The average Australian thermal coal project already experiences $130 million in lost revenue because of regulatory delays relative to competitor nations, according to a report by Port Jackson Partners.

Each year the average delay increases by a further three to four months, with a one-month delay in commissioning a large greenfield open-cut coal mine costing in the order of $10 million in lost revenue.

Federal environment minister Tony Burke yesterday said the government would introduce legislative amendments to include a water trigger in the EPBC Act 1999 – a move that has been described by Queensland Resources Council chief executive Michael Roche as “policy on the run from a government that appears more interested in picking fights than delivering outcomes”

“[The] policy initiative from the federal government is to lay down another obstacle to those valuable projects getting off the drawing board,” he said.

Roche said the coal mining and CSG industries in Queensland were already subject to hundreds of laws and thousands of regulations that more than adequately cover issues the federal government suggests are lacking from current assessment processes.

“There is no more heavily regulated or closely monitored industry sector in the country, yet it appears that for the sake of marginal political interests in NSW, too much is never enough,” Roche said.

Deputy chief executive of the Australian Coal Association Greg Sullivan said the decision was regressive policy making.

“At a time when we should be sharpening Australia’s competitive edge by improving the efficiency of our regulatory system, the government has offered a knee-jerk reaction to campaigning by environment groups, which adds another layer of green tape without delivering any environmental benefit,” he said.

“Rather than drowning Australian industries in regulation, we should be focusing on reducing costly project delays, which are harming Australia’s reputation as an investment destination."

Sullivan said the announcement was at odds with the government’s commitment to eliminate duplication and streamline environmental regulation.

“The government has already established the Independent Expert Scientific Committee to advise governments on the potential water impacts of large coal mining and coal seam gas projects and these impacts are being considered as part of the state approvals process,” he said.

“The Independent Hawke Review specifically considered the use of a water trigger under the EPBC Act and ruled it out. The Review concluded that ‘including water extraction or use as a matter of national environmental significance under the Act is not the best mechanism for effectively managing water resources’.”

The commonwealth’s plans further duplicate the New South Wales assessment process and continues the ongoing pattern of regulatory creep for mine projects, NSW Minerals Council chief executive Stephen Galilee said.

“Water is already a fundamental aspect of the assessment process for mining projects in New South Wales,” he said.

“NSW mine companies already operate within a complex web of regulatory requirements and spend a considerable amount of time and resources meeting the very strict standards set by government regulators.

“The assessment process in NSW was further strengthened last year with the introduction of the Aquifer Interference Policy, the independent gateway panel, and the referral of projects to the Commonwealth Independent Expert Scientific Committee for advice.

“Now we’ll have yet another set of rules, regulations and approvals at the federal level, for no environmental benefit.”

Galilee questioned how project proponents were expected to invest in NSW and nationally when the requirements were constantly changing.

“Mining only uses around 1.4% of water in NSW, compared to agricultural use of 49.2% of NSW water. If the commonwealth is serious about assessing activities that could have a major impact on water resources, why is it only looking a coal seam gas and large coal mining projects?”

Namoi Catchment Study

The Namoi Catchment Water Study, released last year, demonstrated that the cumulative impacts of mining could be managed, according to Galilee.

Even under the study’s hypothetical Scenario 3, which models growth in coal production beyond what is planned in the region, the study’s authors state that “both the Lower and Upper Namoi Alluvium will experience a relatively low impact when compared to existing anthropogenic water use impacts”

“The Namoi Water Study found that the cumulative impacts of mining are likely to be within the historical impacts of agricultural water use across the region,” Galilee said.

Galilee said the NSW Minerals Council welcomes the public release of “Scenario 7” of the Namoi Catchment Water Study, along with an expert review that once and for all confirms it is a completely unrealistic scenario.

“The review by leading coal industry analyst Dr Don Barnett clearly outlines that the Scenario 7 model is based on coal extraction rates that are fanciful,” Galilee said.

Dr Barnett’s review states that: “The Namoi Catchment Water Study Scenario 7 Report is completely misleading. The report does not contribute anything worthwhile to the discussion of coal development in the Namoi Catchment as its assumed production targets are simply unachievable. In fact, the report could be construed as mischievous.”

Scenario 7 was beyond the scope of the terms of reference for the study, but was requested by some members of the Stakeholder Advisory Group.

While the mining industry viewed the scenario as being unrealistic, funding for the scenario was agreed to satisfy the Stakeholder Advisory Group’s request, according to the NSW Minerals Council.

Even under the study’s hypothetical Scenario 3, which models growth in coal production beyond what is planned in the region, the study’s authors state that “both the Lower and Upper Namoi Alluvium will experience a relatively low impact when compared to existing anthropogenic water use impacts”.

“The Namoi Water Study found that the cumulative impacts of mining are likely to be within the historical impacts of agricultural water use across the region,” Galilee said.

Coal mine proponents will still need to undertake detailed assessments of their potential impacts on water resources when they put forward proposals to gain a full understanding of localised impacts.