Environment Protection and Biodiversity Conservation Amendment
Posted on Tuesday, 29 May, 2012
Mr RAMSEY (Grey) (19:34): I rise to address the Environment Protection and Biodiversity Conservation Amendment (Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development) Bill 2012. The potential for coal seam gas extraction, particularly in eastern Australia, is enormous. Already the estimate is there is more gas contained within the rocks of Queensland and New South Wales than there is under the sea off the North West Shelf of Western Australia.
Unfortunately, along the way, coal seam gas extraction has become a highly controversial issue. It is estimated there will be something like 40,000 coal seam gas wells within Australia and the estimates suggest that coal seam gas wells could extract anywhere from 125 to 300 gigalitres of water from the ground each year to facilitate that extraction. That, of course, is one of the key issues that communities are concerned about. The modelling suggests the industry could produce 31 million tonnes of waste salt over the next 30 years—and in anyone's terms that is a big pile of salt!
On the benefit side, Queensland stands to extract up to $850 million a year in royalties from the industry and New South Wales somewhat less, but still a significant amount of money. There is great potential for new industries to be established from the new desalinated water sources, so there is plenty of upside. It is estimated that Australia has 200 years supply of gas and great potential to discover more than that. What this means for all Australians is that this industry is going to be developed one way or another. It is our job and our chore to make sure it is developed properly and that the side effects are minimal.
One could well ask why a member from South Australia would be so interested in this industry, which is idiosyncratic in that it is basically confined to Queensland and New South Wales. But I see many correlations in the establishment of this committee to oversee and provide scientific advice to state governments and to my electorate. My electorate, which covers 92 per cent of South Australia, has enormous interest at the moment in its resources. With respect to those correlations I talked about, for a start, South Australia is home to over 50 per cent of the installed capacity of wind generators in Australia. You might ask what wind generators have to do with coal seam gas. They are an intrusion on people's properties. They operate on arrangements the wind farm generators make with the holders of the property, to pay them a rental each year for allowing the company to operate their wind farms on the landholder's property. They have become quite controversial for a number of reasons, including low-level noise. But those arrangements that those operators make are very similar to the arrangements made with farmers who are going to have coal seam gas extracted on their property.
Another correlation is the possible interference with underground aquifers. As I say, I represent a lot of the state but I live on Eyre Peninsula. It is a significant region within itself. Until very recently it was unconnected to the River Murray. The Eyre Peninsula region uses about nine gigalitres of water a year. As I said, until recently all that water came from underground aquifers predominantly at the bottom end of the peninsula. Over the years we have managed to destroy or certainly disable a number of aquifers that previously supplied the peninsula. Residents of Eyre Peninsula are very sensitive about the fact that we may interfere or overpump the current aquifers, because there really are no second options. Currently, a number of companies are very interested in digging up iron ore from within the area that is the home of the aquifers. That has a great correlation to the coal seam gas industry. People are concerned about what this will do to their underground water supplies, not so much from contamination but more to the dewatering process itself. Will it depressurise the basin? How interconnected are the basins? Does the water from one area run to the next? Those are hydrology issues that also affect the coal seam gas industry.
One other great interface I see, as these industries develop around South Australia, is the interaction between mining and agriculture. This will be the big issue of the first half of the 21st century for the development of our resources. It is not so bad when minerals are found on so-called pastoral country where they do not make much of a footprint—and we are talking about lower production country—but where it actually intersects with farming country there are always bound to be different points of view.
Currently, Rex Minerals are developing large copper resources on the Yorke Peninsula. Yorke Peninsula has some of the best agricultural land within the state. We recognise there are billions of dollars at stake here, but we also understand why farmers and local communities are very concerned about the way that their land may be alienated, perhaps permanently.
In another area, over on Eyre Peninsula, once again around Warramboo, a large company, Iron Road, is looking at mining significant iron ore deposits, with exactly the same outcomes. We are we likely to see acid leach uranium mining across quite a number of farming areas. That would be very similar in nature to the outcome with coal seam gas extraction. I see a lot of similarities.
Any work the expert committee may do in relation to coal seam gas may well provide, at least, a pathway for us in South Australia to learn from their methods and how we manage the challenges we face. The committee will have the power to investigate and give impartial advice to relevant bodies and, as I say, in most cases this will be the states themselves, because there is one thing that we do realise—and this follows the government's moves on the mining tax—that the resources do in fact belong to the states.
I should dwell a little bit on the water issue because I think this is the biggest issue and the biggest concern about coal seam gas. As our understanding in Australia of aquifers is still far from perfect, we do not really understand how fast the water moves from one area of an aquifer to another and how they are interconnected. For instance, many scientists around the coal seam gas industry are telling us there are no leakages between aquifers. But, in some ways, we will not know until we try. That is why it is very important to have independent monitoring in place. Many of the proposed areas that will be exposed to coal seam gas extraction are actually the recharge of the Great Australian Basin and that is very important water resource for the state of South Australia.
Much of the outback of South Australia relies entirely on the resources of the Great Australian Basin. While we are aware that the miners—and I will call them 'miners' for the purpose of the extraction of coal seam gas—are not targeting those aquifers that are the Great Australian Basin, in fact, they have to drill through them and there is the possibility of leakage. We are talking about thousands of kilometres away, but depressurisation in the basin at any point is likely to have, at least, some effect.
This is not a new industry worldwide, but it is a new industry for Australia. That is why the establishment of this body, at least in the interim period, will have a good outcome. Because there is potential to effect a far larger footprint than just the locality where the extraction of the coal seam gas takes place, there are bound to be some errors in the establishment of this industry and it is important that we learn very quickly about any mistakes that may be made. If an area is depressurising, then not only do we want to know what is going on in that particular area but we want to know what the lessons are for other areas.
I have had a number of very good briefings in this area, as I am sure almost every member in this place has had. But it does not matter how often we sit through a briefing, there is much we do not know about this issue. That is why it is particularly important that the bona fides of this committee are beyond reproach. That is why the member for Groom has foreshadowed amendments to the effect that we believe the very scientific rigour of this committee should be beyond question and that it should be solely focused on scientific outcomes and should not be swayed by other interests. It is for other people—for other bodies, for parliaments—to make decisions about what we do with that scientific information; but it is important that we get the facts.
Another issue—and I touched on it briefly when I was talking about mining in South Australia—is the right of landholders to be compensated for the industry's operating on their properties. One of the things I am not sure the mining industry has got right is the code of silence that operates around contracts with landholders to mine on their properties. It is far from a transparent process. Typically what happens is that, if a mining company wants to mine a landholder's property, they do individual deals with the owner, with his neighbour and other neighbours around him and sign confidentiality clauses when they sign the deals. This leads to in-community tension. The fact that a neighbour may achieve a better price than you is not necessarily a good outcome in fostering trust. There are people who feel as though they cracked too early and that they could have got more out of the mining company or whatever.
I have spoken to many mining companies and said, 'I think you should err on the side of generosity,' because, in the overall scheme of establishing a mine, the compensation paid to the landholder is little. I am a landholder, and I have always known that really we only control the top couple of feet of the soil and that the people of the state are the owners of the minerals or whatever wealth is within that land. So I presume that, if there are billions of dollars sitting below my farm and my farm is worth, say, a few million, in the long term I am going to lose the argument.
Because the relative compensation is low, I would like to see the mining industry adopt a code of conduct that would say, for instance, 'If we want to take over your property, we are prepared to give you, as a baseline, three times its current trading value.' If deals were like that—in the open—and everyone understood them, I think you would find farmers opening the gate rather than standing at the gate on the barricades. The same would apply to exploration. If you lived on a very nice property but found that you could buy a property three times the size or three times the value—higher rainfall country or whatever—with whatever payout, that would help you get over the pain. I think that, if we had that sort of open negotiation process where people actually understood what the bottom line was before they opened the gate for the miners, we would see a much more welcoming attitude from farmers. I do not see any great moves in South Australia for the South Australian government to establish that arrangement, but I promote it as I travel around my electorate and talk to mining companies.
As I near the end of my time for this contribution, I go back to this committee and its role. Largely, it is about Queensland and New South Wales. But, as I have said, the interface between agriculture and mining is an Australia-wide phenomenon, and it is going to occupy a lot of our time over the next few years. I reiterate my support for the amendments the member for Groom has already foreshadowed to make sure this committee is rigorous, robust, independent, scientifically based and presents the facts to the decision makers.