Warning: Coal Seam Gas

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You may be aware that a coal seam gas (CSG) company has recently approached a land holder in this area offering a financial inducement to allow the company to drill for CSG on their land. The land holder did not agree. In the event you are approached you may find the following helpful.

If a CSG company seeks access to your land you should proceed with the utmost caution.

  1. Check with your insurance company if your policies would cover gas drilling activities on your land. Gas extraction is a high risk operation. Would your public liability, work cover and other insurances remain valid?
  2. Ask to see their legally-binding contractual liability in the event of water, soil, animal, wildlife and environmental contamination. (Not just a verbal assurance from the company representative). Require that adequate security be provided against such damage. Are you signing up to a shelf company with limited assets and unable to pay in such an event?
  3. As a land holder, if you invite a CSG company on to your land, be aware the chain of responsibility regarding liability changes and you may well be liable for damage incurred to others property as a result.
  4. Check with a reliable real estate agent how your property would be devalued by having CSG wells and the associated infrastructure (pipeline corridors, access roads, compressor stations, power poles, etc). Consider the reduced saleability to prospective purchasers.
  5. Ask for a full list and the Material Safety Data Sheet on all the chemicals and additives used in the drilling mud and fracking fluid. Precisely what would be the chemical compounds which would be brought onto and injected into your land and groundwater.
  6. The NSW government has not established or imposed any or any sufficient standards or regulations for the extraction of CSG. The NSW government does not even know what chemical compounds are used in the drilling and hydraulic fracturing. Nor does it require them to be disclosed.
  7. 8. Request in writing, the projected total number of wells if the initial drilling is successful. Also ask for a map of proposed pipeline corridors, well access roads, location of compressor stations, power poles and other infrastructure.
  8. Research the history of the company involved; records of safety, transparency and commitment to environmental repair.
  9. If you decide to speak with a CSG company representative, do not do so on your own land. Do so on neutral territory or in your solicitor’s office. In any case have a reliable witness present and keep a record of the conversation.
  10. Seek legal advice before talking to a CSG company. Take your legal advice from someone of your choosing and require the CSG company to pay for the advice and your time. After all, these are costs incurred as a result of their approach and are not a normal part of your business.
  11. It would also be a very fair and honourable course of action to meet with all land holders in your vicinity before you make any commitment to a CSG company. As a consequence of your invitation to bring any CSG activity to your land those in the vicinity would suffer the effect of dust, noise, traffic, light, general industrialisation, and be exposed to the risks of above ground and underground chemical contamination without any “compensation” as well as loss of land value and saleability.
  12. If you agree to have CSG drilling on your property and have bore water, ask for baseline testing before they start drilling. This testing should include comprehensive water quality sampling (including bacterial tests), a flow rate/ recharge test and standing water height measurements. Make sure that they will “make good”, in a written document, if or when your bores fail. Be aware of your rights in this matter. Also, request baseline tests of methane in your area.
  13. Refuse to sign a “non-disclosure” contract or “confidentiality clause”. Companies do not like landowners discussing comparisons of payments as they prefer a divide and conquer advantage.

 

If you have already signed an agreement for access with a CSG company, you may be entitled to retract the agreement.

Authorised by the Mullaley Gas and Pipeline Accord, The Black Stump Way, Mullaley. NSW 2379