Have the feds come to the rescue on CSG?

New federal rules are in the offing for the coal seam gas sector and given the inconsistency in regulation nationwide, the move should be supported.

The federal government has moved to exert greater control over coal seam gas mining projects which are currently largely in the hands of the states.

Under the proposed new rules, if a coal seam gas project puts water resources at risk it may be referred to the federal government for review under the Environment Protection and Biodiversity Conservation (EPBC) Act. The level of threat to water that will trigger the operation of the Act is yet to be announced.

Currently coal seam gas extraction in Australia is poorly and inconsistently regulated. States have jurisdiction over subsurface mining and, while comprehensive regulation has been introduced in states such as New South Wales and Queensland, its protective scope is limited. The proposed amendments will significantly improve the environmental assessment and public participation process for these projects.

Currently, the EPBC Act comes into operation when one of the seven areas of national environmental significance is triggered: for example, if a project affects a declared World Heritage property or a national heritage place, or if it affects a nationally listed threatened species or the Commonwealth marine environment.

Until now, coal seam gas projects have rarely come within the scope of these seven triggers. It would only be where, for example, a coal seam gas project indirectly affects a matter of national environmental significance – because it has contaminated a significant water reserve that is habitat for a nationally listed species and ecological community – that it would be assessed under the federal legislation.

But now that water will be added as a new matter of national environmental significance, a coal seam gas project is far more likely to fall within the scope of the Commonwealth law.

All coal seam gas projects have an impact on water resources because the extraction of gas involves the removal of large amounts of groundwater. The trigger is likely to be activated in circumstances where a coal seam gas project affects groundwater resources so dramatically that the impact becomes a matter of national environmental significance.

This is a particularly important development given the volume of groundwater involved in coal seam gas extraction. Significantly, the amendments will ensure careful assessment of the potential impacts of a coal seam gas project on a groundwater resource. This will include considering how the depletion of the aquifer will affect its capacity to recharge, whether depletion will affect other inter-connected aquifers and the likelihood of any groundwater contamination.

The proposed amendment follows on from the 2011 independent review of the EPBC. This review recommended two new proposed matters of national significance that would trigger referral of a project under the Act: greenhouse gas emissions and ecosystems of national significance. The review did not recommend a water trigger, but did propose that water plans authorising actions which have a significant impact on protected matters be subject to assessment under the Act.

The proposed ‘water trigger’ amendment goes a lot further than the reforms proposed by the independent review. Incorporating a specific water trigger will mean that most coal seam gas projects become amenable to federal government evaluation.

Of particular benefit is the initial filtering process under the EPBC. If a coal seam gas project is likely to activate the water trigger – because, for example, of the anticipated volume of water being depleted from a groundwater aquifer – the project must be referred to the federal minister.

The minister will then evaluate the likely impacts on the water resource. If the minister finds a coal seam gas project is a “controlled action”, he or she must decide on a process for assessing the environmental impact. This can range from assessing preliminary documentation, to a public environment report or even a full-scale public inquiry.

Most assessments under the Act will require preparation and publication of draft environmental impact assessment documentation, a period for public comment and finalisation of terms of reference which incorporates public comment. Many projects that are assessed will end up being approved, although approval is usually subject to conditions.

The proposed changes do not completely resolve all of the environmental concerns relevant to coal seam gas mining in Australia. They do not, for example, impose a moratorium on mining nor do they expressly preclude hydro-fracturing, or “fracking”.

For all of that, however, the inclusion of a water trigger in the Environment Protection and Biodiversity Conservation Act will provide a clear process for referral and subsequent environmental impact review of coal seam gas projects at a national level.