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Client Update: Legislative changes to management of CSG water in Queensland

22 April 2010

In brief: Since our recent Focus on the Queensland Government's coal seam gas water management policy, proposed legislation has been released that will place significant new obligations and restrictions on existing coal seam gas environmental authority holders and applicants that were not announced in the initial policy – including a prohibition on evaporation ponds and new environmental management plans. Partner Bill McCredie (view CV) and Senior Associate Suzanne Westgate report.

Background

The South-East Queensland (Water Distribution and Retail Restructuring) and Other Legislation Amendment Bill 2010 (Qld) introduces broad new powers to support the Queensland Government's recently announced policies on the management and regulation of coal seam gas (CSG) water in Queensland, including the policy positions previously announced in the Blueprint for Queensland's LNG Industry that:

  • CSG water producers are responsible for the management, treatment, disposal and beneficial use of CSG water.
  • Evaporation ponds are to be discontinued as the primary means of disposal.
  • CSG producers will need to plan how they will manage CSG water through the preparation of a CSG Water Management Plan.

Key amendments

The key amendments proposed to the Environmental Protection Act are:

for existing CSG activity environmental authorities:

  • Existing CSG environmental authority holders will be prohibited from constructing evaporation dams except where the construction has 'substantially commenced', or where the holder provides a revised CSG environmental management plan (EM Plan) demonstrating that there are no feasible alternatives and the dam is approved by the Department of the Environment and Resource Management (DERM). There is no definition of what is 'substantial commencement'; however, the following example is provided in the explanatory notes: 'such as when all earthworks have been completed and the lining of the dam is underway'. The prohibition relates to all existing CSG environmental authorities.
  • All existing CSG activity environmental authority holders must provide DERM with a revised EM Plan for the CSG activities within one year after the Bill commences to provide for the management of CSG water. If no revised EM Plan is provided, then DERM may exercise its powers to unilaterally amend the relevant environmental authority.
  • Where CSG environmental authority holders are required to file annual returns, the annual returns must include an evaluation about the management of CSG water against management criteria, including statements as to whether the CSG water has been effectively managed and what actions will be undertaken if it has not been managed effectively. While there are no enforcement provisions for annual returns, DERM can use the information provided to initiate mechanisms such as environmental protection orders where the information in the annual return indicates that there is a likelihood of environmental harm, or unilaterally amend the environmental authority.

for CSG environmental authority applicants:

  • EM Plans for CSG activities will not be allowed to provide for evaporation dams unless applications include an evaluation of 'best practice' environmental management and an assessment of alternative methods for managing CSG water, and the evaluation shows that there are no feasible alternatives.
  • Additional matters will be required to be included in any EM Plan, including expected quantity, quality and flow of CSG water and management criteria against which the applicant must monitor and assess the effectiveness of the management of that water.

for CSG environmental authority amendment applications:

  • All amendment applications (regardless of significance) will be required to provide a revised EM Plan that complies with the new CSG water management requirements.

The DERM's powers to amend an environmental authority for CSG activities unilaterally will also be amended to provide that a CSG environmental authority can be amended in circumstances where there is a revised EM Plan (but only where the amendment directly relates to a matter in the EM Plan that is new or has changed from the previous EM Plan).

What next?

The proposed amendments, if the Bill is passed in its current form, will have significant implications for existing CSG environmental authority holders, applicants for new CSG activities and applicants for amendments to relevant environmental authorities.

Given that all CSG activities will require new EM Plans, it is likely that approval of the new plans could suffer significant delay in processing by government. CSG water producers may wish to give consideration to preparing new EM Plans or amending their existing EM Plans as soon as possible to allow sufficient time for approval and implementation.

The Bill received its second reading speech on 13 April 2010. Debate on the Bill was adjourned until Parliament's next sitting on 18 May 2010.

We will provide further updates on the progress of the Bill.

For further information, please contact:

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