Coal seam gas versus other land uses: Has Queensland got it right?

9 February 2012

The optimistically named Resources Legislation (Balance, Certainty and Efficiency) Bill 2011 is the Queensland government’s latest attempt at addressing the conflict between the coal seam gas industry and other land users.

Its modus operandi is to declare “Urban Restricted Areas”, or buffer zones, of 2 km around 163 of Queensland’s cities and towns within which mining and petroleum activities will require approval.

Until recently, the majority of land use conflict arising from mining was between mining companies and agricultural land users or environmental interest groups.  However, coal seam gas extraction has a vastly different surface impact from more traditional forms of resource extraction.  Instead of having a large impact in a relatively discrete area, coal seam gas extraction has a smaller development footprint, but over an expansive geographical area, including areas in the vicinity of settlements and rural residential land.  As a consequence, its potential to impact on other land users, and notably urban settlements, is significantly increased.

Once the new Bill commences, any greenhouse gas storage activities, mining activities or petroleum activities within the URA, with the exception of certain planned activities, will require the consent of either the relevant local government or the Minister. 

Will the Bill deliver on its goals?

We predict a number of issues to arise under the new legislation which may undermine its goal of providing balance, certainty and efficiency:

  • The Minister for Mines is the ultimate decision-maker for applications to undertake activities within the URA.  It is questionable whether this Minister alone is best placed to make decisions which potentially impact the future of communities.  A more balanced approach would have been for such decisions to be made at least in consultation with the Minister for Planning or the Regional Planning Minister. 
  • It is not clear whether local governments, particularly regional local governments, are going to have the capability or the funding to properly assess URA applications.  It seems likely that local governments will be heavily dependent upon proponents for information about the nature and potential impacts of proposed activities and that they will have limited ability to undertake independent verification of the information provided.

It is similarly unclear whether local governments will have the financial resources to support their position about activities in the URA in the Land Court, or the political stomach for making decisions about resources activities which often polarise communities.

  • The current proposal for the URA comprises a buffer area around existing urban zoned land, without any provision for land intended for future urban purposes. 

It is likely that a large number of local governments will establish new urban areas over the next few years as their populations grow.

Future expansion of urban areas will trigger the need to revise the URA creating uncertainty for resources companies considering to invest in development within the URA.  Forward looking companies should become pro-actively involved in public consultation about new or amended urban planning schemes to protect any interests they have within an existing URA or likely future URA.

  • It is disappointing to see the URA established on the simplistic formula of existing urban zoned land, when a more sophisticated approach, which had regard to local and regional planning would be much more likely to protect the growth potential of communities, while providing investment certainty to resources companies.  This failure to consider growth of communities is surprising, particularly given the draft Queensland Regionalisation Strategy which was recently released for public comment. 
  • One of the issues which has caused the most tension has been the overlap of coal seam gas extraction activities with rural residential land.  It is not clear whether the ‘existing urban zoned land’ to be included in the URA will include rural residential zoned land.  However, rural residential land would not traditionally be considered to be to be ‘urban’.  As a consequence, it seems likely that such areas will not be protected by the URA and that this issue may remain unresolved for the time being.
  • It is likely that a proposal to undertaken activities within the URA would also involve the need to obtain or amend an environmental authority and to prepare or amend a development plan or plan of operations.  The new legislation doesn’t attempt to integrate the process for obtaining approval for activities within the URA with these other processes.  This may result in inconsistencies between the various documents with additional costs being borne by resources companies in terms of delay and the need to vary proposals, as well as to the regulators in terms of resources needed to assess the various applications.  This is a missed opportunity in terms of the Queensland government’s ‘Greentape reduction’ agenda.
  • The Bill will give local governments the power to impose conditions and time limits on any approvals to undertake activities within the URA.  The Bill does not, however, create any right to seek review of such conditions or time limits.  As a consequence, there is potential for conditions to be imposed which would make a proposal unworkable or for time limits to be imposed which would compromise the financial viability of a proposal.  As presently drafted, the Bill would not allow any right of appeal or right to seek internal review in such circumstances.
  • The maximum penalty for contravening a condition of the local government’s or Minister’s consent to undertake activities in the URA is 10 penalty units.  By contrast, the maximum penalty for contravening a condition of an environmental authority is 2,000 penalty units and the maximum penalty for contravening an ordinary development permit is 1,665 penalty units.  This low penalty, together with the difficulty local governments are likely to face in creating an effective inspection and enforcement regime, suggests that the conditions power is unlikely to have teeth unless enforcement of conditions is given significant attention by compliance staff.

The most significant outcomes of the Bill are likely to be that resources companies start paying more attention to land use planning and that local governments open more of a dialog with resources companies operating in their areas.  This may, of itself, serve to avoid or minimise some of the conflicts the Bill is aimed at addressing.

In the future, the regulation of coal seam gas extraction will be increasingly influenced by urban and regional planning, thereby eroding the industry’s existing immunity from such laws. However, it is difficult to see that the Resources Legislation (Balance, Certainty and Efficiency) Amendment Bill 2011 could, even with further refinement of the URA, be the last word in striking the balance between coal seam gas extraction and other land uses.

The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.

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Henry Prokuda

Consultant. Brisbane
+61 7 3228 9791