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Rural Affairs and Transport References Committee
19/07/2011
Management of the Murray-Darling Basin system

ARMSTRONG, Mrs Ruth Ann Grace, Private capacity

[14:06]

CHAIR: We have received your submission, which has been numbered 228. Would you like to make any amendments or additions to that submission?

Mrs Armstrong : There is a small typo on the first page, which I have circled.

CHAIR: You are allowed to make typos. I invite you to make a brief opening statement.

Mrs Armstrong : My husband and I are farmers in the Cecil Plains area, approximately 40 kilometres south south-east of Dalby. Our main crop is cotton but we also grow summer and winter grain crops as environmental and economic conditions allow. We irrigate our crops as much as we are able with the water that we have available each year. We farm on an active flood plain, so harvest overland flows when seasonal conditions allow. We have two very small entitlements out of the north branch of the Condamine River which are available when the Leslie Dam has some capacity or when there are flows in the system downstream of Leslie Dam. Our most important source of water is from the Condamine alluvial aquifer. We have a combined licence entitlement of approximately 1,400 megalitres per annum and all of our bores are located within subarea 3 of the management area. This is the most productive part of the alluvium. The water quality is excellent. I rely on it for my domestic supply and the yields are relatively high.

However, the system is under stress and has been for many years. About 20 years ago bore owners within the entire management area were cut back to 70 per cent of their nominal entitlement and in the last few years during the height of the drought bores within subarea 3 were cut back to 50 per cent. This was without compensation and without access to north branch water or overland flows and so we had to turn the pumps off and watch our crops die. We have just survived 15 years of drought, which ended with the worst floods in living memory. Condamine alluvium groundwater is essential to our livelihoods and to our existence on the flood plain. The state government was quite right in reducing the annual extraction out of subarea 3 of the Condamine alluvium in an effort to sustainably manage the resource and to ensure the viability of the water for future generations.

The Water Resource (Great Artesian Basin) Plan was released in 2006, one of the purposes of which was to provide a framework for sustainably managing water and the taking of water, with outcomes for the plan area including to provide for the continued use of all water entitlements and to reserve water in storage in aquifers for future generations. In the Eastern Downs management area, which covers the Condamine alluvium aquifer, a person may not take or interfere with subartesian water other than for stock or domestic purposes or under a water entitlement. Arrow Energy have most of the tenure over the Central Condamine Alluvium groundwater management area and, as recently as May this year, they have publicly stated that their CSG activities will draw down water levels in the Condamine alluvium aquifer. The Queensland government Department of Environment and Resource Management has given Arrow Energy environmental authorities to conduct activities that will take water from the Eastern Downs groundwater management area. Although groundwater falls under the jurisdiction of DERM and therefore deserves protection under the Environmental Protection Act, there are no conditions in these environmental authorities that say anything about the protection or management of groundwater.

The petroleum companies have unfettered access and are able to take or interfere with unlimited quantities of groundwater during the course of gas extraction. Landholders who have taken voluntary reductions in groundwater entitlement during severe drought and without compensation in order to sustainably manage the resource have zero tolerance for any new activity that takes water out of that system and impacts on the long-term viability of that resource. Such extraction is contrary to the strategies of the Water Resource (Great Artesian Basin) Plan and the objectives of the environmental protection, water and petroleum and gas acts for ecologically sustainable development.

It is anticipated that the coal seam gas industry in the Surat Basin will extract in excess of 100,000 megalitres of groundwater every year, most of which is salty to varying degrees. As yet, the CSG industry does not have suitable solutions for dealing with this water. It has been recognised that the draw-down in groundwater levels across the Surat Basin will be unprecedented, greater than anything ever previously seen worldwide. It is therefore essential that the regulator, the Queensland state government, work with all the CSG companies and landholders to develop a plan for the most appropriate solution or solutions for dealing with produced water to mitigate impacts to the groundwater in the area of extraction firstly and within the Surat Basin generally.

The long-term sustainability of these precious groundwater reserves must be the priority. This means that current approved methods for managing produced CSG water, including surface water substitution arrangements, and creating new irrigation agricultural enterprise with the express intent of choosing salt-tolerant crops to dispose of CSG water should not be employed as a first option. These activities do nothing towards mitigating the negative impacts of CSG operations on groundwater.

In the event that a bore owner sustains a decline in bore water quantity that has been proved to have occurred as a result of CSG operations, the 'make good' provisions require the CSG company to make good those impacts by deepening the bore, drilling a new bore, bringing in water from elsewhere or providing compensation. In the case of the Condamine alluvium aquifer, the options of deepening the affected bore or drilling a new bore are likely to not be available. The options for the company, therefore, are to supply replacement water from elsewhere or to provide financial compensation. I do not know where this alternative water will come from.

My water is drinking-quality water. It is plumbed into my house. I drink it; my children bathe in it. I will not feel very comfortable accepting treated CSG water to substitute for my impaired bore given that I use it for my domestic water supply. The CSG industry is going to be around only until 2045. Where will my substitution 'make good' water come from after 2045, when the industry is not here anymore but my bore is still impaired? I have young children; my son is four. If he wants to farm when he is older, he will be only 38 in 2045. What is going to happen then, after the region has sustained the world's largest single draw-down of groundwater in history? Of course, I must first determine that the impairment was as a result of CSG activities. It will be very difficult to determine that in the Condamine alluvium aquifer, where we have just had 15 years of drought and we have sustained overextraction by licensed entitlement holders. Proving that impacts are due to CSG activities may not be possible.

In conclusion, I must again emphasise how vitally important these groundwater resources are to current licensed users, as well as for rural domestic supply. The Queensland government has done extensive research on the sustainable yields for the various groundwater management areas within the Great Artesian Basin system and has concluded that there is roughly 33,000 megalitres available for new use, substantially less than will be extracted annually by the CSG industry. Furthermore, there is no water available for new use in the Eastern Downs region, which encompasses the Condamine alluvium aquifer and the Walloon coal measures. If we must sustain cuts to our groundwater allocations in the guise of environmental sustainability, any impact to this groundwater from unlicensed new users is not and will not be tolerated.

CHAIR: Thanks very much. To clarify for the committee—we are not from around here—do you draw water from the Great Artesian Basin?

Mrs Armstrong : No, we draw water from the Condamine alluvium aquifer, which is technically not an aquifer of the Great Artesian Basin.

CHAIR: But it is a fact that no science has been completed on the recharge of the Great Artesian Basin?

Mrs Armstrong : I could not comment on the Great Artesian Basin as a whole. Certainly there have been studies done on the Condamine alluvium aquifer and, generally speaking, 40,000 to 50,000 megalitres is what they would consider to be annual recharge.

CHAIR: We were told by the CSIRO that the impact of 30 years of coal seam gas mining may take 200 years to rectify—I am talking here about how to make good and I am pleased to hear you talk about Mother Earth and water and sustainability instead of a cheque in the mail as a solution. No amount of money is going to sort that out.

Mrs Armstrong : No. There are several hundred licensed irrigators on the Condamine alluvium aquifer. Most of them are family operated farming enterprises that are multigenerational. Given that we have a history of being multigenerational, it is hoped that, going forward, our children will take on the family farm. I have grave concerns as to what is going to be available for them to take over.

CHAIR: I am not allowed to say what I would like to say, but I fear that this is what I would call a 'something, something' process.

Senator STERLE: Chair, for the first time you have stumped me.

CHAIR: It begins with a 'b' and an 's'.

Senator STERLE: Mrs Armstrong, which gas company is on your property?

Mrs Armstrong : They are not on our property. Arrow Energy approached my husband and me last March and April proposing to do what they call a six-well pilot project on one of our farms. It was the very first venture of any of the coal seam gas companies east of the Condamine River into that heavy black cracking clay country. Although they have done single exploratory chip-and-core wells, at this point in time—I think largely because of the public outcry that occurred after their contact with us—they have not progressed any further east of the Condamine River.

Senator STERLE: They have not approached any of your neighbours?

Mrs Armstrong : No.

Senator STERLE: How long do you think that will last?

Mrs Armstrong : I do not know how long it will last. The company says that it will last for another decade.

CHAIR: That is the advice we have been given.

Mrs Armstrong : The reason for that is that, when they first approached my husband and me, they had been previously operating in country that was predominantly used for grazing, which is a completely different type of farming practice to what we employ. It was immediately evident to my husband and me that they were completely ignorant of the type of farming that we do. They had no idea that we are on a flood plain and that the area where they wanted to put the pilot was right in a major floodway. They did not understand our land values, our irrigation practices or the level of intrusion that their activities would cause to our property. We have since been engaging with them in order to educate them about that, and it is for those reasons they have given a commitment not to come from other 10 years. However, DERM have issued them with the environmental authorities to come—so they do have their permissions to come; they are just being neighbourly and saying that they are not coming yet.

Senator STERLE: But you are not confident that that will last for long?

Mrs Armstrong : No, I am not, and the reason for that is that I discovered after that initial contact last March or April that the area immediately around my properties is a known geological hotspot called the Horrane Trough. It is highly likely that it is very prospective for coal seam gas. The company freely admit that and have every intention of coming.

Senator STERLE: Do you know if your neighbours have been pressured yet?

Mrs Armstrong : No, they have not. When the land access officer visited my husband and me last April, my husband said, 'Well, what if we say no?' He said, 'Then we will go and see your neighbours.' My husband said, 'What if they all they say no?' and he said, 'We will end up just coming and putting it where we want.' What I want to say is that my husband asked him at that meeting, 'Have you approached my neighbours? Have my neighbours been informed?' and the land access officer replied that he had been in contact with our neighbours. My husband rang the neighbours and none of them knew anything.

Senator STERLE: That is a good start for building a relationship, isn't it!

Mrs Armstrong : It is a great start!

Senator STERLE: Obviously you are in contact with your neighbours. Are your neighbours as rock solid as you and your husband?

Mrs Armstrong : Yes.

Senator STERLE: Fantastic; that is a very good start. How many are there?

Mrs Armstrong : How many neighbours?

Senator STERLE: How many neighbours?

Mrs Armstrong : I used to have 27 immediate neighbours. I have fewer than that now. The thing about our area is that it is generally fairly monoculture; we are all on the flood plain. You are either a dryland or an irrigated grower but you have high-value property and you are growing high-intensity, high-value crops. So, irrespective of the impacts to the groundwater, the impacts to the land surface in our part of the world are quite severe. With what we have seen at arm's length of the industry west of the Condamine River, we hold very grave concerns for the effects that it will have on our sorts of businesses.

Senator STERLE: From a completely different angle now—and I will be very quick—has your business suffered through lack of labour or losing labour to the coal seam gas industry? Is that a problem yet?

Mrs Armstrong : I would not specifically name the coal seam gas industry but I would say that generally over the last half a dozen years, easily, it has been difficult to entertain and keep permanent staff and it has been very difficult to try and get casual labour because we are close to several different types of mining enterprises—there is coal mining not very far away as well. So, whilst we do not have a coal seam gas industry in our immediate area as yet, we have already been impacted, yes.

Senator STERLE: My last question is: do you believe that with balance and if it is done properly there is room for mining and agriculture in this region?

Mrs Armstrong : Which region? In my particular region?

Senator STERLE: Your town and its surrounds.

Mrs Armstrong : I think that if the landholders are compensated appropriately that there is room for agriculture and coal seam gas mining to coexist. However, that is a surface level existence. The impacts to the groundwater still remain and, based on the necessity of the groundwater to us—privately, domestically and for our farming enterprises—in that essence I do not believe that coexistence is possible.

Mr Armitage : I had a meeting with Arrow the other day, and I can present you with a 'before' plan of our farm and a plan of our farm with the gas wells on it.

CHAIR: Would you care to table that?

Mr Armitage : Yes.

Senator STERLE: I have no doubt that Senator Edwards will probably want to carry on from my line of questioning.

CHAIR: Yes.

Senator EDWARDS: From the earlier discussions, my view on the water science is definitely still out. It is inconclusive at the best description. That said, I want to go to the commerce of all of this and take a helicopter view of the industry in Australia. In other areas of Australia right now there are major international companies purchasing vast tracts of land for mining—not necessarily coal seam mining, but if there is enough margin in coal seam mining they will get around to that. At this point the regions are struggling, and I think the mining companies are struggling with this whole issue as well. It would appear to me from their private representations that they are struggling with it too. Can you see a time when the region actually changes from farming to coal seam gas mining?

Mrs Armstrong : No, and I am speaking for our area, east of the river on the flood plain. I still think that even if we went into full development with CSG and the worst case scenario was that there was a well every square kilometre and we lost our groundwater, you would still be able to be a dryland farmer, but it would be a massive pain in the proverbial. You could still farm—if you did not go bankrupt first.

Senator EDWARDS: Given that they have legislative dominance—that is probably a fair description, given that they are able to enter if there is no agreement; currently, it is provided for—and your water does fail, because the science is inconclusive, five or 10 years down the track, it is plausible then for all of you to face an uncertain irrigation future and the region may change to mining because you have said the words: it no longer becomes viable and people and people's financiers no longer see the viability in it. I am just making the point that we can struggle with the current legislation or we can change the legislation so that this does not happen. Or you can look at legislation and try to put pressure on. However, it is only people power that will bring this to the fore. The only thing I say to you is that the community, with a resource which is probably more valuable in the short term around the region, may be faced with that and that is what you are facing. That is why, currently, the motels, hotels and everything are full because their economy is much better—their margins are much better than the margins in your agriculture.

Ms Armstrong : I do not necessarily agree with that comment. If we break it down to compensation, if they were to compensate us fairly in our area, on intensive agricultural country so that, at the very minimum, we broke even without impacts, I do not believe they would be able to afford to mine there.

Senator EDWARDS: Farmers in other regions have been offered five times the value of the land. The miners are now compensating you for your land value per hectare or whatever. If you were to receive five times that amount of compensation, which has recently happened in another region in Australia, would you sell?

CHAIR: That is an unfair question.

Ms Armstrong : I am not answering the question.

Senator EDWARDS: That is a question for the region.

Ms Armstrong : These companies have tenures. Each petroleum tenure area is tens of thousands of acres. They cannot afford to buy out every affected landholder even at current market value, never mind at five times the market value. It would cost the companies billions of dollars to buy out our irrigation area. They could not afford the 40 kilometre by 20 kilometre area between Dalby, Pittsworth and Millmerran.

Senator EDWARDS: Therefore, I suspect you could focus their attention on that issue. Thank you.

CHAIR: Thank you.

Senator WATERS: Thank you, Ruth and Stuart, for your evidence today. I am interested in the line of argument on compensation. I do not live in Cecil Plains, but I do not think you can compensate for the loss of your son's future. That is just my view. I take a different view from some of the other senators here. I guess our role as representatives of our various states is to look not just at your individual circumstances but at the health of the region, the state and the country. I am more concerned about the long-term impacts here. I am also concerned about the current impacts on you. But we also have to have an eye on the future and what our rural communities will look like in 20, 30 years time and beyond. That is where I am coming from. Being a Queenslander, I am conscious of the fact that we have only 2.2 per cent of farmland that is considered good quality. To me, that should be sacrosanct. I am doing my best to also convince the other folk in the Senate of that. So rest assured that we will be doing what we can to progress that.

On the water issue, what is your reaction to the fact that there seem to be two different sets of rules for when you can use water and when the gas companies can use water. What do you think the difference is? I have my suspicions, but I am interested in what you think the difference is.

Ms Armstrong : Personally, I think it is disgusting that, on the one hand, the state government has encouraged—forcibly, for starters and then, voluntarily, in recent years—irrigators to take reductions in their water entitlements during a drought in the guise of ecological sustainability, which I fully support because I have a four-year-old son who may want to be a farmer. I would like there to be groundwater for him to use, if he so needs. On the other hand, to give petroleum companies carte blanche, unfettered or, as the legislation says, unlimited quantities of water that can be taken or interfered with just stinks—to put it bluntly.

Mr Armitage : The other issue is that the petroleum companies that we are talking about are foreign; they are not Queensland citizens.

Senator WATERS: They are not poor, either.

Senator EDWARDS: The thing I find interesting about that is they can take that water and fix it. Then they can use it to fix you up for what they have taken from you. It just does not make sense. It is circular and inequitable.

Mrs Armstrong : I think it is too early to say that it is going to fix it up. Yes, they are taking a lot of water out. Yes, they are admitting there is going to be an impact. Yes, they are working with government and landholders to try to come up with solutions to return that water back to the landholders. The water is coming out of an area of extraction; it may not necessarily be returning to that area. It may not necessarily—and I personally find it highly unlikely—mitigate those impacts, certainly within the time frame that the industry is going to be generating this water in another 30 years.

Senator JOYCE: Just to clue you in, it was Ian Brimblecombe who lined me up at the back of church some time ago to try to follow this through. I will say g'day to him. I know about your land because I drive past it every day. I thought it was very interesting today that we went on a bus trip but I thought the bus trip we should have gone along is the one between Cecil Plains up to Hursley Road to see all the problems in that district. Instead, we seemed to go on this convoluted trip. I went to country I had never seen before and I think it was because there were no placards out there. For the Hansard, tell me about your country, Mrs Armstrong. I would call that prime agricultural land. Would that be a fair comment? Don't be bashful.

Mrs Armstrong : Yes, it is prime agricultural land. According to the current state government guidelines for assessing land quality, it is class A1 good quality agricultural land. Looking at the strategic cropping land maps, if the strategic cropping land legislation gets up, yes it will be probably considered to be strategic cropping land if it is assessed. Personally, I have travelled fairly extensively around Australia and internationally and I have never seen country like it.

Senator JOYCE: With self-mulching, deep-cracking loams?

Mrs Armstrong : Yes.

Senator JOYCE: It would probably be of a very similar quality to the Breeza Plains?

Mr Armitage : It would be better quality than the Breeza Plains because it is in Queensland! The thing that also goes with it is the efficiency of production.

Senator JOYCE: That is what I want to get to. I want you to give me a rundown of the yields so that people understand. What would be the yield if you grew wheat on it?

Mr Armitage : Wheat is hardly grown on it. We are going to fibre.

Senator JOYCE: Okay, how many bales an acre do you get?

Mr Armitage : Four, quite comfortably.

Mrs Armstrong : And two tonnes an acre for wheat.

CHAIR: I do that at home too.

Senator JOYCE: This is year-in, year-out—not once in a lifetime.

Mrs Armstrong : It is probably more important to talk about it in terms of yield per megalitre as well. Plenty of other regions can grow that sort of yield per acre but they are using more megalitres of water. I think that given this is the—

Senator JOYCE: How many megalitres of water do you need?

Mr Armitage : Around two and a half to three megalitres per hectare, so about one to one and a half megalitres per acre.

Senator JOYCE: That is highly efficient. For the Hansard, how much would you reckon St George would use?

Mr Armitage : Four megalitres.

Senator JOYCE: Yes. As prime agricultural land, let us be straight: should it have mining or gas on it at all?

Mr Armitage : No, this area is an asset to Australia and it should not be mined.

Senator JOYCE: Can you tell me about how you are organising at the moment? Basically, you feel like you have been deserted, don't you? What are you doing as a community to organise your protests and the campaign?

Ms Armstrong : We are doing several things.

CHAIR: Don't give too much away.

Ms Armstrong : After my husband and I were approached by Arrow Energy last year, we called a meeting in our shed and 70 of our neighbours and friends showed up. We said, 'This is what happened to us. I found the geological map. This is why they want to come.' That was in early May. In the middle of May we called a rally on the site on our farm where a proposed pilot well location was. There were 400 or 500 people who came at very short notice. We organised the rally on a Friday night and we had the rally the following Tuesday. I think that was probably the tipping point for us and really put us on the map. It raised the issue generally in the wider public.

Senator JOYCE: Are you getting support from your local member? He is at the back there. Line up if you are not.

Ms Armstrong : We formed our local group called Save Our Darling Downs, SODD. We are not incorporated, just the neighbours get together, information-share, go to rallies, do things like this, although we are not doing this as SODD. We just keep everyone up-to-date with the latest that is going on and spreading the word.

Senator JOYCE: I will wave the magic wand, right. I make it so that anything that you want to happen can happen. What would you want to happen?

Ms Armstrong : It is very easy to speak about what I would like for myself and it is very difficult to say what I would like for those who to a certain extent it is already too late for. We are very lucky that we have got Arrow Energy with tenure over our area. Arrow Energy have not submitted their environmental impact statement whereas the other three big companies I believe have received or are receiving final investment decisions and they are off to Gladstone.

What I would like to see for ourselves is that there is no CSG mining east of the Condamine River, period. What I would like to see for landholders generally is a lot more oversight by the regulator. To talk about our issue as an example, after they were granted their environmental authority I contacted the delegate of administering authority, which was the person in DERM who actually signed the environmental authority. I had some questions for her. She admitted to me during the course of the conversation that she had not even set foot outside her office and come to the area and had a look-see to see what she was signing an environmental permission to cause harm over. So for those who already have a coal seam gas industry in their backyard, I really cannot answer that question. I think seriously there are some laws are still need to be changed. I think it is an absolute disgrace that a landholder does not have the right to say no before land courts made their determination. That is unacceptable. The issues surrounding the compensation with regards to the secrecy and there not being open and transparent communication between the companies and the landholders regarding compensation, I do not think that is acceptable. I definitely do not think that the current regime with regards to the produced water is acceptable. I am poorly equipped to answer this question right now; you have put me on the spot.

Senator JOYCE: I say it would be better if there was a mine under the Sydney Opera House, because if you pull down the Sydney Opera House and you really try you can build another one. But if you lose prime agricultural land it has just gone.

Mr Armitage : Just to underline how serious we are about trying to protect this land, at the moment some of the landholders in the Cecil Plains area are in Land Court with DERM because of DERM's inadequate response to our concerns. That will cost somewhere in the range of $400,000-$600,000.

CHAIR: Can I give you a bit of distress. The courts are not about the truth. If you go to court you will discover that. The courts are about the law. If you want to avoid the truth, you get a smart lawyer not to tell a lie but to avoid the truth. So do not put any faith in the courts. This will be a lawyers' feast. Where I come from there are all sorts of shonky developers wanting to put buildings on all sorts of places, so they go and see the local councillor and take him to lunch and do all those sorts of things, a free trip to Fiji or the footy box. What is the difference between that and the state government collecting the royalties and then making a decision on the development?

Mr Armitage : That is where it all fails. When we were talking to DERM about the EA, DERM was talking about the gas companies as their clients. Now that is the Department of Environment and Resource Management. So, in the one department, they are managing our resource, which is good coliate land, and they are managing the people who want to mine our resource.

CHAIR: So shouldn't we appoint an independent arbitrator for all of this—for example, the Commonwealth?

Mr Armitage : Of course we should, because the Queensland government stands to make money out of the mine that comes onto my farm.

CHAIR: Can I give you an example. I chaired the Traveston Dam inquiry, by the way, but I also did the one about mining under the flood plains of Gunnedah. The attitude of the players was that, because they had given $300 million to the government for the exploration rights—despite the fact that BHP next door only gave $100 million—they thought they had bought some decisions, and I think they did. I think it stinks. I make one final observation: you have got a son, a four-year-old? I hope you have five or six more. We need some more good men.

Mrs Armstrong : Can I make a remark too. Whilst we face unique challenges being on good agricultural land, the bottom line for this industry and the impact of this industry is water. I have friends who do not farm on good quality agricultural land but who are as dependent on that water for their livelihoods and their businesses as we are. One that really comes to mind are the feedlotters, who might not be on the greatest land in the universe but need that water for their farms. So the common denominator here is the effect on the groundwater. The Queensland government and the industry admit there are going to be massive negative impacts on it. The impact is across the board; it is not just about us on prime agricultural land.

CHAIR: We are onto that. I thank you for your evidence and for the patience of the audience through all of this. On ABC radio this morning, the government's smooth-words spokesman for the mining industry representative body said—and I thought it was a very bold thing to say—he did not think this inquiry would mean much, because no-one would take any notice of it and it would not matter. So there you go. We'll see about that.