NATIONAL HARMONISED REGULATORY
FRAMEWORK FOR NATURAL GAS FROM
COAL SEAMS
STATE AND TERRITORY THIRD ANNUAL IMPLEMENTATION UPDATE ON
THE NATIONAL HARMONISED REGULATORY FRAMEWORK FOR NATURAL
GAS FROM COAL SEAMS
December 2015
BACKGROUND
At the 31 May 2013 meeting, the COAG Energy Council’s predecessor, the Standing Council
on Energy and Resources (SCER) endorsed the National Harmonised Regulatory Framework
for Natural Gas from Coal Seams (the Framework). SCER agreed that the Framework should
not be a static document and noted that it will be updated on a continuing basis by
jurisdictions. Accordingly, states and territories (States) report to the COAG Energy Council
on their implementation of the Framework on an annual basis.
To ensure that the Framework is current with leading practice across Australia, the States
were asked to make suggestions on how the Framework could be improved. These
suggestions are included in the update. The States have also been asked to provide updates
on achievements and challenges in harmonising their regulations over the previous 12
months and plans for harmonising legislation related to coal seam gas (CSG) and other
unconventional gas sources in the year ahead.
The Framework delivers on a commitment by Australian governments to put in place a suite
of leading practice principles, provide guidance to regulators in managing development of
CSG and ensure regulatory regimes are robust, consistent and transparent across all
Australian jurisdictions. The Framework focuses on four key operational areas of CSG, which
cover the lifecycle of development: well integrity, water management and monitoring,
hydraulic fracturing and chemical use.
The Framework acknowledges that CSG is, and will continue to be into the future, an
important component of eastern Australia's domestic gas supply. It also acknowledges that
as the Queensland liquefied natural gas (LNG) projects commence production and exports in
2015 the industry will contribute substantial export income to Australia's economy and is
already creating jobs and business opportunities in rural and regional areas.
INTROUCTION
The 2015 annual State and Territory report on the implementation of the Framework
provides updates from each jurisdiction. It highlights major achievements and challenges of
the previous 12 months.
The major developments related to coal seam and other unconventional gas include:
1. Legislation passed by the NSW Parliament in October 2015 enables the
implementation of many of the actions of the NSW Gas Plan, which was released on
13 November 2014. The NSW Gas Plan introduces a new framework for the gas
industry in NSW and responds to recommendations in a number of reviews,
including the Independent Review of Coal Seam Gas Activities in New South Wales by
the NSW Chief Scientist and Engineer, released on 30 September 2014;
2. Queensland Gas Supply and Demand Action Plan announced on 7 July 2015;
3. Victorian parliamentary Inquiry into onshore unconventional gas in Victoria
announced on 26 May 2015;
4. Independent Inquiry into Hydraulic Fracturing in the Northern Territory (the Hawke
Inquiry) completed in November 2014 and published in February 2015.
1
5. South Australian parliamentary Inquiry into Unconventional Gas (Fracking) in the
State’s South East, which is ongoing;
6. Western Australia’s parliamentary Inquiry into the Implications for Western Australia
of Hydraulic Fracturing for Unconventional Gas, which is ongoing; and
7. COAG Gas Supply Strategy agreed by COAG Energy Council at its December 2014
meeting.
NEW SOUTH WALES
Legislation passed by the NSW Parliament in October 2015 builds on the NSW Gas Plan
reforms to better regulate the state’s resources sector. The Legislation harmonises titles
administration across mineral and petroleum titles and provides both industry and the
community with greater clarity about the rights and obligations that come with operating in
the NSW resources sector.
Specifically the approved legislative amendments create:
1. a new system for the granting of various mining and petroleum prospecting titles
involving designation of areas of the State as "controlled release areas" for particular
minerals and CSG,
2. a move towards greater consistency between mining and petroleum legislation,
particularly in the administration of titles and compliance and enforcement,
3. an adjustment of the balance between mining and petroleum exploration
titleholders and landholders,
4. giving the NSW EPA statutory responsibility for enforcement of "petroleum offences"
under petroleum, planning and water legislation, and
5. generally aligning work health and safety laws at CSG sites with existing laws for
mine sites.
On 26 March 2014, the NSW Government announced a freeze on the processing of new
Petroleum Licence Applications and this freeze was later extended until 31 December 2015.
In September 2014, the NSW Chief Scientist and Engineer released the final report of the
independent review of CSG activities in New South Wales. The report found that many of
the technical challenges and risks posed by the CSG industry can be managed. It also made
recommendations about where governance improvements could be made.
In November 2014, the Government announced its NSW Gas Plan and committed to
implementing all of the NSW Chief Scientist’s recommendations. A number of actions in the
NSW Gas Plan have either been completed or significantly advanced.
The NSW Government Petroleum Exploration Licence (PEL) Buyback Scheme commenced on
11 December 2014 and closed on 30 September 2015. The Scheme provided an opportunity
for holders of PELs to surrender their titles and receive a payment for each title
surrendered. By 1 November 2015, seventeen PELs were bought back and cancelled,
reducing the footprint of CSG titles and applications from more than 60 per cent of NSW to
around 8 per cent. A further three PELs and 1 Petroleum Production Lease Application are
2
due to be bought back, subject to the titleholder shareholders’ approval. If approved, this
will further reduce the area of the NSW covered by PELs to around 7 per cent.
Under the NSW Gas Plan, the Government is establishing a State-wide Strategic Release
Framework for petroleum titles. The Strategic Release Framework will ensure that any
future gas exploration will only be permitted in areas of the State released for exploration,
based on an assessment of environmental, economic and social factors. The freeze on new
petroleum licence applications remains in place until the Strategic Release Framework
comes into effect.
Under the Strategic Release Framework, only operators that meet the highest standards of
financial and technical capacity will be able to obtain petroleum titles.
The NSW Government expunged 16 Petroleum Exploration Licence Applications (PELAs) and
Petroleum Special Prospecting Authority Applications (PSPAPPs) as part of the NSW Gas Plan
implementation. Those current applicants, whose applications have been expunged will
have the first right to apply should the area they had under application be released under
the new Strategic Release Framework, for a proposed future title.
A new Minimum Standards and Merit Assessment Procedure (the Standards) came into
effect on 1 July 2015. The Standards apply to applications, transfers and renewals of PELs.
The Standards require petroleum explorers to meet minimum standards by demonstrating
sound work programs and proven technical and financial capability. Petroleum explorers
must now also commit to developing the State’s resources or risk cancellation of their titles.
Exploration work programs must include genuine community consultation, and sufficient
technical and financial capability to ensure that approved work programs occur in an
environmentally responsible manner. Additionally, explorers must demonstrate they have
the financial capability to ensure the use of the best available science and engineering
practices.
Petroleum explorers that do not comply with work programs or demonstrate nonperformance in work areas, risk having their title cancelled or rejected for renewal. Titles
may only be granted or renewed if the applicant has a satisfactory compliance record.
The Standards also incorporate the Government’s “Use it or Lose It” Policy. That is, the
Government is seeking a serious commitment from petroleum title holders to invest in the
state. If such a commitment to invest cannot be demonstrated, companies may face
cancellation of their titles.
From 1 July 2015 the NSW Environment Protection Authority (EPA) became the lead
regulator for compliance and enforcement of conditions of approval for gas activities in
NSW, excluding work health and safety. Empowering the EPA to lead compliance and
enforcement gives individuals and communities one place to go should they believe
violations of title, regulations or law are occurring. It also means that one agency is able to
focus its energies on undertaking compliance and enforcement work.
The EPA is not an approval body to the planning process, but continues to provide expert
advice to the planning process, and will be consulted regarding proposed conditions to
ensure they are enforceable, practical and reasonable.
In recognition of the fact that communities can be impacted by gas development, the NSW
Gas Plan included a commitment to establish the Community Benefits Fund to fund local
3
projects in communities where gas exploration and production occurs. Gas explorers and
producers will be able to contribute to the Fund voluntarily. The Government will reduce $1
from a company’s gas royalty liability for every $2 paid into the Fund, capped at 10 per cent
of the royalty take for each gas project in each production year.
The aim of the Fund is to ensure that local communities share in the benefits of gas
development; and encourage the development of lasting and mutually beneficial
relationships between gas companies and the communities in which they operate. On 21
May 2015, the Government publically released a discussion paper seeking industry and
community views on how the Community Benefits Fund should be designed. Submissions
are now being considered.
The Government amended the State Environmental Planning Policy (Mining, Petroleum
Production and Extractive Industries) 2007 so that all gas exploration is assessed and
determined by the Minister for Resources and Energy and all gas production is assessed and
determined by the Minister for Planning or the independent Planning Assessment
Commission. All gas activities continue to be subject to rigorous environmental assessment.
As part of the NSW Gas Plan, the NSW Government requested the Independent Pricing and
Regulatory Tribunal (IPART) to recommend benchmark compensation rates for landholders
in NSW who are hosting coal seam gas developments. These benchmarks are to guide
landholders in negotiating compensation agreements with industry. The IPART Final Report
is due late 2015.
Major reforms to NSW’s exploration regulations began to be phased in from 1 July 2015.
Improved Management of Exploration Regulation (IMER) is a new framework for
exploration licences and assessment leases that applies to all grant, renewal and transfer
applications lodged after 1 July 2015, as well as the renewal of any petroleum exploration
licences and petroleum assessment leases from that date. The reforms promote stronger
accountability for industry, as well as the use of innovation and best practice to meet riskbased requirements. Most importantly, they offer the community greater clarity and
confidence in the regulation of the sector.
The adoption of a risk-based regulatory framework is part of the NSW Government's Quality
Regulatory Services initiative and brings NSW into line with governments in other states and
overseas that have shifted to risk-based frameworks, particularly in the areas of exploration,
mining and environmental protection.
New codes of practice developed as part of the IMER framework include:

Exploration Code of Practice: Environmental Management

Exploration Code of Practice: Produced Water Management, Storage and Transfer

Exploration Code of Practice: Rehabilitation
Existing CSG Codes of Practice on Well Integrity and Fracture Stimulation are also under
review.
New guidelines developed or revised as part of the IMER framework include:

Exploration Guideline: Petroleum Land Access

Exploration Guideline: Work Programs for Prospecting Titles
4

ESG5: Assessment Requirements for Exploration Activities

Exploration and Production Guideline: Petroleum Drilling and Well Servicing –
Competencies

Exploration Guideline: Annual Activity Reporting for Prospecting Titles

ESG2: Guideline for Preparing a Review of Environmental Factors
The Division of Resources and Energy released “Common Ground” in June 2015. Common
Ground is a web application that easily allows communities to search all coal, mineral and
gas exploration or production titles in their region. The application aims to help
communities better understand the mineral and petroleum assets under their feet and how
those assets are explored and developed.
Common Ground provides a single access point to data held in numerous government
databases, as well as access to information on the NSW regulatory framework, resource
types, project boundaries, permitted activities and conditions applied to explorers.
Key features of Common Ground include:

A free responsive web-based application that adapts for any PC, smart phone or
tablet. There is no need to register or subscribe and it is available to anyone at any
time

Common Ground is automatically updated daily

Map layers can be used to show resource titles in context with other land uses such
as National Parks, reserves, Strategic Agricultural Land, Native Title areas and
indicative CSG residential exclusion zones. They can also show geological or satellite
information and a perspective from street view

An A-Z company search function that lists all the current titles held by each company

Clearly explains the role of communities, government and industry during
exploration or production.
NORTHERN TERRITORY
There is currently no CGS exploration activity within the Northern Territory (NT). Coal
sequences have been identified at depth in the south-east of the Territory, in the area of the
Simpson Desert and there is a likelihood companies will be looking to undertake exploration
of CSG in the future.
In early 2014 the NT Government commissioned Dr Allan Hawke to conduct an independent
inquiry into the use of hydraulic facturing as a method to extract oil and gas resources in the
NT. The Hawke inquiry determined that the NT laws were sufficient for the current level of
oil and gas activities in the NT, but they needed to be updated and strengthened as the oil
and gas industry grows.
5
On 26 August 2015 the NT Government released its Guiding Principles, setting out how the
oil and gas industry is to operate while the recommendations of the Hawke report are
progressed and a comprehensive review of the existing NT regulatory framework is
undertaken.
As a result of the Hawke Inquiry findings the Department of Mines and Energy (DME) is
undertaking a review of the NT Petroleum Act and drafting new Environment Regulations
and Resource Management Regulations that will take into account all unconventional
exploration including CSG, the environmental impacts and chemical use.
In addition, the Northern Territory Water Act 2011 is due to be reviewed and as such CSG
Water Management impacts will also be considered.
QUEENSLAND
Queensland Department of Environment and Heritage Protection (EHP) has begun work on
a review of the current regulatory requirements for hydraulic fracturing and other
stimulation activities. In the coming year EHP will develop outcome focused conditions for
hydraulic fracturing and also make any other necessary improvements to the regulatory
framework.
Queensland as part of the review of the Queensland Water Act 2000 is proposing to bring
about a consistent framework for management of groundwater use by the resources sectors
(petroleum and gas, and mining) including management of cumulative impacts. Office of
Groundwater Impact Assessment (OGIA) is currently undertaking a number of
hydrogeological assessments to revise cumulative impact assessment in the Surat
Cumulative Management Area in later 2015.
In early 2014 EHP finalised two ‘general beneficial use approvals’ – one for irrigation of
associated water and another dealing with various other uses (e.g. stock, stock intensive,
research and development, coal washing, dust suppression). These general approvals, and
their requirements, apply to those producers and users of water who choose to operate
under them - without the need for a specific application to and approval from EHP. Their
effect is that, where the water meets relevant standards, it can be used, as a resource, for
these purposes. Further information on these approvals is here:
https://www.ehp.qld.gov.au/management/non-mining/csg-water.html
In implementing the purpose of the CSG Water Management Policy 2012, EHP is:
1. amending the definition of regulated waste, so that better quality CSG water can be
transported and managed more simply; and
2. better defining standards for the use of CSG water to provide more certainty and clarity
– (see comment above and the general beneficial use approvals for certain uses of CSG
water).
During 2013 the Queensland government has continued to regulate a large and growing CSG
industry. There are now over 7200 CSG wells in Queensland.
6
There are a number of reforms underway within the Queensland Department of Natural
Resources and Mines (DNRM) that will affect CSG explorers and producers in various
capacities.
The greatest change for the petroleum industry has been amendments made in the Land
and Other Legislation Amendment Act 2014 to allow:

a two-year extension on all current authority to prospect (ATP) work programs and
relinquishment dates; and

flexible relinquishment and work program arrangements for ATPs through the ability
for ATP holders to apply for ‘special amendments’.
The Water Reform and Other Legislation Amendment Bill 2014 was introduced into the
Queensland Parliament in September 2014. It proposes to change the way that petroleum
explorers and producers can access non-associated water, such as for hydraulic fracturing.
To date, petroleum tenure holders have had an automatic right to take water for for
petroleum porduction, subject to make good obligations under the Queensland Water Act
2000. It is proposed that following a two year transition period, and five years for Surat
Basin tenures, petroleum explorers and producers will require authorisation under the
Water Act 2000 to take non-associated water, except where there is an exemption.
These changes will mean petroleum and mining proponents will be treated equally. Both
will be able to take associated water as of right on their tenures, subject to the make good
obligations. Associated water is water as a result of dewatering a coal seam, for example.
Queensland is involved in discussions with South Australia regarding harmonisation of
regulations related to exploration and production, predominantly of deep gas and oil, in the
Cooper Basin, which lies across both states borders.
These discussions are at preliminary stage and will focus on improvements for the
petroleum industry in the Cooper Basin, while ensuring robust environmental standards and
community safeguards continue.
SOUTH AUSTRALIA
As noted previously, South Australia (SA) undertakes to apply leading practice in accordance
with the Petroleum and Geothermal Energy Act 2000. Furthermore, SA seeks to undertake
an independent review of risks and mitigation measures detailed in environmental reports
in the interest of community concerns.
An independent review is being undertaken through the state Environmental Protection
Authority on baseline water quality in the South East of SA; this will inform community
debate and augment existing risk assessments.
A Working Group under the SA roundtable for oil and gas development was established to
provide guidance on efficient and fit-for-purpose water use in the Cooper-Eromanga
basins. The SA Government engaged a third party to undertake a water demand-supply
model for oil and gas activities in the Cooper-Eromanga basins extending across SA and
Queensland. The model provides a baseline framework to enhance the understanding of the
various demands for water from geographical areas and specific operational activities to
7
meet water quality needs. Associated with the demands for water, the model assesses the
various water supply sources, including raw aquifer water, co-produced water and
recycling/re-use. This allows modelling of a future where water co-produced with oil and/or
gas production can be optimally used. Volumes of co-produced water are reported in the SA
Energy Resource Division’s Annual Compliance reports.
As mentioned in Queensland’s update, SA is in preliminary discussions with Queensland
about harmonising regulations related to exploration and production of deep gas and oil in
the Cooper Basin, which spans the states’ borders.
TASMANIA
The Tasmanian Government released a policy statement early in 2015 detailing its intent to
maintain a moratorium on the use of fracking for the purposes of hydrocarbon resource
extraction, for five years, until March 2020. Whilst exploration activities for hydrocarbons
are supported by current legislation, fracking is not permitted in exploration or in the
development or production phases of a resource project.
The potential unconventional gas resources in Tasmania as they are presently known, reside
principally in the Midlands, which is also an important agricultural area with a high level of
public/private irrigation investment. The Government recognises the concerns of the
agricultural industry and the community have regarding unconventional gas development
During the period of the moratorium the Government will consult with stakeholders and
monitor developments in:

National and international policy relating to fracking, including the regulation of
potential environmental and public health impacts and issues of land owner
notification, consent and compensation;

Scientific understanding of fracking and industry practices in other jurisdictions
potentially relevant to Tasmania;

Scientific understanding of environmental and public health issues relating to
fracking in other jurisdictions;

Energy needs and market developments;

Community attitudes; and,

Any other relevant matters.
A review into the practice of fracking, and possibility of harmonising legislation, will be
conducted before the moratorium expires through a process to be determined by the
relevant Minister at the time.
VICTORIA
The Victorian Government has established a Parliamentary Inquiry into unconventional gas
exploration and production in Victoria.
8
The Terms of Reference request the Environment and Planning Committee of the Legislative
Council to inquire into onshore unconventional gas activities, and report by 1 December
2015. Government will then have six months to respond to the findings.
The Inquiry is hearing from experts, reviewing scientific evidence and consulting with the
community to examine a broad range of social and environmental factors associated with
onshore unconventional gas.
The Government will continue the holds on onshore gas exploration and hydraulic
fracturing, pending the Parliamentary Inquiry's findings and the Government response.
The Department of Environment, Land, Water and Planning and the Geological Survey of
Victoria have completed water science studies covering Gippsland and the Otways regions,
which began in early 2014, to help provide a better understanding of the potential impacts
of any onshore gas development on Victoria's water resources. The reports are available at
http://onshoregas.vic.gov.au/science-studies/about-the-water-studies.
The Geological Survey of Victoria, in collaboration with Geoscience Australia, has completed
a seismic survey to acquire data to better understand the geology and hydrogeology
(groundwater) of South Gippsland. The survey was overseen by government scientists, with
a specialist survey team contracted to do the field work. The results will be used to improve
the scientific understanding of the potential impacts of developing onshore gas and will be
made publicly available.
Independent facilitators have completed a community and stakeholder engagement
program. The Government has released both the interim and final report from this program.
The reports are available at http://onshoregas.vic.gov.au/community/communityengagement-final-report.
WESTERN AUSTRALIA
Western Australia’s Petroleum and Geothermal Energy Resources (Environment)
Regulations (2012), Petroleum and Geothermal Energy Resources (Management of Safety)
Regulations (2010) and Petroleum and Geothermal Energy Resources (Resource
Management and Administration) Regulations (2015) provide regulatory guidance for
environmental, safety and resource management.
The regulations require full chemical disclosure, assessment of risk to water resources and
well integrity. The Department of Mines and Petroleum (DMP) is currently drafting
comprehensive baseline water monitoring guidelines, which will be released for public
comment in October 2015. It is anticipated these guidelines will come into effect in early
2016.
Also, the regulations include operators submitting environmental plans for approval,
summaries of which are disclosed publicly by DMP to ensure environmental risks are
minimised and the public is well informed.
DMP is finalising a Regulatory Framework for Shale and Tight Gas which sets out the
regulatory framework for managing on-shore shale and tight gas activities, taking a whole of
Government approach.
9
On 7 August 2013, the WA Environment and Public Affairs Parliamentary Committee
commenced its “Inquiry into the Implications for Western Australia of Hydraulic Fracturing
for Unconventional Gas” addressing:
a) how hydraulic fracturing may impact on current and future uses of land;
b) the regulation of chemicals used in the hydraulic fracturing process;
c) the use of ground water in the hydraulic fracturing process and the potential for
recycling of produced water; and
d) the reclamation (rehabilitation) of land that has been hydraulically fractured.
The publication of the Committee’s findings is understood to be imminent.
Also, DMP is continually refining its community engagement strategy to provide
communities across the State with information on shale and tight gas.
CONCLUSION
Work being undertaken by the States will likely inform an update on leading practices for
regulating CSG. The Australian Government will discuss merits of updating the Framework
with jurisdictions as inquiries, assessments, scientific studies and their results are being
released.
10