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EPA dumps Chief Scientist’s risk measures

Coal Seam Gas wellhead

Fossil Fool Bulletin • 25 February 2020

The NSW Environmental Protection Agency appears to have abandoned a key coal seam gas risk mitigation measure recommended by the NSW Chief Scientist, placing landholders at future risk should the industry go ahead in the state.

The EPA has quietly conceded it will not proceed with implementing a long-term environmental rehabilitation fund recommended by the Chief Scientist.

The environmental authority also admitted it was not sure insurance would be available to protect landholders from spills and contamination.

The concerning revelations follow the EPA’s appearance at a Legislative Council inquiry earlier this month into the long-delayed implementation of the NSW Chief Scientist’s recommendations on coal seam gas.

Robust approach to risk abandoned

Under questions from parliamentarians the EPA told the inquiry it would shortly release the Government’s final response to recommendation 9, which proposed a “robust and comprehensive” three-tier approach to guarding against environmental risk.

The recommendation was for site-based security deposits, enhanced insurance coverage, and an environmental rehabilitation fund for management and response to environmental harm into the future.

The EPA’s response was subsequently uploaded quietly to the agency’s website and reveals the Government has shelved plans for a long-term environmental rehabilitation fund, despite such a fund also being recommended by the Auditor-General for the mining industry more broadly.

The EPA’s response also concedes that it may not be possible for coal seam gas operators to obtain insurance and proposes that “Operators choosing not to hold relevant insurance will be required to instead prove to the EPA the existence of sufficient potential clean up funds.”

Reviewing the document, Fossil Fool Bulletin notes that it states:

We understand that access to adequate insurance for gas operations is not straightforward in the Australian insurance market with the types of activities and risks that insurance companies will cover. We understand that the market is moving towards being more selective with the types of risk insurance companies will cover and the price of insurance coverage, with high-risk activities, such as fracking, commonly excluded.

Yet on the following page, the EPA says:

The risks arising from gas projects are low.

Further on, the EPA states:

The availability of adequate environmental impairment liability for coal seam gas activities in the insurance market is not straightforward. The local Australian insurance market is less willing to provide these products than at the time of the Chief Scientist and Engineer’s review.

In other words, insurance companies think coal seam gas activities are too risky to expose themselves to.

Cosy energy deal

Lock the Gate Alliance spokesperson Georgina Woods said it was a worrying development at a time when the NSW and Federal Governments were cozying up over their recently inked energy deal.

Part of that deal includes the request that the NSW Government find 70 petajoules of gas, almost exactly what the Santos’ proposed Narrabri gasfield would likely yield.

“This latest development continues the pattern of the Berejiklian Government dismantling various commitments and processes to make it easier for the Narrabri CSG project to proceed – following the announcement last week the IPC would be weakened.” Woods said.

“Through this latest announcement, the NSW Government appears to be conceding that it will not put in place the risk mitigation measures that the Chief Scientist said were necessary to properly manage the CSG industry.

“If the CSG industry goes ahead without insurance and without a fund established that can pay to clean up spills and contamination damage, the risk and any associated harm are all going to be loaded onto landholders and the people of New South Wales.

“This failure means a red light for coal seam gas in New South Wales. Having failed to put in place the promised ‘world-class’ regime to protect people, water, soils and landscapes from coal seam gas, the government must urgently stop the Narrabri gasfield.”

• Download the EPA response here:

https://www.epa.nsw.gov.au/-/media/epa/corporate-site/resources/licensing/19p1963-safeguarding-environmental-liabilities-csg.pdf

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