Perhaps one of the most divisive issues plaguing our
airwaves at the moment is hydraulic fracturing, or
'fracking'. Should we be concerned about the way state
governments are regulating it?
Fracking is a relatively new thing on the east coast of
Australia where CSG deposits are extensive, although WA have been
fracking shale gas reserves for decades.
Queensland's Bowen and Surat Basins are the mother lode for
CSG, making this the forefront of exploration and production. The
QLD government is keen to reduce 'green tape' involved in
obtaining CSG-related licences while trying to quell community
concerns. So far this has had mixed success, particularly in light
of reports that the applications for two of Australia's largest
coal seam gas plants failed to include some pretty important
information, like local environment assessment reports.
The NSW government has approached CSG development by both under-
and over-legislating (we didn't think it was possible either).
This has largely been the product of a reactionary policy approach
that has left state environmental agencies confused about their
mandate and their authority to impose remedies on offending CSG
operators. For instance, earlier this year Santos contaminated an
aquifer in the Pilliga State Forest with uranium. The maximum
possible penalty was $1 million however the EPA only fined the
energy giant $1500.
As CSG related incidents increase in NSW there are more rural
communities concerned about CSG operations. This has led to the NSW
government repeatedly tweaking its position on CSG. In October 2013
the government implemented an outright ban on CSG activities within
2km 'exclusion zones' around residential areas, vineyards
and stud farms across the state. Earlier this year, the government
announced a 6-month freeze on all new exploration licences, and
increased the price of CSG exploration licences 50-fold. The
government says it only wants only "responsible
operators" to conduct CSG operations. But we think that this
government's tough guy approach will fail if the penalty regime
has no muscle.
As for the Commonwealth, the Abbott government is
'fast-tracking' environmental approvals by putting full
responsibility for the approval of CSG projects into the hands of
the states. Hardly seems comforting while the states struggle to
agree on an answer to the CSG question. One thing is for certain
though: the allure of increased state revenue, employment
opportunities and long-term gas production means the states might
just fake it till they make it.
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The article examines the regulation of the oil and gas industry and breaks down the regulatory process state by state.
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