The 2013 Coal Seam Gas Engagement and Compliance Plan
will see the Department of Natural Resources and Mines undertake
audits, inspections and spot checks to ensure that CSG companies
across Queensland comply with their on-the-ground obligations.
Partner Martin Klapper and law clerks Alyce Hamlin and Kaitlyn
Rafter outline the key areas to be monitored and explain the costs
to CSG companies of non-compliance.
The Coal Seam Gas Engagement and Compliance Plan, released
by the Department of Natural Resources and Mines (DNRM) on 21
February with immediate effect, aims to ensure that CSG companies
comply with their obligations under the Petroleum and Gas
(Production and Safety) Act 2004 and the Petroleum Act
1923 and facilitate engagement with stakeholders in the
DNRM has committed to a total of 17 initiatives, including
audits of the statutory forms, notices and reports that are
submitted to it to ensure statutory compliance.
With the Plan having such a wide reach, there is a very real
prospect that your operations and paperwork will be inspected and
Penalties will be enforced for serious offences. It is critical
that CSG companies comply with all legal and regulatory
requirements, both on paper and on-the-ground, to avoid costly and
In order to ensure compliance, DNRM has committed to inspecting,
auditing and spot-checking the following throughout 2013:
250 CSG wells for gas leaks, safety fencing, signage and
35 - 45 percent of CSG drilling and work-over rigs for
20 - 30 percent of all pipelines (including distribution and
gathering lines) for integrity
Measuring potentiometer heads/standing water levels in 300
water bores annually, including collecting water samples from 10
percent of the monitoring network for analysis
Conducting site inspections and audits on field monitoring
techniques for CSG monitoring bores
In addition, DNRM will check the following for the application
of Safety Management Plans in accordance with section 675 of the
Petroleum and Gas (Production and Safety) Act 2004, which
sets out the content requirements for such plans:
20 - 30 percent of all petroleum facilities (including
80 percent of CSG seismic activities
Any non-compliance identified in carrying out any of these
activities can attract fines of up to 1,500 penalty units
(currently $110 per unit, so $165,000), which is the maximum
penalty for non-compliance with Safety Management Plan
requirements. The reputational cost of non-compliance and the
imposition of penalties must also of course be considered.
It is now more important than ever that all forms, notices and
reports that CSG companies submit or issue are compliant with the
A significant initiative of the Plan is to undertake audits or
checks of the statutory forms, notices and reports that are
submitted to DNRM.
The Plan also implements initiatives for assessing the adequacy
of company procedures for CSG groundwater monitoring bores,
including standard operating procedures and safe work practices,
through desktop audits of CSG company procedures.
The article examines the regulation of the oil and gas industry and breaks down the regulatory process state by state.
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