THE National Farmers’ Federation (NFF) has thrown its weight behind a fresh demand by Barnaby Joyce for farmers and landholders to be given a fair share of royalties from gas mining.
Amid an intense public debate around energy prices and security, the Agriculture and Water Resources Minister and Nationals leader released a statement today saying he “praised” an initiative of the SA government to pay landholders a 10 per cent royalty for new gas production on their land.
“While I’m critical of the SA Labor government’s failed energy policies that have plunged that state into darkness, I do praise their initiative to start talking about giving landholders a better return from gas development,” he said
“I listened to Premier Weatherill’s announcement and there is one issue I strongly agree with: a fair return has to go back to the farmer.
“I commend his recognition of this in the discussion of a royalty return back to farmers of coal seam gas extraction.”
Mr Joyce’s comments follow calls by the Commonwealth for state and territory governments to lift any gas moratoriums and revisit restrictions on gas exploration and development.
He said landholders with gas reserves should be viewed by the industry as potential business partners and not as obstacles to could be ridden roughshod over.
Mr Joyce said he also welcomed the growing realisation by many that unless a fair return was provided to a landholder, then nothing may be released.
“We need to have a national discussion on how to give landholders a greater say and greater share in the hydrocarbon resources on their land,” he said.
“Landholders have a right to a greater annuity from their land.
“By paying a royalty it means the value of a farmer’s land increases as a result of gas extraction, rather than decreasing.”
But Mr Joyce said lifting gas restrictions should not result in carte-blanche development.
“We must protect prime agricultural land and we must protect productive aquifers,” he said.
“Where these caveats are abided by in relation to gas extraction, then a strong return back to the landholder means a strong return to the town and the whole local economy; and it means a vastly better chance of a cooperative environment with landholders.”
NFF President Fiona Simson said her group also welcome SA’s plan to provide royalties to landholders in return for gas extraction as a “step in the right direction”.
“Adequately compensating farmers’ for the use of their land is essential but its never been just about the money,” Ms Simson said.
“The NFF’s job is to represent and advocate for farmers and the two things we can’t and won’t compromise on is the secure access to water and land.
“It’s up to the industry and government to make sure that the concerns of the community are addressed with science and evidence that clearly and categorically proves there is not going to be a negative impact on the huge growth opportunities for the farm sector.”
Ms Simson said the NFF’s view was, given the states had regulatory control over the issue, the Commonwealth’s role was to focus its investments on providing the quality science needed to underpin a robust state-based regulatory approach.
“As the peak representative body for Australia’s farmers – the NFF stands ready to work with state and federal governments to ensure we get the best possible outcome when it comes to a sustainable and affordable energy market for farmers, the environment, the economy and the community in general,” she said.
Ms Simson said moratoriums on gas mining were “a blunt instrument” but were in place because of the lack of community confidence including the farming community, in the way governments had regulated the gas industry in the past.
“Until we have absolute confidence these concerns have been adequately addressed, then moratoriums will be part of the response,” she said.
In an interview with controversial media identity Andrew Bolt, Queensland Nationals Senator and Minister for Resources and Northern Australia Matthew Canavan also backed the SA royalties plan saying people who owned property and land, like farmers, wanted to gain a fair return from gas development, on their property.
He said if a landowner doesn't see a stake or benefit in having a gas well on their property, “why would they accept it?”
“Put yourself in their shoes - if someone's going to rock up and drill a few hundred metres under your house and put a big steel well next door….you’re not going to be thrilled about it and if you're going to accept it, you'd want something in return, like any investment or asset,” he said.
“And that's what needs to happen.
“I do welcome what the SA government has done in saying that a percentage of royalties will be dedicated and reserved for landowners.
“That's the kind of stuff we need and the industry are going to themselves increase their calls for that.
“You know, they don't control that either, it's got to come from the state governments but that's a positive step forward.”
Currently landholders negotiate financial compensation for any disruptions or inconvenience caused by mining projects, in access agreements with mining companies.
States also have individual royalty arrangements for gas mining; mostly paid on an ad valorem basis (percentage of value) of extraction.
In a statement, Livestock SA said it was seeking clarity on the state government’s plan to return 10pc of royalties for gas extraction to landowners.
But it said gas extraction on agricultural land can involve the controversial process of hydraulic fracturing, or fracking, a process which Livestock SA has called for the government to halt.
This was due to concerns about the use of fracking as a relatively new and untested technology and its potential to damage the underground aquifer system, issues with land access and conflict with livestock production.
Livestock SA Chief Executive Officer Andrew Curtis said information on how the royalties’ scheme would work, or who would be entitled to royalties, needed more detail.
“It appears to be a simplistic response to a very complicated issue,” he said.
“There will be no royalty payments until there is productive extraction from a gas well, yet a lot of damage can be done to agricultural land in the exploration phase of mining using hydraulic fracturing.
“There is also the question of who gets paid the royalties?
“Currently the legislation refers to ‘landowners who have gas extracted from underneath their land’.
“Hydraulic fracturing allows sideways drilling so how will it be known which property the gas comes from to determine which landowner receives payment?
“Livestock SA continues to advocate for livestock producers on this issue, and believes that no fracking should be conducted in these regions.”