Farmers call for national fund to protect against coal seam gas | Ralph-Lauren

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A group of Queensland farmers say they can’t get adequate insurance and are calling for a national compensation fund to be set up to protect landholders from possible future claims relating to coal seam gas.

They say insurers won’t commit to cover farmers for liability caused by infrastructure remaining on, or under farm land after a gas company has withdrawn from drilling on private land.

“If I can’t get insurance, I can’t operate my business,” Zena Ronnfeldt said, a farmer from near Dalby in Southern Queensland.

Farmers say they need public liability insurance to protect them if an employee or contractor is injured on their property.

It can also be a condition of lending by the banks.

Multiple gas wells at a farm near Cecil Plains, Queensland in 2020.
An example of gas wells being grouped to reduce impact, which are part of the new Arrow Energy Surat Gas Project near Cecil Plains, 200 kilometres west of Brisbane.(ABC Southern Queensland: Nathan Morris)

Last year Australia’s biggest insurer IAG stopped offering public liability insurance to landholders with coal seam gas infrastructure on their properties.

Farmers with gas wells or pipelines can still get public liability insurance from general insurers, but experts say it is dependent on the particular contract between the landholder and the gas company.

“There wouldn’t be one (insurer) that would take on a client without a gas company taking on some sort of indemnification,” Toowoomba-based Insurance broker Jason Johnston said.

Indemnifications are negotiated between the gas company and the host landholders to protect against CSG related risk.

Zena and Gary Ronnfeldt stand in a golden wheat crop in late 2020 at Kupunn, near Dalby, Queensland.
The loamy, black soil of the Kupunn area is a renowned crop growing region.(ABC Southern Queensland: Nathan Morris)

A new levy on gas companies

Southern Queensland farmer Zena Ronnfeldt recently travelled to Parliament House in Canberra to lobby for a national fund to be set up to protect farmers.

“The coal seam gas industry needs to have an industry levy which would be implemented federally to put in place and properly fund a scheme,” she said.

“As the agricultural sector we have lots of levies, we have levies on our grain, levies on our livestock.”

When a gas well is decommissioned, it is cut off one to two metres underground, plugged with cement and the ground is rehabilitated.

Farmers can’t farm without insurance

The GasFields Commission (GFC) is an independent body operating in Queensland, which facilitates interaction between landholders and gas companies.

Acting chief executive Warwick Squire said the GFC has been working with landholders, the gas industry and the state government to create an indemnity clause to help protect farmers.

“We’re very close to an agreement across the Ag, gas and insurance sectors,” Mr Squire said.

Zena and Gary Ronnfeldt stand at fence look at gas wells on the property next door at their farm near Dalby, Queensland, 2020.
Gas company Arrow Energy own the property next door to the Ronnfeldt’s, and gas wells surround their farm.(ABC Southern Queensland: Nathan Morris)

Insurance broker Jason Johnston has seen the draft indemnity clause the GFC has been working on.

“It think this indemnity document, that seems to be going in the right direction, that will help,” he said.

But the indemnity clause would only apply during the operation of a gas project.

“We’re exploring the issue of long term liability further with our stakeholder groups at the moment,” Mr Squire said.

A satellite map showing CSG wells near the area where the gassy water leaks occurred, August 2020.
A satellite photo from 2020 showing hundreds of gas wells drilled around Chinchilla, 300 kilometres west of Brisbane.(Source: Google Earth)

The Insurance Council of Australia (ICA) said it is in talks with stakeholders about issue of long term liability for landholders.

“Insurers are equipped to cover farm associated risks, but most Australian insurers do not specialise in underwriting resource and mining activities,” an ICA spokesperson said.

“The industry is committed to working with stakeholders, most particularly farmers and their representatives, to ensure landholders are adequately protected against any loss.”

Chief executive of the Australian Petroleum Production and Exploration Association (APPEA) Andrew McConville said every farmer’s situation was different.

“As with all insurance policies, exclusions apply and farm insurance products therefore generally do not cover third party infrastructure such as telecommunications infrastructure, electricity infrastructure, mining activities, and gas activities,” he said.

As for the long term risk, that was question for State Government regulators.

“The Queensland Government is currently enhancing it’s ‘residual risk’ policy, and the oil and gas industry is working in partnership with government and other stakeholders in this process,” Mr McConville said.

“The oil and gas industry has a long history and excellent safety record investing in the rehabilitation of gas infrastructure.”

Cattle grazing beside an on farm gas well
There are many landholders who farm alongside gas developments, and people are compensated for the impact on their land.(Supplied: Santos)

Agriculture Minister David Littleproud agreed that landholders shouldn’t be liable for the risk.

Mr Littleproud said the states, which receive royalties from gas companies, should address the farmers concerns.

“The gas companies leave this infrastructure, now if that infrastructure then causes an injury the landholder should not be liable for that and I think the landholders have a legitimate concern here,” he said.

“There’s an opportunity through that royalty process to give confidence to landholders that the states will be an insurer of last resort or that petition off some of that money to make sure there’s an opportunity for redress, if there’s an issue down the track,” Mr Littleproud said.

Farmer Zena Ronnfeldt said the impost on landholders was an extra burden in an already tough business.

“It is unfair that landholders are forced to bare the risk for the national good of a liability that is created by coal seam gas companies that those companies and state governments reap the benefit from,” she said.

The Queensland Government has been contacted for comment.



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