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The NSW Government has released a draft Bill for public comment which seeks to amend the concept proposal pathway for projects under the Environmental Planning and Assessment Act 1979 (NSW) (the Act).
On 13 November 2014, the NSW Government released its Gas Plan which is designed to deliver world’s best practice regulation and secure vital gas supplies for the State. As part of the roll out of the Gas Plan, the Petroleum (Onshore) Amendment (NSW Gas Plan) Act 2014 (Gas Plan Act) has commenced and draft State Environmental Planning Policy Amendment (Gas Exploration and Mining) 2014 (Draft SEPP Amendment) has been released for public comment.
In summary, the key regulatory changes for the onshore gas industry are:
Following a 19 month review of CSG activities in the State, the NSW Chief Scientist and Engineer released the Final Report on 30 September 2014. The Final Report presented the Chief’s Scientist’s findings, including that the risks of CSG development can be effectively managed, and made 16 recommendations to the Government.
On 13 November 2014, the NSW Government released its Response to the Final Report and accepted all of the Chief Scientist’s recommendations which are adopted in the Gas Plan.
The NSW Gas Plan provides a strategy across five priority areas:
1. Better science and information to deliver world’s best practice regulation.
To ensure that the State’s water resources are protected, the NSW Government is drawing on existing datasets to gather the facts to make informed decisions. The data is being gathered by the NSW Office of Water from a network of 3,500 bores.
2. Pause, reset and recommence – gas exploration on our terms.
Currently, petroleum titles and applications cover 45% of the State. Under the Gas Plan, the coverage of gas exploration licences will be drastically reduced to 15% through the introduction of the Gas Plan Act which:
Further, the NSW Government will:
The Government will also introduce the Framework which will identify the most appropriate areas for gas extraction, ensure that community consultation is conducted upfront and put the title area out for public expressions of interest. Under the Framework, the Government will choose the most suitable and capable proponents to undertake CSG development and implement a “use it or lose it” policy in relation to issued titles. No new applications will be accepted until the Framework is in place.
3. Strong and certain regulation.
World best practice environmental and regulatory standards will be applied to CSG development, including minimum standards for assessment of petroleum applications to ensure titleholders have the necessary skills and financial backing. Petroleum exploration applications will be assessed by the Office of Coal Seam Gas and determined by the Minister, and production applications will be assessed by the Department of Planning and Environment and determined by the Minister for Planning or its delegate, the Planning Assessment Commission.
The Environment Protection Authority (EPA) will be appointed as the lead regulator and will be responsible for enforcement of conditions of development consent under the EPA Act and approvals under the Petroleum (Onshore) Act 1991 (NSW). While CSG development already requires titleholders to hold an environment protection licence, this requirement will be extended to conventional, tight and shale gas development.
4. Sharing Benefits.
Legislation will be introduced to:
5. Securing NSW gas supply needs.
CSG production development that is able to demonstrate that it will provide substantive amounts of gas into the market will be designated as a Strategic Energy Project to ensure that gas production is progressed as efficiently and safely as possible. However, this designation will not exempt such development from the requirements to meet environmental standards and undertake community consultation.
An independent expert will be appointed to undertake a review of the settings required to develop a competitive gas industry in the State and secure supply needs, including the royalty payment regime. It is anticipated that the recommendations will be made in May 2015.
The Draft SEPP Amendment proposes to amend:
The Draft SEPP Amendment was publicly exhibited between 18 November and 2 December 2014.