Submission of Friends of the Earth Australia

Submission of Friends of the Earth Australia

Public Consultation Submission – First Exposure Draft of the National Harmonised Regulatory Framework for Coal Seam Gas.

Name and Position: / Prepared by Madeleine Egan, Community Campaigner, for Friends of the Earth Australia
Address: / PO BOX 222, FITZROY, VIC, 3065
Telephone/Fax: / (03) 9419 8700
Email address: /
Organisation authorised level:
Confidentiality of submission: / Open

Stakeholder Comments:

Draft National Harmonised Regulatory Framework

Part 1 – Preface

Comment

Thank you for the opportunity to respond to the Draft National Harmonised Regulatory Framework for Coal Seam Gas (CSG). We recognise the importance of feedback on Chapters 3 to 6, which deal in detail with the core technical issues involved in CSG activity. We also consider it important to provide feedback on the main concepts and directions of the Draft Framework, as the Harmonised Framework will ultimately support the implementation of key policy choices.

Friends of the Earth make this submission on behalf of all its members and those people with whom our campaigners have worked directly in CSG affected communities across Queensland, NSW and Victoria.

The Preface of the Draft Framework clearly places it within a context of live ‘community concern’. Through our work, Friends of the Earth has closely witnessed this concern and would like to impress on those who are involved in finalising this Framework, the genuine distress, anger and fatigue felt by people faced with the prospect of industrial-scale gas operations which proposes to become a feature of their daily lives.

Our overwhelming experience in working with rural and regional communities has been that attitudes toward CSG are informed by concerted and thorough research voluntarily taken up by individuals and shared among families, friends and neighbours. Like the writers of this Draft Framework, community members concerned about CSG have considered the results of studies and listened to the experiences of those in places where CSG has been longer or more intensively developed.

As the writers of the Harmonised Framework will know firsthand, it becomes clear to anyone who examines the issue, that development of the CSG industry demands compromise from other land-use industries, from our environment and from the social fabric of existing communities. The conclusion of those for whom the long-term liveability and productivity of Australia is considered of higher importance than the short-term interests of the natural gas industry, has overwhelmingly been that CSG is an industry to which Australia does not need to resort.

Part 2 – Executive Summary

Comment

‘Co-existence’: all at the table, or ‘revolving doors’?

The Executive Summary introduces the concept of co-existenceunderstood as ‘shared commitment … to multiple and sequential land-use’. It appears to be drawn from the Multiple Land Use Framework (MLUF), which, we note, is not a planning document but an unpublished consultant’s report produced for the Standing Council on Energy and Resources (See pages 10 and 12 of the Draft document) to address ‘issues impacting on investment in resources exploration and development’. The MLUF was not a study intended to give even-handed consideration to all types of land-uses but was geared toward mineral resource development. The co-existence concept thus construed should not be transposed to a broader context in which, adopted uncritically, it would subvert well-established land use planning principles that must give proper weight to all types of land values and land uses.

We consider any reasonable interpretation of co-existence entails types of land uses existing together, in the same time frame. It has long been the task of an orderly planning process backed by legislation to allocate land according to inherent values and established usages, to avoid the juxtaposition of incompatible uses and to give some protection to existing uses. Orderly planning allows reallocation of land to accommodate changing uses and to provide better protection for land uses that are under threat. However, it does not contemplate ‘spot-changes’ where incompatible uses take over for a limited time, ousting existing activities and degrading inherent land values. The revolving door type of co-existence is illusory. A piece of land cannot be urban back yard one year, mining pit the next and farmland thereafter.

The Executive Summary recognises that the CSG industry needs to have the confidence of the community, requiring a ‘social licence’ to operate. Firstly, this is consistent with the well-established notion that some activities give rise to ‘nuisance’, for example noise, smell or other pollution, and are therefore incompatible with the health, safety, comfort or convenience of people affected. Secondly we note that, as mentioned in the Draft document itself,

The National Harmonised Regulatory Framework responds to community concerns about the potential environmental, health and social impacts of CSG development.

It is apparent that levels of community concern are significant. Indeed CSG is widely distrusted and unwanted. We would refer the writers of this Framework to those communities in the Northern Rivers region of NSW as well as to Poowong in Victoria, where surveys have been taken as to community attitudes towards CSG. Of 12000 respondents in the Northern Rivers, 96% did not want CSG in their region[1], and in Poowong, 95% of 600 respondents did not want CSG in their region[2].

Recommendations

Friends of the Earth would urge that the Framework make more concrete reference to demonstrated levels of community opposition. We would also request that the Framework, when referring to the prerequisite “‘social licence’ to operate”, acknowledge the CSG industry’s current lack of such licence.

Chapter 1 – Towards Sustainability and Co-existence

Comment

The Draft Framework’s premise is that Australia should have a substantial CSG industry. The criterion ‘ALARP’ (risks and impacts ‘as low as reasonably practical’) is deployed to facilitate the underlying decision that Australia will have a substantial CSG industry. This unquestioned premise relegates other considerations to secondary status.

The expression ‘ALARP’ contains multiple qualifications of the promise that CSG risks can and will be managed. It substitutes the promise of harm avoidance with the prospect that harms are inevitable and will be approved on the basis of avoiding inconvenience and cost to the project owner/operator.

We question whether ‘merit-based land access’ (page 10) is to be assessed solely through an accounting exercise; if not, how non-monetary values are to be taken into account; also how the readily calculable gains from CSG activity over a limited period are to be fairly compared with the complex values accruing to established uses over very long time-frames.

It is concerning that, at page 10, the Draft Framework expressly places all the following on an equal footing: CSG industry, environmental protection, human health. It states that governments should ‘address and respond equally to these concerns’.

Friends of the Earth have identified a number of interests we believe do not sit within a reasonable definition of co-existence and which render the industry incapable of achieving long-term sustainability:

1. Agriculture

The 2012 report prepared for the Australian Council of Environmental Deans, which looked at CSG and natural resource management in Australia, identified agriculture, especially cropping, as an industry particularly incompatible with gas production[3]. The analysis identified business-as-usual issues (rather than scenarios in which accidents or negligence result in leakage, contamination etc.). The study found that the nature of the CSG industry led to a high density of well pads, so that in some cases, there are as many as 300 wells within a 700-metre diameter space[4]. This intensity, combined with the intrusive impact of accompanying industrial equipment such as pipes, cables, waste water storage and roads, makes the use of heavy farm machinery difficult and changes the pattern of water flow across farmland[5].

We would also like to note that the future of Australian agriculture is already likely strained by land and water scarcity, and by climate change – three factors which will be exacerbated by a substantial CSG industry.

2. Communities

2.1 Jobs

CSG is sold as a jobs provider that can contribute to the health of rural communities. The reality is that the industry provides few jobs, even fewer jobs go to locals, and those jobs are not long-term.

The industry requires a short labour-intensive construction period while wells and infrastructure are put in place. This is followed by approximately 35 years of intermittent well checks and infrequent spurts of production before the wells are abandoned. This means that the industry has tended toward employing non-resident workers and that any work for locals is short-term.

The NSW Government inquiry into the use of ‘fly-in fly-out’ (FIFO) and ‘drive-in drive-out’ (DIDO) workforce practices in regional Australia heard evidence that the mining industry was drawing skilled workers away from local businesses and had an adverse impact on the local economy[6]. In their submission to the inquiry, the CEPU argued that the practice creates both economic and social problems[7]. It was found that wealth generated through mining activity in regional areas is flowing back to metropolitan centres.

Another report, authored by Professor Kerry Carrington of Queensland University of Technology questioned the health of the FIFO model, and drew clear links between FIFO, a largely segregated male workforce population and spikes in incidents of alcohol related violence in towns where the FIFO models had been implemented. The three-year study also showed that workers were reporting an increased use in drugs and alcohol in the isolated mine environments where there was little in the way of passing time productively. ‘The result was a spike in violence, including brawls over women, sex workers and spilt drink.’[8]

2.2 Traffic

The CEPU has also identified that extra roads, traffic and freight would make road networks in areas affected by the CSG industry more dangerous[9].

It is estimated that a vertical well (such as would be required for CSG mining), requires a total of 1810 vehicle trips, including 398 heavy truck trips and 507 light truck trips[10]

2.3 Property Value

A significant focal point of community concern has been the clear trend of property depreciation in areas near to CSG activity. An article in the Herald Newspaper reported in December 212 that millions of dollars had been wiped off the value of Hunter Valley properties adjoining mining projects. Some of the properties in question had lost 30% of their value over the past 5 years[11].

We suggest that the inability to sell land or obtain loans based on land value renders many land-uses untenable. An outcome which so severely precludes activity other than CSG mining and limits the life-choices available to people, cannot be considered co-existence.

2.4 Inflation

The depreciation of assets and enterprise opportunity is regrettably accompanied by inflation in many mining towns. An increase in fuel, rental and other prices was noted by the previously mentioned CEPU submission as characteristic of towns to which FIFO mining had been introduced[12].

Friends of the Earth consider the co-existence of the CSG industry alongside rural and regional communities unsustainable, in that mining overwhelms other business and social structures without contributing substantially to local prosperity or community strength.

3. Biodiversity

We note that currently, CSG operations are exempt from the Native Vegetation Acts in both NSW and Queensland. If there is a particular threat to threatened species, the Commonwealth Environment Protection & Biodiversity Conservation Act 1999 can be bought to bear, as can State Threatened Species legislation. This remains a legislative weakness.

As Dr John Williams states in his report to the Australian Council of Environmental Deans,

These Acts do not easily deal with broad-scale fragmentation of bushland and loss of habitat. The cumulative impact of surface installations for CSG operations can be expected to undermine future habitats and the management of threatened species of both plants and animals.[13]

Friends of the Earth recommend that the Framework look closely at current weaknesses in legislation dealing with biodiversity and mining. The Framework has an important task, not yet fully realised, of guiding legislation to better address the issues of broad-scale fragmentation and cumulative impacts of CSG mining.

4. Climate Change

The industry claims that CSG ‘produces up to 70 per cent fewer greenhouse gases’ than coal[14]. This figure is based on a very limited investigation of the true greenhouse gas impact of the extraction process. The reality, highlighted in a report commissioned by the Department of Climate Change and Energy Efficiency, is that ‘There is effectively no public information about methane emissions associated with unconventional gas production in Australia’[15].

The Federal government, in its Energy White Paper, has signaled that CSG should play an important part in Australia’s energy future[16]. At the same time, the government has committed to effectively price greenhouse gas emissions as a means of reducing Australia’s contribution to dangerous climatic change. Given the uncertainty and lack of solid data around actual emissions intensity of CSG, it is imprudent to proceed with industry expansion and risks undermining key, existing climate policy.

Until such a time as the full climate impacts can be assessed and monitored effectively, a moratorium on all new unconventional gas projects should be in place.

Chapter 2 – Applying Leading Practices

Comment

While Friends of the Earth recognise the intention of the Framework to ensure consistent good practice within the CSG industry, this Draft document’s deference to the concept of ‘leading practice’ raises concern. The attitude of the Draft suggests that leading practice will provide panacea for all social, environmental and economic issues arising from CSG operations.

There are a number of claims regarding leading practice, which carry this assumption most explicitly.

E.g. the Draft document states, in reference to leading practices, that,

…their application aims to ensure that a balance exists in public discourse about CSG development in Australia… (page 15)

It has to be assumed that ‘leading practice’ here refers to the most efficient and effective approaches to business and operational practice currently used by industry in the production of CSG. Therefore, it is natural that leading practice is primarily guided by industry, who have the great bulk of influence over the kinds of research undertaken, which technologies become commercialised and what kind of operational systems are implemented. Industry can be expected to prioritise the maximisation of production and the minimisation of costs, so the application of leading practice, rather than ensuring ‘that a balance exists in public discourse’, will skew debate in favour of norms expressly designed to benefit industry.

The report goes on to state that,

By applying these leading practices, decision-making relating to CSG development will also be informed by risk-based approaches; decisions made will be evidence based and accountable. (page 15)

Our contention with this section of the report is not that leading practices be included in legislation, but that leading practices be considered impartial, purely scientific or sufficiently comprehensive to provide assurance of good outcomes.

We further note the Draft Framework’s intention that governments will lead in the management of CSG activity, based on a robust national regulatory regime (see Key Points, page 14). However, successful implementation of leading practices is said to ‘depend on the willingness of industry’ (page 15). We consider it undesirable that adoption of leading practice be at the licensees’ discretion and urge a straightforward regulatory approach.

The Draft Framework flags ‘enforced conditions’ as part of the anticipated regulatory regime. Our recommendations are as follows:

• A regime relying too much on individual conditions of licence will require more monitoring and enforcement and will therefore be more costly. The regulatory function should be carried out by the regulator.

• Monitoring and enforcement requires an adequate workforce of technical and administrative staff. The project owners should carry the costs of regulation and enforcement through a tailored levy to support regulatory activity.

Further, we are concerned that in the case of methane gas seam deposits, regulation 10B of the Mineral Resources Development Regulations 2002 (Victoria) relaxes the requirement that a formally qualified metallurgist with at least five years experience provide the mineralisation report to be submitted with mining licence applications. This does not sit well with the relatively undeveloped state of the technology and we seek assurances to be given in the Harmonised Framework, that CSG licensing will be approached with particular caution.

Finally, while this submission may not be the place to debate the role of democratic governance, Friends of the Earth would like to note that it is generally understood that the Australian government’s role is that of serving the interests of its constituent citizens – the community - rather than industry. It is disappointing that in this Draft document, the application of leading practice is stated to have the aim of ensuring governments ‘[treat] the community and industry on an equal basis.’ We take issue with this statement, and point out that if community and industry interests compete, as they do in this case, it follows that good governance should actually favour the community.

Re Table 1, Summary of leading practices (LPs) for CSG operation:

LP1

• Comprehensive environmental impact assessment including the elements enumerated is essential. Assessment left in the hands of the project owners is not disinterested. See for example section 41A of Victoria’s Mineral Resources (Sustainable Development) Act 1990. It is clear from CSG operations to date that the geological and hydrological data is not sufficiently fine-grained to predict all the material risks. Therefore there is no basis for exempting projects from project-specific impact assessments.

• It will probably be accepted that there is no ‘offsetting’ of project impacts on human health (see page 17). If such impacts are anticipated, they should simply be avoided. It should also be accepted that there is no satisfactory offsetting of environmental health impacts, many of which impact indirectly on human health, e.g. through contamination of soil or water. Further potential losses arise from loss of opportunity for alternative uses e.g. tourism, food production, biodiversity habitat. Identified risks should be avoided, not merely ‘minimised’.

• The ‘leading practice’ articulation of environmental impact assessment (pages 17-18) is encouraging. However, the specifically detailed model of assessment of CSG projects proposed here needs to be imported into the relevant Mineral Resources legislation to ensure that leading practice in this area is embedded.

LP2