Australia: Victorian Gas Market Taskforce: Final report and recommendations

Last Updated: 15 March 2014
Article by Jeremy Loeliger and Stephen Thompson

The Gas Market Taskforce was established by the Victorian Government in January 2013 to examine gas supply issues in the State. The Taskforce delivered the final report to the State Government on 1 November 2013, which was made available to the public several weeks later alongside an invitation for submissions on the report which the Government will receive until the end of this month (March 2014).

The Taskforce was not created to exclusively review and report on coal seam gas (CSG) in Victoria, yet the emphasis of attention surrounding the report has been its implications for CSG in the State. With a fracking moratorium in place since April 2012, CSG remains an un-tapped source of gas in Victoria. The State Government has expressed an intention to keep the moratorium in place until at least July 2015, by which time it will also have had the time to complete and consider a community consultation process and independent water study across potentially affected areas of the State.

The report makes 19 recommendations, the first 9 of which are directly related to CSG. The report is broadly supportive of CSG, though only in a regulatory environment where the reforms it has proposed are also put in place. The key reforms within the report that affect CSG are summarised below.

  • Legislative and regulatory reforms to implement the 18 leading practises set out in the "National Harmonised Regulatory Framework for Coal Seam Gas" (Framework), endorsed in May 2013 by the Standing Council on Energy and Resources, a body established by the Council of Australian Governments (COAG).
  • Until these leading practices are implemented, participants seeking to obtain an exploration, retention or mining licence, or seeking approval of a work plan under an existing licence, should have conditions imposed on the licence or work plan to comply with the leading practises until these have been fully implemented as part of the legislative and regulatory framework.

    Included among the 18 leading practices are measures such as:

    1. independent supervision and sign-off on well construction, aimed at ensuring well integrity;
    2. adopting advanced water accounting methods to be able to monitoring and, to the extent possible, recover all fluids used in the hydraulic fracturing (fraccing) process;
    3. requiring a baseline water assessment prior to undertaking any fraccing activities; and
    4. full disclosure of all chemicals used in fraccing operations on a publicly accessible online register.
  • Creating a new position of "Gas Commissioner" within the Victorian administration, to be charged with facilitating and overseeing community consultation in relation to onshore gas exploration and extraction
  • Creating an independent "Water Science Commission" to be chaired by an eminent scientist and sitting under the supervision and administration of the Gas Commissioner. The Water Science Commission would be charged with:
    1. Making the lead in all water science and monitoring programmes in Victoria; and
    2. providing independent advice to industry participants on, in particular, water quality, and also other environmental issues relevant to onshore gas exploration and/or extraction activities.
  • Undertaking a comprehensive baseline assessment and on-going monitoring of water resources in areas that may be prospective for onshore gas and, in particular, requesting the Commonwealth to commence the Gippsland bioregional assessment as soon as possible.
  • Independently reviewing and, where appropriate, utilising data from industry participants to inform the State's water science and licensing programmes.
  • Encouraging alignment and coordination between applicable legislation and agencies responsible for water management and gas industry regulation by, in particular:
    1. ensuring all industry participants undertaking fraccing activities are issued with a water licence under the Water Act 1989 (Vic), and are therefore subject to the same requirements and oversight as all other water resource users; and
    2. ensuring all industry participants are required to hold a water licence where aquifers are known to be connected by their particular extraction or exploration activities, including where this applies to conventional, off-shore gas activities.
  • Encouraging the use of benign chemicals in fraccing activities by, in particular, imposing a permanent ban on BTEX chemicals in hydraulic fracturing activities in Victoria and requiring a demonstration of the effects of proposed chemical mixes proposed to be used in such activities prior to their use.
  • Adopting a competitive royalty rate (in comparison to rates existing in other jurisdictions and, in particular, other States in Australia) to appropriately incentivise industry to explore and develop onshore, unconventional gas. This should include a "royalty holiday" at the outset of production to reduce project set-up costs and, importantly, encourage projects to proceed to production.
  • Encouraging a fair share of the benefits from onshore gas production that goes directly to the regions affected, to build community support for the activities, by:
    1. adopting a mechanism for a share of the royalties from gas extraction activities to go directly to local communities ("Royalties for the Regions");
    2. establishing a process to allow local communities to advise on funding priorities for the royalties received through the "Royalties for the Regions" programme; and
    3. raising the upper limit for compensation for loss of amenity ("solatium payments") from $10,000 to $20,000, and indexing this new upper limit to CPI.
  • Streamlining regulatory arrangements and reducing duplication of regulatory oversight, in particular by:
    1. requesting the Commonwealth Government to work with Victoria to accredit its environmental assessments and approval processes; and
    2. appointing a senior official and within the Victorian administration, in addition to the Gas Commissioner and chair of the Water Science Commission (see second and third dot point above), as the 'go to' person for coordinating all applicable regulatory approvals and other industry requirements.

Footnote

1 http://gastoday.com.au/news/a_fractured_framework_new_rules_for_fraccing/082992/

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

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

Authors
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”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (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 www.mondaq.com

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 Mondaq.com’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.

Disclaimer

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.

Registration

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 by clicking here .

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 unsubscribe@mondaq.com 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.

Cookies

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.

Links

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.

Mail-A-Friend

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.

Security

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 webmaster@mondaq.com.

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 EditorialAdvisor@mondaq.com.

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 enquiries@mondaq.com.

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