On 22 November 2013, certain sections of the Land Water and Other Legislation Amendment Act 2013 (LWOLA Act) that amend the Petroleum Act 1923 and the Petroleum and Gas (Production and Safety) Act 2004 (petroleum legislation) commenced.
The new provisions address the conversion of coal seam gas (CSG) wells to water bores on a landowner's property. In particular the amendments address:
- who may drill a water observation bore or water supply bore;
- conversation of a well to a water observation bore or water supply bore; and
- the transfer of a water observation bore or water supply bore to a landowner.
Who may drill a water observation bore or water supply bore
The amendments permits the holder of an authority to prospect, a petroleum lease or a water monitoring authority to drill a water observation bore or water supply bore in the area of the respective authority or lease.
Prior to these amendments, a water bore or water supply bore could only be drilled by a licensed water bore driller or under the supervision of a licensed water bore driller.
A petroleum tenure holder must now decide whether the bore will be drilled as per the requirements of the petroleum legislation, where there is significant gas hazard or whether it is safe to drill the bore under the Water Act 2000 (Qld). If the bore is to be drilled under the petroleum legislation, there is no longer a need for the presence of a water bore driller to supervise drilling.
Conversion of a well to a water observation bore or water supply bore
Previously, the conversion of a well to a water observation bore or water supply bore could only be performed by a licensed water bore driller. The changes under the LWOLA Act allow petroleum tenure holders to convert a petroleum well into a water observation or water supply bore so long as the petroleum tenure holder complies with the prescribed requirements. As the presence of a water bore driller is no longer required for the conversion, some cost savings will also accrue for the petroleum tenure holder.
A new provision has been inserted which states that only a well drilled or decommissed on or after 12 January 2012 may be converted into a water observation bore or water supply bore. These wells were drilled or decommissioned in compliance with the Code of Practice for Constructing and Abandoning Coal Seam Gas Wells in Queensland. As such, the construction standards of CSG wells after this date are closer to the Minimum Construction Requirements for Water Bores in Australia, enabling CSG wells to be more readily converted to water bores.
In order to convert the well to a water observation bore or water supply bore, the holder must lodge a well completion report for the well and issue a notice of intention to convert the well.
The petroleum tenure holder must ensure that the drilling and/or conversion of a well is carried out in accordance with the Code of Practice For constructing and abandoning coal seam gas wells and associated bores in Queensland(Code of Practice) as well as the Safety Management Plan for the site, and that the party engaged is fully competent.
A fine of up to $55,000 applies for non-compliance with the prescribed requirements in drilling or converting a well.
Transfer of a water observation bore or water supply bore to a landowner
A water observation bore or water supply bore may now be transferred by a petroleum tenure holder or water monitoring authority holder to the owner of the land on which the bore is located. In completing this transfer. Responsibility remains with the petroleum holder to satisfy the landowner that all legislative requirements have been met.
Prior to these amendments, a CSG well could not be directly transferred from a petroleum tenure holder to a landholder on whose land the petroleum well was drilled due to health and safety and environmental concerns.
The changes allow landholders to access new water supplies without incurring the costs of drilling a separate water bore.
The Code of Practice states that prior to conversion and transfer of a well to a landowner, or transfer of a purpose built water bore to a landowner, a local Department of Natural Resoures and Mines (DNRM) office should be contacted to confirm that the location of the proposed take through bore is permitted under relevant licensing regulations.
The updated Code of Practice can be located at http://mines.industry.qld.gov.au/assets/petroleum-pdf/csg_code_of_practice.pdf
DNRMs have indicated that a similar Code of Practice is intended to be introduced for non- CSG petroleum wells in the near future.