Australian State Proposes Stricter Coal-Seam Gas Industry Rules

Coal-seam gas producers planning projects near prime farmland and wineries in New South Wales, Australia’s most populous state, will face stricter regulation under government proposals to protect the environment.

Developments within 2 kilometers (1.2 miles) of “strategic agricultural land” must gain approval from an independent scientific panel before they can advance, Brad Hazzard, the New South Wales planning and infrastructure minister, said today in an e-mailed statement.

“We are delivering the best protection for agricultural land in Australia and extremely tough controls on coal-seam gas,” Hazzard said. The government’s plan will “ensure prime agricultural land,” and the state’s wine and horse-breeding industries are safeguarded, he said.

AGL Energy Ltd. (AGK) and Santos Ltd. (STO) are among Australian companies with coal-seam gas projects in the state. Companies exploring for the fuel in New South Wales and Queensland face the risk of higher costs and delays because of tighter regulation, Deutsche Bank said in a report yesterday.

Some environmental groups and politicians are concerned drilling will damage aquifers, contaminate and deplete water supplies, and diminish the capacity of food-producing land. The state identified 1.35 million hectares of “high-quality agricultural land” that will be subject to the tougher review.

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

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