Welcome 2020!! As (roughly) the first decade of the CSG industry ended, two recent articles, one in the Qld Country Life, and another on ABC hint at the issues that are ongoing and remain important for the landholder expected to host the CSG Industry into 2020 and beyond.
Those issues are listed below and will be the subject of further discussion over the coming weeks in order to support Landholders and strengthen David’s sling (1).
The issues associated with land access are underestimated but are an essential element of the CSG arena. A major element of this is the forgotten fact that CSG Industry land access relies on the voluntary goodwill of the host farmers. That goodwill may be dwindling, and it may be replaced by farmers who want firm and detailed information regarding the impacts the industry will have both short and long term for them, their family and their business.
The industry and the government have ‘attempted’ to address the conflict between the landholder (host) and titleholder (gas company) by establishing the “Land Access Code”. But this code has been developed with the industry in mind and has been left wanting in terms of the Landholder (2). This Code has failed to address the legal rights of the landholder and the limits of the gas company’s rights.
Molliwell can assist in filling the massive gap between the the Land Access Code, the farmers required to host unconventional gas and the lawyer they need to negotiate a contract with.
Aging CCAs, CSG equipment and Farmers NET Losses
The embodiment of the Land Access Code is the conduct and compensation contracts (CCA). The CSG company must gain the host farmer’s signature on the CCA in order to gain access to the property. There are several issues to note here.
Firstly prior to signing a CCA, the host farmer must access as much expert support as possible to help them identify the long term needs of their business when it is required to host another. There is non traditional sources of expertise becoming available to help give landholders an edge in the negotiation.
Secondly, engaging with the CSG industry represents a net cost to the landholder, from the first engagement, the first ‘community consultation meeting’ attended, to the late nights reading and replying to industry emails/texts. The CSG industry will try to say that there is no statutory requirement for them to pay for your time, but there is no statutory requirement for them NOT TO. Value your time and make the industry value yours. Non traditional experts will assist you in ensuring that you are not the only person at the table not being paid.
Thirdly, with the CSG industry reaching the milestone of 10 years, this also means there are many CCAs that are reaching 10 years of age. Many of these may have been signed on front porches with no legal advice. Many of those landholders may be suffering frustration over the inconveniences, irritations and failures of the day to day realities of hosting the industry versus the inadequate ‘contract’ they were thrust into.
Even the Petroleum and Gas Inspectorate has recognize that the industry is reaching an important milestone regarding aging equipment. The Inspectorate recently conducted inspections of aging oil and gas production facilities in Western Queensland.
The results of these were reported to indicate multiple areas for improvement, including: reports not being submitted by the due date; lack of clear evidence being provided within the abandonment reports to show that legislative requirements have been met; wells requiring better signage post abandonment; failure to properly decommission equipment and monitor/maintain the facilities during the shut-down period including factors such as corrosion, erosion, fatigue, equipment obsolescence, normalization of deviance (accepting degraded conditions as being normal), changes in codes and standards and lack of data to forecast future risks.
Reach out to non traditional experts to gain support in researching and correcting these issues if you are facing them.
Contingencies for host landholder and community Health and Safety
As highlighted by the devastating bush fire season we are currently experiencing, another under managed element of the CSG industry presence in host landholder and community lives is the management, impact and consequent loss and cost of contingency situations (emergencies). This element must be more transparently addressed (see outrageously inadequate industry response in media to recent local fire risks) and compensated for by industry and government for those required to host the risk and the impact. Molliwell has non traditional experts to help you to ensure this is appropriately addressed.
Compliance and Record Keeping Tools
If nothing else hosting the CSG industry effectively requires enormous amounts of time, effort, monitoring and responding!
Landholders and community members can download and use the FREE GasHAZ App. (search GasHAZ on App Store or on Google Play)
This app allows your time, issues, queries and problems to be recorded and expert support sourced at the touch of a button. Each entry will be sent privately and confidentially directly to Molliwell’s Advocate and Consultant. We will maintain your records for you, expertly assess each of your entries for relevant actions and options and advice and give support in implementation.
The CSG Industry has a supposed 20 year life span, the business of agriculture is one that has already and will continue to endure much longer. At this potentially mid point in the short life of the CSG industry, it is time for those expected to host it now and into the future to continue to set the standards and expectations.
(2)Hunter, 2016; Turton 2014