Interstate Harmonisation of Underground Water Regulatory Frameworks for Unconventional Gas Resources Through Statutory Water Plans

Abstract

There is currently no interstate harmonisation of underground water regulatory frameworks within the unconventional gas resources (UGR) industry within Australia. The UGR industry,consisting primarily of coal seam gas, shale and tight gas, often requires the taking of underground water to be used in the process of hydraulic fracturing.

Differing geological characteristics and regulatory approaches between states; as well as a parochial approach to regulating water resources makes harmonisation of regulatory frameworks challenging.

The consequence of this lack of harmonisation is overlap of regulations, duplication of compliance; and general lack of clarity and consistency. For interstate resource projects, this can lead to delays and significant increases in costs. Project proponents must bear the impact of delays and costs; and governments experience a corresponding loss of revenue due to loss of associated royalties and taxes.

To encourage states to voluntarily harmonise, incentives that are realised through economic considerations are required. The development of cross-boundary projects (e.g. the Cooper Basin, the Murray-Darling Basin, the Georgina Basin) requires states to utilise water resources in a manner that will optimise economic outcomes while ensuring the sustainability of water resources.

It is proposed that through the harmonisation of the states’ statutory water plans, a more holistic approach to regulating underground water for the taking and use in hydraulic fracturing for UGR projects can be achieved. The benefit of doing so is that states retain their individual approach to regulating while achieving a unified result.

This paper analyses the regulatory frameworks of statutory water plans in South Australia, Queensland and the Northern Territory with reference to the Cooper Basin. Specifically, it compares regulation in relation to the taking and use of underground water for hydraulic fracturing; draws a comparison of the similarities and dissimilarities between states regulatory frameworks; and through the lens of economic incentive and sustainability, suggests reasons that harmonisation through statutory water plans will present a long-term solution to current regulatory challenges.

Biography

Sarah is a PhD candidate at the TC Beirne School of Law, University of Queensland. Sarah’s research interests include oil and gas regulatory frameworks of governments, specifically in relation to underground water used in the process of hydraulic fracturing.