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Australia Plans Stricter Approvals for Coal-Seam Gas, Mining

The Australian government plans to make the approval process for coal-seam gas and coal mining projects more stringent to ensure protection of water resources.

Developments expected to have a significant impact on water will have to be evaluated and approved by the government, Environment Minister Tony Burke said today in a statement. The government until now has only been able to consider water when projects have affected threatened species or wetlands, he said.

“There is the potential for this to increase costs and increase the time it takes things to get done for some projects,” John Young, a Melbourne-based analyst at Wilson HTM Investment Group (WIG), said today in a phone interview.

AGL Energy Ltd. (AGK) and Santos Ltd. (STO) are among companies in Australia whose coal-seam gas projects on the east coast have faced opposition from some environmental groups and farmers worried about potential damage to water supplies. New South Wales, Australia’s most populous state, moved last month to restrict access to some areas for drilling.

Santos, Origin Energy Ltd. (ORG) and BG Group Plc (BG/) are building more than $60 billion in projects in Queensland state to convert coal-seam gas to liquid form for export to Asia.

Projects already being assessed won’t need to restart the process, the government said. While the government is seeking additional information, “we are not seeking to have a needlessly delayed process as a result,” it said.

“People have expected that something like this would come along,” Wilson HTM’s Young said. “Most are aware that in order to progress their projects, they need to meet the concerns of the community and explain what they are doing.”

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

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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