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The information in this fact sheet is up-to-date as of April 2012.

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5.1 Mining and Coal Seam Gas

5.1.6  Coal Seam Gas

5.1.6.1  Overview

Coal seam gas (CSG) is a form of petroleum.1 It is also referred to as coal seam methane or coal bed methane.

Even though landholders own their land, they do not own the petroleum in their land. All petroleum, helium and carbon dioxide existing in a natural state on or below the surface of any land in the State is the property of the Crown,2 and therefore the Government can authorise third parties to explore for and extract CSG.3

This fact sheet explains how CSG projects are assessed and approved, with a focus on the provisions which allow landowner and public participation.

5.1.6.1.1  Responsible Ministers

• Department of Primary Industries (Minerals and Petroleum)

Minister for Resources and Energy

• Department of Planning and Infrastructure

Minister for Planning and Infrastructure

5.1.6.1.2 Other decision-makers

• Planning Assessment Commission (PAC)
• Local Council (limited role)

5.1.6.1.3  Useful web links and legal texts

TAS Map - TAS Map enables the public to access and view frequently updated maps that show the various coal seam gas titles and applications that exist in NSW. Map images can be printed straight from the screen display or saved and inserted directly into word processing documents.

MinView - MinView allows on-line interactive display and query of exploration tenement information and geoscience data. It allows spatial selection, display and download of geological coverages, mineral deposits and mine locations, geophysical survey boundaries, drillhole locations, historical and current exploration title boundaries and other spatial datasets of New South Wales.

There is no need to become a registered user. Click on 'Guest Entry' in top left corner. Click to agree with the conditions of use and go to 'Petroleum' - here you can view all petroleum titles. Using the query tool you can find out further information regarding the titles.

EDO e-bulletin - A free bulletin with weekly alerts to keep you informed of opportunities to comment on proposed developments at the State and Federal level.

5.1.6.2  Legislative Framework

The exploration for and exploitation of CSG is regulated by a number of different laws.

A range of licences and leases can be granted to allow gas companies to look for or extract CSG.4 The Minister for Resources and Energy is responsible for issuing these licences and leases. The relevant department is the Department of Primary Industries (Minerals and Petroleum).

Many CSG activities also require development consent.5 The Minister for Planning is usually responsible for granting development consent. The relevant department is the Department of Planning and Infrastructure. Sometimes the Planning Assessment Commission (PAC) assists the Minister for Planning to assess a development application. In some cases, the PAC can replace the Minister for Planning as the decision maker.

Other approvals are sometimes necessary before a CSG project can commence. For example, the Minister for the Environment may have a role to play if the CSG activities relate to a national park.

5.1.6.2.1  Types of CSG approvals

The types of approvals that can be granted by the Minister for Resources and Energy to allow for CSG exploration and production include:6

• Exploration licences;
• Assessment leases;
• Special prospecting authorities; and
• Production leases.

Exploration licences

An exploration licence gives the holder the exclusive right to explore for petroleum within the area specified in the licence.7

The area covered by the exploration licence must be between 1 and 140 blocks, unless the Minister considers that a smaller area is necessary or desirable.8

Exploration licences can be granted for no longer than 6 years, but can be renewed.9 In the case of a first renewal, the size of the area over which the renewal is granted must not exceed 75 per cent of the size of the area over which the licence was originally granted.10

For subsequent renewals, the size of the area over which the renewal is granted must not exceed 75 per cent of the size of the area over which its last renewal was granted. However, for both first and subsequent renewals, if the Minister is satisfied that special circumstances exist, he or she is able to override these limits.11

Assessment leases

The holder of an assessment lease has the exclusive right to prospect for petroleum and to assess any petroleum deposit on the land comprised in the lease.12 The area comprised in an assessment lease must be no more than 4 blocks.13

An assessment lease is designed to allow the holder to retain rights over an area in which a significant petroleum deposit has been identified, where mining the deposit is not commercially viable in the short term but there is a reasonable prospect that it will be in the longer term.14

The assessment lease allows the holder to prospect and assess any deposit found.15

Assessment leases can be granted for no longer than 6 years.16

Special prospecting authorities

The holder of a special prospecting authority has the exclusive right to conduct speculative geological, geophysical or geochemical surveys or scientific investigations on and in respect of the land covered by the authority.17

The area comprised in a special prospecting authority is an area considered feasible by the Minister for Resources and Energy, having regard to the surveys and other operations sought to be carried out by the holder.18

The initial term of a special prospecting authority is to be a term (not exceeding 12 months) fixed by the Minister.19

Production leases

The holder of a production lease has the exclusive right to conduct petroleum mining operations. They also have the right to construct and maintain on the land works and structures such as roads, buildings, dams, electric power lines, and other structures and equipment that are necessary to allow the mining to take place.20

In many cases, a production lease will only be granted to an applicant who has held the land concerned under an exploration licence or assessment lease and complied with the terms of the licence or lease. However, the Minister can, by notice published in the Gazette,21 invite applications for a production lease.22

The area comprised in a production lease must be not more than 4 blocks.23 Production leases can be granted for no longer than 21 years.24

5.1.6.2.2  Planning approval (development consent) may also be required

In addition to obtaining an appropriate licence or lease, the applicant may also need to get development consent for the CSG activity. In most cases, the Department of Planning and Infrastructure will be responsible for assessing the application and the Minister for Planning and Infrastructure will be responsible for deciding whether or not to grant consent.

The types of CSG activities that will require development consent include:25

• All development for the purpose of petroleum production;
• Development for the purpose of drilling or operating petroleum exploration wells, but not including:

  (a)  stratigraphic boreholes, or

  (b)  monitoring wells, or

  (c)  a set of 5 or fewer wells that is more than 3 kilometres from any other petroleum well (other than an abandoned petroleum well) in the same petroleum title.

• Development for the purpose of drilling or operating petroleum exploration wells (not including stratigraphic boreholes or monitoring wells) that is carried out in an environmentally sensitive area of State significance.
• Development for the purpose of petroleum related works (including pipelines and processing plants) that:

  (a)  is ancillary to or an extension of another State significant development project, or

  (b)  has a capital investment value of more than $30 million.

Stratigraphic boreholes are boreholes drilled specifically to obtain a detailed record of the character and composition of the rock formation and not for the purpose of locating a mineral deposit.26

Monitoring wells are drilled specifically to obtain accurate formation samples and are equipped and used for the sole purpose of taking water samples and/or monitoring water levels.27

Environmentally sensitive areas of State significance include:28

• Coastal waters of the State;
• SEPP 14 coastal wetland or SEPP 26 littoral rainforest;
• Aquatic reserves or marine parks;
• Ramsar wetlands;
• World heritage areas;
• Land identified in an environmental planning instrument as being of high Aboriginal cultural significance or high biodiversity significance;
• State conservation areas;
• Land, places, buildings or structures listed on the State Heritage Register;
• Land reserved or dedicated under the  Crown Lands Act 1989  for the preservation of flora, fauna, geological formations or for other environmental protection purposes; and
• Identified critical habitat for endangered plants and animals.

5.1.6.2.3 Changes to regulation of CSG activities

The NSW Government has announced some changes to laws regulating CSG activities. The Government will prepare strategic regional land use plans for NSW to identify land use priorities within a region. There will be triple bottom line assessments to determine the environmental, social, and economic values of each region. The process will identify the best places for agriculture, mining, coal seam gas extraction, viticulture, thoroughbred breeding, conservation, urban development and other types of development.

The process will take up to three years. There will be transitional arrangements while the plans are prepared. Priority will be placed on those areas that are already targeted by mining and CSG activities.

Priorities are the Upper Hunter and New England/North West. The remaining areas will follow, including Southern Highlands, Central West, Western, Murrumbidgee, and the Alpine region.

The NSW Government has committed to seeking local input into strategic regional land use plans.

A Reference Group has been established which includes the Nature Conservation Council of NSW and Total Environment Centre. Local Councils will also be consulted regarding the collection of information.

Once established, the plans will not be legally binding but they will be implemented through legally binding mechanisms29 such as local environmental plans (LEPs), State Environmental Planning Policies (SEPPs) and other legislation.

5.1.6.3 Exploration and Assessment

5.1.6.3.1 Exploration activities

Exploration can include a range of activities:

• Reconnaissance

Can involve visits by geologists to look at rock outcrops (on foot). They may gather small samples from streams or from rock or soil for chemical analysis.

If an area of interest is identified during this reconnaissance work, further testing may occur. This may involve taking further small soil or rock samples for analysis or probing beneath the surface with electronic instruments (geophysical exploration).

• Exploration of a zone of mineralisation

This can involve drilling core holes. Normally only one or two holes would be drilled to test a zone using truck-mounted drill rigs.

• Locating coal seams - Seismic surveys

A seismic source - such as sledgehammer - is used to generate seismic waves which are sensed by receivers deployed along a pre-set geometry and then recorded by a digital device called seismograph.

• Testing economic viability

Pilot testing of gas production can occur under an exploration licence.

5.1.6.3.2 Exploration activities must be authorised

Exploration licences can be granted over any land, including privately owned land.30

As discussed, exploration for CSG requires a licence and will in most cases require a development consent.

Other approvals may also be required, such as:

• A permit to clear native vegetation
• An environment protection licence to authorise pollution; or
• A licence to extract and use water.

These other approvals need to be granted by the relevant Government department. For example, the Office of Environment and Heritage grants environment protection licences and the Office of Water grants water licences.

However, where the exploration has development consent from the Department of Planning, these other approvals are either not required, or must be issued consistently with the development consent.31

5.1.6.3.3 Approval process

Application

The gas company will need to apply for an exploration licence and, in most cases, a development consent. The Department of Primary Industries (Minerals and Petroleum) will assess the application for an exploration licence. The Department of Planning and Infrastructure will assess the application for development consent.

Each application must meet the requirements of the relevant legislation. For example, it should be in the prescribed format and contain the required information.

Environmental Assessment

Environmental assessment is undertaken by a consultant paid for by the proponent.

The environmental assessment that is undertaken will depend on whether or not the exploration activities require development consent.

Where development consent is required, the environmental assessment will occur under the relevant provisions of the Environmental Planning and Assessment Act 1979 (NSW). In most cases, this will be the environmental assessment process that applies to State significant development. Sometimes, the project will not qualify as State significant development, and in those cases it is likely to be assessed as designated development. See below.

• Where CSG exploration does not require development consent

Even where development consent is not required, the environmental impacts of the exploration will still need to be assessed.32 The applicant will need to undertake a review of environmental factors or REF. An REF is a preliminary review of environmental impacts. If the REF reveals that an exploration title is likely to have a significant impact on the environment, then the applicant must provide the Minister for Resources and Energy with an environmental impact statement (EIS).33 An EIS is a more detailed assessment of the environmental impacts. A Species Impact Statement (SIS) assesses the impact of the development on threatened species, populations, and ecological communities and their habitats. A SIS is only required where a significant impact is likely.

These environmental assessment reports can only be accessed by the public after approval has been given.34

For more information on Part 5 of the EPA Act, see Fact Sheet 2.2.

• Where CSG exploration qualifies as State significant development

In most cases, CSG activities will qualify as State significant development35. These types of development go through a specific environmental assessment process. This process is outlined in Fact Sheet 2.3.

• Where CSG exploration qualifies as designated development

Sometimes CSG exploration activities will not qualify as State significant development, but will instead be categorised as 'designated development'.36 Designated developments are assessed by local councils and undergo a different form of environmental assessment. The process is outlined in Fact Sheet 2.2.

Determination

In deciding whether or not to grant an exploration licence, the Minister for Resources and Energy is to take into account the need to conserve and protect:37

• The flora, fauna, fish, fisheries and scenic attractions, and
• The features of Aboriginal, architectural, archaeological, historical or geological interest in or on the land over which the petroleum title is sought.

If development consent is required, the Minister for Planning (or the local council) must take into account:38

• The provisions of any environmental planning instrument such as a local environmental plan or State environmental planning policy
• The provisions of any planning agreement or draft planning agreement
• The provisions of any coastal zone management plan
• The likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality
• The suitability of the site for the development,
• Any submissions made in accordance with this Act or the regulations,
• The public interest.

Exploration licences can be granted subject to conditions

There are usually extensive conditions attached to the exploration licence and/or development consent.

Common conditions relate to:

• Pilot testing of gas production;
• Cultivated land;39
• the conservation and protection of flora, fauna, scenic attractions and features of Aboriginal, architectural, archaeological, historical or geological interest in or on the land subject to the petroleum title;40
• the rehabilitation, levelling, regressing, reforesting or contouring of land the land the subject of the title that may have been damaged or adversely affected by operations, and the filling in or sealing of excavations and drill holes.41

This list of conditions is not exhaustive and different types of conditions can be attached to a licence as required.42

The conditions are legally binding. The Minister for Resources and Energy can serve a written notice on the holder of a petroleum title directing the person to give effect to any conditions included in the petroleum title.43 Failure to comply with such a direction is an offence which may incur a maximum penalty of $11, 000.44

If the person fails to comply with the direction, the Minister can have the work undertaken at the expense of the title holder.45

The conditions attached to a development consent are also legally binding.46

Exempted areas

Exploration for petroleum must not be carried out in an "exempted area" unless the Minister for Resources and Energy has granted an exempted area consent.47 An exempted area is defined as land which is held for public purposes, and includes areas such as State Forests and National Parks.48 The concurrence of the Environment Minister is needed before consent can be granted in respect of a State Conservation Area under the National Parks and Wildlife Act 1974 (NSW).49

CSG activities in National Parks

It is unlawful to prospect or mine for minerals in a National Park.50 The definition of minerals includes petroleum. Some National Parks include the land beneath the surface and this would mean mining under the park would be prohibited, however it is unclear as to whether extracting CSG from under a National Park is lawful or not.

5.1.6.3.3 Landholder Rights

Finding out about CSG exploration

• Exploration licences

There is no legal requirement for the public to be notified of a CSG exploration licence application.51

• Assessment leases

Applicants for CSG assessment leases must notify the application in a State and regional newspaper.52 The notification must be published either before, or within 21 days of applying for, the assessment lease.

The notification must state that an application for an assessment lease has been or will be lodged and provide enough detail to allow the relevant land to be identified. It must contain a plan and description of the area and indicate the direction and distance to the nearest town.53

The council for the local government area that includes the area over which the lease is sought may provide to the holder of the lease the names and addresses of landholders whose lands lie wholly or partly within that area within 21 days. If the council provides these details, the applicant must send each landholder a copy of the notice that appeared in the newspaper.54

• Development consent

If development consent is required, the application will be publicly notified on the Department of Planning and Infrastructure's website.

Having a say

Until recently, landholders did not get a say as to whether an exploration licence was granted.

The public can now comment on coal and CSG (petroleum) exploration licence applications. This is a recent change. However, there will not be a REF to comment on. You must keep an eye on the website or EDO NSW bulletin. The public will only be able to comment on the impacts of exploration – not future extraction.

Additionally, for exploration activities that require development consent, landholders do get to have a say. This is by way of written submission and the opportunity arises when the development is being assessed by the Department of Planning and Infrastructure.

The application will go on public exhibition for 30 days and during this time any person can write a submission either in support of or objecting to the proposal. It is important to keep abreast of what developments are on public exhibition so that the opportunity to comment is not missed.

Restrictions on exploration activities near houses, gardens etc

A landholder must give written consent for exploration to occur within:

• 200m of a house;
• 50m of a garden, vineyard or orchard; or
• On any 'improvement' (substantial building, dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work or other valuable work or structure).55

This is an important right that landholders can exercise to ensure that exploration activities do not encroach too close the landholder's assets. Once a landholder has given consent it cannot be withdrawn.56

The Minister for Resources and Energy decides whether an improvement is substantial or valuable.57

Disputes are heard by the Land and Environment Court.58

Enforcing environmental approvals

If the licence holder causes environmental damage without approval, this can be reported to the Office of Environment and Heritage (OEH) who can take enforcement action. If the OEH does nothing, the landholder may be able to commence enforcement action.59

Any person can ensure that the licence holder only engages in activities that they are authorised to do by bringing legal proceedings in order to restrain a breach that is causing or is likely to cause harm to the environment in the Land and Environment Court (LEC).60

A landholder can ensure the licence holder only engages in activities that are authorised by the licence. The landholder may have an action in trespass for unauthorised entry or damage, or may be able to get an injunction to stop the unauthorised activities. The Land and Environment Court has jurisdiction to hear these cases.61

5.1.6.3.4 Landholder Obligations

A person must not unlawfully obstruct or hinder the holder of an exploration licence from undertaking authorised activities. The maximum penalty for this is $11,000.62

It is not unlawful to obstruct or hinder a title holder if the purpose of the obstruction is to prevent unauthorised actions.

5.1.6.3.5 Access Arrangements

Parties to negotiate an access arrangement

If an exploration licence, assessment lease or special prospecting authority is granted over a property, the title holder must negotiate a land access arrangement with the land holder before undertaking any activities authorised under the licence, lease or authority.63 The title holder cannot enter your property without an access arrangement in place.

The process begins when the title holder serves on the landholder a notice of intention to seek an access arrangement.64 This may be hand delivered or sent through the post. The title holder will then attempt to negotiate an access arrangement with the landholder.

Typically, the title holder will provide the landholder with a generic access arrangement as the basis for negotiations.

The landholder can choose to negotiate an access arrangement but does not have to do so. The landholder can refuse to negotiate.

Arbitration if the parties cannot agree

Once 28 days have elapsed from the date that the title holder served their notice of intention on the landholder, the title holder becomes able to seek arbitration. So if no arrangement can be negotiated within 28 days, the landholder may be served with a further notice in writing requesting them to agree to the appointment of an arbitrator.65

The title holder and the landholder may agree to the appointment of any person as an arbitrator.66

If the parties cannot agree on the arbitrator within 28 days, an arbitrator can be appointed by the Director-General of Primary Industries.67 The Director-General will appoint a member of the Arbitration Panel.

The arbitrator sets the time, place and procedure for the hearing, some of which may take place on the property.68 It is an informal process and legal representation may or may not be allowed.69 The matters which are decided are whether access should be granted and, if access is allowed, the terms of the access arrangement.70 A landholder should therefore be prepared to argue why access should not be granted. It is also advisable to prepare a list of terms upon which access can be granted.

The arbitrator will seek to facilitate a conciliated agreement whereby the parties agree to access and the terms of the access arrangement. If this cannot be achieved, the arbitrator will make the decision. This is known as an arbitrated agreement. If there is an arbitrated agreement, each party will be served with the arbitrator's interim decision. Each party has 14 days to approach the arbitrator seeking a reconsideration of the question of access or variation to the draft access arrangement. The arbitrator may make the suggested changes.

Once 14 days have elapsed, the decision becomes final.

Each party bears his or her own costs.71 Costs of the arbitrator are to be paid by the title holder as an obligation under that title.72

It is important to note that there is no guarantee that a failure to negotiate an access arrangement will result in arbitration. The title holder may decide not to pursue access at all.

Land and Environment Court if arbitration fails

Either party can challenge the arbitrator's decision in the Land and Environment Court (LEC).73 Leave to appeal must be filed within 28 days of the interim determination being served, or 14 days after the final determination.74

The LEC will give a final determination on whether access should be granted and, if so, on what terms.75 It is probable that some form of access will be granted.76

Matters to be covered by the access arrangement

Each access arrangement will outline the terms upon which the title holder can access the landholder's property. Each access arrangement will be different as each will need to address the issues relevant to the property in question and the types of exploration activities that have been authorised. What is acceptable to one landholder may not be acceptable to another.

However, each access arrangement should address the following:

• Benchmark studies to establish the condition of the property before exploration. This could include a valuation of the property, assessment of water quality and quantity, soil testing, ambient noise benchmarks etc;
• Access routes and exploration sites. These should be shown on a map;
• Permitted exploration activities;
• Requirements for how much notice should be given by the title holder to the landholder before access is sought;
• Periods of access;
• Times during which access will not be granted (such as Sundays, public holidays, or when the landholder will be undertaking particular activities such as harvesting);
• Logbooks for entering and leaving the property including who entered, the purpose of the entry etc;
• Mining company responsibilities;
  • OH&S provisions
  • Indemnity
  • Insurances
• Environmental protection mechanisms - what action will the title holder take to minimise or avoid environmental damage? For example, will vehicles be sterilised before entering the property to ensure weeds are not brought onto the property, will certain areas be avoided to minimise impacts on threatened species etc;
• Monitoring of impacts by independent experts;
• Legal costs - note: If a landholder requests it, the licence holder must pay the reasonable legal costs of the landholder in obtaining advice about the making of the access arrangement;77
• Dispute resolution;
• The duration of the arrangement;
• The manner of varying the arrangement (including terminating the agreement);
• The compensation to be paid.78

Enforcing access arrangements

If the licence holder breaches the access arrangement, a landholder can deny access until the breach is stopped or fixed.79 An arbitrator can be appointed to determine if the breach has been sufficiently remedied.80

Terminating access arrangements

An access arrangement can be terminated in accordance with the terms of the arrangement.81

An access arrangement can also be terminated:

• By the agreement of the parties to the arrangement; or
• By the arbitrator who determined the arrangement (with the consent of all the parties to the arrangement); or
• By the Land and Environment Court if the arrangement was determined by a Court or arbitrator.82

Tips for negotiating access arrangements

• Landholders should never sign an arrangement without getting legal advice first. An access arrangement is a contract that deals with a landholder's most important asset - their land. It is vital that the landholder understands and agrees to the terms of the arrangement and has legal protections in place to ensure damage can be avoided, minimised or appropriately compensated. Landholders can have their reasonable legal fees paid for by the title holder.83

• The access arrangement should be as detailed as possible. This will make it easier to enforce the arrangement.

• The access arrangement provided by the title holder is likely to benefit the interests of the title holder. It is not likely to be in the interests of a landholder to sign such an arrangement without making some amendments. Landholders should consider devising their own access arrangement for use as the basis for negotiations.

• Landholders should speak to their neighbours - If possible, agree on standard terms that you will all seek in your access arrangements. It's important to note that an access arrangement between the title holder and one landholder may adversely impact on neighbours. To avoid this scenario, it's helpful to discuss the arrangement with any neighbours and try to come to an access arrangement that will not harm the neighbour's interests.

• Avoid confidentiality provisions. Many title holders seek to have the landholder sign a confidentiality provision to prevent the landholder discussing the terms of the access arrangement. This is not in the landholder's best interests. It can be useful to discuss access arrangements with neighbours, especially the compensation provisions as the entitlements of one landholder may be more than another depending on how well each landholder negotiates. It may also be necessary for the landholder to discuss the arrangement with the media as part of a campaign to prevent CSG activities in an area.

Compensation

Landholders are entitled to compensation for land that is 'injuriously affected' or likely to be so affected, by reason of any action taken in pursuance the CSG title.84 The term 'landholder' includes secondary landholders and landholders whose lands are not subject to the exploration licence,85 and includes native title holders.86

The title holder and the landholder can agree as to the amount of compensation that is payable.87 Such agreements are often contained in the access arrangement. They can also be stand-alone compensation agreements.

If the parties cannot agree, they can appeal to the Land and Environment Court to make a determination. The Court's determination is binding on the parties.88

In assessing compensation, the Court must consider loss caused or likely to be caused by:

• Damage to the surface of land, crops, trees, grasses, or other vegetation, or to buildings or other structures or works;
• Deprivation of the possession or the use of the surface of land;
• Severance of land from other land of the landholder;
• Surface rights of way and easements;
• Destruction, loss, injury or disturbance of stock ; and
• Damage consequential on any matter referred to above.

5.1.6.4 Production

If the exploration process reveals a commercially viable CSG reserve, the next phase is production.

5.1.6.4.1 Production activities

CSG production can involve the clearing of vegetation, the building of roads, the drilling of production wells, the construction of dams to store produced water, the construction of pipelines to transport the gas and associated infrastructure such as buildings and other works.

5.1.6.4.2 Production must be authorised

A petroleum production lease is required. The Minister for Resources and Energy grants production leases. Production leases are usually granted for a period of up to 21 years.

The Minister usually consults:89

• any government agencies that may be 'materially affected' by the lease;
• the Director-General of Planning;
• the Dams Safety Committee;
• local councils within the area of the proposed lease; and
• the general public.

Development consent will also be required. This is usually granted by the Minister for Planning and Infrastructure.

5.1.6.4.3 Approval process for production

Approval is gained under a parallel two-stage process - for development consent and a production lease.

Typically proponents get their development consent before they apply for a petroleum production lease.

A production lease may be granted only to an applicant who has held the land concerned under an exploration licence or an assessment lease, unless the Minister, by notice published in the Gazette, has invited applications for a production lease in respect of the area concerned.90

CSG production activities qualify as State significant development91 and will be assessed under the relevant provisions of the Environmental Planning and Assessment Act 1979 (NSW). For information on how State significant development is assessed, see Fact Sheet 2.3.

5.1.6.4.4 CSG production can be approved subject to conditions

As with exploration, conditions can be attached to the production lease and/or the development consent.

Conditions are legally binding.

5.1.6.4.5 Other environmental approvals may be required

Other approvals may also be required, such as:

• A permit to clear native vegetation
• An environment protection licence to authorise pollution; or
• A water use licence.

These other approvals need to be granted by the relevant Government department. For example, the Office of Environment and Heritage grants environment protection licences and the Office of Water grants water use licences.

However, one extra approval that is required is an aquifer interference approval. All new mining or CSG applications that will interfere with an aquifer will need an aquifer interference approval from the Office of Water.92

5.1.6.4.6 Landholder rights

Finding out about CSG production

• Production leases

An applicant must notify the public of an application for a production lease within 21 days of lodging the application. Notice must appear in a newspaper which has a State-wide circulation.93

The notice must state that an application for a production lease has been or will be lodged and contain enough detail to allow for the identification of the area of land over which the lease is sought. It must include a plan and a description of the area as well as a the approximate direction and distance of the nearest town.94

• Development consent

If development consent is required, the application will be publicly notified on the Department of Planning and Infrastructure's website.

Having a say

Affected landholders do not get a say as to whether a production lease is granted.

However, when development consent is applied for, members of the public can write a submission outlining objections to the proposal. This must be done in the 30 day exhibition period.95 Any person can write a submission. When writing, people are encouraged to consider what conditions would minimise the adverse impacts of the development on them, and ask for these conditions to be attached to the consent. Conditions could relate to things such as:

• The public interest;
• Restrictions on noise, dust, light and operating hours;
• Buffer zones to preserve visual amenity;
• Restoration works;
• Avoidance of certain sites; and
• Water monitoring.

Restrictions on petroleum production near houses, gardens etc

A landholder must give written consent for petroleum production to occur within:

• 200m of a house;
• 50m of a garden, vineyard or orchard; or
• On any 'improvement' (substantial building, dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work or other valuable work or structure).96

This is an important right that landholders can exercise to ensure that petroleum production activities do not encroach too close the landholder's assets. Once a landholder has given consent it cannot be withdrawn.97

The Minister for Resources and Energy decides whether an improvement is substantial or valuable.98

Disputes are heard by the Land and Environment Court.99

Restrictions on petroleum production on cultivated land

The holder of a production lease must not carry out any mining operations or erect any works on the surface of any land which is under cultivation except with the consent of the landholder.100

This is an important provision to protect cultivated land from the adverse impacts of CSG production. It is important that landholders are aware of their right to withhold consent and the implications of giving such consent.

Despite this, the Minister for Resources and Energy may define an area of the surface of any parcel of cultivated land on which mining operations may be carried out or works may be erected.101

5.1.6.4.7 Landholder Obligations

A person must not unlawfully obstruct or hinder the holder of a production lease from undertaking activities that are authorised by that lease. The maximum penalty is $11,000.102

It is not unlawful to obstruct or hinder a title holder if the purpose of the obstruction is to prevent unauthorised actions.

5.1.6.4.8 Access Arrangements

There is no requirement for the gas company to negotiate an access arrangement with you for mining/production activities. Access arrangements are only required for the exploration and assessment stage.

Your existing access arrangement may cover production activities.

5.1.6.5 Commonwealth Approvals

CSG activities are regulated by the State government. However, sometimes, an approval will also be required from the Federal Government. Federal Government approval is required for actions that:103

• Are on Commonwealth land and likely to have a significant impact on the environment;
• Are taken by the Commonwealth and are likely to have a significant impact on the environment; or
• Are likely to have a significant impact on 'matters of national environmental significance;

These approvals are issued by the Federal Minister for Environment

5.1.6.5.1 Matters of National Environmental Significance

If an activity is likely to have a significant impact on a matter of national environmental significance, it must be assessed and approved by the Federal Minister for the Environment. This is in addition to any assessment and approval that is required at the State level.

Matters of National Environmental Significance are:104

• the world heritage values declared World Heritage Areas;
• the ecological character of a Ramsar wetland;
• listed threatened species;
• listed migratory species;
• nuclear actions;
• Commonwealth marine areas;
• listed heritage items and places.

So, for example, if CSG activities are proposed on land that is known to be habitat for a federally listed threatened species, the project will most likely need to be referred for assessment by the Federal Environment Minister. Similarly, if the project is proposed close to a world heritage area or a Ramsar wetland, the project may need to be referred.

5.1.6.5.2 Referrals

The applicant has responsibility to refer their project to the Federal Government. The environmental assessment (such as the Review of Environmental Factors) should identify whether the project is likely to have a significant impact on a matter of national environmental significance.

However, sometimes the applicant does not refer the project - either because they have not identified any matters of national environmental significance, or they have concluded that the activities are not likely to have a significant impact on the matters of national environmental significance.

In such cases, members of the public cannot make the referral. However, other bodies can make referrals and members of the public can bring the activity to the attention of these bodies and ask that they refer the project.

Local councils, State Government departments and Commonwealth Government agencies are all able to refer projects. In addition, the Federal Environment Minister can 'call in' a project if he or she believes it qualifies for assessment.

5.1.6.5.3 Landholder Rights

Landholders can seek to have a proposed CSG project referred for assessment by the Commonwealth Government.

Once a project has been referred, members of the public have the right to comment on the project. However, the submission period is only 10 days. Projects that are open for comment are listed on the website of the Department of Sustainability, Environment, Water, Population and Communities.105

5.1.6.6 Taking Legal Action

Mining projects are difficult to stop and legal action is costly so opponents are encouraged to consider their bottom line. It is important to get involved early, raise awareness, and campaign, and to encourage the decision maker to prioritise other industry in the area over CSG mining.

It may be possible to challenge a CSG project in Court. There are two types of challenge that may be available - 'merits review' and 'judicial review'.

5.1.6.6.1 Merits Review

These cases challenge the decision to grant development consent to the CSG project. The basis of the challenge is that the decision was a bad decision. The Court stands in the shoes of the original decision-maker and decides whether or not the project should go ahead. Both sides present evidence to show why the project should and should not be approved.

The Court may overturn the approval or uphold the approval. Even where the approval is upheld, the Court may impose additional conditions to minimise the impacts of the project.

Merits review proceedings can only be commenced by 'objectors'. Objectors are people who wrote a submission objecting to the project at the assessment stage when the project was on public exhibition.

Merits review is only available for State significant development and designated development. Merits review is not available where the project has gone to a public hearing as part of a review by the Planning Assessment Commission.106

Objectors only have 28 days after they receive notice of the decision to commence merits review so it is important to seek legal advice early.107

5.1.6.6.2 Judicial Review

Any person who is concerned with the legality of the decision making-process in the granting of development consent may apply to the court for judicial review. Judicial review proceedings are not concerned with whether the decision to approve a CSG project was a good or bad decision. The proceedings look at whether the decision was arrived at legally.

There are strict time limits on judicial review proceedings: any challenge to the legal validity of a development consent must be brought within 3 months from the date on which public notice of the decision was given.108

Grounds for judicial review include:

• Failure to follow proper legal procedure,
• Failure to take into account relevant considerations,
• Decision was affected by fraud.109

5.1.6.2.3 Third Party Enforcement

Conditions of consent are legally binding, as are any environmental approvals such as the licence to pollute, the permit to clear native vegetation or the licence to extract water.

Members of the public who think that a gas company is breaching any of the conditions or approvals that apply to the CSG activities should notify the responsible government department. If that department fails to act, it is possible for any member of the public to commence proceedings to enforce the law against the gas company.

1. Petroleum (Onshore) Act 1991 (NSW) s. 3(1).
2. Petroleum (Onshore) Act 1991 (NSW) s. 6.
3. Petroleum (Onshore) Act 1991 (NSW) s. 6.
4. Under the Petroleum (Onshore) Act 1991 (NSW).
5. Under the Environmental Planning and Assessment Act 1979 (NSW).
6. Petroleum (Onshore) Act 1991 (NSW), Part 3.
7. Petroleum (Onshore) Act 1991 (NSW) s 29.
8. Petroleum (Onshore) Act 1991 (NSW) s 30.
9. Petroleum (Onshore) Act 1991 (NSW) ss 30, 31.
10. Petroleum (Onshore) Act 1991 (NSW) s 30.
11. Petroleum (Onshore) Act 1991 (NSW) s 30.
12. Petroleum (Onshore) Act 1991 (NSW) s 33.
13. Petroleum (Onshore) Act 1991 (NSW) s 34.
14. Petroleum (Onshore) Act 1991 (NSW), s. 33 note.
15. Petroleum (Onshore) Act 1991 (NSW), s. 33.
16. Petroleum (Onshore) Act 1991 (NSW), s. 35.
17. Petroleum (Onshore) Act 1991 (NSW), s. 38.
18. Petroleum (Onshore) Act 1991 (NSW), s. 39.
19. Petroleum (Onshore) Act 1991 (NSW), s. 40.
20. Petroleum (Onshore) Act 1991 (NSW) s. 41.
21. NSW Government Gazette http://ww,w.nsw.gov.au/gazette .
22. Petroleum (Onshore) Act 1991 (NSW), s. 42.
23. Petroleum (Onshore) Act 1991 (NSW) s 44.
24. Petroleum (Onshore) Act 1991 (NSW) s 45.
25. State Environmental Planning Policy (State and Regional Development) 2011 , Schedule 1, cl. 6.
26. http://www.webref.org/geology/s/stratigraphic_hole.htm accessed 31/08/11
27. LWBC (Land and Water Biodiversity Committee), 2003, Minimum construction requirements for water bores
28. State Environmental Planning Policy (State and Regional Development) 2011 , cl. 4.
29. As per s.117 directions from the Minister for Planning and Infrastructure. See: Environmental Planning and Assessment Act 1979 (NSW), s. 117.
30. Petroleum (Onshore) Act 1991 (NSW) s 9.
31. Environmental Planning and Assessment Act 1979 (NSW), ss. 89J. 89K.
32. Environmental Planning and Assessment Act 1979 (NSW) s 111.
33. Environmental Planning and Assessment Act 1979 (NSW), s. 112.
34. http://www.dpi.nsw.gov.au/minerals/environment/nod
35. See State Environmental Planning Policy (State and Regional Development) 2011 , Schedule 1, cl. 6.
36. See Environmental Planning and Assessment Regulation 2000 (NSW), Schedule 3, cl. 27.
37. Petroleum (Onshore) Act 1991 (NSW), s. 75.
38. Environmental Planning and Assessment Act 1979 (NSW), s. 79C.
39. Petroleum (Onshore) Act 1991 (NSW), s. 71.
40. Petroleum (Onshore) Act 1991 (NSW), s. 75.
41. Petroleum (Onshore) Act 1991 (NSW), s. 76.
42. Petroleum (Onshore) Act 1991 (NSW), s. 76.
43. Petroleum (Onshore) Act 1991 (NSW), s. 77.
44. Petroleum (Onshore) Act 1991 (NSW), s. 77.
45. Petroleum (Onshore) Act 1991 (NSW), s. 78.
46. Environmental Planning and Assessment Act 1979 (NSW), s. 89E(1)(a).
47. Petroleum (Onshore) Act 1991 (NSW), s. 70.
48. Petroleum (Onshore) Act 1991 (NSW), s. 70.
49. Petroleum (Onshore) Act 1991 (NSW), s. 70.
50. National Parks and Wildlife Act 1974 (NSW,) s. 41.
51. Petroleum (Onshore) Act 1991 (NSW), ss. 29-32.
52. Petroleum (Onshore) Act 1991 (NSW), s. 36.
53. Petroleum (Onshore) Act 1991 (NSW), s. 36.
54. Petroleum (Onshore) Act 1991 (NSW), s. 36
55. Petroleum (Onshore) Act 1991 (NSW), s. 72.
56. Petroleum (Onshore) Act 1991 (NSW), s. 72(2).
57. Petroleum (Onshore) Act 1991 (NSW), s. 72.
58. Petroleum (Onshore) Act 1991 (NSW), s. 72.
59. Protection of the Environment Operations Act 1997 (NSW), s. 253(1).
60. Protection of the Environment Operations Act 1997 (NSW), s. 253(1).
61. Petroleum (Onshore) Act 1991 (NSW), s. 115.
62. Petroleum (Onshore) Act 1991 (NSW), s. 136.
63. Petroleum (Onshore) Act 1991 (NSW), s. 69E.
64. Petroleum (Onshore) Act 1991 (NSW), s. 69E(1).
65. Petroleum (Onshore) Act 1991 (NSW), s. 69F(1).
66. Petroleum (Onshore) Act 1991 (NSW), s. 69F(2).
67. Petroleum (Onshore) Act 1991 (NSW), s. 69G.
68. Petroleum (Onshore) Act 1991 (NSW), s. 69H.
69. Petroleum (Onshore) Act 1991 (NSW), s. 69I.
70. Petroleum (Onshore) Act 1991 (NSW), Part 4A.
71. Petroleum (Onshore) Act 1991 (NSW), s. 69O.
72. Petroleum (Onshore) Act 1991 (NSW), s. 69O.
73. Petroleum (Onshore) Act 1991 (NSW), s. 115.
74. Petroleum (Onshore) Act 1991 (NSW), s. 69R.
75. Petroleum (Onshore) Act 1991 (NSW), s. 69R.
76. Petroleum (Onshore) Act 1991 (NSW), s. 69R.
77. Petroleum (Onshore) Act 1991 (NSW), s. 69D.
78. Petroleum (Onshore) Act 1991 (NSW), s. 69D.
79. Petroleum (Onshore) Act 1991 (NSW), s. 69D(4).
80. Petroleum (Onshore) Act 1991 (NSW), s. 69D(4).
81. Petroleum (Onshore) Act 1991 (NSW), s. 69T.
82. Petroleum (Onshore) Act 1991 (NSW), s. 69T.
83. Petroleum (Onshore) Act 1991 (NSW), s. 69D.
84. Petroleum (Onshore) Act 1991 (NSW), s. 107.
85. Petroleum (Onshore) Act 1991 (NSW), s. 107.
86. Petroleum (Onshore) Act 1991 (NSW), s. 107(1A).Native title holders as per the Native Title Act 1993 (Cth).
87. Petroleum (Onshore) Act 1991 (NSW), s. 108.
88. Petroleum (Onshore) Act 1991 (NSW), s. 108.
89. Petroleum (Onshore) Act 1991 (NSW), s. 49.
90. Petroleum (Onshore) Act 1991 (NSW), s. 42.
91. See State Environmental Planning Policy (State and Regional Development) 2011 , Schedule 1, cl. 6.
92. Environmental Planning and Assessment Act 1979 (NSW), s. 89J(1)(g). See also Water Management Act 2000 (NSW), s. 91.
93. Petroleum (Onshore) Act 1991 (NSW), s. 43.
94. Petroleum (Onshore) Act 1991 (NSW), s. 43.
95. Environmental Planning and Assessment Act 1979 (NSW), s. 79.
96. Petroleum (Onshore) Act 1991 (NSW), s. 72.
97. Petroleum (Onshore) Act 1991 (NSW), s. 72(2).
98. Petroleum (Onshore) Act 1991 (NSW), s. 72
99. Petroleum (Onshore) Act 1991 (NSW), s. 72
100. Petroleum (Onshore) Act 1991 (NSW), s. 71(1).
101. Petroleum (Onshore) Act 1991 (NSW), s. 71(2).
102. Petroleum (Onshore) Act 1991 (NSW), s. 136(3).
103. Environment Protection and Conservation of Biodiversity Act 1999 (Cth).
104. Environment Protection and Conservation of Biodiversity Act 1999 (Cth).
105. Environment Protection and Conservation of Biodiversity Act 1999 (Cth), s. 78B.
106. Environmental Planning and Assessment Act 1979 (NSW), s. 98(5).
107. Environmental Planning and Assessment Act 1979 (NSW), s. 98 (1).
108. Environmental Planning and Assessment Act 1979 (NSW), ss. 85A(1), 123, 101; Environmental Planning and Assessment Regulation 2000 (NSW), cl. 137.
109. Administrative Decisions Tribunal Act 1997 (NSW).

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