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Thursday, 5 March 2015
Page: 1364


Senator KETTER (Queensland) (16:51): I rise to make a contribution to this debate about the coal seam gas industry. I recognise the well-intentioned motives of Senator Lazarus in putting forward this resolution. I have also sat with Senator Lazarus as part of the inquiry into certain aspects of Queensland government administration. We have listened to some quite concerning submissions in respect of certain practices that have occurred in the industry. I for one do recognise that there are some community concerns.

But I think it is important in this debate that all of the information be made available to the chamber so that properly informed decision can be made. I think it is important that there should also be a focus on the scientific evidence that is before us and that a rational approach be adopted in respect of this particular issue. I preface my following remarks by talking about the fact that there should always be community consultation involved as this industry progresses. I think it is important to talk about some of this extra information.

It should be well known that the processes employed by the CSG industry have been in use for more than 65 years and in more than two million wells around the world. The CSG industry has been around for decades and it has been a significant source of gas production in Queensland for almost 20 years. The gas industry and government approvers and regulators have detailed knowledge and understanding of the processes employed by the industry. This includes knowledge about the chemicals being used in the process. It may be of interest to senators to know that water and sand comprise more than 99 per cent of the volume of the fluids used in the mining process. Companies must identify the chemicals being used in their operations and detail any likely interactions with water and rock formations in the area which is the subject of mining.

I would encourage those with concerns about the practices employed in the industry to educate themselves on the technology and on the efforts to understand this technology taken by the states and the Northern Territory. I firstly refer to a report by Mary O'Kane, the Chief Scientist of New South Wales, who conducted an independent review of coal seam gas activities in New South Wales. That report was released in September last year. The review concluded that the technical challenges and risks posed by the CSG industry can in general be managed through: careful designation of areas appropriate in geological and land-use terms with CSG extraction; high standards of engineering and professionalism in CSG companies; the creation of a state whole-of-environment data repository so that data from CSG industry operations can be interrogated as needed and in the context of the wider environment; comprehensive monitoring of CSG operations with ongoing automatic scrutiny of the resulting data; a well trained and certified workforce; and application of new technological developments as they become available. The report concludes that the risks associated with CSG exploration and production can be managed. With an almost identical result, the Northern Territory's inquiry recently conducted by Allan Hawke AC found that the environmental risks associated with some of the more contentious practices can be managed effectively subject to the creation of a robust regulatory regime. That report was finalised on 28 November last year.

At budget estimates last year, Dr Chris Pigram, the CEO of Geoscience Australia, made comments to the effect that the concerns around the practices employed by the industry are unwarranted and 'they do not represent a problem for the community by and large'. Geoscience Australia, a Commonwealth government agency, has carefully studied the issue and provided advice to the government to ensure that the impacts of the coal seam gas developments on groundwater systems are minimised and mitigated. As part of its advice to government, Geoscience Australia recommended an adaptive management approach that is underpinned by four principles: the first principle is the explicit requirement to minimise and mitigate any impacts on groundwater during coal-seam gas developments; the second principle is that adaptive management regimes should be underpinned by the best groundwater models available and that these models should be continually improved as new information becomes available; the third principle is that a regional scale multistate groundwater model be developed so that the potential cumulative impacts of multiple developments can be monitored, assessed and the potential impacts mitigated; and the fourth principle is that long-term water balances of the groundwater system must be maintained. All predevelopment groundwater pressure levels should be maintained wherever possible.

The Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development was established by the former Labor government as a statutory body under the Environment Protection and Biodiversity Conservation Act 1999 in late 2012. The committee consists of eight members with extensive scientific qualifications and expertise in the fields of geology, hydrogeology, hydrology, ecology, eco-toxicology, natural resource management and environment protection. Under the EPBC Act, the committee has several legislative functions: to provide scientific advice to the Commonwealth environment minister and relevant state ministers on the water related impacts of proposed coal seam gas or large coal mining developments; provide scientific advice to the Commonwealth environment minister on bioregional assessments including the methodology, research priorities and projects; publish and disseminate scientific information about the impacts of coal seam gas and large coal mining activities on water resources.

The reports by Mary O'Kane and Allan Hawke are recent, are credible and are independent. Along with the advice provided by Geoscience Australia and the independent expert scientific committee, I would encourage all senators to make the most of the expert research and educate themselves on this issue. I would particularly reference my South Australian Liberal Party colleagues to take note of this advice. The South Australian Liberal Party's inquiry into the industry—an industry which supports thousands of jobs in that state—has been characterised by the outgoing Managing Director of Beach Energy, Reg Nelson, as an investment killer.

Global energy markets are being transformed by gas from coal seams, shale and tight gas. The use of CSG as an energy source is longstanding and accounts for 33 per cent of eastern states' domestic gas production. For example, 95 per cent of the gas used in Queensland comes from CSG. CSG powers a number of domestic electrical generation projects throughout Queensland, including the Origin Energy-operated Darling Downs power station and the Braemar-2 power station.

The policy challenge for state governments is twofold: to ensure the appropriate compensation of landholders for the access and use of their land and to ensure that coal seam gas is exploited on behalf of its citizens, unlocking an important transition fuel, providing a source of employment and export income, and generating a long-term revenue source through royalties and rents.

Coal seam gas exploration represents an immense opportunity for Australia, particularly regional Australia. LNG projects in Queensland's CSG to LNG industry are worth more than $70 billion and are responsible for almost 30,000 jobs. At its peak, the industry workforce was 40,000 people, including 7,000 direct employees and 33,000 contracted employees. It is important to note that more than 5,000 land access agreements have been signed in my home state between landholders and gas companies since 2012. That is not to say that there have not been some issues in respect of individual landholders. As I said earlier, I acknowledge that there has been some community concern around some of these negotiations.

The policy challenge for the Commonwealth is to ensure more gas production and the best possible environmental protection. The industry has created good, sustainable jobs, particularly in regional communities; boosted the economy at both state and federal levels; and will deliver billions in government revenue. In terms of regional growth—and I note that Senator Lazarus talked about the Chinchilla area—a CSIRO study found that in CSG affected areas there was a reversal of population decline in the age category 25 to 29 years during the period 2006 to 2011. There seems to have been some effect in the alleviation of poverty in some of these regional areas. The town of Chinchilla was a standout out in this particular study, as it went from being a location with higher rural poverty than surrounding regions to having one of the lowest rates of rural poverty.

I think the chamber should acknowledge that this industry is one that will lift Australia's export income and provide states and the Commonwealth government with a significant source of revenue. As a cleaner alternative to coal-fired power, LNG is an essential part of the global solution to reduce greenhouse gas emissions and provides many jobs and opportunities in regional Australia. I do not resile from some of the comments I made earlier that in the past there have been some practices where the industry has not been its own best friend. In order for this chamber to make a decision on this matter I think that a proper analysis of the scientific evidence needs to be had.