COAL seam gas (CSG) gets the green light in NSW according to the Chief Scientist’s much anticipated ?nal report, but it also calls for sweeping reforms to regulation and oversight.
Chief Scientist Mary O’Kane’s independent review of CSG in NSW was foreshadowed by Premier Mike Baird as a “line in the sand” before the industry moved forward.
Professor O’Kane’s review, released on Tuesday night, said “it is inevitable the CSG industry will have some unintended consequences, including as the result of accidents, human error and natural disasters”.
However, “the technical challenges and risks… can in general be managed”, she said.
The review issued 14 recommendations to government to bolster controls on the industry and address the “major concerns” and “lack of trust” from landholders and rural communities.
Professor O’Kane cited industry transparency, public bene?t and lack of rigorous, independent regulation from government as key issues.
Government's response to the recommendations will determine the ultimate signifcance of the report.
Complete adoption of the recommendations would see a seismic shift from the present system.
Recommendations that would have most impact on regional and rural NSW include:
- Insurance and environmental risk coverage for short- and long-term impacts from CSG – including coverage for landholders, an environmental rehabilitation fund and a scheme to manage legacy issues.
- Designated areas for CSG development, as opposed to the current system whereby the whole state is open to CSG, but certain areas are cordoned off - notably residential zones and wine and thoroughbred regions.
- Public benefit of the industry should be demonstrable and transparent. Full cost of “regulation and support of the CSG industry” be covered by fees, levies, royalties and taxes taken from the industry.
- A “fair and appropriate” system to govern land access and compensation to landholders is needed. Also, compensation should be extended to cover regional communities and councils.
- Government should beef up oversight and implement a “world class regime” for CSG extraction. This includes “a single independent regulator” with geological and geotechnical expertise, and set up independent advisors on the complex modelling of groundwater systems to provide a “glass earth” view of sedimentary basins.
NSW Farmers president Fiona Simson welcomed the “strong” and “necessary” advice from Professor O’Kane, but said reforms were needed before CSG expansion kicked off.
“We urge government to adopt all the recommendations immediately,” she said.
“We would caution against the report being used by government and industry as a ‘green light’ for CSG extraction in this State.”
Mrs Simson praised the “permitted area” approach favoured by the report and highlighted the importance of new insurance measures.
“We simply will not and cannot accept a situation whereby landholders are put in jeopardy ?nancially for issues that are outside their control,” she said.
The Australian Petroleum Production and Exploration Association praised the ?ndings and said it paved the way for a well regulated industry to take off in NSW.
Mike Foley
Senior journalist for The Land.
Senior journalist for The Land.
