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The coal seam gas industry in NSW

The coal seam gas (CSG) industry in NSW is regulated by laws that control the exploration, assessment and production of the state’s vast natural gas reserves.

The NSW Government’s policy framework is aimed at balancing the growth of the CSG industry with the need to protect the valuable agricultural land and water resources, and residential communities.

The framework has been put in place to protect the environment, land and water resources, local communities and critical industry clusters.

As part of these measures:

• an Office of Coal Seam Gas (OCSG) within NSW Department of Trade & Investment will oversee the regulation of CSG matters within the scope of the Petroleum (Onshore) Act 1991 and the Work Health and Safety Act 2011
• the assessment of applications for coal seam gas exploration, assessment or production will be the responsibility of the OCSG or the NSW Department of Planning and Infrastructure (DP&I), depending on the nature and scale of the proposed operation
• the independent Environment Protection Authority (EPA) will be the lead regulator of environmental and health impacts of CSG activities in NSW with responsibility for compliance and enforcement
• all exploration, assessment and production titles and activities, once approved, by OCSG or DP&I, will be required to hold an environment protection licence issued by the EPA
• the Chief Scientist and Engineer will conduct an independent review of all CSG activities in NSW, including the impact on water catchments
• a proposed two-kilometre exclusion zone will be imposed around residential areas to prevent any new CSG exploration, assessment and production activities
• exclusion zones are proposed to apply to identified Critical Industry Clusters such as the viticulture and equine industries.

More information about the CSG industry in NSW and the regulation of the industry is available on the Resources and Energy website.

Regulating the environmental impacts of CSG activities

The EPA is the lead regulator of environmental and health impacts of CSG activities in NSW with responsibility for compliance and enforcement.

All CSG activities, from exploration, assessment to production will now be required to hold an environment protection licence, issued by the EPA. This is additional to the approval process and the requirements of the OCSG and the DP&I.

Any company or individual seeking to explore for petroleum (including CSG) must first apply to the NSW Minister for Resources & Energy for a petroleum title under the Petroleum (Onshore) Act 1991, before undertaking any exploration activities. Before a titleholder can access land for exploration they need to have entered into a land access arrangement with the landholder.

An Environment Protection Licence contains legally enforceable conditions, which holders must comply with in order to prevent pollution, and safeguard the environment. This includes air, water, waste and noise requirements. The EPA’s legislation and licences also include ‘community right to know’ requirements.

Licence holders are required to notify the EPA if there is an environmental incident or a breach of licence conditions. The EPA investigates and takes appropriate compliance action for all incidents and breaches. Significant penalties exist for companies that fail to provide notification of breaches.

The EPA inspects industry sites to check compliance with licence conditions and legislative obligations and can undertake detailed compliance audits if needed.

Holders of Environment Protection Licences must also provide an annual report to the EPA that is a record of compliance with licence conditions. Licences, annual returns and regulatory actions are available to the community from the EPA’s public register.

All licence holders must also make available to the public information from monitoring programs that are required under their Environment Protection Licences.

Penalties for environmental breaches

The EPA has a suite of tools to regulate activities so that the environment is protected. Failure to comply with environmental laws or licence conditions can result in warning letters, clean-up and prevention notices, penalty notices, legally binding pollution reduction programs and for serious cases – enforceable undertakings or prosecution.

Under environmental legislation the Courts can impose significant penalties for non-compliance and/or order the offender to undertake an environmental service. For example, the maximum penalty for not operating in a proper and efficient manner is $1,000,000. The maximum penalty for failure to report a pollution incident that threatens or causes material harm to the environment is $2 million for corporations or $500,000 for individuals.

Reporting incidents

Report any incidents or complaints regarding a CSG operation to the Environment Line on 131 555. This line operates 24 hours per day.

This includes incidents or complaints relating to environmental or community health matters such as air quality, water contamination, noise and waste disposal.