PRESSURE is mounting on the federal government to show leadership in resolving the long-running clash over land access arrangements between farming and Coal Seam Gas (CSG) exploration and extraction.
The emotion-charged issue reignited in the public sphere recently, sparking another federal Senate inquiry to examine regulatory flaws around unconventional gas mining, including social and economic impacts on farming communities.
That inquiry will also interrogate current royalty and taxation arrangements and regulatory ambiguity between State and federal governments, in reporting by June 30 next year.
Newly appointed federal Energy and Resources Minister Josh Frydenberg has also come under scrutiny but has pointed towards Friday’s COAG Energy Council meeting with his State counterparts as another step towards coexistence.
Ahead of that gathering, various policy solutions have been raised publicly by different stakeholders, including one by Queensland LNP Senator Matt Canavan.
Senator Canavan has suggested that - instead of taxing mining profits via royalties to raise public funds - an income tax system could be used, allowing landowners and mining companies to negotiate their own land access arrangements.
“That would give the landowner a financial return while still allowing the gas company room to invest, and then the State governments could take a cut - let’s say 50 per cent as a benchmark which is like the top tax rate,” he told Fairfax Agricultural Media last month.
In a separate policy statement released before the COAG meeting, Property Rights Australia has demanded Mr Frydenberg back farmers having the right to say no, saying granting those powers won’t stifle or stop resource development - but would ensure negotiations can proceed on a commercial basis.
SA Liberal MP Rowan Ramsey has also produced a policy discussion paper aimed at easing tensions between agriculture and mining stakeholders, suggesting farmers be paid three times their property’s value, for approved extraction projects.
“By offering a PMO of three times the market value the landholder knows from day one that they will be forced to accede to the rights of the State, as is the case at the moment - but they will also know that their family farming business, wherever it is chooses to relocate, will be significantly enhanced,” the seven-page paper says.
“The reason for this may not be immediately obvious to all, but the market is a very good tool for measuring the productive capacity and profitability of any given property or region.”
Up to States and Territories
Speaking to Fairfax Agricultural Media, Mr Frydenberg said he welcomed feedback and ideas from the community, including those from fellow members of parliament.
But he said because the regulation of land access and royalty arrangements ultimately rested with State and Territory governments, Senator Canavan’s policy suggestion was a matter for those jurisdictions to pursue.
Mr Frydenberg said Australia stood to benefit from adopting land access arrangements “conducive to coexistence now and into the future”.
But he said it the States and Territories had ultimate responsibility for regulating onshore mineral and petroleum resources who the Commonwealth had been working with to address land access challenges, including for the resources sector.
“The COAG Energy Council, which I now chair, provides an appropriate forum to build on shared experience and leading practice,” he said.
“This forum has been used successfully to develop the Multiple Land Use Framework and the National Harmonised Regulatory Framework for Natural Gas from Coal Seams, to help inform best practice within existing regulatory frameworks.
“The Commonwealth has a strong interest in ensuring that rights are respected and land and water resources are not adversely affected.
“This is something I’m keen to discuss, including through this week’s COAG Energy Council meeting.”
On the complex and controversial issue of farmers have legal rights to say no to mining companies conducting exploration or extraction on their properties, Mr Frydenberg said land access “remains a State-regulated issue”.
“This week’s COAG Energy Council Meeting provides a timely opportunity for the Commonwealth, States and Territories to reaffirm their commitment to best practice in this area,” he said.
Mr Frydenberg said it was important the community and industry both engaged in active discussion about land use.
He said clear examples existed of those two groups having worked closely together, citing the example of more than 5200 land access agreements being in place which relate to CSG mining.
“I’m confident that the community and industry will continue to work effectively together going forward,” he said.
"I do not want to pre-empt the discussions I will have with my COAG colleagues.
“However, I am keen to see a well-informed, productive discussion about how we can produce more effective outcomes for all.
“State and Territory governments already have established land access arrangements according to existing regulatory frameworks.”
'Don't destroy aquifers'
Federal Agriculture and Water Resources Minister Barnaby Joyce said his party’s policy on CSG mining had several core principles including firstly not allowing activity to occur on prime agricultural land and secondly “don’t destroy aquifers”.
“Just because you live on Sydney Harbour it doesn’t mean you own the harbour,” he said.
“An aquifer is a common resource and you have to share it with other people so don’t destroy it.”
Mr Joyce said another core policy principle was not disturbing people’s quiet enjoyment of the land they live on.
“If the landholder was there first, you can’t turn their back-yard into an industrial site,” he said.
“If none of these core principles are breached, you then need to ensure a fair return goes back to the community because they’re the ones who are actually delivering the resource.
“A fair return must also go to the landholder – a minimum negotiated rate that you can’t go below.”
Mr Joyce said he previously endorsed the landholder receiving 1 per cent of the gross revenue raised by the well-head as the minimum royalty but he now believes that figure may be too low.
“Federally we’ve always had the position - because it’s not really our bailiwick - that you should not go onto someone’s land without their say-so,” he said.
“That then forces (the mining companies) to negotiate a good settlement with the landholder and if they do that, I think you’ll find that in many instances farmers will go from fighting them, because they can see no upside, to being allies, because they can see a great return coming back to them.
“And money talks.
“Ultimately the farmer is left with the problem and needs an income stream so when they find out that there’s gas underneath the property, it should be one of the best days they have, rather than one of the worst days.”
