After one postponement, a change in responsible Minister and another postponement, on Friday, 22 October 2010, the Federal Environment Minister Tony Burke (Federal Environment Minister) approved the Queensland Curtis LNG Project and the Gladstone LNG Project (GLNG Project) subject to 300 environmental conditions.

On 31 October 2010, BG Group announced that it had taken the Final Investment Decision approving implementation of the first phase of the Queensland Curtis LNG Project with development and construction to progress “with immediate effect”.1

In this article, I will provide a high level overview of the conditions imposed by the Federal Environment Minister on the Coal Seam Gas (CSG) components of the projects and how they relate to the conditions imposed by the Queensland Coordinator General as part of the environmental impact assessment process under the State Development and Public Works Organisation Act 1971 (Qld) (State Development Act).

The Legislation

Approval was given under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). The EPBC Act imposes requirements for Federal assessment and approval of certain actions, which are additional to any assessment and approval requirements imposed by State legislation.

The EPBC Act requires that a person must not take an action that has, will have or is likely to have, a significant impact on a matter of national environmental significance (MNES) (e.g. world heritage values of a World Heritage property or listed threatened species or communities) without approval from the Federal Environment Minister. Such actions are referred to as ‘controlled actions’. Therefore, the impacts assessed by the Federal Environment Minister are more limited than those assessed under State environmental impact legislation, such as the State Development Act.

If the Federal Environment Minister determines that a project is a controlled action, the Minister must also determine the assessment process, e.g. based on preliminary documentation, an EIS or an accredited process under a bilateral agreement. In this case, the assessment was done also relying on the State assessment process, either by way of bilateral agreement or accredited process.

An overview of the assessment and approval process for an application assessed by way of an EIS under the EPBC Act is as follows:

  • referral of a proposed action to the Federal Environment Minister
  • the Minister decides that the action is a controlled action and the method of environmental assessment by which the application is to be assessed by EIS
  • the Minister gives the proponent of the action written guidelines for the preparation of a draft EIS about the relevant impacts of the action (these can be standard guidelines or tailored guidelines)
  • the proponent prepares a draft EIS in accordance with the EIS guidelines
  • if the Minister approves, publish the draft EIS ( for a period specified by the Federal Environment Minister, but not less than 20 business days) and invite public comment
  • the proponent finalises the draft EIS, taking into account any comments received and summarising the comments, and publishes the final EIS
  • a recommendation report is prepared by DEWHA and given to the Federal Environment Minister as to whether the action should be approved and, if so, the conditions that should be imposed
  • the Federal Environment Minister must invite comments from the proponent and from the public in relation to his or her proposed decision, and
  • the Federal Environment Minister decides whether to approve the action within 40 business days of receiving the final EIS (or such longer period as notified in writing).

The Federal Environment Minister may include as conditions of approval requirements for specified activities to be undertaken to protect or to repair/mitigate damage to a matter for which the approval has effect. A condition may also require a financial contribution to be made to a person for the purpose of supporting activities to protect or to repair or mitigate damage. It is an offence under the EPBC Act not to comply with a condition imposed by the Federal Environment Minister.

The Projects

There are currently four major CSG to LNG projects subject to an environmental assessment process in Queensland. All four required assessment and approval under the State Development Act and the EPBC Act. (See related article Rise of the Girly Gas for details about these projects).

Of these four projects, the Queensland Curtis LNG Project and the GLNG Project have received conditional approval from the Queensland Coordinator General in May 2010 and June 2010 respectively. When he was Federal Environment Minister, Peter Garrett was due to make his decision under the EPBC Act on 11 July 2010 but this decision was subsequently postponed until 22 October 2010.

The proponents for the Queensland Curtis LNG Project are Queensland Gas Company Ltd (QCG) and BG International Limited (BG). The following components of the Queensland Curtis LNG Project were referred separately under the EPBC Act:

  • Development of existing coal seam gas fields
  • Pipeline network
  • LNG Plant and onshore facilities
  • LNG marine facilities, and
  • Shipping activities.

The proponents for the GLNG Project are Santos Limited (Santos) and PETRONAS Australia Pty Limited (PETRONAS). The following components of the GLNG Project were referred separately under the EPBC Act:

  • Coal seam gas field development
  • Gas pipeline and alternative pipeline
  • Natural gas liquefaction park
  • Marine facilities to service natural gas liquefaction park.

The Minister approved all components of the projects (together with the strategic dredging and disposal project of the Gladstone Port Corporation, which is not dealt with in this article).

The Minister imposed a range of conditions on all aspects of the two projects. In this article, I focus on the conditions imposed on the coal seam gas field development aspects of the projects. The conditions imposed in this respect are similar for both projects and I will draw out the common elements of the conditions.

The Conditions

Protocol

Before the commencement of gas field development, the proponents are required to develop a Constraints Planning and Field Development Protocol (Protocol), which is to apply for the life of the projects and include the principles of:

  • Avoiding direct and indirect adverse impacts on MNES
  • Mitigating and managing direct and indirect impacts to minimise cumulative adverse impacts on MNES, and
  • Active site remediation and rehabilitation of impacted areas to promote and maintain long-term recovery of MNES.

The Protocol must classify and map what is referred to as ‘Zone 4a’ – the highest environmental constraint class. Zone 4a must include relevant threatened ecological communities, flora species and relevant habitats listed under the EPBC Act. The conditions require pre-clearance site assessments and field ecological surveys within Zone 4a to assess options relating to potential impacts on MNES and provide recommendations to inform decision making.

On the whole, development that can occur in Zone 4a is limited. For example, the conditions prohibit exploration and production wells within Zone 4a, unless the proponents can justify the location of the wells as an exception and the impact on any MNES will be minimal, short term and recoverable.

The conditions also restrict the types of linear and non-linear infrastructure permitted in the ‘no impact zone’ (the area within 300 metres from the perimeter of Zone 4a) and the ‘impact risk zone’ (the area within 200 metres from the perimeter of Zone 4a). Exceptions to these restrictions are permitted in certain circumstances.

Plans

Under the Federal approval, the proponents must provide to the Federal Environment Minister a range of management plans, usually staged to coincide with each major stage of gas field development. Commencement of each major stage may not occur without written approval of the plans relevant to the proposed area of development.

The conditions allow the proponents to undertake activities that are critical to commencement and that are associated with mobilisation of plant and equipment, materials, machinery and personnel prior to approval. However, this is the case only where such activities will have no adverse impact on a MNES and only if the proponents notify the Department of Sustainability, Environment, Water, Population and Communities (Department) in writing before such an activity is undertaken.

The types of plans required by the conditions include:

  • Management plans for the species and ecological communities listed in the approval documents (which are all MNES under the EPBC Act)
  • Remediation, Rehabilitation, Recovery and Monitoring Plan
  • CSG Water Monitoring and Management Plan (discussed further below), and
  • Decommissioning Plan (to be developed within five years of gas field development).

All plans are required to be regularly reviewed to take into account any new information available to the proponents, including any information and advice provided by Commonwealth or Queensland agencies or (interestingly) available from other CSG proponents. The Federal Environment Minister can also require a review of the plans either by the Department or by an independent qualified ecologist or other appropriate expert (at the proponents’ cost).

Coal Seam Gas Water

The proponents have a general obligation to take all reasonable measures to ensure that CSG water, including extracted groundwater, treated or amended CSG water, and any associated waste water, brine crystals and/or solids generated as a result of treatment have no significant impact on any MNES either during or beyond the life of the projects. Measures must be applied to mitigate or make good any such impacts to the satisfaction of the Federal Environment Minister.

The conditions require the proponents to submit to default groundwater drawdown limits specified by the Federal Environment Minister (based on information supplied by the proponents).

These default drawdown limits apply until the Federal Environment Minister approves a Stage 1 Coal Seam Gas Water Monitoring and Management Plan (Stage 1 CSG WMMP) which must include:

  • Groundwater drawdown limits for each targeted aquifer
  • A program and schedule for aquifer connectivity studies and monitoring of relevant aquifers to determine hydraulic connectivity
  • A program and schedule for field piloting of aquifer reinjection of treated CSG water and other groundwater repressurisation techniques, and
  • Early warning indicators where drawdown thresholds are being approached.

The Stage 1 CSG WMMP must also provide for ongoing surface water monitoring and management and provide details of constituent components of any hydraulic fracturing agents and other reinjection fluids, together with their toxicity based on methods outlined in the National Water Quality Management Strategy.

A Stage 2 CSG WMMP is also required to be approved within 18 months from the date of the approval which must also include (in addition to the matters set out above):

  • an ongoing CSG water treatment program
  • a groundwater quality and quantity monitoring plan, and
  • an exceedence response plan.

Three months before the commencement of each major stage of the gas field development, the proponent must submit a revised Stage 2 CSG WMMP to the Federal Environment Minister for approval.

The Federal Environment Minister will set up a technical expert panel to advise on the assessment and approval of the Stage 1 and Stage 2 CSG WMMP (and any revisions) over the life of the projects. It is not clear at this stage who will be appointed to this panel.

Disturbance Limits and Offsets

The conditions set maximum ‘whole of project’ disturbance limits for relevant listed threatened species and ecological communities. For example, for the Queensland Curtis LNG Project, there is a 73 ha disturbance limit for the ecological community of Brigalow. Interestingly, no disturbance is authorised of the community of native species dependent on natural discharge of groundwater from the Great Artesian Basin.

The conditions require three types of offset plans:

  • Offset Plan
    • to be provided within 6 months of commencement of the action
    • to provide an offset area for the approved disturbance limits relating to MNES within the project area which includes particular species and ecological communities
  • must include details of the timing and arrangements for securing properties, maps, environmental values relevant to MNES, connectivity with other habitats and biodiversity corridors, a rehabilitation program and mechanisms for long term protection, conservation and management.
  • Offset Area Management Plan to specify measures to improve the environmental values of the offset area in relation to MNES.
  • Rehabilitation Area Plan to secure an offset of at least 700 ha of privately owned property to re-establish areas in perpetuity of the threatened Brigalow ecological community and associated listed migratory and listed threatened species habitat. This Rehabilitation Area Offset requirement is in addition to the offset area referred to above.

How do they interact with the Queensland Coordinator General’s conditions?

While it remains to be seen how the Federal Environment Minister’s conditions will interact with the Queensland Coordinator General’s conditions in practice, it is clear that significant attempts have been made to ensure the two sets of conditions are complementary.

In general, if the Coordinator General’s conditions require the proponents to provide a plan, then under the Federal approval, the proponents must:

  • Provide the plan to the Department of the Federal Environment Minister on request within the time specified, and
  • Prepare and combine plans that meet both Queensland Government requirements and the Federal approval requirements where this is efficient (in which case, the proponents must clearly identify the respective responsibilities and how these are being addressed in relation to the conditions).

Further, the Federal Minister has also made it a condition to comply with all State environmental authorisations.

The Federal approval allows the ‘cross fertilisation’ of information between State and Federal approval requirements. For example, the Federal approval requires the Protocol and related plans such as the Stage 1 and Stage 2 CSG WMMP to be updated to take into account the findings of the Cumulative Impact Assessment Report required by the Queensland Coordinator General before each major stage of gas field development or following a written request from the Department.

The conditions also require the proponents to include certain matters in that Cumulative Impact Assessment Report that relate to potential adverse impacts on MNES.

The Federal approval also requires the proponents to develop a regional scale, multi-layer, transient groundwater flow model of the cumulative effects of multiple CSG developments. This regional ground water model must be provided at the same time as it is provided to the Queensland Government in compliance with the Coordinator General’s conditions. There is also scope to allow the proponents to satisfy this requirement by contributing to a regional groundwater model developed by the Queensland Water Commission. This allows the proponents to contribute financially and cooperate with other proponents to develop a single representative regional modal and/or to provide a single report from one or more proponents.

It is clear that there will be significant overlap between State and Federal interests. It is hoped that the sharing of information (as contemplated by the conditions) will assist in avoiding unnecessary duplication.

Conclusion

The Federal Environment Minister’s decision has generated much discussion as industry players and environmental groups come to grips with the impact of the conditions. However, with BG’s announcement over the weekend, it will be interesting to learn of Santos’ decision. We will continue to update you on this including with a deeper analysis of the conditions applying to other components of the projects.