Resources Environment and Planning

This publication is introductory in nature. Its content is current at the date of publication. It does not constitute legal advice and should not be relied upon as such. You should always obtain legal advice based on your specific circumstances before taking any action relating to matters covered by this publication. Some information may have been obtained from external sources, and we cannot guarantee the accuracy or currency of any such information.