Environmental Engineering Reference
In-Depth Information
In Australia, sub-surface rights are separated from surface rights and re-
tained by the Crown.
18
Surface rights come in several forms, predominantly
long-term leases from governments, and freehold title. Sub-surface rights are
dominant over surface rights in the sense that protections for surface-rights
holders who may be impacted by sub-surface extraction are limited to those
provided explicitly by statute law and regulations.
Traditionally, federal, state and territory governments, the sub-surface
rights holders in Australia, allocate exploration and production rights to
private investors and collect a return for the public via a mix of arrange-
ments, predominantly royalties and taxes.
12
Commentators have described
Australia's rights regime for minerals as effectively 'finders keepers'.
19,20
Exploration licenses are issued inexpensively and non-competitively, and
license-holders are encouraged to explore actively. Licensed explorers who
find potentially profitable deposits are awarded extraction leases, so that
discoveries belong effectively to the finder. The states collect royalties,
typically 10% ad valorem at the well-head for CSG,
21
which likely is well short
of the full economic value of the nation's mineral resources depleted,
12
a
stance that is tilted toward rewarding extraction excessively. Researchers
have concluded that such regimes encourage extraction.
20,22
3 Coal Seam Gas Development in Australia
There is a lot of economic momentum behind the expansion of coal seam
gas (CSG) mining in Australia, driven by buoyant international demand for
liquefied natural gas and an accommodative minerals rights and taxation
regime. From a trivially small baseline in 1995, CSG is projected to provide
about one-half of Australia's total gas output by the mid-2020s. Queensland
is the state that led the way in terms of projects operating and committed,
CSG production and CSG reserves remaining (see Figure 1). By 2012, annual
production of CSG was 252 petajoules (PJ) in Queensland and 6 PJ in NSW,
accounting for around 35% of Australian east coast gas consumption.
23
Queensland was projected in 2010 to have about 40 000 wells producing CSG
by 2030.
24
Ongoing exploration may add to that number, but a modest
contraction in export projections, reflecting increased supply from com-
peting exporters, may have the opposite effect. Much of the output will be
exported in several forms, the most prominent being liquefied natural gas
(LNG) with projected exports of 16 million tonnes (Mt) by 2015.
24
New li-
quefaction facilities and export terminals are under development on the east
coast of Australia, to enable export of CSG. To meet known domestic and
overseas commitments, including new LNG projects, the rate of drilling CSG
wells in Queensland is forecast to intensify during 2014-15.
25
Even at a relatively high rate of development, Australia is thought to have
about 100 years of CSG reserves.
24
The largest reserves of CSG are in
Queensland's Surat and Bowen basins, while the CSG reserves in NSW are
relatively small (see Figure 1). Conventional gas remains an important re-
source, with substantial offshore reserves near Victoria and terrestrial
