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The coal seam gas industry in Queensland has expanded rapidly in the last decade from a relatively insignificant energy source to its position today as a reliable supplier of over 25% of Queensland's gas market. This expansion is due to technological advances, greater financial commitment to the industry, reduced costs, environmental advantages and a favourable legislative regime that encourages gas fired power generation.
This paper will outline the legal issues that have emerged from the rapid growth of the CSG industry, the practical implications of the new legislative regime and the legal obstacles that still need to be addressed.
The coal seam gas industry in Queensland has been expanding at a rapid rate for the past 10 years. This expansion placed significant pressure on a legislative regime that had been in force for more than 80 years and did not consider the possibility of coal and petroleum tenure overlapping.
It has now been over one year since Australia's most comprehensive legislative regime regulating the exploration and production of petroleum came into force. Queensland's new petroleum regime, in the form of the Petroleum and Gas (Production and Safety) Act 2004 (P&G Act) and the Petroleum and Other Legislation Amendment Act 2004, was long anticipated and was introduced to provide certainty and stability to enable the development of Queensland's significant coal seam gas and coal resources.
Since the new petroleum regime's commencement the CSG industry has continued to expand due to new drilling technologies, greater market opportunities and the encouragement of government through the Queensland 13% gas scheme and green credits. The new petroleum regime is a significant upgrade from the former Petroleum Act 1923 (1923 Act) which did not contemplate the overlap between coal and petroleum tenure which is inherent in the coal seam gas industry.
There has been much discussion of major parts of the new petroleum regime both before and after its commencement. However, it is not surprising that several important and at times forgotten provisions hide within the 900 odd pages of new legislation.
This paper discusses the important water disposal and landowner compensation provisions and briefly revisits and provides an update on the more talked about areas such as coordination arrangements, relinquishments and potential commercial areas (which are also referred to as PCAs).
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