Bureaucrats are flouting their own fracking laws, say activists. Paddy Manning reports.
THE boom in fracking has blanketed vast tracts of the country in oil and gas exploration permits, creating uncertainty for landholders who often do not know if or when their property will be subject to drilling.
Titles for petroleum exploration and production, plus applications and release areas, cover 408 million hectares or roughly 53 per cent of Australia, according to figures released this week by activist group Lock the Gate.
Much of that onshore exploration "acreage" has been awarded in the past decade as Australia has sought to replicate the American unconventional energy boom - extracting previously unrecoverable shale oil and gas, and coal seam gas, using directional drilling and hydraulic fracturing (fracking) technology.
Until 1998, petroleum titles (excluding applications and release areas) covered only 12 million hectares, but in the past 15 years that has jumped tenfold, with 153 million hectares awarded since 1998, according to Lock the Gate's figures.
Of the eastern states, Queensland has petroleum titles covering 41 million hectares and NSW has 19 million hectares. Victorian titles cover just 817,131 hectares as exploration gets under way by juniors, including the Gina Rinehart-backed Lakes Oil and the Exxon Mobil-backed Ignite Energy.
To encourage timely exploration and development, and stop under-resourced companies sitting indefinitely on acreage, state governments oblige explorers to relinquish a proportion of their permit area when they seek to renew it. But in NSW, as Fairfax Media reported on Friday, documents released under Freedom of Information laws show the relinquishment requirements were often waived, as renewal of 22 CSG petroleum exploration licences (PELs) was announced last September. That announcement coincided with the NSW government outlining its new regulatory framework for the industry after an 18-month delay including a moratorium on fracking.
Lock the Gate sought the application and renewal documents for 10 controversial NSW exploration licences and found half a dozen cases where the exploration licence holder had sought a waiver of the relinquishment requirements under current rules - which requires the hand back of 25 per cent of the permit area on renewal - often citing an inability to explore due to community opposition.
Metgasco, targeting the northern rivers region of NSW, which takes in Casino, Lismore and Byron, has faced strong opposition with police called in before Christmas to investigate a bomb threat against the company. Since spiking above 28¢ in September, on hopes the new state policy would pave the way for speedier development, Metgasco's shares have fallen two-thirds and were trading at 9¢ on Friday.
Last May, officials reviewing Metgasco's renewal application for a licence known as PEL13 noted: "The proposed work program . . . is light but in the recent past Metgasco had experienced severe delays due to opposition, blockade and access problems which renders a bigger work program rather meaningless if they cannot fulfil them."
Metgasco says its exploration rights were effectively suspended for almost 18 months during the NSW regulatory hiatus. "[We] provided a range of arguments to minimise the amount of blocks that were relinquished [which were] accepted by the NSW government," chief executive Peter Henderson told BusinessDay.
Of Santos's renewal applications, relinquishment requirements were waived in its licence number PEL 238 - its prime title near Narrabri, where it proposes to spend $18 million on exploration - and in PEL12, which covers an area south-west of Gunnedah. Santos said results from eight wells drilled in PEL12 were disappointing with elevated levels of carbon dioxide found, but applied for a six-year renewal to unravel the "sweet spot" by seismic survey and drilling core holes. The department decided four rather than six years was fair, "considering the delays and efforts of Santos in securing landholder permission and access for any of the contemplated operations".
The mandatory relinquishment provision was never enforced by the previous state government, according to a spokeswoman for NSW resources and energy minister Christ Hartcher, who said titleholders could seek special circumstances renewal, and extreme difficulty in obtaining access to land within the licence area could be taken into account as an extenuating factor.
But Lock the Gate spokeswoman Carmel Flint said the "special circumstances" excuse was "an abuse of process" which fell outside the government's guidelines.
Peter Martin, the former CEO of Rothschild Asset Management, is convenor of Southern Highlands Coal Action Group, affiliated with Lock the Gate. Martin owns a 44-hectare truffle grove at Sutton Forest which is covered by PEL469 for coal seam gas exploration, held by Leichhardt Resources and Planet Gas, and an exploration authority held by Hume Coal.
Martin says Planet Gas has done no exploration work for three years at PEL469, which covers 3172 square kilometres, and says the relinquishment waivers constitute maladministration.
"It's a joke," he says. "We're just stunned the government didn't take the opportunity to pull some of these licences.
"It's happening all over NSW. The departments have not enforced their own regulations."
Pressure building over fracking sites
Bureaucrats are flouting their own fracking laws, say activists.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free