Our experience has shown us that gas operations and farming activities, as well as other land uses such as viticulture, can successfully co-exist while providing regular income to landholders, without impacting important agricultural resources and future land uses.


We're working for local communities

In addition to helping meet the state’s gas needs, being a good neighbour and making positive contributions in the communities in which we operate is important to us. We are committed to working with landholders to ensure our projects operate alongside farming activities, without impacting important agricultural resources and future land uses.

So, engaging locally is key to the work we do.

Video: Camden landholder, Lachlan, shares his experience of having gas producing wells on his property.

Review of gas assets and exit of gas exploration and production

On 4 February 2016, AGL announced it will not proceed with the Gloucester Gas Project and will cease production at the Camden Gas Project in South West Sydney in 2023, twelve years earlier than previously proposed. Resulting impairments for both projects have included additional provisions ensuring rehabilitation costs have been appropriately provided for.

ASX Release: 4 February 2016

Access, coexistence and compensation
Legal obligations
FAQs

In this section

Land access principles

When we are working with you and carrying out gas production or exploration activities on your land, we will be guided by the following overarching principles:

We will act with honesty and integrity. We believe that trust is the most important part of establishing good landholder relationships.

We will pay reasonable legal costs incurred by you and compensation for your time. We recognise the time and effort you spend dealing with us.

We will pay you fair and equitable annual compensation for the use of your land. In addition, we will look for opportunities to compensate you in other useful ways.

We will respect you and your land.

  • We will protect the environment and minimise our impact by meeting or exceeding statutory obligations, codes of practice and AGL company standards.
  • We will minimise noise, dust and light from our operations to the extent possible, and we will respond as soon as possible if you contact us with a concern.
  • We will avoid disturbing or interfering with your stock or use of land. If AGL or its contractors cause any loss or damage to your land, gardens, improvements or stock from its activities, we will pay for any loss or damage.
  • We will rehabilitate your land in consultation with you, and make sure that you are satisfied with the final rehabilitation.
  • At your request we will install cattle grids on the access roads we are using.
  • We will always leave gates exactly as we found them i.e. the open or closed position unless told otherwise.

We will protect your water resources.

  • We will carry out a baseline survey of your property’s water sources before we carry out our activities.
  • We commit to make good any direct impact to water quality or quantity in your bores, dams or other water storages, in the highly unlikely event that damage is caused by our operations.

Safety is our priority. All our operations are done in accordance with best practice safety standards.

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Coexistence

Our priority is to be a good tenant, neighbour and community member, ensuring our operations peacefully and successfully coexist with the communities and landholders we work with.

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Rehabilitation

AGL’s team will work with landholders and farm managers to develop rehabilitation plans for each property.

As no two properties are the same, early consultation will take place to determine the best way forward. The aim is to get the land back to its original state or better in the quickest time possible through reseeding and monitoring. We have achieved this result across our projects in the Hunter, Gloucester and Camden regions.

Rehabilitation is assessed by the NSW Department of Trade and Investment, Regional Infrastructure and Services. The Department holds a substantial bank guarantee to be used in case the licence holder fails to rehabilitate the area in accordance with our agreement with the landholder, and to the Department’s satisfaction. The bond is only released on the completion of a Rehabilitation and Relinquishment Report. It is usual practice for the Department to conduct a site inspection as well.

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Agreed principles of land access

On Friday 28 March 2014, AGL and Santos signed Agreed Principles of Land Access with NSW Farmers, Cotton Australia and the NSW Irrigators’ Council.

On Thursday 10 September 2015, the Country Women's Association (NSW) and Dairy Connect also signed on to the Principles.

The Principles reflect Santos’ and AGL’s approach to working with landholders, and provides further assurance that a landholder’s decision to say yes or no to coal seam gas drilling operations will be respected.

Government ministers and AGL come together to sign the Principles of Land Access Document.

Signing on the dotted line: Minister for Energy Anthony Roberts, AGL CEO Andy Vesey, NSW Irrigators’ Council CEO Mark McKenzie, CWA NSW President State President Tanya Cameron, Santos’ General Manager of Energy NSW Peter Mitchley, Michael Johnsen MP Member for Upper Hunter, Mike Logan CEO Dairy Connect.

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Land access plan

The land access plan is about how we (and our contractors) will respect the landholder and their farming activities. The plan will be developed between AGL and the landholder, and will set out how AGL will access the land, work with the landholder to coordinate with farming or other activities, as well as the rehabilitation process.

The land access plan for each property will cover:

  • Access – determine the best access to the property and across the property. Where possible we will use and upgrade existing access roads.
  • Use of land – understand your farming or other activities so that we can respect and work around your land use practices.
  • Timing – notice periods and expected duration of our activities.
  • Location – agree the location of pads, wells, pipes and associated equipment.
  • Contact – inform you of key AGL contact people. Determine how you best want to be updated (for example, regular on-site meetings or phone calls/emails).
  • Visitors – develop a protocol for gates, fences, stock interaction, operating hours, vehicle movements and any other requirements relating to your property.
  • Rehabilitation – agree a rehabilitation plan for the areas we use.
  • Landholder requirements – any other matters you think are important for us to be aware of.

Every AGL employee or contractor is required to adhere to the land access plan for each property.

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Compensation principles

We have developed standard compensation principles to provide fair and equitable compensation to landholders. The level of compensation will reflect the type of activity proposed, the location of the project as well as the value and agricultural productivity of the land.

In working with landholders to develop an Access and Compensation Agreement, we will pay for:

  • landholder’s time;
  • reasonable legal costs;
  • initial works payments for disturbance (e.g. construction noise) and our activities; and
  • annual compensation for landholder time and “rental” for the use of land for wells, pipelines, access roads and other infrastructure.

Access Arrangement and Compensation Agreement

An Access Arrangement and Compensation Agreement is the written legal agreement between AGL and a landholder to access land for gas exploration or production. The Agreement will include things like:

  • compensation;
  • conditions of access including hours of operation;
  • responsible person;
  • rehabilitation;
  • insurance; and
  • notification and time periods for access.

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In this section


Approvals

In NSW, coal seam gas activities are strictly regulated by the Department of Industry, Resources & Energy (Office of Coal Seam Gas), the Environment Protection Authority, the Office of Water and the Department of Planning and Environment.

For every gas exploration and production well in NSW, AGL must obtain approvals and comply with conditions of the following approvals:

Petroleum title

A Petroleum Exploration Licence (PEL) is an exploration licence that is granted by the NSW Department of Industry, Resources & Energy and allows the holder to explore for gas. PELs are granted under the Petroleum (Onshore) Act 1991, and contain conditions regulating the holder’s conduct, as well as strict environmental, water and technical controls.

Once exploration has taken place, the titleholder can apply to the NSW Department of Industry, Resources & Energy for a Petroleum Production Licence (PPL). The PPL allows the holder the exclusive right to extract the gas from the lease area during the term of the lease. PPLs are granted under the Petroleum (Onshore) Act 1991, and contain conditions regulating the holder’s conduct, as well as strict environmental, water and technical controls.

Review of Environmental Factors (REF)

A REF is an environmental assessment under Part 5 of the Environmental Planning and Assessment Act 1979, which is required for some exploration activities. The REF is assessed by the NSW Office of Coal Seam Gas. The REF examines the potential environmental impacts of the proposed gas exploration activity. For example, the REF examines noise, water management plans, cultural assessments, community impacts and visual impacts. The REF approval will contain conditions and restrictions on the gas exploration activity.

Development consent

A development consent is required for petroleum production activities under the Environmental Planning and Assessment Act 1979 in relation to the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007. A formal application is submitted to the Department of Planning and Infrastructure. The application for this approval includes an assessment of all potential impacts of the project. Consents come with a number of conditions regulating water, air quality, noise as well as other matters.

Environment Protection Licence

The Environment Protection Authority (EPA) issues environment protection licences. The licence is required for both exploration and production activities under the Protection of the Environment Operations Act 1997. The licence has conditions that regulate air, water and noise pollution and monitoring.

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Water licence

Gas wells require water licences under the Water Act 1912 or Water Management Act 2000.

Water Act 1912

This Act is mainly used for licensing and water allocations. This Act is being progressively phased out and replaced with the Water Management Act 2000.

Water Management Act 2000

The object of this Act is to ensure the sustainable and integrated management of NSW water for the benefit of both present and future generations.

The NSW Aquifer Interference Policy explains the water licensing and impact assessment processes for aquifers.

Land and Water Commissioner

The Land and Water Commissioner has been appointed by the NSW Government to provide independent advice to the community, landholders, resource companies and the government on mining and coal seam gas activities in NSW. The Commissioner is also responsible for overseeing the finalisation of the standard land access agreements for NSW.

NSW Code of Practice for Coal Seam Gas Well Integrity

This Code provides a practical guide for coal seam gas titleholders to ‘ensure that well operations are carried out safely, without risk to health and without detriment to the environment.’

NSW Code of Practice for Coal Seam Gas Fracture Stimulation

This Code is designed to ensure that fracture stimulation activities are conducted in a safe manner and that communities, the environment and water resources are protected.

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Commonwealth Government

Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act)

The EPBC Act is the key piece of environmental legislation for the Commonwealth. In June 2013 the Act was amended to include a new matter of national environmental significance, the ‘water resources trigger’ which relates to coal seam gas and large coal mining development.

Where can I go to find more information?

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What is coal seam gas?

Coal seam gas is natural gas found in coal seams, formed as a by-product of the conversion of plant material to coal, and primarily consists of methane, which is an odourless, colourless gas. It is used in the same ways conventional gas is used to power hot water systems, heaters and for a wide range of industrial uses.

How do you decide on well location?

The location of our coal seam gas wells is flexible. We work with landholders to locate our wells and associated infrastructure to minimise impact to the landholder's current and future land uses. We are mindful of our impact on the neighbours and do everything possible to minimise any disturbance.

What is the process of entering into an access and compensation agreement

If AGL is interested in placing a well on a property, the first thing we will do is to arrange a member of our Land and Approvals team to contact the landholder. The Land and Approvals team member will be the landholder’s key point of contact. Informal conversations will take place before any formal agreements need to be entered into. This will give the landholders time to ask any questions they have, including to our environmental, groundwater and technical specialists. This will also enable AGL to take into account any specific constraints or considerations the landholder may have, and discuss potential locations of infrastructure taking into account those matters.

How long will AGL be on my property?

The amount of time we are on your property will depend on the type of operation taking place. Your AGL Land and Approvals contact will be able to advise you of the specifics of your property. Production wells generally have a life span of 15-20 years. After that, AGL will decommission and rehabilitate the well site. The surface will look as good as or better than before operations began.

Will I receive compensation for AGL activities on my land?

AGL will compensate landholders for activities on their land. Compensation will depend on the value of the land, as well as the type of activity proposed to be undertaken.

What happens if a gate is left open?

AGL personnel and all contractors are inducted into each site and part of the induction includes any particulars regarding your property. The general rule for all personnel accessing private property is to leave the gate as you find it and any AGL person that does not follow this procedure will be subject to disciplinary action and any stock losses that arise will be compensated by AGL.

Will your operations cause subsidence on my land?

No. Previous work has demonstrated that AGL’s coal seam gas production activities do not cause measurable subsidence.

Will coal seam gas activities impact my groundwater?

The local geology of an area determines what impact (if any) might occur to shallow groundwater as a result of coal seam gas activities. In many of the areas that AGL operates the impact is expected to be negligible.

In addition to the natural geological conditions that exist, protection of shallow groundwater is established by having strict environmental management plans and groundwater monitoring plans and monitoring networks in place, constructing wells to best industry practice and monitoring well integrity, and containing and disposing all drilling and fracture stimulation fluid (where applicable).

How will the site be rehabilitated?

AGL works with landholders and farm managers to create a rehabilitation plan for their property. As no two properties are the same early consultation will take place to determine the best way forward for the rehabilitation. The aim is to get the land back to its original state or better in the quickest time possible through reseeding and monitoring.

Are the wells safe enough for my stock to be near them?

Production wells are fenced, and cattle are unable to access the well.

Can I have access to environmental reports relating to my land?

Yes. If you would like them, AGL will provide you with copies of any environmental reports (such as groundwater studies) which are relevant to your property.

Will the community be kept informed throughout the project?

Yes. A thorough community engagement program will be prepared to ensure landholders and the community are informed throughout the duration of the project.

The community will be kept informed throughout the project via a number of communications mechanisms, including; community updates, fact sheets, letters, meetings, project website, and through the Community Consultative Committee (CCC).

What is seismic exploration?

Seismic surveys are a non-intrusive exploration method used to create a map of the structures beneath the Earth’s surface. The method sends sound waves into the Earth, where the different rock formations then reflect the waves back to the surface. The information is recorded over a period of time measured in seconds.

Geologists and geophysicists can then interpret this data to understand where possible petroleum reserves might be located, to identify areas that are unsuitable for coal seam gas exploration and to gain a regional understanding of the geology of the area.

What is a core hole?

A core hole is a hole drilled to take a core sample of coal and its surrounding geology. A core hole is typically 10 centimetres in diameter and can vary in depth from 300 metres to 1,500 metres, depending on the depth of the targeted coal seams. A piece of core sample is typically five to six centimetres in diameter and sectioned into one metre lengths.

Once core samples have been collected, they undergo a variety of tests to understand the rock, coal and gas properties including the amount and type of gas contained within the coal. Other tests including down hole logging and analysis are also undertaken to provide geophysical information.

How is a core hole drilled?

An area of approximately 60 by 60 metres is usually required for drilling core holes. The process used for drilling is similar to that used for domestic and irrigation bores, but at a larger scale.

A drill rig is needed to extract the core samples. Different rock structures dictate how quickly a core hole can be drilled, but typically the drill rig will be on site for up to eight weeks.

Core holes are lined with steel casing cemented to the side of the hole, both for safety reasons and to isolate any aquifers that are intersected during the drilling process.

Once the core sampling and testing is complete, the well is backfilled, or plugged, and cemented all the way to the surface. A marker is placed at least two metres below ground level to mark the top of the well. The site is then remediated to its original state or as prescribed by the landholder.

What is a stratigraphic hole?

This involves drilling exploration holes to retrieve and test drill cuttings and complete subsequent down hole logging and analysis. The holes are typically designed to provide geological, permeability and gas composition data.

Stratigraphic holes are generally cemented, plugged and abandoned in accordance with requirements, and then rehabilitated, unless the holes are needed for further exploration testing.

An instrument called a piezometer may be installed into the hole for ongoing data collection and the hole may be capped and suspended for future testing work.

What is an exploration test well?

A test well is a gas well used to investigate the potential gas reserves in an area. It is used to measure the flow of gas and the volume of water produced from the targeted coal seam. A well is drilled down to the coal seam of interest. The well is fully cased with steel and concrete. The casing is perforated at the coal seam to allow the flow of water and gas from the seam.

A test well generally operates for several months to collect the necessary data. Once the testing is complete the well may be removed, and the site rehabilitated, or it may remain in place to allow for testing of other coal seams.

What happens when a coal seam is hydraulically fractured?

When hydraulic fracturing a coal seam, a fluid (the “fracture fluid”) is injected into the seam at pressures high enough to widen the existing fractures in the coal. Sand is then pumped in to hold the fracture open, which creates a better path for gas and water to flow out of the coal seam and back to the surface.

Typically for AGL’s operations, fractures are millimetres wide and extend for tens of metres into the coal seam. The process is carefully managed so that there is minimal impact on the rock layers above and below the coal seam.

What is a fracture fluid?

The ingredients used to make up a fracture fluid are determined by the specific characteristics of the target coal seam, such as the ability for water or gas to flow through the coal (permeability), the number of coal seams, and the coal formation’s thickness, and stress or mechanical properties of the coal. The fluid used also depends on the desired length and direction of the fracture.

The fracture fluid is designed to have a certain viscosity or fluid thickness. A low viscosity fluid, like water, tends to flow more easily and faster; while a high viscosity fluid, like honey, tends to flow less easily and slower.

Most fracture fluids used by AGL are simply sand and water. Sometimes small amounts (usually less than 2 percent of the total volume) of commonly-used household chemicals are added to prevent bacterial growth, to make it easier to pump the fracture fluid into the coal seam, and to thicken the fluid so that less water is needed to carry the sand into the fracture.

Are the fracture fluids used in coal seam gas wells safe?

Yes. The chemicals used are highly diluted when injected into the coal seam and are then further diluted by the naturally occurring water in the coal seam.

No BTEX chemicals (Benzene, Toluene, Ethylbenzene and Xylenes) are used or have ever been used by AGL in any of its fracturing fluids. Any chemicals used must be disclosed to, and are assessed for safety by, government agencies during the application process and before the hydraulic fracture operation takes place. Under the recently announced NSW Code of Practice for Coal Seam Gas Fracture Stimulation, full disclosure is required of all additives used for fracturing in NSW. A human health and ecological risk assessment is conducted for every fracture fluid and its constituents must confirm that the use of a fracture fluid is of minimal risk before being used.