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Coal Seam Gas

How the Queensland Government fracked the state

by Mark Anning MBA

In February 2013 Queensland Premier Newman announced a Crime and Misconduct Commission (CMC) inquiry into the approval of two of the State's biggest coal seam gas (CSG) projects.

On 19 September the CMC announced that the matters raised 'do not fall within the CMC’s jurisdiction'.

To date no official examination of the alleged breaches of health and environmental protection laws has been conducted into the approval process of the Santos and QGC coal seam gas projects in Queensland.

The Abbott Federal Government is now about to “fast-track” environmental approvals by putting full responsibility for the approval of coal seam gas (CSG) projects in the hands of the states.

With increased calls for a Royal Commission into Queensland's approval process, we examine the test case that the gas industry want to follow.

Sale of Coal Seam Gas before any projects approvals given

Qld Premier Anna Bligh tabled a letter in parliament in March 2010 from BG Australia chairman and Reserve Bank of Australia board member Catherine Tanna saying a deal had been signed to supply $60 billion of coal seam gas to China. QGC is part of the BG Group.

People in attendance at that Chinese meeting included federal Minister for Resources and Energy Martin Ferguson (who now sits on the advisory board of the peak body representing the gas industry - APPEA and the global board of BG Group), BG Group London boss Frank Chapman (now Sir Frank) and Prince Andrew in a trade role.

Martin Ferguson's media adviser was Michael Bradley (who now works for APPEA)

Queensland's gas was sold before any projects had been assessed or approved by government.

In an article headed Coal seam gas company threatened to walk away from $16 billion project if approval not granted quickly, the Courier-Mail exposed that in May 2010 an email to then-treasurer Andrew Fraser from his director-general, Ian Fletcher, said he was told by QGC's senior vice-president David Maxwell there was a 'drop-dead date' of June 2010 for the approval of the QGC LNG project. 

"After that customers will begin to go away and the company will not continue its investment," Mr Fletcher said. "One or two weeks tidying up is possible but six months or anything like it is not."

The approval for the $16 billion QGC LNG project was granted in June 2010.

The Co-ordinator General

The Coordinator-General's Office in the Queensland Government Department of State Development, Infrastructure and Planning handles the assessments and approvals of infrastructure projects, including environmental and social impacts of projects such as coal seam gas licenses. 

On April 1, 2013, ABC's 4 Corners broadcast an investigative program looking into the approval process, entitled "Gas Leaks" - the Gas leak video is here

Simone Marsh, a Senior Environmental Specialist with the department, outlined concerns that the approval process was rushed for Australia's largest coal seam gas developments by Santos and QGC.

She said the Environmental Impact Statements were only conceptual in nature, omitting vital requirements under the Environmental Protection Act 1994 (Qld) with little hard data on where the wells or pipelines were going or potential environmental impacts.

"I am concerned that the proponent has in recent days been submitting comments and requesting alterations to the draft Coordinator-General's report and that paragraphs containing important text appear to have been deleted and other changes made in a non-transparent manner and without adequate justification," Ms Marsh wrote in an email to her bosses in the Coordinator-General's Office.

Ms Marsh said "I wrote that email to make sure that the deputy coordinator-generals, the assistant coordinator-generals and the project directors were aware that the information I had been preparing and that I had been drafting and sending through to the project directors was not making it into the final report."

"It was an impossible task. Firstly, the information wasn't there so you can't do an assessment without the basic site information, the baseline studies and an understanding of where the infrastructure was going to be laid, and which environmentally sensitive areas were going to be impacted," she said.

4 Corners obtained 900 pages of ROI (Right of Information) documents which verify Ms Marsh's claim.

4 Corners said: "The documents detail an approval process that was rushed, made with insufficient information, and put commercial considerations above environmental ones."

During Ms Marsh's assessment of the Santos project, she said she was shocked to find that the impacts to ground water for the Santos project were missing or inadequate. The Coordinator General did not wait for advice regarding groundwater assessment from DERM on the projects.

AgForce, under new management, issued a press release in April 2010: 

'Under the Petroleum and Gas (Production and Safety) Act 2004, companies were required to lodge a report to document any anticipated impacts their activities will have on underground water and the environment'.

"The statutory requirements were in place back then, but the failure to set trigger thresholds until now has meant that these reports have not been lodged, and CSG operators have been operating almost unchecked for the past five years," AgForce mining taskforce chairman Ian Burnett said.

A Bankable Outcome

According to 4 Corners, a memo sent by the Department of Planning and Infrastructure to the coordinator-general in May 2010 explains why required elements under the Environmental Protection Act of the Santos EIS were left out:

"As advised previously, not all the 'usual' information is available. This has been difficult and uncertain without the full suite of information normally available. We are mindful of the CG's (Coordinator-General) Report being able to provide a 'bankable' outcome.

Then, on 28th May 2010, Queensland Government coordinator-general and director-general of the Department of Infrastructure and Planning, Colin Jensen, delivered his report on the Santos project.

There was no ground water assessment and only a half a page dealing with policy and legislation.

Mr Jensen added that he 'was not convinced that there was sufficient detail ... to determine impacts on environmental values', according to the 4 Corners webpage.

In June 2010, Brisbane Lord Mayor Campbell Newman appointed Mr Jensen as Brisbane City Council CEO with a $410,000 a year salary. 

“Colin Jensen was responsible for assessing some of the state's most significant developments, and for the program management of $18.2 billion capital investment this year,” Cr Newman said.

CMC Inquiry with No Jurisdicton

In February 2013, Premier Campbell Newman supported Drew Hutton in calling for the Crime and Misconduct Commission (CMC) to probe the approval of two of the State's biggest CSG projects. 

"It's very rare that I would every agree with anything my former opponent in City Hall days would say but on this occasion I support what he has suggested," Mr Newman said.

On 19 September the CMC announced 'it is important to note that the assessment did not examine matters of government policy or the environmental and health impacts of the coal seam gas industry as these issues do not fall within the CMC’s jurisdiction'.

“It was only within the CMC’s jurisdiction to assess whether the conduct of any person in this matter could have amounted to official misconduct.”

“The CMC has concluded that there is no evidence of official misconduct, and, on that basis, will take no further action”.
No official examination of the possible breaches of health and environmental protection laws has been conducted into the approval process of the Santos, QGC and Origin coal seam gas projects.

The Coordinator-General's main aim is the economic development of the state and that department does not sign off on projects for approvals under the Environmental Protection Act.

Planning and development barrister Chris McGrath said: 

"you shouldn't also put them in charge of the environmental impact assessment process. That should be separated out so that you try and have some independence."

Mr McGrath has assessed the 4 Corners ROI documents and says both the Santos and the QGC coordinator-general reports could be tested in court.

"For him to sign off on this project in my view was a bad decision, a flawed decision".

Rick Wilkinson, currently APPEA's chief operating officer for eastern Australia, was head of Santos's coal-seam gas projects until June 2011.  

"Mr Wilkinson steered Santos through state and federal government approvals for its $15 billion project, and will continue the lobbying process on behalf of the whole industry," The Australian reported in 2011.

APPEA is conducting a $5 million advertising blitz to lobby government to rush through final approvals for others projects warning that approval delays, rising labour costs and “anti-gas misinformation” will jeopardise jobs and exports.

BG Australia chairman Catherine Tanna told The Australian Financial Review

“For too long, vocal minorities have dictated public policy. The tail has wagged the dog.” 

Obeid and the Queensland Gasfields

Mr Jon Grayson, the director-general of Queensland's Department of the Premier and Cabinet and represents the government on the Great Barrier Reef Marine Park Authority (GBRMPA) board.

The ABC have revealed that in May 2013 a company called Gasfields Water and Waste Services Pty Ltd was set up with Mr Grayson, a one-sixth shareholder.

Until August, Eddie Obeid Jr, the son of corrupt former NSW Labor minister Eddie Obeid, was also a one-sixth shareholder.

The GBRMPA watered down their resistance to ports opening along the reef to allow the exportation of CSG.

Greens spokeswoman Senator Larissa Waters says the allegations are worrying and require investigation.

"Management of the reef must be free from mining interests, and members of the board should put the future of this World Heritage icon before their own self-interest and the profits of big miners.

Calls for a Royal Commission

“The pressure placed on public servants to approve CSG without proper scrutiny of its water and climate impacts is exactly why we oppose any further expansion of the industry and have moved in the federal Parliament for a permanent ban on CSG,” Senator Larissa Waters said.

"Sadly the CMC inquiry was nobbled without the jurisdiction to examine these facts," said Drew Hutton, the 2013 Environmentalist of the Year.

"Serious enquiries into these serious matters have not been undertaken, therefore the only real avenue to get to the truth is a Royal Commission," Mr Hutton said.


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