Following the actions outlined in the Queensland Resources Industry Development Plan (QRIDP), which was released in June 2022, and our article written last year in anticipation of the amendments, the Queensland Government has proposed amendments to manage the impacts of coal seam gas induced subsidence.
On 18 April 2024 the Mineral and Energy Resources and Other Legislation Amendment Bill 2024 (MEROLA) was introduced to the Queensland Parliament.
In this article, we examine the proposed amendments and outline the potential requirements for petroleum resource companies with operations within a subsidence management area which are to be declared by the Chief Executive of the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld) (MERCP Act).
The need to enhance the coexistence framework in Queensland
Queensland’s coexistence framework strives to balance the rights and interests of the resource sector with those of landholders to ensure coexistence can occur.
In the QRIDP, the Queensland Government committed to a review of Queensland’s coexistence framework to ensure that successful coexistence outcomes are being delivered, both for existing and emerging industries.
Currently, Queensland’s coexistence framework consists
primarily of:
- the land access regime set out in the MERCP Act and accompanying regulations, which requires the negotiation of conduct and compensation agreements (CCAs), or less commonly Deferral or Opt-Out Agreements, prior to the resource authority holder undertaking advanced activities on privately owned land; and
- the assessment and management of groundwater impacts caused by resource authority holders in exercising their underground water rights, which includes the requirement for holders to use ‘best endeavours’ to enter into a make good agreement (MGAs) with affected landholders pursuant to chapter 3 of the Water Act 2000 (Qld) (Water Act).
For some time, landholders, industry bodies and academics have been raising concerns about the impact of CSG-induced subsidence on agricultural land and cropping activities. Particularly, concerns have been raised surrounding the impact of CSG-induced subsidence on agricultural productivity due to the impacts of subsidence on slope and drainage, both of which are critical for good irrigation practices and maintaining overland flow.
Several institutions exist to support coexistence outcomes, including:
- the Office of Groundwater Impact Assessment (OGIA) which assess and manages CSG impacts on groundwater;
- the GasFields Commission Queensland (GFCQ) which seeks to, among other things, facilitate better relationships between landholders, regional communities and the onshore gas industry; and
- the Land Access Ombudsman (LAO), established to independently resolve disputes between landholders and resource authority holders in relation to CCAs and MGAs.
Stakeholders have raised concerns about service gaps, confined jurisdiction and coexistence issues relating to these institutions.
Amendments to the MERCP Act
The MEROLA proposes to amend the MERCP Act to include the ability for:
- the Chief Executive to declare a subsidence management area (SMA) to which the subsidence management framework will apply; and
- the Chief Executive to take compliance and enforcement action on breaches of the legislative requirements.
- the OGIA to prepare a subsidence impact report for a SMA, which will include:
- a cumulative assessment of existing and predicted subsidence
- a risk assessment of the impacts where land will be classified as either:
- Category A - high risk of impacts of CSG-induced subsidence;
- Category B - moderate risk of impacts of CSG-induced subsidence; or
- Category C - low or no risk of CSG-induced subsidence; and
- a subsidence impact management strategy requiring the petroleum resource holder to carry out land monitoring, baseline data collection or farm field assessments for the land during the report period (the Chief Executive can also give a subsidence management direction requiring the holder to undertake any of these actions for land within a SMA).
A farm field assessment of agricultural land is an assessment undertaken by a ‘relevant holder’ (being, the holder of a petroleum resource authority within a SMA) of: the CSG-induced subsidence that has happened or is predicted to happen on the land; the susceptibility of the use of the land or farming practices on the land due to changes resulting from CSG-induced subsidence; and the impacts or predicted impacts of CSG-induced subsidence on the productivity of the agricultural activities on the land.
If a farm field assessment indicates that CSG-induced subsidence will have ‘more than a minor impact on any agricultural activities on the land’, a relevant holder must take ‘reasonable steps’ to enter into a Subsidence Management Plan (SMP) with each owner and occupier of the land. Unlike MGAs, both the relevant holder and the owner or occupier of the land have an obligation to use all ‘reasonable endeavours’ to negotiate an SMP. An SMP is a plan to provide for how and when CSG-induced subsidence impacts will be managed by the responsible holder. If the landholder and tenure holder cannot agree through negotiation (3-month minimum negotiation period) or mandatory alternative dispute resolution procedures, the Land Court has the power to determine the measures to be included in the SMP.
In addition, relevant holders will be required to compensate landholders for ‘compensatable effects’ suffered because of the impacts, or predicted impacts, of CSG-induced subsidence through a subsidence compensation agreement (SCA). An SCA may be incorporated into a CCA.
The MEROLA also introduces the ability for the landholder to apply to the Minister for a decision about whether a critical consequence has or will occur on agricultural land due to CSG-induced subsidence and if the Minister decides it has, the Minister can direct the holder to take reasonable steps to prevent the critical consequence from occurring, continuing or becoming worse.
Institutions established to support coexistence outcomes
In addition to establishing the coexistence framework, the MEROLA proposes to:
- amend the Gasfields Commission Act 2013 (Qld) by rebranding GFCQ as ‘Coexistence Queensland’ and broadening the commission’s existing coverage to include the resources and renewable energy sectors and giving Coexistence Queensland the scope to identify systemic coexistence issues;
- broaden the jurisdiction of the LAO to investigate alleged breaches of access agreements and SMPs; and
- increase the OGIA’s remit to include functions under the MERCP Act to provide for cumulative assessment of CSG-induced subsidence and provide advice relating to subsidence caused by petroleum and gas activities in Queensland.
Are there any other changes to be aware of?
Companies and landholders should also be aware of amendments proposed in the MEROLA to:
- the Mineral Resources Act 1989 (Qld) to, among other things, include a new mandatory condition requiring mining lease holders to keep the surface area of a mining lease tidy;
- the MERCP Act to remove the potential for aerial surveying to be considered an advanced activity and exempting aerial surveying conducted above 1000ft in altitude from the entry notice requirements; and
- the Mineral and Energy Resources (Financial Provisioning) Act 2018 (Qld) to refine its operation and, among other amendments, increase the prescribed Estimated Rehabilitation Cost for the initial risk category allocation from $100,000 to $10 million.
Resource authority holders will also be required to pay an annual industry levy to the LAO to cover costs associated with the LAO’s expanded dispute resolution and investigation functions.
Getting ready
We encourage resource and petroleum companies in Queensland to be across the amendments proposed in the MEROLA. In particular, petroleum resource authority holders should be aware of the pending requirements for subsidence management, monitoring and compensation in declared SMAs.
If you have any questions about what the MEROLA amendments might mean for your operations, and how to prepare for the changes, please get in touch with HopgoodGanim’s Resources and Energy team.