Compensation for Coal Seam Gas Occupation: Assessing the Harms

Abstract

Coal seam gas (CSG) extraction is expanding in eastern Australia. However, while the body of knowledge relating to compensation for partial taking is well established, the theory concerning the valuation of landholder compensation for occupation by CSG infrastructure is in an embryonic stage. In order to further the development of theory in this important area, this research investigates the harms that are inflicted upon landholders and their property by CSG occupation. As indicated in the Queensland mining case of Peabody West Burton Pty Ltd & Ors v Mason & Ors [2012] QLC 23, the assessment of compensation begins by enquiring as to the acts or events that occasion loss. In order to identify and assess the relevance of harms that may be inflicted upon landholders, this introductory research analyses key judgments relating to compensation for CSG and mining projects and takes advantage of the material created by the 2011, NSW and Australian Senate inquiries into matters related to CSG. Some aspects of CSG occupation are unusual. In land affected by CSG works, the property occupied is handed back to the landholder at the cessation of extraction: moreover, the actual term of occupation is difficult to determine at the outset of occupation. The research concludes that the harms inflicted by CSG occupation depend upon the interaction of the CSG project with the property occupied, its uses and its topography. Importantly, the “harms” caused by the occupation by part of land can extend outside the land occupied by the CSG work. The potential loss in value to “balance lands”, disturbance costs and potential for longer term blight are issues that need close consideration in assessing compensation.