AUSTRALIAN Chief Scientist Dr Alan Finkel’s report from an expert panel’s independent review of the National Energy Market has supported giving farmers and landholders “fair” compensation for Coal Seam Gas (CSG) mining activities.
The Finkel report’s only reference to agriculture was in its recommendation 4.3 that governments should adopt evidence based regulatory regimes to manage the risk of individual gas projects on a case-by-case basis.
It said that approach to the controversial CSG mining issue should also include an outline on how governments would adopt means to ensure that landholders receive fair compensation.
The high level government report said one of the key differences between CSG and other mining activities was that CSG wells “cohabit” with other land uses such as agriculture.
“There is a strong need for sustainable co-existence between the gas industry, landholders and communities,” the report said.
“South Australia has announced that 10 per cent of royalties will be provided to landowners whose property overlies an unconventional gas field that is brought into production.
“In Queensland, landholder and resource companies must negotiate a legally binding Conduct and Compensation Agreement that outlines compensation for landowners for the effects and impacts of authorised activities.
“The Queensland Government has established a Land Access Ombudsman to deal with disputes between landholders and resource companies in relation to Conduct and Compensation Agreements.
“The NSW Chief Scientist and Engineer’s independent review into CSG activities in New South Wales found that CSG extraction and related technologies are mature and Australia is well equipped to manage their applications.
“The role of governments and industry is then to provide leadership and establish community trust while ensuring legitimate concerns are acknowledged and addressed.
“Listening to and responding to diverse community segments is absolutely necessary for any new industry wishing to operate successfully within communities.”
The report said the panel considered governments should avoid blanket restrictions and bans on gas projects and instead encourage the safe exploration and development of the industry.
“Evidence based regulatory regimes enable the risks of individual gas projects to be managed on a case-by-case basis,” it said.
“A number of submissions to the Review support this approach.”
The report also cited the Australian federal government’s three principles for the development of CSG.
That agricultural land should only be accessed with the farmer’s agreement, and farmers should be fairly compensated; that there must be no long-term damage to water resources used for agriculture and local communities; and prime agricultural land and quality water resources must not be compromised for future generations.
The report from the review which was first commission in October last year was handed to COAG last Friday, suggesting a Clean Energy Target (CET) to achieve various urgent reform of the NEM, needs like lower greenhouse gas emissions combined with increased security and reliability and more affordable energy supply.
In March, after SA’s announcement of support for a 10pc royalty to landholders for gas mining activities on their land, Agriculture and Water Resources Minister Nationals leader Barnaby Joyce praised the move and was also backed by the National Farmers’ Federation.
“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 at the time.
“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.
“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.”
Mr Joyce said on Sky News in relation to the Finkel report, there was no point having an energy policy if you turn the switch on and nothing happens.
“It's going to be reliable - it's got to be affordable - otherwise those who are the poorest, and reside in our electorates, are hurt the most,” he said.
“We've got to be heading towards an affordable power price, and the reason we are encouraged at the moment is because business as usual is not working.
“We've got to try to do something more, to get more supply on especially baseload supply on and we have to comply with our international requirements (on greenhouse gas emissions) and we intend to do that.
“(We’re not going to be) completely religious about what we want to achieve, which is reliability, affordability and compliance with our international obligations but we are completely agnostic about how we get there.
“We're not going to say coal fired power is evil, or only wind power is good, or photovoltaic is all good.
“This should be an argument about emissions reduction, not a religious view on how you generate electrons.
“Even wind towers emissions are not zero - you've actually got to build the wind towers, they're not made out of wood.”
Mr Joyce said the Finkel report was a report to government - not a report from the government “and now we'll have that debate”.