Gas regulation in NSW
What is the EPA’s new role in the regulation of gas activities?
On 1 July 2015, the NSW Environment Protection Authority (EPA) became the lead regulator of gas activities in NSW, taking on responsibility for compliance with and enforcement of all conditions of gas activities. This includes conditions issued by other agencies, excluding work health and safety conditions.
The Division of Resources and Energy (DRE) and the Department of Planning and Environment (DPE) will continue to be responsible for determining gas applications and issuing conditions of consent.
Is the EPA responsible for regulating all non-compliances relating to gas?
The EPA will be responsible for regulating all non-compliances for gas activities in NSW except those related to work health and safety conditions, which will remain the responsibility of the Division of Resources and Energy.
This means the EPA will be responsible for assessing non-compliances related to the conditions of approval issued by the Division of Resources and Energy, Department of Planning and Environment and Department of Primary Industries-Water.
When investigating a non-compliance the EPA will determine whether a breach has occurred and then take the appropriate and proportionate regulatory action. The EPA’s publicly available Compliance Policy and Prosecution Guidelines guide its decisions, ensuring its regulatory activities and actions are consistent, fair and credible.
The consent authorities will continue to provide expert advice to the EPA to assist with compliance and enforcement activities.
What penalties can the EPA impose for breaches of conditions of approval?
The EPA will apply the appropriate penalties available for each breach of condition outlined in the legislation relevant to that condition. Although the agency issuing the penalty has changed, the penalties that apply for breaches of conditions remain unchanged.
The EPA’s Compliance Policy and Prosecution Guidelines guide its decisions, ensuring its compliance activities and actions are consistent, fair and credible.
How can the community contact the EPA to report a potential breach?
The EPA encourages people to report incidents regarding gas operations to the EPA’s Environment Line on 131 555. This line operates 24 hours a day.
This includes incidents or complaints relating to matters such as air quality, water contamination, noise impacts and waste disposal. Note as many details of the incident as possible, including time, date, location, descriptions of the people involved, vehicles and number plates and anything else noticed.
If the incident presents immediate threat to human health or property, the emergency services should be contacted immediately on ‘000’.
Is the EPA responsible for regulating pipelines?
No. Within the state of New South Wales, the Division of Resources and Energy is responsible for the oversight of legislative requirements for licensing of certain pipelines under the Pipelines Act 1967. Further to this, the Department of Planning and Environment is responsible for any pipeline conditions on the Development Consent.
Who will be undertaking the inspections of the gas sites?
The EPA will undertake regular inspections of gas sites for non-work health and safety matters.
Consent authorities such as the Division of Resources and Energy, Department of Planning and Environment and the Department of Primary Industries - Water will continue to provide expert advice to the EPA to assist with any compliance and enforcement activities.
The EPA will continue to consult with the relevant consent authority without limiting the independence of the EPA’s enforcement and compliance role.
Currently there are numerous government authorities that carry out inspections. If the EPA is taking over this role, how will compliance be managed under one agency given the current number of inspections and type that need to be conducted?
As the lead regulatory authority for gas activities, the EPA will streamline any regulatory and enforcement processes to reduce duplication and ensure the effective, transparent and efficient regulation of gas activities.
As fewer agencies will be conducting inspections, the total number of inspections may reduce. However, an appropriate regulatory oversight will be maintained, as the EPA’s inspections now include compliance with the conditions set by other agencies.
What are the EPA’s regulatory powers concerning breaches of conditions that occurred prior to 1 July 2015, that are still being investigated by another agency?
The EPA has worked closely with the other government agencies to finalise any outstanding issues. The Memorandum of Understanding (MOU) sets out how the agencies managed these matters and clearly defines the responsibilities involved in the regulation of gas activities in NSW during the transition.
What is the Memorandum of Understanding in relation to the regulation of gas activities in NSW and what is its purpose?
On 1 July 2015, the NSW Environment Protection Authority (EPA) took over full responsibility for monitoring and enforcing compliance with conditions of approval for all gas activities in NSW, including those conditions issued by other agencies.
To clearly define the responsibilities of the key agencies involved in the regulation of gas activities in NSW, the government released a MOU, which is available on the EPA’s website.
The MOU has been developed between the NSW Environment Protection Authority, the Division of Resources and Energy (within the NSW Department of Industry, Skills and Regional Development), the Department of Planning and Environment and the Department of Primary Industries – Water. The MOU establishes the necessary systems and processes for agencies to perform their roles effectively and seamlessly.
The MOU also includes provisions that will help the community understand and navigate the gas industry regulatory framework.
The MOU will be revised to reflect the commencement of the legislation formalising the EPA’s new role in October 2015.
How will the EPA communicate the new gas regulation processes to the community and what involvement will the community have?
The EPA now leads compliance with and enforcement of the conditions of approvals for gas activities in NSW, excluding work health and safety issues. This provides individuals and communities with one place to go to report potential pollution incidents and breaches of title, regulations or NSW law.
The EPA sees this new role as an opportunity to create a more open dialogue with the community about how it regulates industry.
The EPA will meet with stakeholders to provide information about its new role. The EPA also participates in industry consultative committees and also leads community consultation groups. Consultative groups in current gas activity areas include:
There is also information on the new regulation processes on the EPA’s website. This includes the MOU which provides a clear outline of the roles and responsibilities of the key agencies in the regulation of gas activities in NSW.
Coal seam gas industry in NSW
Why is coal seam gas being explored in NSW?
The coal seam gas (CSG) industry is an emerging industry in NSW. It is still largely focused on exploration and assessment activities, with only one facility (at Camden, near Sydney) being formally in production.
The NSW Division of Resources and Energy reports that more than 1.1 million NSW consumers use gas in their homes and the demand for gas is rising. Only 5% of the gas supply in NSW is met locally by the AGL Camden Gas Project. As existing contracts with interstate suppliers begin to expire, NSW will have to compete with offshore demand and pay export prices, leading to a rise in the cost of gas. An exploration licence issued by the Division of Resources and Energy does not permit production nor does it guarantee that a production lease will be granted.
The Coal Seam Gas location map shows where current petroleum titles (including CSG titles) have been approved for exploration or production. Along with areas where CSG activities are restricted – either not allowed or involve an extensive gateway process in order to pass approval. A map of petroleum titles in NSW is available on the Division of Resources and Energy website.
Who regulates CSG in NSW?
The CSG industry in NSW operates under some of the toughest controls in Australia. The principal bodies responsible for regulating CSG in NSW and their roles are described in the table below.
|Department||Department role||Company responsibility|
The Division of Resources and Energy
The Division of Resources and Energy is responsible for granting exploration approvals, administering petroleum titles and workplace health and safety issues.
CSG companies must apply to the DRE for a petroleum title to undertake petroleum activities from exploration through to production. The different titles consist of Petroleum Special Prospecting Authorities, Petroleum Exploration Licences, Petroleum Assessment Leases and Petroleum Production Leases.
Environment Protection Authority
The Environment Protection Authority is responsible for compliance and enforcement of conditions of approval for gas activities in NSW, including those consent conditions and activity approvals issued by other agencies (excluding work, health and safety).
CSG companies must hold an environment protection licence issued by the EPA and comply with the conditions of the licence.
Department of Planning and Environment
The Department of Planning and Environment is responsible for delivering the Strategic Regional Land Use Policy, establishing CSG exclusion zones, resourcing the Gateway panel and assessing development applications for major CSG projects.
CSG companies must hold a development approval where required and comply with the development conditions.
Department of Primary Industries - Water
TheDepartment of Primary Industries - Waterassesses each CSG project application to determine any potential impacts on waters. This includes the potential risk of groundwater movement between aquifers, impacts on the water table, water pressure levels and water quality changes in different types of groundwater systems.
Companies must apply tothe Department of Primary Industries - Waterfor a water access licence for any activity extracting more than 3 ML per year from groundwater sources.
Land and Water Commissioner
The Land and Water Commissioner provides guidance to landholders, industry and the community on the implementation of new land access agreements.
Companies must enter into land access agreements with landholders before accessing their property
What measures are CSG companies required to have in place to protect the environment from its activities?
All CSG activities must have an environment protection licence (EPL) issued by the EPA. An EPL contains legally enforceable, site-specific conditions, which holders must comply with in order to prevent pollution, and safeguard the environment, including air, water, waste and noise requirements. This is in addition to legislative requirements.
All EPLs are available to the public via the EPA public register.
The EPA has issued the following EPLs to CSG operations including exploration, assessment and production activities:
- 3 EPLs to Santos (for operations at Narrabri, Scone and Gunnedah)
- 1 EPL to Metgasco (for operations at Casino)
- 2 EPLs to Dart (for operations at Lismore and Fullerton Cove)
- 1 EPL to Apex (for operations at Darkes Forest)
- 3 EPLs to AGL (for operations at the Hunter, Camden and Gloucester)
To help protect our water, the Department of Primary Industries -Water assesses each project application to determine any potential impacts on waters. This includes the potential risk of groundwater movement between aquifers, impacts on the water table, water pressure levels and water quality changes in different types of groundwater systems. More about water and coal seam gasis available on the Department of Primary Industries - Water website.
What measures are CSG companies required to have in place to prevent and manage incidents?
All environment protection licence holders must have an incident management plan in place that
- ensures comprehensive and timely communication about a pollution incident to facility staff, the EPA, other relevant authorities and people outside the facility who may be affected by the impacts of the incident
- minimises and controls the risk of a pollution incident at the facility by requiring identification of risks and the development of planned actions to minimise and manage those risks
- identifies trained staff who are responsible for implementing them
- are regularly tested for accuracy, currency and suitability
- promotes community involvement and education in, and awareness of, environmental matter.
Find out more about incident management plans.
What environmental monitoring is occurring?
An environment protection licence includes requirements to undertake monitoring for pollution. All pollution monitoring data that is required to be collected by a licence condition must be made available to the community from the licensees’ website. Find out more about monitoring requirements.
The EPA also regularly inspects industry sites to assess environmental performance, check compliance with licence conditions and legislative obligations, respond to environmental incidents and undertake detailed compliance audits if needed.
Get more information on the AGL Camden audit report
How safe is groundwater from CSG activity?
The single greatest risk to groundwater occurs during the drilling of any well. To manage this, the NSW Government has introduced a Code of Practice for Coal Seam Gas Well Integrity. The Code of Practice ensures that CSG wells meet world best practice standards. The Code specifies technical requirements for industry to meet during the life cycle of the well through design, construction, production, maintenance and rehabilitation.
To safeguard valuable groundwater resources, an Aquifer Interference Policy has been introduced The Office of Water assesses each project application against the requirements in the Aquifer Interference Policyto determine any potential impacts on aquifers. This includes the potential risk of groundwater movement between aquifers, impacts on the water table, water pressure levels and water quality changes in different types of groundwater systems.
A Water Access Licence is mandatory for any CSG activity extracting more than three megalitres per year from groundwater sources. New licences will not be issued where the proposed activity means extraction limits in water sharing plans will be exceeded. More information about water regulation and monitoringis available on the Department of Primary Industries- Water website.
What is fraccing?
Hydraulic fracturing or fraccing of the coal seam involves the pumping of fluid under pressure into the coal seam to open up fractures to release the gas. The fluid is typically a mixture of sand, water and additives that open up cracks in the seam to create a path for water and gas to flow back to the surface.
The process depressurises the coal seam, allowing the gas in the pores of the coal to be released and flow to the surface. On the surface, the gas is separated from the water. The produced water is safely disposed of, or treated and recycled for industrial purposes or irrigation.
In NSW, a Fracture Stimulation Management Plan (FSMP)must be in place before any hydraulic fracturing activity can commence. This is administered by the Division of Resources and Energy. An FSMP must demonstrate that any potential risks to the environment, land, water and community are managed through an effective risk management process. The use of BTEX chemicals (Benzene, Toluene, Ethylbenzene and Xylene) for fraccing has been banned in NSW. Find out more about how CSG is extracted.
What rights do landholders have?
Coal Seam Gas (CSG) explorers must hold a title and enter into a written access arrangement with landholders before entering a property.
The NSW Government has appointed a Land and Water Commissioner to oversee the development of a standardised land access arrangement in consultation with farmers, irrigators, cotton growers and petroleum explorers. This helps ensure the protection of landholders' rights in the land access process. More information about land access and landholders rights is available on the Division of Resources and Energy website.