The future of CSG mining in NSW is officially as bleak as we expected. Following the recommendations last year, the Government has announced that it will impose a 2km exclusion zone around residential areas to prevent new CSG exploration, assessment and production activities. Exclusions zones will also apply to industry clusters- viticulture and the equine industry.

In addition to creating exclusion zones, the reforms also mandate all permit holders to have an Environmental Protection Licence and charge the Environmental Protection Agency with regulating all health and environmental impacts of CSG in NSW. Further regulation on CSG mining near water catchments is also in the works as the government considers protection for sensitive environments such as the Sydney water catchment, the Northern Rivers, Gloucester Valley, Southern Highlands and the Great Artesian Basin aquifer.

Speaking of water, the Federal Government is looking at boosting the Commonwealth’s powers to boot CSG projects on environmental impact grounds. The effect of the changes, if made, will be that coal seam gas and large coal mining developments which threaten to impact on a water resource will be required to undergo a federal assessment and approval process under the Environment Protection and Biodiversity Conservation Act. It is unclear what level of threat to water will bring the assessment process into play.

The changes mean that the industry will face extra red tape. The opponents of the reforms argue that the changes will increase costs, which will hurt employment in the industry. It all comes back to maintaining that delicate balance of sustainability and economic wellbeing. In any event, we think that focusing on the standards for effective well casing and minimal impact drilling would be a far better use of everyone’s time than an extra round of ministerial review.