Australia: A fractured framework – new rules for fracking

Last Updated: 15 July 2013
Article by Jeremy Loeliger and Stephen Thompson

On 31 May 2013, the Standing Council on Energy and Resources (SCER) endorsed the National Harmonised Regulatory Framework for Natural Gas from Coal Seams (the Framework).

SCER is a body established by the Council of Australian Governments (COAG), and its members are the relevant Ministers for energy and resources from the Commonwealth, States, Territories and New Zealand. SCER has particular policy responsibility, on behalf of COAG, regarding regulation and oversight of the energy and resources market in Australia.

The Framework is not a legislative document. First and foremost, its purpose is to provide guidance to State and Territory governments, who each have primary responsibility for regulating the energy and resources markets within their respective jurisdictions. Therefore, the key relevance of the Framework is how it will affect future regulation at a State and Territory level. Indeed, in Victoria, the State Government announced a moratorium on hydraulic fracturing (fracking) and on issuing new exploration licences for coal seam gas until the Framework had been finalised and released.

The application of the Framework is broader than its full title suggests – the Framework applies to fracking activities in general, not just fracking related to coal seam gas. The Framework will therefore be of interest to participants in the broader shale and tight gas industries, as well as coal seam gas.

Fracking is given a chapter of its own in the Framework, which has three other key topics also covered in individual chapters, each relating to specific concerns with the fracking process – well integrity, water management and chemical use.

Fracking broadly refers to a mechanical process which produces fractures in geological formations. A fluid composed of water, sand and chemicals is injected underground at high pressure though a perforated well. The high pressure fluid injection creates underground fractures, releasing hydrocarbons. The fractures are kept open by a 'proppant', usually composed of sand and chemical additives, which allows the hydrocarbons and fluid mixture to travel back to the well, and then to the surface.

The Framework needs to be implemented and reflected in regulation at a State and Territory level. No time limit for implementation is specified, but it is worth noting that the Framework was developed and approved by an organisation whose membership comprises the relevant ministers of each of the States and Territories.

Participants in the sector should expect that any future fracking activities, nation-wide, will only be approved if they accord with the Framework. For Queensland and New South Wales, where the market and regulatory landscape are more developed, detailed legislative and policy implementation may not be required to implement the Framework. For other States and Territories, where the market is still relatively immature, as in Victoria, we would expect a more detailed legislative response to the Framework, and for that to occur quite quickly.

Leading practices for fracking

The Framework identifies 18 'leading practices' to be followed across all Australian jurisdictions to 'build a robust national regulatory regime'. Five of the leading practices are general and apply equally to each of the key areas of concern identified in the Framework, calling for the development of an environmental impact assessment and management plan for each fracking project. Of the remaining leading practices, key points to note include:

  • Well construction should be independently supervised, with a well construction report required to be given to the regulator after completion of construction of each well.
  • 'Water accounting' methods should be applied to allow all water used and produced in the fracking process to be monitored, located, accounted for and, if need be, treated. Significantly, compensation arrangements should extend to water users, not just land owners and occupiers.
  • Fracking fluids should be recovered as soon as possible after fracking has been completed, and recovery rates of fracking fluids should be maximised (ie the volume of fracking fluids left underground should be minimised). Both of these measures are intended to reduce the likelihood of any chemicals contained in the fracking fluids from migrating into the surrounding geological formation around the well and the fractures.
  • Of the recovered fracking fluids, maximising water recycling should be operator's first priority, through cleaning and provision to water users or re-insertion into surface waters or aquifers. If recycling is not feasible, water should be disposed of in accordance with regulator-approved conditions, for example at a regulated waste disposal facility. This tiered priority approach for dealing with produced water is the practice currently adopted in Queensland under the Coal Seam Gas Water Management Policy 2014.
  • Full public disclosure of chemicals used in the fracking process should be required, subject to a legitimate need to protect intellectual property rights. It is hoped this measure will 'increase public confidence in the industry'. Where full public disclosure is not possible, operators should at least ensure they are able to give full disclosure of all chemicals used to the relevant regulator on a confidential basis. This will impact on operators' confidentiality and disclosure arrangements with chemical suppliers, among others.
  • A baseline water assessment should be conducted, prior to commencing any fracking activities. This water assessment will give a reference point for future water quality monitoring, which should also required. The presence of any contaminants in the water should be reported to regulators immediately who, if required, will be able to shut down the fracking operations and re-design the process to ensure protection of the environment.
  • An initial geological assessment should also be required, ideally prior to the operator beginning any activities (ie commencing to dig any wells), but at least prior to any fracking taking place. This geological assessment will help inform the operator's planning process, yielding valuable information regarding the locations of underground aquifers and faults. When combined with fracture monitoring techniques this will help operators and regulators to determine maximum pressures that can be used safely in different geological formations, in particular ensuring fractures do not extend too far, causing inter-connectivity between previously separate aquifers. A fracturing completion report should be prepared and submitted to the regulator after completion of particular fracking operations.

Regional scale assessments of the cumulative impacts of fracking on the water system should be conducted, as well as assessments of the combined effects of chemicals used in the fracking process. Whilst these assessments may be conducted by a governmental agency, rather than the operators themselves, the Framework does not make it clear that this will necessarily be the case. Operators should therefore be aware that these requirements, at least in part, may be imposed on them.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Jeremy Loeliger
Stephen Thompson
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions