The coal seam gas (CSG) industry in NSW operates under the toughest controls in Australia, with companies facing fines of up to a million dollars for any environmental breaches.

The NSW Government is implementing strict regulations to protect the State's important agricultural lands and industries such as; farming, fisheries, crops, livestock, horse breeding, winemaking and horticulture from any potential impacts of CSG activity.

The Environment Protection Authority (EPA) is the sole authority responsible for compliance and enforcement of all coal seam gas exploration and production activities - with the exception of work health and safety issues. The Environment Protection Authority (EPA) can impose heavy fines of up to $1 million on any company breaching its Environment Protection Licences. Companies that fail to inform the EPA of a serious incident can be prosecuted and fined up to $2 million.

Environment Protection Licences

All CSG operators are required to hold Environment Protection Licences (EPLs) external link for both CSG exploration and CSG assessment and production activities. These EPLs contain stringent conditions that relate to pollution prevention and monitoring, and cleaner production via the implementation of best practice.

CSG activity in NSW is also regulated under the following legislation:

  • Petroleum (Onshore) Act 1991
  • Environmental Planning and Assessment Act 1979
  • Protection of the Environment Operations Act 1997
  • Water Management Act 2000, Water Act 1912
  • Work Health and Safety (Mines and Petroleum Sites) Act 2013
  • Threatened Species Conservation Act 1995
  • Heritage Act 1977

The federal government imposes further regulatory controls under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999 and the National Greenhouse and Energy Reporting Act 2007.

NSW Chief Scientist & Engineer's Review

In September 2014 the NSW Chief Scientist & Engineer external link, Professor Mary O'Kane, released the Final Report of the Independent Review of Coal Seam Gas Activities in NSW.

The report was the culmination of an in-depth study which included:

  • a comprehensive study of industry compliance involving site visits and well inspections;
  • identifying and assessing any gaps in the management of potential impacts arising from CSG exploration, assessment and production;
  • consideration of how the characteristics of the CSG industry compare with the industry in other jurisdictions; and
  • inspecting and monitoring current drilling activities, including water extraction, hydraulic fracturing and aquifer protection techniques.

The report acknowledges CSG extraction, like all forms of energy production, poses human health and environmental challenges. But it found many of these concerns can be offset by ensuring engineering best practice; monitoring by industry; diligent and transparent compliance checks by regulators; and a rapid and effective response, then remediation, should an incident occur.

In response to the report, the NSW Government committed to implementing all of the Chief Scientist's recommendations, and released the NSW Gas Plan in November 2014.

Water protection

Scientific research by the CSIRO¹ shows that groundwater contamination from CSG operations is considered a low risk because:

  • hydraulic fracturing, when conducted correctly, is unlikely to introduce hazardous concentrations of chemicals to groundwater or to create connections between fresh and coal-containing aquifers;
  • water extraction from coal seams makes cross-contamination of aquifers unlikely;
  • long-term monitoring of well bore integrity can help to identify the potential for well leakage into surrounding aquifers; and
  • the surface footprint of CSG infrastructure does not prohibit other uses of the land.

All new CSG exploration and production activity is banned within 2km of existing and future residential areas. It is also banned within areas identified as the Upper Hunter equine and viticulture critical industry clusters.

Groundwater level and quality is regularly monitored across NSW by DPI Water with:

  • a network of 3,500 State-owned monitoring bores; and
  • real-time data made available on the internet.

The NSW Government is investing significant resources into improving groundwater monitoring in relation to resource extraction projects. This includes analysing water data in key areas, seeking advice from the NSW Chief Scientist on additional water monitoring and developing an environmental data repository.

DPI Water is enhancing its deep monitoring sites and constructing new bores in groundwater sources that are being actively explored for CSG and mining opportunities in NSW. All of these monitoring sites can be seen on the OurWater website.

¹(www.csiro.au Coal seam gas developments - predicting impacts)