Coal seam gas-induced subsidence flagged for further regulatory attention

Key Insights

• Earlier this year, the GasFields Commission Queensland conducted targeted consultation as part of its review of the regulatory framework associated with subsidence resulting from coal seam gas (CSG) operations. 
• As part of that consultation, the Commission released a Discussion Paper which reviewed the adequacy of the current regulatory framework, with a view to identifying potential regulatory or other enhancements in this space.
• In its Discussion Paper, the Commission found that there is no clear jurisdictional responsibility for regulating and managing the impacts of CSG-induced subsidence.  This is an area for potential regulatory improvement that would provide landholders with greater certainty and protection against the adverse consequences of CSG-induced subsidence.
• The Commission is aiming to deliver the final report, with a package of recommendations on how to best address CSG-induced subsidence, to the relevant Queensland Government Ministers in late 2022. 

In May 2022, the GasFields Commission Queensland released a Discussion Paper which considered the adequacy of the current regulatory framework relating to potential subsidence from coal seam gas (CSG) operations, and potential enhancements to improve the management of the economic impacts of that subsidence on farming operations.

What is CSG-induced subsidence and why is it a problem?

During CSG production, coal seams are depressurised to allow gas to flow to the surface.  The resulting compaction of coal seams in response to this depressurisation can cause subsidence at the ground surface as overlying formations subside.

Agricultural peak bodies, and landholders with farming operations on high-value agricultural land near Dalby and Cecil Plains on the Condamine River floodplain, have raised concerns about the potential for CSG-induced subsidence to impact farming.

How is the existing regulatory framework deficient?

The Discussion Paper found that the current regulatory framework is complex, multi-faceted and touches on a number of State and Federal regulations.  This means that there is no clear jurisdictional responsibility to regulate and mitigate the impacts of CSG-induced subsidence.  Further, there is uncertainty surrounding:

• the potential on-farm consequences and economic impacts of CSG-induced subsidence;
• when the protections under the existing regulatory framework may be invoked;
• which farming operations are afforded protections under the existing framework; and  
• how the adverse impacts of CSG-induced subsidence can be assessed, determined and resolved (other than in the Land Court of Queensland).

What is the way forward for regulatory reform?

According to the Discussion Paper, the key to appropriate reform will be gaining a clearer understanding of the consequences and materiality of CSG-induced subsidence at a farm scale.  This is especially important in terms of economic impacts.  

The Commission has devised a set of principles that will guide its recommendations for regulatory reform.  These principles include:

• providing a statutory framework that ensures appropriate protection for landholders where CSG-induced subsidence can be demonstrated to have economic impacts on farming land; 
• providing clear roles and responsibilities to various entities involved in monitoring these impacts; and
• providing a pathway to impact assessment and dispute resolution, including alternative dispute resolution, with an ultimate determination in the Land Court as a last resort only.

This Commission will bring together its research findings and the outcomes of the regulatory review, and will produce a report containing the review findings and recommendations.  The Commission may seek further engagement from stakeholders to inform the final report. 

The Commission is aiming to deliver the final report, with a package of recommendations on how to best address CSG-induced subsidence, to the relevant Queensland Government Ministers in late 2022.  The final report will also be made available on the Commission's website.  We will keep track of key updates. 

Authors: Paul Wilson, Senior Associate; Leanne Mahly, Lawyer and Brigid Horneman-Wren, Lawyer.