Onshore Gas Industry
Regulatory framework
The NSW Environment Protection Authority (EPA) is the lead regulator responsible for compliance and enforcement of all conditions of approval for onshore gas exploration and production activities - with the exception of work health and safety issues which are regulated by the NSW Resources Regulator.
The regulatory framework is summarised below:
- Petroleum Onshore Act 1991 (PO Act). This includes the issuing of Petroleum Exploration Licences (PELs), Petroleum Assessment Leases (PALs) and Petroleum Production Leases (PPLs) by Mining, Exploration & Geoscience with the Department of Regional NSW. Prior to the issuing of PPLs, development consent is also required under the Environmental Planning and Assessment Act 1979 (see below).
- Petroleum Onshore Act 1991. This includes the granting of gas exploration activity approvals by the NSW Resources Regulator within the Department of Regional NSW.
- Environmental Planning and Assessment Act 1979 (EP&A Act). This includes the granting of development consents by the Department of Planning, Housing and Infrastructure (DPHI) for gas production operations which are classified as State significant developments (SSD).
- Water Management Act 2000 (WM Act). This includes the issuing of Water Access Licences (WALs) by NSW Department of Climate Change, Energy, the Environment and Water (DCCEEW).
- Water Act 1912 (Water Act). This includes the issuing of Bore Licences by DPE-Water but not including bores for groundwater monitoring or investigation under the Water Act
- Protection of the Environment Operations Act 1997 (POEO Act). This includes the issuing of Environment Protection Licences (EPLs) by the NSW EPA as well as enforcing other provisions of the POEO Act.
Mining, Exploration and Geoscience remain responsible for the assessment and management of the required rehabilitation security deposits. All holders of a PEL, PAL or PPL are required to lodge a security deposit with the NSW Government that covers the full rehabilitation costs to ensure the government does not incur financial liabilities in the event of a title holder defaulting on their rehabilitation obligations.
Gas exploration activity approvals
Details regarding the process for the assessment and determination of gas exploration activities by the Resources Regulator are provided here. Once an approval has been granted, the exploration activities are regulated by the NSW EPA - with the exception of work health and safety issues which are regulated by the NSW Resources Regulator.
Details of recently approved gas exploration activities can be found here.
NSW Gas Plan
The NSW Gas Plan builds on the findings of the 2014 Independent Review of Coal Seam Gas Activities in New South Wales and sets a framework for the future of the state's onshore gas industry and ensures a consistent and transparent approach to compliance and enforcement activities.
The NSW Gas Plan comprises 17 key actions under five priority pathways and included appointing the NSW Environment Protection Authority as the lead regulator for onshore gas exploration and production activities in NSW.
Environment Protection Licences
All onshore gas operators are required to hold Environment Protection Licences (EPLs) for both exploration, 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.
The onshore gas industry 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
- Biodiversity Conservation Act 2016
- 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.
Water protection
Scientific research by the CSIRO¹ shows that groundwater contamination from onshore gas 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 onshore gas infrastructure does not prohibit other uses of the land.
All new coal seam gas exploration and production activity is banned within 2 kilometres 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 the NSW Department of Climate Change, Energy, the Environment and Water (DCCEEW) 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.
DPE Water is enhancing its deep monitoring sites and constructing new bores in groundwater sources that are being actively explored for onshore gas and mining opportunities in NSW. All of these monitoring sites can be seen on the DCCEEW website.
¹ CSIRO | Coal seam gas developments - predicting impacts