Qld permanently bans UCG, publishes gas discussion paper

PERTH (miningweekly.com) – Underground coal gasification (UCG) in Queensland is now a thing of the past after legislation was introduced into the state Parliament to ban the operations.

Minister for State Development and for Natural Resources and Mines, Dr Anthony Lynham, said on Tuesday that amendments to the Mineral Resources Act would implement an April decision to prohibit UCG in Queensland.

“The government has carefully considered the results of trials at two UCG pilot projects undertaken to establish the commercial and environmental viability of this potential industry,” Lynham said.

“The government has concluded that with the potential impacts of UCG activities and the issues associated with the trial projects to date, the risks of allowing UCG projects to grow to commercial scale are not acceptable and outweigh the foreseeable benefits.

“Accordingly, the government had decided not to allow the development of a commercial-scale UCG industry in Queensland.”

Lynham said that the ban would also apply to the in-situ underground gasification of oil shale. The legislation also provided for the necessary work involved in decommissioning Queensland’s remaining existing UCG pilot project.

“While UCG activities will be prohibited in Queensland, the remaining existing UCG pilot project will still need to carry out those activities necessary for environmental rehabilitation, and the decommissioning and removal of plant and equipment related to carrying out UCG activities.

“Regulation and monitoring of the UCG decommissioning and rehabilitation activities are being undertaken by the Department of Environment and Heritage Protection.”

GAS DISCUSSION PAPER

The ban on UCG comes just days after the state government launched its first industry-wide gas discussion paper, filled with 29 reform ideas expected to spark debate.

“The gas sector is critical to the Queensland economy for the jobs, revenue, regional growth and significant economic benefits it delivers,” Lynham said.

“Gas helps fuel our homes, businesses and industry and our growing liquefied natural gas (LNG) exports will increasingly delivering important royalties to fund Budget initiatives.”

He noted that although there was strong demand, and solid foundations for reliable supply for the next 30 years, there were challenges to the industry.

“That’s why we are developing a Gas Supply and Demand Action Plan to tackle the challenges and maximise supply, economic and job benefits for Queensland. We will deliver an overarching strategy to maximise domestic and industrial supply at affordable prices.”

Lynham said the discussion paper’s 29 recommendations focus on supply and the gas sector’s “social licence” - the community’s general acceptance of the resources sector and its activities.

“Building community understanding and confidence in the gas sector and striking the right balance between environmental protection, health and safety and social performance will be critical for its ongoing growth,” he said.

The Australian Petroleum Production and Exploration Association (Appea) has welcomed the action plan, with CEO Malcolm Roberts noting that with A$70-billion invested in local LNG projects, Queensland was now a world leader in the sector.

“The industry congratulates the state government for recognising the need for regulatory reforms to boost local exploration and development. It is heartening to see the government accept the need to reduce the regulatory costs of doing business in Queensland; industry has already sharply cut its own operating costs to stay competitive in a depressed global market.

“The problem is acute for the smaller explorers that play a vital role in finding and developing new gas reserves. They battle to attract investment capital and can face high upfront regulatory costs,” Roberts said.

He said that reforms in this area would give industry the confidence to turn exploration into production.