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.
Key points
- 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 industry.
- 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 evaluated.
- 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 avoidable fines.
On-the-ground obligations
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 construction
- 35 - 45 percent of CSG drilling and work-over rigs for compliance
- 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 processing plants)
- 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.
Statutory forms
It is now more important than ever that all forms, notices and reports that CSG companies submit or issue are compliant with the statutory requirements.
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.
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