Naomi Woodley reported this story on Wednesday, November 30, 2011 18:18:00

MARK COLVIN: A new senate report is recommending a moratorium on coal seam gas projects in key parts of Queensland and New South Wales until the completion of studies into the impact on groundwater.



Unusually, all sides of politics have endorsed the recommendation.



The interim report from the Senate's Rural Affairs Committee also calls for more establishment of a trust, funded by gas companies, to pay for any problems caused by collapsing pipelines.



But it's stopped short of recommending that landholders have the absolute right to lock gas companies out of their land.



From Canberra, Naomi Woodley reports.



NAOMI WOODLEY: The inquiry's been looking into the impact of coal seam gas exploration on the Murray-Darling Basin, as part of a wider inquiry into the management of the river system.



It's presented its interim report today with 24 recommendations.



The New South Wales Liberal Senator, Bill Heffernan chairs the committee.



BILL HEFFERNAN: It seems to me that the industry's got well ahead of the knowledge of the long term impacts and certainly the long term legal and financial liabilities of any damage that's done.



NAOMI WOODLEY: The report says given the degree of uncertainty about the long-term consequences of the coal seam gas industry on water resources, there should be a moratorium on approvals in the part of the Murray-Darling Basin which overlays the Great Artesian Basin.



The report says the ban should be in place until three investigations into groundwater in the region are complete.



BILL HEFFERNAN: It's obvious to people that have put millions of dollars and to governments that have put millions of dollars into the capping and piping system for the Great Artesian Basin to repressurise it in some areas, that it's almost an insult.



At the same time as doing that, they've let an industry in where there is no licensing and no regard to take more water out than they're saving. So I mean it just doesn't make any sense.



NAOMI WOODLEY: Many of the report's recommendations cover the rights of landholders, and the need for scientific work to be done before exploration is given the go ahead.



The committee's also had an eye to the future, calling for an independent trust to be set up, funded by gas companies, to pay for any problems caused by collapsing pipelines in the future.



BILL HEFFERNAN: At the present time there's a bond system for miners per well, which they get back when the well is sealed. And some of the problems with these wells turn up in 50 years time and by that stage of the game no doubt the miner has gone defunct, the directors are all dead, all the farmers are dead - that generation has been and gone, gone to heaven but the liability is still there. So we think a long term bond to protect the interests of repair would be a useful thing to do.



NAOMI WOODLEY: The Nationals and the Greens have contributed additional comments to the report, but the recommendations are endorsed by all parties.



The Greens Queensland Senator Larissa Waters says it's a significant step.



LARISSA WATERS: Basically this is an endorsement of a moratorium on coal seam gas approvals in those two areas, which the Greens are thrilled with because that's what we've been asking for for a very long time.



This industry has just absolutely gotten away with itself without having a proper understanding of the full long-term impacts on our groundwater. And it's really welcome that the report agrees with that approach and really recommends a far stronger and consistent regulatory framework at the federal level as well as improvements at the state level.



NAOMI WOODLEY: The Nationals Senate leader Barnaby Joyce says they would have liked to see the report go further on the issue of compensation for landholders. He's suggesting a floor price of 1 per cent of the gross income generated by a gas well head.



BARNABY JOYCE: From our own part in the National Party, we believe that farmers deserve a default clause, so that when the mining companies turn up in your kitchen and say this is the deal, you can actually say well, there is a default deal that is backed by the Government that gives me a base to work from. That is it's not that the mining company has all the cards in their hands; there are some cards that the farmer, the landholder, actually holds.



BILL HEFFERNAN: We didn't sign up to the National's 1 per cent as a fallback position for the farmer because it is a fact under this mining regime that you may well have the mine on your farm but the gas may come off my farm by way of horizontal mining, so there are all sorts of vagaries in that area.



NAOMI WOODLEY: The report does call for landholders to be given more say on access to their land, and a log of who comes and goes. Senator Joyce says it doesn't quite amount to a lockout.



BARNABY JOYCE: Unfortunately the horse has bolted on that one.



NAOMI WOODLEY: But the report does recommend exploration be banned on prime agricultural land.



BARNABY JOYCE: So there are certain areas where yes it should be an exclusion whether you like it or not; even if you wanted it you shouldn't be allowed it, there be certain areas where mining should just be excluded because the value of the asset to the Australian people is vastly greater and that's prime agricultural land, where it destroys aquifers.



NAOMI WOODLEY: The industry body - the Australian Petroleum Production and Exploration Association - has noted the report, and says many of the recommendations are already being addressed.



The Federal Government now has three months to respond to these recommendations, and the committee's final report is due in June next year.



MARK COLVIN: Naomi Woodley.