News

Landholders should get 1pc of CSG well income: Nats

Beef Central, 02/12/2011

Landholders would receive one percent of the gross income generated from coal seam gas wells located on their properties under a new compensation plan recommended by the Nationals.

In an addendum to a senate committee report on the coal seam gas industry released this week, Nationals senators Fiona Nash and Barnaby Joyce say the recommendation would provide a floor in compensation negotiations and would  bring about greater parity in the bargaining position for landholders.

The senators said the inquiry confirmed that CSG poses potential impacts to prime agricultural land and aquifer integrity and represents an extraordinary and unanticipated intrusion for rural and urban areas.

The return to the nation over the long term from agriculture was vastly superior than from mining, the senators said.

The inquiry highlighted the lack of the bargaining position for farmers and landholders, the substantial and unfair capacity of mining companies to access their rights at the expense of the farmer or landholder’s property rights.

“We believe that to underwrite the landholder’s bargaining position on access agreements onto the landholders land that a default agreement be in place to put a floor on the return to the most affected party, the owner of the land with the gas wells on it,” the senators said.

“As miners have argued that a standard price does not reflect the variant returns of the wells then it would seem logical and fair that just as the state gets a percentage in royalties so should the landholder.

“If 99pc is shared between the state and the miners then 1pc for farmers should hardly be deemed unreasonable for an asset that is extracted from their place and an asset that historically in many instances they owned.”

But not all agree that a simple one-size-fits all approach is the answer. 

AgForce president Brent Finlay said the 1pc proposal was possibly too simplistic for what was a complex situation.

“The issue is the impact coal seam exploration and extraction has on agricultural operations  and that impact is different for everyone,” Mr Finlay said.

“Obviously producers need to be fully compensated for the impacts on their day to day operations and the uncertainty that this industry creates on their ability to plan for the future, but there’s no ‘one size fits all’ approach that creates equity for everyone.”

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