Legislation for fracking moratorium and prohibition on underground coal gasification operations in South Australia

By Nicole Besgrove, Nick Thomas

21 Jun 2018

There is a new push to legislate the 10-year moratorium policy on hydraulic fracking in South Australia announced earlier this year, and to prohibit underground coal gasification operations.

SA Greens Parliamentary Leader Mark Parnell MLC introduced two private member bills to the South Australia Parliament on 6 June. The bills seek to amend the Petroleum and Geothermal Energy Act 2000 by proposing a 10-year moratorium on hydraulic fracturing (fracking) for coal seam gas (CSG) in the State's South East and to prohibit underground coal gasification operations across the entire State.

While it is not likely that the bills will pass as private member bills, their introduction steps up the heat on CSG and gasification. They also provide a good opportunity to check in on the status of fracking laws in other Australian states.

Bill to confirm 10-year moratorium on fracking

A 10-year moratorium on hydraulic fracturing for coal-seam gas in the State's South East was one of the new Liberal Government's key election promises. In April 2018, the newly elected Premier of South Australia Steven Marshall stated that the moratorium had already been implemented when the Government issued a direction to the public service and accordingly did not require legislation, however advice was being sought.

Now the Petroleum and Geothermal Energy (Moratorium on Hydraulic Fracturing) Amendment Bill 2018 has been introduced to Parliament by Mr Parnell to give effect to the Government's election promise and enshrine in legislation a moratorium on hydraulic fracturing until 17 March 2028 in prescribed designated areas.

The prescribed designated areas under the Bill include the areas of the City of Mount Gambier, the District Council of Grant, the Kingston District Council, the Naracoorte Lucindale Council, the District Council of Robe, the Tatiara District Council and the Wattle Range Council.

Bill to prohibit underground coal gasification operations

The Petroleum and Geothermal Energy (Underground Coal Gasification) Amendment Bill 2018 was also introduced by Mr Parnell to impose a prohibition on underground coal gasification operations on any land within the State.

It is proposed that the prohibition would apply whether or not a person holds an exploration licence or a production licence that entitles that person to carry out underground coal gasification operations on land within the State, and no compensation would be payable by or on behalf of the State.

In his Second Reading Speech, Mr Parnell referred to Linc Energy's underground coal gasification plant near Chinchilla, Queensland as an example of why such operations should be prohibited. With respect to Linc Energy, on 11 May 2018 the Brisbane District Court imposed penalties of $4.5 million for five counts of wilfully and unlawfully causing serious environmental harm over a period of seven years.

This Bill is identical to a bill that Mr Parnell introduced to Parliament on 30 November 2016 which subsequently failed in October 2017.

Corresponding actions in other Australian jurisdictions

Most Australian jurisdictions have undertaken investigations, reviews or inquiries into the onshore gas industry and hydraulic fracturing. Here is a brief snapshot of what is happening around the country with respect to hydraulic fracturing:

  • Queensland - There is currently no ban or moratorium in effect. Queensland has some of the most well established CSG fields in Australia.
  • New South Wales - There is currently no blanket ban or moratorium in effect, however certain restrictions apply and the legal landscape is quite complex. Broadly speaking, CSG activities are prohibited from occurring in restricted areas which include Residential Exclusions (in and within a 2 kilometre buffer around existing residential areas, future residential growth areas or nominated additional rural village land), Equine Critical Industry Cluster areas, Viticulture Critical Industry Cluster areas and Conservation Zones. CSG activities may be approved within Biophysical Strategic Agricultural Land (BSAL) areas based on the decision of an independent panel.
  • Victoria - There is a moratorium on conventional onshore gas exploration and development which is in effect until 30 June 2020 and there is a permanent ban all onshore unconventional gas exploration and development.
  • Tasmania - There is a moratorium currently in effect until March 2020. A review into the practice of hydraulic fracturing will be conducted before the moratorium expires.
  • Northern Territory - A moratorium on hydraulic fracturing was imposed in September 2014 and has recently been lifted following an independent scientific inquiry which was completed in March 2018. The Final Inquiry Report contained 135 recommendations which will now be implemented by the NT Government, some of which must be implemented before future exploration or production licences can be granted.
  • Western Australia - Currently there is a ban on hydraulic fracturing for existing and future petroleum titles in the South West, Peel and Perth metropolitan regions. There is also a moratorium on the use of hydraulic fracturing for the rest of Western Australia pending an independent scientific inquiry into the potential impact of hydraulic fracturing. A final report to the Minister is expected this year.

If you have any queries about the implications the new bills (if passed) or South Australia Government policy will have on your operations, or any queries about hydraulic fracturing in any Australian jurisdiction, please contact us.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.