Understanding the opposition to onshore gas development

Abstract

In contrast to the US where private landowners have retained rights to the gas underlying their lands, in Australia, State legislation has vested all petroleum (including gas) in the Crown. As such, it is the states, rather than landowners, that have the right to issue licences to gas developers and receive royalties. Landowners’ lack of control over the development of gas under their lands has caused most discontent within farming communities, particularly towards the coal seam gas industry.

Similar opposition will presumably be faced by the onshore shale gas industry once it begins to burgeon. The resistance to onshore gas development is typically justified by concerns relating to the adverse effects that development has on agriculture and groundwater. In this respect, development methods such as fracking have been criticised by an arguably ill-informed public.

This opposition cannot be ignored, particularly as it has become such a highly politicised issue, with calls for landowners to have a right to veto access by gas developers. The significance of this is further heightened by numerous senate inquiries into the adverse affects claimed to be caused by onshore gas development.

Accordingly, it is critical for anyone proposing to undertake onshore gas development to understand the underlying motivation driving this powerful opposition. Is it really a product of the inability of regulatory regimes to balance the interests between private landowners and gas developers? If so, perhaps if other states followed the novel measures recently introduced by Queensland, these concerns would be largely addressed.