Australia: A Legislative Update On Coal Seam Gas

Article by Martin Klapper, Partner

This 2007 update on legislative issues affecting coal seam gas expands on issues discussed by Tony Nunan1 in 2006. It deals with these issues:

  • incidental coal seam gas and rights to dispose of and to profit from incidental coal seam gas;
  • some advances in the development of coordination arrangements; and
  • developments in the area of coal seam gas production water.


Laws of the Australian States declare both coal and petroleum to be the property of the States, and the States impose royalties on their commercial production. In exchange, industry should be entitled to expect consistent and appropriate legislative and policy regimes that enable the efficient production and commercial utilisation of these resources.

Queensland commenced a process for the revision of its policy and the development of new legislation on petroleum and gas, inclusive of coal seam gas (CSG), around five years ago. At that time the perception was that the interests of CSG explorers and producers were neither well understood nor well represented to government. This led to the foundation of the Australian Coal Seam Gas Council. The Council contributed intensively to the development of the new legislation. This paper addresses some areas that were either left incomplete or that are still under development. No doubt there are other areas of concern.

This paper examines a number of specific issues, principally with the aim of further examining issues that were discussed at the equivalent conference in 2006. The aim is for this paper not to address legal technical issues, but rather to deal with developments in specific areas in the context of existing legislation and policy.

This paper will deal principally with the Petroleum and Gas (Production and Safety) Act 2004 (Queensland) (PGA) and the Mineral Resources Act 1989 (Queensland) (MRA). On relevant issues the Petroleum Act 1923 (Queensland) is similar to the PGA and so will not be separately discussed.

Finally, the focus of this paper is on Queensland because the development of policy and law concerning CSG in the other States where CSG exploration or production exists or is proposed lags someway behind. Unfortunately that includes NSW where a number of companies have explored for and produced CSG for some time. This paper will conclude with a brief overview of the state of petroleum laws in relevant states.

Incidental CSG

As CSG is produced and stored in coal, one of the significant conflicts that arises between coal miner and gas producer relates to rights to access CSG in the area, or just ahead, of coal mining.

Apart from Queensland, Australian States’ laws do not deal with incidental CSG.

In South Australia, PIRSA released a Green Paper in December 2006 that, in the context of CSG, makes two proposals (numbered 1.10.1 and 1.10.2):

  • that the Petroleum Act and the Mining Act impose mandatory licence conditions that require, where relevant, consultation and agreement between parties having rights under both Acts to address potential conflict between CSG, in seam gasification and coal mining; and
  • that an existing coal miner is able to obtain a PPL [production licence for petroleum] without holding a precursor tenure. In that case, the proposal is to permit the coal miner holding the PPL to produce CSG – not only incidental CSG.

Public consultation on the review of South Australia’s petroleum law started in 2005, and finally led to the December 2006 Green Paper. The May 2005 "Discussion Draft on Implementation Issues" ( dealt with incidental CSG, although in an abbreviated form. It proposed that "coal miners have the right to release CSM as a result of coal mining…coal miners would not have the right to sell CSM". Unfortunately not even those limited proposals have made it into the latest discussion draft, and there is no indication at present that the South Australian regime might include detailed incidental CSG provisions. There is a clear challenge here for the coal and CSG industries.

Comments on the Green Paper close on 29 June 2007. The Queensland model would serve as a useful guide to the development of new legislation in South Australia and in the other States.

Queensland’s regime is a detailed one. Let’s begin with the definition of incidental CSG. The definition is found in the MRA, in the context of a grant to the coal ML holder of a right to "mine" incidental CSG. The term is defined by reference to any of the following activities:

  1. the mining happens as a necessary result of coal or oil shale mining carried out under the mining lease; or
  2. the mining is necessary to ensure a safe mine working environment for coal or oil shale mining under the mining lease; or
  3. the mining is necessary to minimise the fugitive emissions of methane during the course of coal mining operations.2

In addition, if the PL is held by the coal ML holder and the PL area overlaps with an ATP held by someone else, the PL holder’s activities are limited to the mining of incidental CSG within the "mine working envelope". That comprises past and current mine workings, mine workings scheduled for the next five years and associated activities.3 The central question on which this part of the paper will focus is what can be done with incidental CSG. Queensland has extensive underground coal mines, particularly in the Bowen Basin. Large quantities of incidental CSG are released each year. What commercial use may be made of them, and how can the commercial potential of this vast resource be realised? A particular difficulty arises here which is explained and some solutions proposed.

The starting point is MRA s 318CM. The coal ML holder cannot mine CSG unless the CSG is mined in circumstances described in one of (a), (b) or (c) above. In practice, given the time taken to degas a coal seam ahead of mining, that restriction limits the coal miner’s rights to an area within past and current mine workings and those scheduled to be mined in the next five years.

Unless the coal ML holder also holds a PL, MRA s 318CN says that the ML holder can do this with incidental CSG:

  • use it beneficially for mining under the mining lease;
  • transport or store it within the area of the mining lease to allow it to be used under the preceding paragraph.

The MRA goes on to say that the coal ML holder cannot, under the coal ML, use the incidental CSG for a purpose other than for coal mining under the mining lease. That restriction and in particular the language used here create particular difficulties for both the coal miner and also for any overlapping PL holder when it comes to commercialisation of the incidental CSG.

So what can the coal miner really do with the incidental CSG?

The MRA gives two examples – power generation for equipment used in any mining on the mining lease, and heating. These do not limit the use, rather they are examples only. The incidental CSG can be used, for example, to directly power vehicles or equipment provided it is technically suitable. The limiting factor, however, is that it is used "beneficially for mining under the mining lease."

In only 2 circumstances can the coal ML holder commercialise the incidental CSG. One is where the coal ML includes the mineral hydrocarbon. All CSG (not only incidental CSG) mined is then taken to be a mineral and can be sold or otherwise disposed of.

The other is where the coal ML holder also holds a PL. Under MRA s 340, the coal ML holder effectively has the right to grant of a PL over the area of the coal ML. It can then commercialise incidental CSG – but not, if there is an overlapping ATP, any CSG other than incidental CSG.

Incidentally, the coal ML holder’s right to the grant of a PL is regarded by CSG producers as discriminatory and inequitable given that there is no right to a grant of a PL to an ATP holder – rather, the grant of a PL to an ATP holder is in the discretion of the Minister. There appear to be no significant policy grounds that mandate that a coal ML holder should have a right to the grant of a PL where the ATP holder who applies for a PL is subject to the discretion of the Minister.

In this context one other unfortunate consequence arises. The coal ML holder who obtains a PL over the ML area can use the PL only to commercialise the incidental CSG. It cannot commercialise other CSG. Because a PL has been granted to the coal ML holder, however, an overlapping ATP holder cannot obtain a PL at all to commercialise other CSG. The "as of right" grant of a PL to the coal ML holder effectively sterilises the remaining CSG in the area of the coal ML for some time. Hopefully this can be addressed in future legislation.

So how can incidental CSG be commercialised?

If incidental CSG is mined by the coal ML holder and there is no other relevant tenement, the coal ML holder cannot commercialise it. It can only flare or vent it. What the coal ML holder does when flaring or venting is not permitted under MRA s 318CO is not clear.

If the coal ML is a mineral hydrocarbon lease, or the coal ML holder also holds a PL, the coal ML holder can commercialise the incidental CSG.

Different issues arise where a coal ML that does not include the mineral hydrocarbon overlaps with a PL that is held by another person. In that case:

  • the coal ML holder has the right to mine incidental CSG but cannot commercialise it;
  • the PL holder has the right to produce and commercialise other CSG.

The challenge in this case is to find a way, absent onsite use of the incidental CSG for mining, to obtain a benefit for the producer and the State from the mined incidental CSG. Unfortunately the legislation is less than clear and again there is a case for amendments to add clarity.

Can the coal ML holder sell or give the incidental CSG to another party, for example, to a third party for power generation, or to an overlapping PL holder for commercialisation?

There is no doubt that the sale of incidental CSG to a third party or an overlapping PL holder is not a permitted use of the gas under MRA s 318CN. But can the incidental CSG be given away (without receiving any commercial benefit such as a monetary payment)?

The argument that it can rests on the definition of "mine" in MRA s 318CM(4) which defines the term "mine" to include "dispose of". It could, for example, be argued that giving the gas away to a third party or an overlapping PL holder is a disposal and therefore "mining", and authorised under MRA s 318CM.

A difficulty with that argument is that the restrictions imposed under MRA s 318CN relate to the "use" of the incidental CSG, not to its disposal. The s 318CM permission to "dispose" of incidental CSG does not apply to s 318CN. The writer’s view is that it would be difficult to argue that giving the gas away to a third party or an overlapping PL holder would not in some form be a "use of" the gas. There is, clearly, a degree of uncertainty here that would benefit from legislative intervention.

Another significant difficulty relates to royalties. When incidental CSG is produced, prima facie the State royalty applies. It is unlikely that the royalty would be waived if the gas is used beneficially by a third party or a PL holder. Clearly the ML holder that gives away the incidental CSG will wish to be recompensed for the royalty that it must pay. The financial consideration that the reimbursement of royalty represents characterises the transfer of the incidental CSG as akin to a sale rather than merely giving the gas away, so even the relatively thin argument that "use" does not include giving the gas away does not help if there is any form of reimbursement of the royalty.4

Another argument on this topic is that by including appropriate provisions in the coordination arrangement between the PL holder and the ML holder, the prohibition on beneficial use other than for mining purposes in MRA s 318CN can be overcome. The argument is that the MRA and the PGA permit, to an extent, provisions in a coordination arrangement that are inconsistent with requirements of the mining or petroleum tenure.5 Therefore, it is argued, the coordination arrangement can provide, for example, for the coal ML holder to give incidental CSG to the PL holder for disposal.

The suggestion is that this argument has merit not only because of the enabling effect of the MRA and PGA, but also because the coordination arrangement requires approval of the Minister. In the writer’s view there is no real substance to this argument because the coordination arrangement cannot alter the effect of the Acts, but merely the effect of certain of the conditions of the ML or the PL, or both. MRA s 318CN will continue to apply.

Legislative intervention aside, there is another way to deal with this issue. The PL holder can authorise the ML holder, as its agent or contractor, to exercise the PL holder’s rights under the PL to extract CSG. The CSG is produced under the PL and the PL holder can take and dispose of it for its commercial benefit. This too is not free of complications. In producing the CSG the ML holder will be bound by the provisions of the PGA and so will be required to work to different standards to those to which it is accustomed. This can be overcome, but it is a solution clearly not free of complications.

Ideally these issues should be addressed in further legislation. In order to maximise the vast potential that incidental CSG presents for Queensland, it is desirable that legislation follow sooner rather than later.

Coordination Arrangements

In his 2006 paper Tony Nunan6 outlined the types of coordination arrangements and the issues that they address. In the context of coordination between coal mining and CSG production, the comments made in 2006 appear to have stood the test of time. Two particular developments are worthy of note and update.

Different approaches to safety management

For coal mining, safety matters are addressed by the safety and health obligations imposed under the Coal Mining Safety and Health Act 1999 (Queensland) (CMSHA). For petroleum, the PGA deals with safety. The principal safety obligations are these:

1. Under the CMSHA:

  1. The ML holder must ensure that the coal mine operator (CMO) is given notice of all relevant information to ensure that the site senior executive (SSE) for the mine develops and implements a Safety and Health Management System and prepares and implements a Principal Hazard Management Plan for the mine (the SSE is the most senior safety officer for a mine). The ML holder must also include in the contract appointing the CMO obligations to establish a Coal Safety and Health Management System and for a mining lease to be a party to a Mines Rescue Agreement.
  2. The CMO must ensure that the risk to coal mine workers while at the mine is at an acceptable level; ensure the CMO’s own safety and health and the health and safety of others is not affected by the way the CMO conducts coal mining operations; to appoint an SSE; and related obligations.
  3. The SSE for a coal mine has onerous obligations including, principally, to ensure that the risk to persons from coal mining operations is at an acceptable level. All of those obligations apply to the "coal mine". Essentially that term includes all places where onsite activities are carried on within a mining lease, or on adjoining, adjacent or contiguous land. "Coal mine" is not limited to the actual mining operations or to the five year mine working envelope. The potential overlap with a petroleum exploration or production operation creates obvious conflicts.

2. Under the PGA:

  1. The operator of an operating plant must make a Safety Management Plan and implement and maintain the plan. The operator also has an obligation to ensure that everyone who has an obligation under the Safety Management Plan complies with the obligation.
  2. The executive safety manager (ESM) of operating plant is generally the senior managing officer of the principal tenure holder. In most companies that will be the managing director or the chief executive officer. The ESM’s obligations include: to have in place necessary standard operating procedures, emergency response procedures and other information necessary for safe operation; first aid, safety and like equipment; to provide for training of persons working at the plant; to ensure that training is recorded; and that records are kept of training. The ESM must also prepare and give the department an annual safety report.
  3. The site safety manager (SSM) is appointed for operating plant if the appointment is required under the Safety Management Plan. The SSM will generally be a senior onsite person who is responsible for operation or supervision of operation of the operating plant. The SSM can be appointed for a stated site, or a stated activity. His or her obligations include: to ensure that persons entering the operating plant are given an appropriate induction; that persons on the site comply with standard operating procedures, emergency response procedures and other safety measures; that persons working at the site perform their functions safely and follow SOPs; that first aid, safety and like equipment is available and maintained; and that relevant staff are trained in safety procedures. If no SSM is appointed, the plant operator is the SSM.

Under both Acts, duties of care are also imposed on other relevant persons, for example, suppliers and manufacturers of equipment.

The fundamental safety obligations are similar – to ensure that persons are not exposed to more than an acceptable level of risk.7 A fundamental difference between the CMSHA and the PGA is that for a coal ML, the SSM is appointed for the mine or a part of the mine; under the PGA, safety positions are created for relevant plant.

So how can overlaps be dealt with at a practical level?

Although the writer has heard the view expressed that in areas of overlap, the SSE (under the coal ML) must have the final say in all circumstances, that outcome is not supported by the law. However, in practice there are some significant reasons why that should be so in limited circumstances. The coordination arrangement is an appropriate place to deal with safety issues that arise between coal mining and CGS production.

Although the PGA gives little guidance as to the required or desired content for coordination arrangements, experience shows that such arrangements address issues relating to consents to grants of production tenements (where required), co-development and co-production of resources, safety and health management and rehabilitation.

The Queensland Department of Mines and Energy’s guidelines on coordination arrangements, issued as a draft in early 2006 and at the time of writing still in draft form, focus on a regulatory checklist (that is, when can a coordination arrangement be used and when must it be used), resource optimisation, safety and administrative matters.

It is important to bear in mind that although there are issues with which a coordination arrangement need not deal, in theory there is no subject that a coordination arrangement cannot address. As a matter of practice it is best to address in the coordination arrangement only those matters that are required to obtain the Minister’s consent, and to include other matters in a separate agreement (often called a co-development agreement or similar).

The first generation of coordination arrangements tended to deal with safety in quite conventional ways. The coal miner and CSG producer were required to agree on a process for the establishment of safety and health management plans, and a liaison committee was established to deal with safety and other issues on a month to month or quarter to quarter basis. The parties also agreed to a statement of common principles for safety management. Rarely, however, were the specifics of coal and gas overlap issues affecting safety addressed.

More recently, more detailed and subtle approaches to the allocation of health and safety responsibilities between coal miners and CSG gas producers have emerged.8 Some significant issues arise with a dual SMP system. Importantly, does the safety obligation under the CMSHA for a coal mine apply to all activities in the area, or just those authorised under the ML? How can one party ensure that the other party complies with its SMP? How do you determine which SMP will apply if an accident occurs? Can it be a combination if there is some form of contributory negligence?

One development relates to the growing recognition of the need to deal with hazards (including those identified in safety legislation) that coal mining poses to CSG production and vice versa. Some of these hazards and obligations relating to them are found in the Mineral Resources Regulation 2003 (hazards are described in schedule 2A) and the Petroleum and Gas (Production and Safety) Regulation 2004 (the hazards are in schedule 4). Whereas the initial approach taken to coordination arrangements was an imposed requirement for hazards to be identified and for the relevant parties to seek to minimise them, emerging approaches now deal with:

  • the development of Hazard Management Plans to evaluate and deal with hazards;
  • the preparation and circulation of information about hazards as they emerge and as further information becomes available during coal mining or CSG production; and
  • for measures to be taken to deal with hazards and their emerging consequences.

The nature and extent of risks that coal mining and CSG production create for each other are still not as well understood as they might be, but more is known as time passes. As legislation is notoriously slow to change, it is up to coal miners and CSG producers to give serious thought to the development of systems and processes to identify and deal with hazards as information about the hazards grows, and for them not simply to be limited to the framework that the law imposes.

Over time the process of identifying and procedures for dealing with hazards will no doubt become more subtle and refined. For that process to be effective experiences need to be shared. The Australian Coal Seam Gas Council can play a major role to achieve that.

The other significant area of development relates to provisions for the onsite management of safety. For example, where agreements formerly dealt with communication on a general level (through a liaison committee or the like), more recently the focus has been on communication via committees that are focused on safety only. The process brings the front line safety managers – the SSE, the SSM and the ESM – together.

Whereas earlier agreements provided for agreement on fairly general safety protocols, with each party then developing its safety and health management plans essentially in a vacuum, more modern agreements tend to include specific and detailed safety protocols with processes for the development of coordinated coal and gas safety and health management plans. For example:

  • For the coal miner’s activities in the coal mine that overlaps a petroleum production area, the coal miner’s activities should be subject to the coal miner’s SHMP and the petroleum producer’s activities should be subject to the coal producer’s SHMP. Responsibilities for implementation should be placed on the SSE and the SSM/ESM respectively.
  • However, if the coal miner enters an area outside the mine working envelope where the CSM producer produces gas, or vice versa, the risks posed by the activities of the entrant need to be evaluated against the producing party’s SHMP and additional controls developed and imposed, with the producing party in control of the process.

A particular issue relates to the resolution of differences between the parties’ respective SHMPs for an overlap area – to put it bluntly, does the SSE or the SSM/ESM have a right of veto where different approaches to safety in overlap areas emerge?

Such differences should be addressed by agreement where possible, through a safety committee, or where that fails by reference to senior executive officers or to mediation. The fallback where none of that resolves the issue may be for existing producer of a commodity to have the power of veto (to be exercised reasonably) when the new producer moves in. To give clarity to this by an example: if the CSG producer wishes to develop wells and pipelines in the mine working envelope of an existing underground coal mine, the coal miner’s SSE (acting reasonably) should be able to prohibit or order the cessation of petroleum activities that are inconsistent with the coal miner’s SHMP and that would, if conducted or continued, cause the coal miner to breach safety laws relating to coal mining.

It may fairly be added that the extent and detail of cooperation for which these more recent agreements tend to provide were unthinkable when Queensland’s new petroleum legislation was passed in 2004 and certainly for some years before that. It is indicative of the higher levels of trust and mutual understanding that have developed between coal explorers/miners and CSG explorers/producers in the intervening years.

Production Water

CSG production water remains a principal focus of recent developments in CSG law and practice, not least because of concerns for Australia’s water security that the drought we are currently experiencing has created. For a discussion of the background to and a description of the legislative regimes that apply in Queensland for production water, under the PGA and also under the Water Act 2000 (Qld) and the Environmental Protection Act 1994 (Qld) (EP Act) see papers by Tony Nunan.9

Although located some distance from population centres and usually high in TDS and other contaminants, production water or (as it is also called) associated water is nevertheless an enormously valuable resource. By way of broad summary of the current legislative position:

  • Under the PGA, the PL holder has the right to extract associated water providing the extraction happens during the course of or results from the carrying out of an authorised activity for the tenure.
  • The PL holder can use the associated water for activities carried on under the PL.
  • The PL holder can apply for a water licence to on-supply associated water for all other purposes not expressly authorised under the PGA.
  • The PL holder has a "make good" obligation if its extraction of associated water adversely impacts on landowner’s ability to extract water from the same aquifer.
  • Once a water licence is granted, the PL holder can on-supply the water but must not charge a fee unless the PL holder is also registered as a water service provider under the Water Act.

A number of different practical solutions for the disposal of associated water have emerged. For example, associated water has been:

  • supplied to landowners for stock and domestic purposes and, in limited quantities, for pastoral purposes (given the level of TDS);
  • stored in dams and disposed of gradually, generally by evaporation;
  • provided to coal miners for coal washing and dust suppression; and
  • supplied to local councils to replace fresh water or for production of fresh water by reverse osmosis.

A proposal in the USA focuses on associated water as a problem by reason of its salt levels. Disposal in a non-sustainable way has the potential to render affected land sterile in the long term, and arguments are emerging in the USA for a national solution that involves zero discharge effluent limitations, principally by re-injection.10

Although Australia is a long way from even considering much less adopting a national standard for CSG associated water discharge or reduction, a more sophisticated system is now emerging in Queensland.

Under Queensland law, associated water is underground water taken or interfered with under PGA s185(1); that is, water taken or interfered with during the course of, or resulting from, carrying out of an authorised activity for a petroleum tenure. These rules do not apply under the MRA. Currently the ML holder must obtain a water licence. This has been identified as an omission in the legislation (where a ML holder extracts water while extracting incidental CSG) and is to be included in the next amending Act.

In March 2007, the EPA circulated its final draft and comment summary for an associated water policy (operational policy). It is not clear what if any legal status the operational policy has. It is expressed to apply to associated water produced from both petroleum and gas operations but does not mention associated water produced with incidental CSG or from operations under mineral hydrocarbon coal MLs. It mandates "consideration of the waste management hierarchy and the principles set out in the Environmental Protection (Waste Management) Policy 2000" when deciding upon management techniques for associated water.

There is no legal obligation to comply with the operational policy. It is likely that the EPA will argue that the operational policy sets up criteria upon which it makes decisions under the Environmental Protection (Waste Management) Policy 2000 in respect of the grant of, and the imposition of conditions on, environmental authorities relating to petroleum exploration and production. At the time of writing the policy remains in draft form.

The operational policy expresses its aim to be:

to promote beneficial use of associated water from petroleum activities in Queensland in accordance with the waste management hierarchy.

The hierarchy, in brief, is expressed as follows:

Category 1 – preferred management options: the preferred options are avoidance, reuse or recycling of associated water or its use for a beneficial use.

Category 2 – non-preferred management options: these are disposal by evaporation ponds (the most common way by which explorers and producers currently deal with associated water) and disposal by direct discharge to waters.

The trend, then, is essentially towards to reuse, recycling and other beneficial uses, avoidance not being practical in a CSG operation.

The operational policy will apply to all new applications for non-code compliant environmental authorities (petroleum activities), and to any application to amend environmental authorities for level 1 ERAs for a project for the storing, treating, recycling, reprocessing, transportation or disposal of associated water. In essence this means that existing operations that hold appropriate authorities will not be affected by the policy. New operations will be affected, as will existing operations which add level 1 ERAs to their existing authorities.

The operational policy takes a curious approach to associated water as "waste". The conditions of approval (in the form of a general approval) that are attached to the operational policy suggest that associated water that complies with certain criteria will not be considered regulated waste under the EP Act. It can, according to the operational policy, be put to a use described in the conditions of approval without the need for an environmental authority. The only qualification that the operational policy imposes is that the petroleum tenure holder must obtain the written agreement from the receiver, re-user or recycler of the associated water that it will comply with the conditions of approval.

Two interpretations are possible of this approach. One is that if water quality complies with the notice, the associated water is not a regulated waste. That interpretation appears to conflict with the express terms of the EP Act and to that extent the policy could have no effect.

The other interpretation is that the EPA will not treat that associated water as a waste. That on its face appears nonsensical if the associated water is in fact waste under the EP Act.

A constructive interpretation of this part of the operational policy is that the EPA will consider the compliance of associated water with the water standards in the conditions of approval when it decides what conditions it will impose on the environmental authority. In other words, the policy is to that extent a guide to EPA decision making. The writer considers this an appropriate view of the operational policy.

unexpected result is that if the associated water (because it is not considered a regulated waste) causes environmental harm, the petroleum tenure holder and the receiver may not have any liability under the EP Act - because the associated water was not considered regulated waste and therefore cannot be taken to cause environmental harm under the EP Act, even if harm is in fact caused. A number of technical legal questions arise in this context which it is beyond the scope of this paper to address.

What remains clear is that the issue of liability for associated water, whether or not it is considered regulated waste, must be addressed in detail by both disposer and receiver of the water.


In the last year a number of significant changes have occurred in the law and policy relating to, and more significantly in the practice of departments and industry participants in, both coal mining and production.

As the following table shows, in many areas the Australian States are well shy of a pass mark. In Queensland, which has the most detailed regime, a number of significant legislative impediments remain.


New South Wales


South Australia

Western Australia

Coal law

Mineral Resources Act 1989

Mining Act 1992

Mineral Resources Development Act 1990

Mining Act 1971

Mining Act 1978

Petroleum law

Petroleum Act 1923 and Petroleum and Gas (Production and Safety) Act 2004

Petroleum (Onshore) Act 1991

Petroleum Act 1998

Petroleum Act 2000

Petroleum Act 1967

CSG under petroleum law






CSG under coal law

Incidental CSG only


Yes: naturally occurring hydrocarbon within a coal deposit is a mineral



Production and use of incidental CSG by coal miner

Permitted under coal ML, otherwise PL required. Use for mining purposes only, no sale.



Proposal to permit coal ML holders to obtain PL for CSG and ISG without holding prerequisite tenure3


Coal or CSG prevails






Coal/CSG coordination provisions

Detailed processes with first to production having priority

Minister (after enquiry by Warden) determines differences between coal and petroleum tenement holders


Obligation not to interfere with rights under tenures for the other resource13


Addresses production water

No (draft policy)

No specific regime – addressed through mining, environmental and planning approvals


Green Paper proposes application of WAP for the Far North Prescribed Wells Area to PLs, with restrictions and license requirements, including for CSG coproduced Water3


CSG specific royalty regime







Each Act provides. Requirement for safety coordination and safety plan where overlap





Addresses geothermal tenements overlap

No but Government now developing geothermal laws





Those comments must all be taken in this context: Queensland has, and there is emerging elsewhere in Australia, a strong and vibrant coal seam gas industry that is increasingly forming links and cooperating with coal explorers and miners and the community generally. CSG is providing, and has the potential to provide increasingly in the future, significant benefits to Australia, in the form of cheaper and cleaner energy, the beneficial use of a resource that until recent years was considered a waste and danger to mining, the creation of jobs and fostering other economic opportunities and, not least, by the provision of water that can supply or replace other fresh water supplies.


1 Legal issues emerging from the growth of the CSG industry in Queensland, Tony Nunan, presented at the CSM-CMM Summit in March 2006

2 MRA s 318CM

3 MRA s 364

4 The writer acknowledges the contribution to the development of these arguments by Tony Nunan, Hopgood Ganim and Andy Kozak, Department of Mines and Energy, Queensland

5 PGA s 234(3)(b)

6 See footnote 1

7 A discussion of what presents an acceptable level of risk is beyond the scope of this paper; it is capable of supporting the paper in its own right

8 The writer recognises the leading role played by John Bruce of Arrow Energy in the development of the approaches to safety in coal and CSG discussed in this paper

9 See footnote 1 and Legal Issues Emerging from the Growth of the Coal Seam Gas Industry in Queensland, Tony Nunan (2006) 25 ARELJ 189, 190-193

10 Coal Bed Methane Wastewater: Establishing a Best Available Technology Standard for Disposal under the Clean Water Act, Julie Murphy, 14 Southeastern EnvLJ 333

11 Sydney gas is holder of Petroleum Production Leases 1 and 2, making it the first petroleum producer in NSW

12 S 78: Minister may include petroleum in coal mining lease on application

13 Current PIRSA Green Paper ( df) on amendments to Petroleum Act also includes proposals for requirements for closer coal and CSG coordination, including consultation and agreement between parties having rights under both Acts

14 24 June 2004 White Paper on water and 2004 Guidelines for Quarries and Mines (under the Water Act 1989) do not address production water

15 Except that petroleum royalty is not payable on CMM

© Hopgood Ganim

Australia's Best Value Professional Services Firm - 2005 and 2006 BRW-St.George Client Choice Awards

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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.

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 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.


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.