There are few people who can lay claim to radically changing the law of property as it has been defined in Australia over the past century and more.
Alan Jones is one such. The overwhelmingly sensible courses of actions he normally pushes have gone seriously astray on the issue of coal seam mining. He incorrectly sees this activity as ruining good farmland and posing unacceptable risks to ground water.
The evidence is overwhelming that neither poses problems. Agriculture continues virtually unmolested from the activities of gas extractions and there is handsome restitution from any incidental harm farmers might incur.
As far as damage is concerned the best endeavours of the US Environment Protection Agency has failed to find a single case of contamination. And this is in the US where exploration and production is progressing at a rate that can only be dreamed of in Australia. Over 45,000 wells were sunk in the US during 2012 alone. The number of wells sunk amounts to under 10,000 in Queensland, less than 1,000 in NSW and zero in Victoria.
Because the usual radical anti-business activists have been joined in opposing unconventional gas extraction by Alan Jones with his enormous radio following, the NSW and Victorian governments’ economic judgements have collapsed in a heap.
Victoria has put an indefinite moratorium even on the search for the gas.
NSW, having first welcomed it, then announced restricted areas (said to comprise around 4 per cent of the state). It has now said it will “enforce” CSG license requirements and is cancelling Petroleum Exploration Licences awarded to those “without fiancial security or industry expertise” saying “under Labor Government, it was too easy for speculators and cowboys to be granted licences over large areas”. All explorers are, of course, speculators and, Eddie Obeid notwithstanding, the raging against the small, underfinanced explorer who has been the leading discoverer of mineral deposits is misplaced. Moreover, it is completely contrary to the fostering of small business that the Coalition says it favours.
Oddly enough, the Liberal NSW Government has given the Aboriginal Land Council (ALC) pre-cursor “Petroleum Special Purpose Applications” covering over one third of the state, even though the ALC has no history or expertise in conducting exploration activities. The government has even sunk an expensive exploration well (ostensibly looking for a site for carbon capture and storage) in one of the four exploration licence areas the ALC has been awarded.
For over a century, mineral rights have been vested in “the crown”. That means they are transferred to whoever finds them, with some increasingly extortionate share of this seized by the government. This is efficient since it gives maximum incentive to the party best placed to make a discovery to expend resources and energies in that activity. If the one doing all the work were required to give a share to a passive landowner, less is available for search activity and fewer searches will take place. Australia’s regime, until the depredations of Rudd et al had led to us obtaining some 16 per cent of global exploration spending. The Mabo judgement paved the way to giving aboriginals forms of rights over a great deal of Australia and hence raised the cost of exploration in virgin areas.
Now, in order to circumnavigate the perfidious activities of lock-the-gate and other miscreants NSW has given landowners a veto over coal seam gas mining.
This will clearly be followed by vetos over mining generally and means the landowner will be able to extract a share of an income stream that they had no part in creating.
Everyone loves farmers but giving them a share of the results of exploration must mean less exploration is undertaken and fewer new developments. There is no free lunch.