Queensland Government Administration related to Commonwealth Government Affairs : 19/02/2015 : Certain aspects of Queensland Government Administration related to Commonwealth Government Affairs (2024)

BRIDLE, Mrs Anne, Committee Member, Basin Sustainability Alliance

COPELAND, Dr Mark, Executive Officer, Social Justice Commission, Catholic Diocese of Toowoomba

SHANNON, Mr Peter, Solicitor, Basin Sustainability Alliance

[15:51]

CHAIR: I would now like to welcome Dr Mark Copland from the Social Justice Commission and Mrs Anne Bridle. I have been told that Mr Peter Shannon from the Basin Sustainability Alliance is going to join us very soon. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. The committee has your submissions. I now invite each organisation to make a short opening statement, and at the conclusion of your remarks I will invite members of the committee to put questions to you.

Dr Copland : Our Social Justice Commission has been going since 2012. One of our directions is to work with people who are marginalised or disadvantaged in the broader community. In 2010, at the invitation of local landholders, in the Tara district we started to meet and hear concerns about the issues around the extraction of coal seam gas. From the outset, we have no particular beef with the Newman LNP government. Our on-the-ground observation was that there would be little difference between the Bligh ALP government and the Newman LNP government in terms of how the group of people that I got to know were treated. As you would already have experienced today, I would like to acknowledge the people that I have got to know as incredibly brave and supportive of each other. I have been encouraged to make this submission as they feel that they have not been listened to. This is an opportunity where some of their stories can be told, so I thank you for that.

I have observed a group of people who feel that they have been ignored and not taken seriously, not by the gas companies and not by local government, state government or federal government. I would also like to acknowledge—and I probably cannot name them or I will get them in lots of trouble—a few brave state public servants and also people working within the gas companies, who have acted with integrity and have actually tried to get a measure of justice for local residents.

I will close there. The main thing I am saying is that there has been a group of people with a distinct lack of power. I think the role of government is to protect the health of people, good land and good water. People feel that the government has not been doing that. I have been part of a community gas field support group and a refrain that has been continually asked and asked of premiers, health ministers and others is: is it safe? Is it safe for people like John Jenkyn to live in the vicinity and to live near gas field? We still have not had a response to that question.

Ms Bridle : The Basin Sustainability Alliance is a group of landholders and community members concerned that coal seam, tight and shale gas developments have been impacting on and will continue to impact on vital land and water supplies in Queensland. On behalf of our chairperson, Lyn Nicholson, and our members, we thank you for the opportunity to appear as witnesses today. Members of BSA do not see ourselves as political activists. We are farmers, mums and dads, who are volunteering our time and desperately trying to get governments to see what impact their decision making is having on the livelihoods, health and wellbeing of rural Queenslanders.

The seriousness of successive Queensland governments' failure to properly administer and regulate the coal seam gas industry has led us to urge your committee to seek a federal judicial commission of inquiry to fully investigate and report on the coal seam gas industry in order to force change. Our full submission and appendix covers 30 pages of genuine issues your consideration. I would like to highlight a few of those. I firstly direct you to section 3.2.3 and the supporting information on page 16, where we detail how the government's misnamed adaptive management regime is a failure. This is because successive governments have given approval to coal seam gas developments with no apparent capacity or intention to intervene or even scale back those developments now that unacceptable adverse impacts are occurring.

Secondly, I direct you to section 3.4 on pages 7 to 11, which outlines how poor regulation of the coal seam gas industry and failings by the Australian and state governments in their decision making threatens non-coal-seam-gas interests in Queensland. The promise of jobs and a royalty windfall heavily influenced both state and federal government approvals of major coal seam gas projects in Queensland and both governments failed to appreciate the impact of market forces such as the world oil price and competing international gas play on planned developments.

After doing a scenario analysis, BSA now anticipates the loss of cashflow to companies from lower world oil prices will cause coal seam gas companies to aggressively cut costs against a backdrop of a royalty hungry state government, already poor industry regulation and already poor monitoring and industry compliance. The latter has already been identified by the Auditor-General as exposing the state of Queensland to unnecessary environmental harm and legal liability. In section 3.2.10 and within the appendix of our submission, BSA details how the Queensland legislation that requires coal seam gas companies to make good their impacts on water bores is totally inadequate. In brief, the modelling is useless. Where is the make-good water going to come from? Also, having the onus of proof on the landholder is wrong.

In section 3.2.12 on page 5, we detail a frightening, yet possibly very strategic move, by coal seam gas companies to use their coal seam gas grant of approval to drill for tight and shale gas. These developments potentially have far greater impacts than those specified in the EPBC Act water trigger, but were not specifically addressed by the Queensland government in the state approvals process or in its subsequent recommendations to the Australian government.

The reality on the ground is that coal seam, tight and shale gas developments are a cultural and environmental tsunami that is sweeping across rural Queensland. Many people who happily and innocently lead and operate their business in good faith in rural Queensland will have their land impacted and their groundwater supplies drawn down or contaminated. The industry is not open and transparent and this adds to the distrust. Coexistence is simply not possible when one party rides roughshod over the other and eventually takes away the other's capacity to happily live where they live and to operate their legitimate business. I am heartbroken to think that because our governments have let us down, my children—the next generation of Queenslanders—may be facing a future with little agricultural industry and no water security. Quite frankly, Queenslanders deserve better.

For these reasons, combined with the fact that we do not have an upper house in Queensland, the Australian government must not devolve its responsibilities under the EPBC Act to the Queensland government. We urge the Australian government to expand the EPBC Act water trigger provisions, firstly to include tight shale gas and other forms of gas still to be discovered; secondly, to include appropriate make-good provisions as an obligatory component of the EPBC Act water trigger; and thirdly, that this mandatory requirement should be imposed as a retrospective requirement on existing coal seam gas grounds approvals for all tenures where there are identifiable future impacts on landholders' groundwater resources.

Based on the evidence we have provided, we call on this committee to request the federal Minister for the Environment appoint a judicial commission of inquiry under division 7, sections 106-129 of the EPBC Act to investigate and report on matters raised within our submission which have never been adequately addressed by successive governments. I am not sure if Peter wants to expand on the tight gas.

Mr Shannon : Forgive me for being late; the weather made sure of that. What I would add to that is that, first of all, the BSA submission is comprehensive. Unfortunately, these days, detailed documents tend to get skimmed. There is a lot of work gone into that and I urge the committee to consider it. In relation to coal seam gas generally, as a regional practitioner, I certainly do not move in the halls of power. I do not host lunches on the 20th floor with all the captains of industry tut-tutting about the obstacles to making money. What I do deal with are real people with real issues, and coal seam gas has been deplorably handled. I do not think anyone would say it has been anything other than shambolic, in terms of its regulation. Essentially, I equate it to the global financial crisis, in the sense that those countries which survived that were those which had good regulation of their banks and financial structures, such as Australia. That is: we took a realistic view about what could go wrong and we planned for it. We failed to do the equivalent in relation to coal seam gas.

Queensland has been out there buying every single junk bond it can and loading up on them. It is obvious we are heading for something of an environmental problem and certainly a social one. We have a foundation that is rotten and, until it is either reinforced or addressed properly, it will linger on. What really worries me, though, is the tight gas, shale gas and tight coal—all these things that are now potentially going to fly under the radar. We had a situation recently where a landholder had seven potential sources of gas under his land. In the course of that, we were worried about coal seam gas in the Walloon Coal Measures. Extensive homework was done—and no doubt there will be great argument over whether it was needed for the landholder—and this extensive homework reflected that seven layers, down to about two or three kilometres, were potential targets for coal. There is no doubt in my mind—and these are all identified in this company's reports as commercial quantities, so we are not just talking potential but commercial gas—that we are headed that way. A couple of the companies are doing tight gas around the place in an exploratory fashion.

There is not a tight gas field in Australia that I am aware of, although there is something in South Australia that might approach it. If, however, you get on Google and you look at Texas and those sorts of areas, you will see what it means. It is potentially a nightmare for us. What I am worried about is all these mistakes being repeated. And just to tone that up, what we have is QGC applying to do 400 wells in Wandoan. When it initially made that application for its environmental authority, it relied heavily on reference to the QC LNG project—as if that somehow permitted the tight gas side of things. In its dealings with the regulator to address the environmental authority amendments it wanted, it identified other things. If I could table, please, this document. I have provided a number of copies; unfortunately they are all stapled together, so just rip one off as needed. Could I have one of those, please? The top one. I can just explain. These ones I will also hand up are an explanation of the position. Basically, the regulator, consistent with its existing approach, identified and permitted the authorised petroleum activities as follows. There were 59 existing wells and they wanted that increased to 400; it wound up going to 500, but anyway. In addition, the tight gas wells permitted were proposed at two. This document is actually an extract of this one. QGC, when it went to the regulator—so emboldened was it that it would have little scrutiny, or perhaps so emboldened at the way you can steamroll the regulator in Queensland—marked up the environmental authority that it wanted to progress with its process. And I will tender one copy of that, because it is about 80 pages, or table the copy. So when the regulator said: 'You can have two tight gas wells,' et cetera, QGC responded, in terms of the second document that I have tabled, basically saying: 'You can't really tell us what type of gas wells we're going to do. We just want to do gas wells, and we'll decide what sort of gas wells they'll be.' If you take that back to our client with seven potential sources under him, you get this horrible feeling that what is coming is environmental authorities to do gas wells, and they will basically elect where they go, if the landholder has not been represented or had the representation that he should be limiting what is going on to coal-seam gas in the Walloon Coal Measures to a depth of no more than X.

The implications of tight gas on our water resources are frightening. You have to understand the amount of water that they use for fracking—leaving aside the implications of that water. So with coal-seam gas, we are taking water from underneath and making it a problem on top. With tight gas, it is almost the other way: we are taking good water and we are putting it down, and then 80 per cent of it or whatever might come back if we are lucky. So, leaving aside what is going down under there, we still have this problem. There are states in America that will not take that water once it comes back up. So in some states water is very expensive, because they are using it for this and then, when it comes back up, they have to truck it three states away to find someone that will take it. And the amount of water is mind-blowing.

So for this to slip through the radar, as I can see happening, I think is frightening. I would urge upon this committee that there needs to be scrutiny. You do not have to be anti gas or anti anything; you just need some degree of common sense to make sure that these things are regulated sensibly, and to understand that, when large organisations with billions at stake come along offering you junk bonds or whatever, they really do not have your interests at heart. And the government seems to buy it that they do.

Because of that, and because of the conflict, it seems to me that what is needed here is an independent tribunal or a court to decide what conditioning goes on; to decide whether these things are approved. Of course, it will have to decide whether we are concerned about ecological sustainability, whether we are concerned about intergenerational equity, or whether we are going to do as the Queensland government recently did and turf all that out and come up with some other criteria. So the court will have to accommodate the legislation.

The environmental protection act has never been about stopping all environmental harm, and no-one I think suggests that we should not have electricity and power generation. It is how we do it that is important and whether we are going to buy junk bonds or whether we are going to sensibly regulate our banks, so to speak, and address what might go wrong. And in this whole scenario, what could go wrong has gone wrong. The oil price has plummeted. They are in a world of hurt. They are not getting the gas they thought they would. It is a mess. Let us not make that mistake with tight gas, let alone what we are going to do about coal seam gas.

CHAIR: Senator Waters, do you have any questions?

Senator WATERS: Indeed, thank you, Chair. Thank you all for coming along today. It has been a really powerful day, and I look forward to asking each of you more questions, but I just want to start off with the legals, Mr Shannon. I was not aware of this, and I am an environmental lawyer, so I should know these sorts of things: have they always allowed a coal seam gas permit to facilitate other gas extraction, or has this been a recent change whereby you get your coal seam gas permit and it means you can do tight and shale extraction as well?

Mr Shannon : You will see QGC's submission about the law they have but essentially the regulator has usually identified what you can do.

Senator WATERS: Don't they often have more than one gas listed?

Mr Shannon : Yes they have. But usually it is only one, because it is an infant industry—the tight gas industry. Shale gas is the same thing really. It is all about the rock it is embedded in and all that. But at the end of the day, the regulator has usually identified that.

QGC, in its application, drew heavily on: this is going to feed the QCLNG project. But really, that area had never been properly dealt with, you might say. They sort of accepted that they needed another authority there and so it went by a different project. But it is almost schizophrenic. Sometimes they say this is all QCLNG, when it suits them, but when it does not, they say this is a new project.

It is a worry, but you cannot blame QGC. They are doing what they are legally obliged to do and trying to get returns for their shareholders. The people you have to blame are the regulators, or at least government, that just do not see that their duty is higher than that. As you would know, with the Butler case, the government does have a duty to follow through on regulation. The Auditor-General's report, which no doubt has been mentioned today, is flagging it like crazy. One of the things, for instance, when you look at the IESC—and leaving aside the politicisation of that organisation—

Senator WATERS: I know what that is, but you might want to use its full name.

Mr Shannon : The independent expert scientific committee, which was set up in relation to the Windsor amendments. First of all, by the way, as we have said in our submission, that only relates to coal-seam gas—so that trigger is glaringly problematic for tight gas.

Senator WATERS: We did try to amend that the week before last and, sadly, did not get the support of the parliament on that one.

Mr Shannon : You might slip through a change to section 52 of the TPA or its equivalent, which I understand you might have criticised some years ago. The problem we have is all these promises are is made in the EISs etcetera and never followed through—and there is no consequence that follows. Sorry, I digress.

The IESC, in evaluating one of the projects—I think it was Arrow's expansion—commented on the underground water impact report. There is a transmissivity reading or scale that you give to porosity between rocks. What is important is the layer of rock and its transmissivity between an aquifer and then another layer of rock et cetera.

Usually a high rate of transmissivity might be 100 isotonic whatever it is. In its provision of several samples, in relation to the modelling, it was rated by the company at 5,000—I think it was. The IESC, in its polite scientific language, said that seems a bit much. The UWIR should be remodelled to deal with 100, which is considered highly nonporous. Scientists are very polite to each other, but if you look at the IESC's report, they call that questionable and things like that, which in normal speak is: this is a load of garbage.

Senator WATERS: Could you put that into plain English for us. Are you saying that the company said the rocks were not permeable, and therefore you would not connect your aquifer with your coal-seam? And yet the independent expert scientific committee, who is charged with advising government, said that was not to be trusted?

Mr Shannon : Yes. It says: how about you go and relook at it using 100 instead of—I think it was—5,000.

Senator WATERS: And did they go and relook at it using that different measurement?

Mr Shannon : Well, the IESC has since been neutered, in effect, hasn't it?

Senator WATERS: They have not been defunded yet, but I am sure it is not far off.

Mr Shannon : Okay. I do not think that has happened. I am not sure what has gone on. But it is an example of how far this can be out. One of the problems is that in the environmental impact statements we have hydrological assessments and scientists going mad doing reports supporting the project, so when you then go to another scientist, they are already on the back foot. The nature of scientists is that they hate criticising each other, and you have a theory that is proven until something compelling changes that. Their level of proof and their mindset is entirely different to the way you assess risk generally. When you are assessing risk, you do not have to be convinced of the risk.

In fact, if I could table this document? This is the ARROW's own risk assessment process. It is a common risk assessment. Essentially, you look at the extent of likelihood of an event and you look at the consequences of it, so to speak. As ARROW itself says, if it is a rare event but the consequences are extreme then you are into a degree of caution. But if you get to something that could happen and the consequences are extreme, on the ARROW's own matrix it says, 'Activity must not proceed. It should be redefined or further control measures put in place to reduce risk.'

When these things were being regulated, the assessment—for instance, with the Surat gas project—was that there is no way that the aquifers are going to interconnect. The Condamine Alluvium is separated by an aquifer. Now, in the current state of information, we know the Condamine Alluvium sits in the Walloon coal measures in places. What if you re-evaluate it now to current knowledge and take a standard of proof that in the courts says, 'What is probable? What is the most probable thing that we have to worry about?'—instead of the scientific standard, 'Are we convinced that they are wrong?' That is the problem with the assessment.

Any objective assessment would say, 'Hey, don't take the risk,' or regulate it to hell. That is why people took comfort from the adaptive management regime. In the adaptive management regime we were more or less assured: 'Yes, there could be problems. Don't worry. We've got it sorted.' I have a book on the adaptive management regime. It seems it is a bit of a novelty across the world, but it is meant to mean what it says.

Senator WATERS: It does not sit very well with the precautionary principles, does it?

Mr Shannon : No, but at least it is something. If you are going to do it properly and you say, 'Well, we can't wait about because we've all got to make money, so let's get in there'— then at least if you are going to say, 'Well, if we see a problem we'll deal with it,' that gives us some minor comfort. But, frankly, we see problems that we are not dealing with. We are throwing 'make good' at it, and 'make good' is rubbish.

I would draw the committee's attention to the AREC proceedings in the Queensland Parliament, which reviewed the amendments to the Water Act. In specifically dealing with make good, that committee, which comprised five government ministers and two non-government members who had passed the initial bill, so to speak, on reflection and on hearing the evidence—to their credit, those members of the government that were on that cooperated in a report that said, 'Hey, we'd better think about this. We'd better take this a bit more cautiously.' The minister totally ignored that. In the course of that, BSA did a submission on make good flaws and tabled that. Then there was a report done and the recommendations and observations were made. If I could table that as well, please. You will see in that report—and, as I say, to their great credit—that government members were saying, 'Hey, we might have overlooked a few things here.'

Senator WATERS: And then they were ignored.

Mr Shannon : That is the tip of the iceberg of what is wrong with make good.

Senator WATERS: We have had some critique already of the make good arrangements—and it is pretty hard to make good an aquifer once you have stuffed up—and the substitution of money for water and that that is somehow making the problem good. Can you maybe summarise for us, because this is quite a lengthy document, your key criticisms?

Mr Shannon : The main thing to me is the imbalance in knowledge. The reality is that the companies know a hell of a lot more about the stratigraphy under our feet than they let on. When they do their fracture risk assessments, that goes to government and no-one can speak better on that tan Anne Bridle, and I would invite you to ask that question. But trying to get them as a landholder lawyer is impossible. You cannot access that information as a member of the public. We have to go in there and prove that the impacts are due to gas activity. So we are hamstrung by not having all their knowledge. Then we have to get scientists that are willing to take it on and challenge it, and not work for the industry, you might say. Luckily there are a couple willing to do that, but it is a hell of a process. Then we get to the end of it, of course, and the company say, 'Well, you didn't have to do all that. You could have gone to a government modelling scheme. You've run up 50 grand in legals and your lawyer is ripping you off. We'll give you five grand for legals et cetera.'

It is a constant battle with them because there is no pressure on the companies. With make good, at least they have the commercial incentive to get onto the property, whereas in the make-good process the commercial incentive is purely on the landholder. So the company can muck around as much as they like, with no consequence—unless, of course, they want the goodwill of that landholder or it is strategic for some reason. Then it is a different proposition and they can do all sorts of things.

But it is the access to the information where there is an imbalance, and it is the presumption—the burden of proof—on the landholder. There should be a presumption that if a well were operating previously and it were not after gas then because of the monopoly privilege we give them to extract the community resource, with such gain to them, surely the presumption should be that it is due to gas and they have to disprove it. Plus, obviously, you should be entitled to recover hydrogeological expenses. It was an oversight, I believe, in the drafting, because it did not reflect the access process. They said you get legal, accounting and valuation costs and the companies always say, 'Well, we're not paying for your hydrogeologist,' which, obviously, you need to prove the other thing. We argue that is a legal disbursem*nt that we should be able to recover. It would be far easier if it were—

Senator WATERS: If it were clearly set out.

Mr Shannon : Yes.

Senator WATERS: Mrs Bridle, I invite you to address the issue that we were just discussing.

Mrs Bridle : I can give you an example of just how hard it is to try to get information out of a company. It probably also points to the reasons for distrust of both industry and the government.

Back in May 2013, we were advised by a landholder that they had been told by a petroleum tenure holder that four wells would be fracked over a month, starting in a couple of days time. But they would not give the landholder any more information.

In order to understand the frack operations, about three days later we approached QGC for their stimulation risk assessment report for the fracks. This report is required by the government to be prepared so that the stimulation activities—the fracking—is managed to prevent environmental harm. There are a lot of things that have to be in the report: it has to say where, when and how it is to occur; there has to be a geological model; they have to understand what the limits are above and below the frack; they have to understand the proximity to aquifers above and below; and they have to do a mass balance before they even frack so they can estimate the concentrations and absolute masses of chemicals that will be reacted and returned to the surface. So it looks at not only what is added but also what is mobilised from the coal seam.

Senator WATERS: And that is important, because what is mobilised is often carcinogenic?

Mrs Bridle : Yes. And that is a risk assessment. In this particular incident it was QGC; but this is a document that is required by all tenure holders when they are doing a well stimulation.

QGC came back to us and said that they could not provide the information because it contained information that was commercial-in-confidence. We were concerned that we were not going to get the information from them, so a few days before that we had actually launched a RTI with the government. We lodged that in May. In June we were advised in writing by Right to Information Services that our request had failed for that stimulation risk assessment because government did not have it. They could not provide a report that they did not have.

Now, whilst condition B24 of their environmental authority compelled QGC to prepare the report, they were not required to lodge it with government. That meant that in the event that something went wrong, the very document required in an investigation, and that would potentially provide a defence for the industry, was not held with government. Knowing that, we then lodged a complaint with government, to say, 'We're really worried. We know that QGC has fracked an aquifer intentionally to get the gas before. We're worried and we're concerned that they might breach their environmental authority.'

We then waited for the required number of days, because we knew that our complaint would force the government to go to QGC for that report. Once we knew they had that report in their hands—or they should, if the time frame had gone past—we then lodged a second RTI. That then became a long process of internal-external review by QGC to block access to the document and by BSA to gain access. We also applied under section 542 of the Environmental Protection Act for the stimulation risk assessment. That particular part of the act relates to their plan of operations, but we were told that the stimulation risk assessment was not a plan of operations, so we were unable to get it that way.

Mid last year—so this is a good time after those fracks occurred, because they occurred in May of 2013—DEHP tried to block the release of some of the information, citing that 'there is a possibility that the quality and transparency of future stimulation risk assessments submitted to DEHP may be impacted'.

Senator WATERS: Very prudent!

Mrs Bridle : They were concerned that if they gave us this report then in future the companies were not going to give them decent reports, because they knew that a third party could come and have a look at that report. We felt that, in providing that rationale, DEHP were undermining their regulatory role in coal seam gas development. The standard and quality of transparency of data in the risk assessment is a legal obligation on the resource tenure holder, conferred through the environmental authority, which they cannot opt out of.

We were eventually able to secure some of that information, and we are concerned, although we have been told by DEHP that QGC did not breach their environmental authority. I just want to give you a couple of examples. When DEHP gave their environmental authority to QGC, they were very clear, detailing that QGC must not do certain things if they were to stimulate CSG wells. They did not say, 'You shouldn't do them,' or, 'Just do them if you feel like it.' There was a legal onus on QGC to comply.

I will give you those examples. To meet one of the conditions, QGC must assess the 'potential environmental or health impacts which may result from stimulation' in relation to water quality, air quality, noise and vibration, sediment and erosion control, and land contamination. QGC did not do these assessments. QGC therefore had no idea of the risk to the environment and health of its frack prior to proceeding.

To give you a bit of an idea, I was talking about how they were going to frack four wells. Those wells were fracked multiple times. In all, they were fracked a total of 33 times. One was nine times, one was 10, another was nine and I am not sure about the other one—whatever the difference is. They were fracked within less than 2½ kilometres of each other, within weeks of each other, and at no time did they do that risk assessment to ascertain the environmental or health risk.

Senator WATERS: Can I just interrupt there and ask: how on earth did DEHP or DERM or whatever they were at the time—the environment department—say that QGC were complying with their environmental authority if studies that the company were required to do before they did their fracking had not been done?

Mrs Bridle : I do not know. I do not know how they could say it. Another condition was that QGC must have sufficient information to estimate the fracture propensity and conductivity of intervals directly above the Walloon Coal Measures. QGC did not have sufficient information to be able to estimate this. Without knowledge of the fracture propensity and conductivity of intervals directly above the Walloon Coal Measures, QGC may not have been able to control the upper extent of the frack.

To meet another condition, they must have done 'a mass balance estimating the concentrations and absolute masses of chemicals that will be reacted, returned to the surface or left in the target gas producing formation'. QGC did not do this, instead saying that a mass balance was not possible to do prior to activity due to changes in operational requirements and limited understanding of water quality. That was very concerning to us, because it has been scientifically proven that, among other factors, a mass balance is critical to unravelling water mixing should interconnectivity occur or water quality changes be experienced in nearby water bores. If QGC had changed the operational parameters of the frack, they should not have proceeded until a mass balance was done.

Lastly—and this is most alarming for me—QGC had identified in their stimulation risk assessment that its well stimulation activities in this area posed a risk to QGC's social performance. QGC were very clear about this, revealing that they had local reputation issues and that the well stimulation activities were likely to trigger anti-QGC protest interest, because the fracking was occurring in or adjacent to a rural residential area, and there is current protest activity and known sensitive landholders in the area of the stimulation. QGC made these statements in their stimulation risk assessment dated August 2012, yet the 33 fracture stimulations of the four wells did not occur until 18 May 2013.

We strongly believe that nearby landholders and water users would be legitimately and rightfully concerned by QGC undertaking fracking, because QGC had already interconnected aquifers in a frack nearby. And we strongly believe that anyone living in a rural residential area would equally hold legitimate and rightful concerns about impacts of the frack for their health and safety. If QGC knew they had a heightened social performance risk, why didn't they assess the environmental and health risks of their well stimulation before proceeding?

Senator WATERS: But they said, 'We don't want to do the studies because they might annoy people, because we don't want to know that what we're doing actually would'—validly—'annoy people'. So, they are just wilfully blocking their own eyes to information that would be inconvenient to their continued operation. That is my interpretation of what you just said.

Mrs Bridle : I cannot comment on what they were thinking, but yes, it is—

Senator WATERS: I want to take you to one further point. What you have just read out sounds like those stringent, rigorous conditions that government always claims they have placed on projects. If those said conditions are not then enforced—as the Auditor-General's report showed happened in Queensland in the mining industry; conditions do not get enforced—and if half of the environment department has been sacked, thanks to the last state government, and there are no people to do the enforcement, what good are those conditions?

Mrs Bridle : But even those conditions are not good enough, if you have companies preparing reports that just go into a bottom drawer and then pulling them out if they suddenly get caught, or pushed to provide them. The company has a defence every time.

Senator WATERS: And I wonder whether it would be more appropriate for those studies to be done not ahead of a frack but ahead of the actual approval being given. We see again that the government seems to approve absolutely everything. There has never been a coal seam gas project or a coalmine rejected in Queensland, to my knowledge, yet they do all these studies after the fact and tell us how they are going to manage the risk. Well, why doesn't the government have that information before they decide to approve this activity?

Mrs Bridle : When you see blatant examples of this you can understand why landholders do not want a bar of a coal seam gas company on their property, especially if they are going to frack the wells and so on. We are in a hard place.

Senator WATERS: Yes, why would you take the risk? Exactly.

Mr Shannon : In terms of the general approach to regulation, given all the history of environmental regulation in Queensland, knowing what you are going to do, knowing the site and then knowing what is the building or the project is the only way you can really assess environmental damage et cetera and regulate accordingly and work out what is acceptable and what is not. The difference for coal seam gas was always that they did not know exactly then where they would be putting everything. I had a case in which, under normal environmental regulation, the company was saying: 'We know where we want to put it, but we're not going to tell you exactly what this thing's going to look like, because it costs millions to design it. You give us the constraints, and we'll design something around it.' And the court bought that. The court said: 'Okay, here are your constraints.' Not only did we not really know what it meant but we did not even know where it was going. So, we have broken new ground in ignoring environmental regulation by ignoring all that. And, as I said, adaptive management was meant to do it. Well, that is not working either. But the concern is that unless we start addressing the rotten foundations it just keeps on like this.

Senator WATERS: The only conclusion one can draw from all of the evidence we have heard today and on other days is that the environmental approval is geared to simply approve projects, and it is irrelevant what the environmental impact is going to be or what the social impact is going to be. Governments do not care; they simply want to approve everything. Do you have a different view?

Mr Shannon : No, I do not. The problem we have, of course, is that most Australians these days, or a lot of us, are heading to where we are business right, social left, and it is a very difficult dynamic, because no party fits into that, and I think a lot of people are heading there. Getting that balance right is very difficult. But above all that is, potentially, environmental disaster, because if you have that, then those two things fall, as much for the companies, as is apparent now. They could all fall in a heap, frankly. So it is really about, as I said, coming back to regulating sensibly and deciding what the long-term strategy is. We have lost sight of that, because the government wants it. The regulators are devoid of funds and enthusiasm, because they get picked on if they start to get in the way. We have to take government out of the process, and that is why I say give it to the courts, or give it to—

Senator WATERS: They do not have scientific training either.

Mr Shannon : No, but at least the courts are used to it. They can then have scientific evidence. The court is used to weighing up where to go and evaluating that kind of thing. I suppose as a lawyer I like courts. But it certainly should not be a government controlled organisation. The Coordinator-General process is a disaster.

Senator WATERS: Agreed.

Mr Shannon : The one-house system is bad enough. But certainly if we do not start valuing the importance of environmental protection then we will head down the road of China, frankly. I am getting a bit soapboxy there! So, forgive me.

Senator WATERS: No, that is okay. I think Dr Copeland wanted to add something there and I inadvertently cut him off.

Dr Copeland : That is fine. I was just going to give you a little example of that notion that the risk is the protest, or local landholders making a scene. That is the risk, not what is actually happening. In August 2013, in the vicinity of the Ironbark plant, conducted by Origin Energy, there were some black specks—oily substances—coming on to a number of residents' cars, and their children were sick, and they made complaints. The first person to come to their property was not anyone from the environment department and it was not anyone from the health department; it was the local Tara police sergeant. They were concerned that they had seen the police car come from the Origin depot to their place. I then wrote to that sergeant. She rang me and said that yes, absolutely her main issue was protests: 'It's my job to keep a safe community, so I'm worried about protests.' These families had not previously been involved in protests. They had a sign outside saying how they felt about the coal seam gas extraction. But, again, you would have thought that the first step would be to investigate the health issue—not treat the symptom but look at the cause.

Senator WATERS: They do not actually want to get to the bottom of what is going on. They just want to silence people.

Mr Shannon : I certainly had a run-in with the department at one stage in a similar sort of situation. Straight after a complaint—and, admittedly, it is in an isolated area—the department officer came up to the complainant with the company representative. That was the first contact they had. And it is just as bad. I was saying, 'You can't do that', and they thought I was anti-gas et cetera. But I said, 'You're a regulator, for God's sake'. It is like a cop rolling up with the victim: as if you are going to be interviewed objectively or say what you really think. They do not understand the need to be independent.

Senator WATERS: Yes. Regulatory capture, I think it is called.

CHAIR: I am gobsmacked about what I have heard today, and everyone keeps echoing it. I would really like to thank you all for coming. Obviously your submissions have been very powerful, and I think you have got your message out there. We are happy to have provided the platform for you to come out and tell us these horrific stories that are going on around the area. So, thank you very much for coming. That concludes today's proceedings, and I would like to thank all the witnesses who have given evidence to the committee today. I would also like to thank Hansard, Broadcasting and the secretariat.

Committee adjourned at 16 : 39