Barrington-Gloucester-Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure

[2012] NSWLEC 197

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Barrington - Gloucester - Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197
Hearing dates:	18, 19 and 20 October 2011
Decision date:	27 August 2012
Jurisdiction:	Class 4
Before:	Pepper J
Decision:	Amended summons dismissed. The applicant is to pay the respondents' costs of the proceedings, unless within 21 days a notice of motion is filed, together with appropriate affidavit evidence in support, seeking an alternative costs order.
Catchwords:	JUDICIAL REVIEW: whether conditions of a project approval under Pt 3A of the Environmental Planning and Assessment Act 1979 are invalid for uncertainty - applicable legal principles - conditions not impermissibly uncertain - whether the Minister failed to take into account a mandatory relevant consideration - whether the principles of ecologically sustainable development, including the precautionary principle, are mandatory relevant considerations under Pt 3A - ecologically sustainable development principles, including the precautionary principle, are mandatory relevant considerations forming part of the public interest - ecologically sustainable development principles were correctly formulated and taken into account by the Minister granting approval.
Legislation Cited:	Environmental Planning and Assessment Act 1979, ss 4(1), 5, 7, 23(1)(f), 23D(1)(a), 75A, 75B, 75C, 75I, 75J, 75L, 75M, 75O, 75W 75X(5), Sch 6 cl 3(1), Pts 3, 3A, 4 Environmental Planning and Assessment Amendment (Part 3A Repeal) Act 2011, Pt 3A Protection of the Environment Administration Act 1991, s 6(2) Protection of the Environment Operations Act 1997, s 120 State Environmental Planning Policy (Major Projects) 2005, Sch 1
Cases Cited:	Aldous v Greater Taree City Council [2009] NSWLEC 17; (2009) 167 LGERA 13 Anderson v Director-General, Department of Environment and Climate Change [2008] NSWCA 337; (2008) 163 LGERA 400 Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 Australians for Sustainable Development Inc v Minister for Planning [2011] NSWLEC 33; (2011) 182 LGERA 370 Coffs Harbour City Council v The Minister for Planning and Infrastructure [2012] NSWLEC 4 Drake-Brockman v Minister for Planning [2007] NSWLEC 490; (2007) 158 LGERA 349 Foster v Minister for Customs and Justice [2000] HCA 38; (2000) 200 CLR 442 Gray v Minister for Planning [2006] NSWLEC 720; (2006) 152 LGERA 258 Haughton v Minister for Planning and Macquarie Generation; Haughton v Minister for Planning and TRUenergy Pty Ltd [2011] NSWLEC 217; (2011) 185 LGERA 373 Hunter Environment Lobby Inc v Minister for Planning [2011] NSWLEC 221 Kennedy v NSW Minister for Planning [2010] NSWLEC 240 Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 King Gee Clothing Co Pty Ltd v Commonwealth (1945) 71 CLR 184 Leatch v National Parks and Wildlife Service (1993) 81 LGERA 270 Mid Western Community Action Group Inc v Mid-Western Regional Council & Stockland Development Pty Limited [2007] NSWLEC 411 Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40; (1986) 162 CLR 24 Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; (2010) 243 CLR 164 Minister for Planning v Walker [2008] NSWCA 224; (2008) 161 LGERA 423 Mison v Randwick Municipal Council (1991) 23 NSWLR 734 MyEnvironment Inc v Vic Forests [2012] VSC 91 Newcastle & Hunter Valley Speleological Society Inc v Upper Hunter Shire Council and Stoneco Pty Limited [2010] NSWLEC 48 Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230 Pittwater Council v Minister for Planning [2011] NSWLEC 162; (2011) 184 LGERA 419 Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213; (2009) 178 LGERA 347 Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363 South East Forest Rescue Incorporated v Bega Valley Shire Council and South East Fibre Exports Pty Ltd [2011] NSWLEC 250 Telstra Corporation Ltd v Hornsby Shire Council [2006] NSWLEC 133; (2006) 67 NSWLR 256 Ulan Coal Mines Ltd v Minister for Planning [2008] NSWLEC 185; (2008) 160 LGERA 20 Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118 Williams v Minister for Planning (No 2) [2011] NSWLEC 62 Williams v NSW Minister for Planning (No 3) [2010] NSWLEC 204
Texts Cited:	Oxford English Dictionary, online edition Macquarie Dictionary, online edition
Category:	Principal judgment
Parties:	Barrington - Gloucester - Stroud Preservation Alliance Inc (Applicant) Minister for Planning and Infrastructure (First Respondent) AGL Upstream Infrastructure Investments Pty Ltd (Second Respondent)
Representation:	Mr R P L Lancaster SC with Mr N M Eastman (Applicant) Mr A Shearer (First Respondent) Mr N J Williams SC with Ms A M Mitchelmore (Second Respondent) Environmental Defender's Office (Applicant) Department of Planning (First Respondent) Freehills (Second Respondent)
File Number(s):	40411 of 2011

INDEX

Topic	Paragraph Number
The Applicant Challenges Approvals to Grant an Exploration Licence for Coal Seam Gas	[1]
AGL Applies for the Approvals	[8]
The Director-General's Environmental Assessment Report	[27]
The PAC Determination Report and Concept Plan Approval	[47]
The Major Project Approval and Conditions	[57]
Grounds 1 and 2: the Major Project Approval Conditions Are Invalid due to Uncertainty	[71]
Invalidity by Reason of Uncertainty: Applicable Legal Principles	[72]
The Conditions Under Challenge	[86]
The Conditions Are Not Invalid For Uncertainty or Lack of Finality	[93]
Condition 3.5	[98]
Conditions 3.8, 3.9, 4.1, 4.2 and 7.4 e)(i) - Groundwater Monitoring and Management	[106]
Conditions 2.1 and 3.9 c) - Gas Well Location	[125]
Condition 3.12: Uncertainty in Relation to Water Re-use and Disposal	[135]
Grounds 3 and 4: Failure to Consider the Precautionary Principle	[145]
Was the Minister Bound to Take Into Account the Principles of ESD and the Precautionary Principle?	[147]
The Precautionary Principle	[150]
The PAC Was Obliged to Consider ESD Principles Including the Precautionary Principle as Part of the Public Interest	[152]
Did the PAC Correctly and Adequately Consider ESD Principles, Including the Precautionary Principle?	[172]
The PAC Did Not Incorrectly State or Apply the Precautionary Principle	[180]
There Was No Failure to Properly Consider the Precautionary Principle in Respect of Groundwater	[191]
There Was No Failure to Properly Consider the Precautionary Principle in Respect of Water Re-Use and/or Disposal	[210]
Costs	[217]
Orders	[218]

JUDGMENT

The Applicant Challenges Approvals to Grant an Exploration Licence for Coal Seam Gas

1. It is a matter of common knowledge that the exploration for, and use of, coal seam gas is contentious. This judgment will, however, do little to quell the current anxiety surrounding the coal seam gas mining debate. In this regard it must be understood that the merits, or otherwise, of the use of this resource are irrelevant to the issues raised for determination by these judicial review proceedings, concerning, as they do, only the lawfulness of the approval under challenge.

1. The impugned decision concerns a project approval granted by the Planning Assessment Commission ("PAC") for coal seam gas extraction, processing and transportation development at Gloucester Basin (the Gloucester Gas Project or "the project") within a sub-area covered by petroleum exploration licence 285 ("the licence"). The licence covers an area of approximately 1600km² across the region around Gloucester and Stroud.

1. On 22 February 2011 two approvals were granted by the PAC, subject to conditions:

(a) a concept plan approval, pursuant to s 75O of the Environmental Planning and Assessment Act 1979 ("the EPAA"), for a staged well field development within the concept area, including development of wells, gas and water gathering lines and associated infrastructure ("the concept plan approval"); and

(b) a major project approval, pursuant to s 75J of the EPAA, for the construction and operation of gas wells at proposed sites within the Stage 1 Gas Field Development Area ("the Stage 1 area") and associated infrastructure, a central processing facility and the construction and operation of a high-pressure gas transmission pipeline from Stratford to a delivery station at Hexham in New South Wales ("the project approval").

1. The approvals were made by the PAC under delegation from the first respondent, the Minister for Planning and Infrastructure ("the Minister") (s 23(1)(f) of the EPAA), pursuant to ss 23D(1)(a) and 75O(1) of the EPAA.

1. The second respondent, AGL Upstream Infrastructure Investments Pty Ltd ("AGL"), is the proponent of the project for the purposes of 75A of the EPAA.

1. The applicant, Barrington-Gloucester-Stroud Preservation Alliance Inc ("the Alliance"), is an incorporated non-profit association, which contends that each of the approvals is invalid. In short, it argues, first, that certain conditions imposed in relation to both groundwater and wastewater in the project approval left open the possibility of a significantly different development from that for which approval was sought and are, therefore, uncertain. And second, that the PAC failed to correctly formulate and properly consider the precautionary principle in respect of the project approval.

1. I do not agree with either argument. First, properly construed, the conditions about which complaint is made in relation to the project approval are within the permissible limits of the power pursuant to which they were imposed and are not uncertain with respect to impacts. Second, notwithstanding that the precautionary principle is a mandatory relevant consideration forming part of the public interest, the principle was adequately considered by the PAC in granting the project approval. It follows that the amended summons filed 17 June 2011 must be dismissed.

AGL Applies for the Approvals

1. On 21 May 2008 the project was declared by the Minister to be a major project under the now repealed (effective from 1 October 2011: see the Environmental Planning and Assessment Amendment (Part 3A Repeal) Act (2011) ("the Repeal Act")) Pt 3A of the EPAA (the transitional provisions of the Repeal Act applied Pt 3A to projects already approved under that Part: Sch 6 cl 3(1) of the EPAA).

1. On 28 May 2008, the Minister (by his delegate) determined that the project was development of a kind described in Sch 1 of the State Environmental Planning Policy (Major Projects) 2005. Thus the project was declared to be one which attracted the operation of Pt 3A of the EPAA for the purpose of s 75B of that Act.

1. On 31 July 2008, ENSR Australia Pty Ltd ("ENSR"), the then owners of the licence, lodged a preliminary project application for the project. Approval was sought for the concept plan and concurrent project approval was sought for Stage 1 of the project.

1. On 4 August 2008 the Minister authorised the submission of a concept plan application for the project pursuant to s 75M of the EPAA.

1. The proposal for the concept plan approval was described as comprising five elements, and concurrent project approval was sought for elements two to five. The five elements were:

(a)   first, staged development of gas extraction wells and associated infrastructure within an area of approximately 210km² of the Gloucester Basin;

(b)   second, construction and operation of up to 110 gas extraction wells and associated infrastructure within the Stage 1 area;

(c)   third, the construction and operation of a central processing facility to compress and process the extracted gas ready for transport;

(d)   fourth, construction and operation of a gas transmission pipeline to transport the gas from the central processing facility to the existing gas supply network at Hexham; and

(e)   fifth, construction and operation of a gas delivery station at Hexham to deliver gas to the existing Sydney-Newcastle gas pipeline.

1. The Director-General of the Department of Planning and Infrastructure ("the Department") issued requirements for the preparation of an Environmental Assessment for the concept plan application and the project plan application on 26 August 2008 ("the DGRs"). Supplementary requirements were provided on 19 October 2008.

1. In December 2008 AGL purchased the licence from ENSR.

1. On 11 August 2009, AECOM on behalf of AGL advised the Department of a variation of the concept plan and the major project applications. By letter dated 25 August 2009, the Director-General confirmed that the environmental assessment requirements previously issued would apply to the amended project together with specified additional requirements.

1. By letter dated 10 November 2009, AGL was notified by the Director-General that the draft Environmental Assessment prepared by AECOM dated November 2009 had been relevantly assessed as adequately addressing the DGRs issued for the project on 26 August and 19 October 2008 and 25 August 2009.

1. On 11 November 2009 an Environmental Assessment for the concept plan and concurrent project application prepared by AECOM ("the EA") was submitted to the Director-General of the Department on behalf of AGL. The EA noted that, given the spatial nature of the Stage 1 development, an "environmental envelope" approach had been adopted to assess and avoid or minimise potential environmental impacts. The content of the EA is discussed in further detail below.

1. The EA was placed on public exhibition on 18 November 2009 for two months. A Submissions Report analysing the 147 submissions received was prepared by AECOM, finalised on 24 May 2010. The potential impacts of wastewater produced by the project and groundwater management and the impact on aquifers were among the key issues raised in the submissions. The Submissions Report stated that, in relation to the submissions on groundwater, a conceptual hydrogeological model should be developed and subject to ongoing review.

1. On 8 July 2010 the NSW Office of Water ("NOW") wrote to the Department and recommended against concept approval for individual bores or determination of volumetric limits for bores until such time as the conceptual hydrogeological model referred to in the Submissions Report was completed and NOW had determined its adequacy.

1. On 30 July 2010 SRK Consulting (Australasia) Pty Ltd ("SRK") prepared a report for AGL entitled Gloucester Basin Stage 1 Gas Field Development Project: Preliminary Groundwater Assessment and Initial Conceptual Hydrogeological Model ("the SRK Report"). The objective of the report was to conduct a review of the hydrogeological regime in the Gloucester Basin and to present a hydrogeological model to "conceptualise the groundwater system across Stage 1" of the development.

1. On 16 August 2010 NOW wrote a further letter to the Department stating that the Stage 1 development should not be approved until AGL had completed the model and NOW was satisfied that the impacts of any production wells were consistent with its policies.

1. On 20 August 2010 AGL provided the SRK Report to the Department.

1. On 31 August 2010 AGL emailed NOW outlining the staged investigation approach that it was proposing for the project, which consisted of five (or six, depending on how they were divided) phases. The phases included a desktop study, a detailed groundwater investigation together with the establishment of a baseline monitoring network, numerical modelling, monitoring and project updates.

1. In a letter to the Department dated 28 September 2010, NOW indicated that it was satisfied that the Stage 1 development could be granted approval and that if approval was granted NOW would be in a position to authorise drilling works. The letter noted that the SRK Report "clearly identifies the knowledge gaps which exist" but that the monitoring and assessment program "will largely satisfy the requirements of condition 4.1 of the project approval, and inform the development of the hydrogeological model referred to in condition 3.6". The letter went on to state, however, that production well entitlements would not be issued until the modelling had been assessed as satisfactory and demonstrated "no more than minimal harm to beneficial aquifers" consistent with its guidelines and that, if the modelling did not demonstrate compliance "with minimal harm requirements, the scale of the operation may need to be adjusted to a level at which these requirements can be satisfied."

1. Also on that day, the Minister delegated his approval powers to the PAC for consideration of the concept plan application. This decision was made on the basis that there would be merit in the PAC determining both applications.

1. On 28 October 2010, NOW indicated in an email to the Department that the previous issues raised by NOW concerning the draft project approval conditions had now been "covered" and that the proponents preference for a field development plan was acceptable.

The Director-General's Environmental Assessment Report

1. In November 2010, the Director-General issued his Environmental Assessment Report pursuant to s 75I of the EPAA and provided it to the PAC ("the Director-General's EA Report"). It is necessary to examine the Director-General's EA Report in some detail because of its significance in light of the grounds of review.

1. The Director-General's EA Report stated that the Department was satisfied that AGL had undertaken "an appropriate and conservative level of assessment covering all aspects of the project, including the concept plan area". It was satisfied that the project was consistent with best practice and acceptable environmental and amenity standards. After setting out the objects of the EPAA in s 5(a) of that Act, the Director-General's EA Report canvassed the application of those objects to the project, including the principles of ecologically sustainable development ("ESD"). The Report expressly stated the following (p 10, emphasis added):

Of particular relevance to the environmental impact assessment and eventual determination of the subject project application by the Minister, are those objects stipulated under section 5(a). Relevantly, the objects stipulated under (i), (ii), (vi) and (vii) are significant factors informing determination of the application (noting that the proposal does not raise significant issued relating to communication and utility services, land for public purposes, community services and facilities or affordable housing). With respect to ecologically sustainable development, the EP&A Act adopts the definition in the Protection of the Environment Administration Act 1991, including the precautionary principle, the principal of inter-generational equity, the principle of conservation of biological diversity and ecological integrity, and the principle of improved valuation, pricing and incentive mechanisms. In applying the precautionary principle, public decisions should be guided by careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment and an assessment of the risk-weighted consequences of various options.

It is important to recognise, that while the EP&A Act requires that the principles of ecologically sustainable development be encouraged, it provides other objects that must be equally included in the decision-making process for the subject proposal. The Department's assessment has given due to consideration to the objects of the Act in its assessment including:

the need to encourage the principles of ecologically sustainable development;

the Department's assessment of the need for the project (section 2.3) has considered the benefits of the project in helping to secure less-greenhouse gas intensive fuel resources, which are consistent with the principle of inter-generational equity;

the Department's assessment of the ecological impacts of the project (section 5.3) is based on a conservative and rigorous assessment of the likely extent of the ecological impacts and of likely offset requirements to ensure that appropriate and adequate measures are put in place to prevent the threats of serious or irreversible environmental damage consistent with the precautionary principle and the principle of conservation of biological diversity and ecological integrity; and

the Department's assessment of key issues (including sections 5.1 and 5.3) has considered the requirement for appropriate contingency strategies (in relation to groundwater impacts to surrounding users) and appropriate offsets for residual biodiversity impacts, which is consistent with the principle for the appropriate valuing of natural resources.

the proper management, development and conservation of natural and artificial resources (including agricultural land, natural areas, water resources and minerals) has been considered in sections 4.4 and 5 (in relation to land use, water and biodiversity impacts);

the orderly development of land, which has been considered in sections 5.2, 5.4 and 5.5 of the Department's assessment in relation to the potential amenity impacts of the project (noise, air quality and visual) on surrounding receptors; and

the protection of the environment including threatened species, which has been considered in section 5.3 of the Department's assessment.

1. In the Director-General's EA Report the Department identified the "following key environmental issues associated with the proposal" (p 21):

Surface and groundwater;

Air quality;

Flora and fauna;

Noise and vibration;

Heritage; and

Visual amenity.

1. Section 5.1 contained a detailed analysis of the environmental impacts of the project on the surface and groundwater. The "key risks" identified related to potential risks to groundwater aquifers during gas well drilling for coal seam gas extraction (including potential dewatering of beneficial aquifers, groundwater migration between aquifers and risks to groundwater quality) and the management of water extracted from the wells (including the potential for groundwater and surface water contamination from water storage, surface water discharge or reinjection into the aquifers and disposal of waste produced from the water treatment process) (p 21).

1. Other impacts discussed concerned general issues relating to erosion and sedimentation.

1. The Director-General's EA Report noted that low connectivity between deep bedrock aquifers and surface bedrock and alluvial aquifers indicated that the shallower surface and alluvial aquifers were not substantially dependent on water levels in the deeper coal seams. Hence dewatering these deeper aquifers was unlikely to affect water volumes available for beneficial use closer to the surface within the Gloucester Basin. The Director-General's EA Report noted that groundwater monitoring results from nearby coal mining operations at Duralie and Stratford also supported this conclusion (p 24):

In this regard, the Department is satisfied even with consideration of dewatering activities from surrounding mines, the dewatering volumes proposed as part of the project (2 mega-litres a day) are unlikely to affect overall water availability or water security for beneficial use within the Gloucester Basin (including for associated ecosystems), as the dewatering activities associated with the project would be limited to deep rock aquifers.

1. On this basis the Department recommended conditions of approval limiting the maximum water extraction rate for the project to 2ML per day unless otherwise agreed to by NOW.

1. Further, because the Department considered that the shallow/alluvial aquifers were likely to remain the primary source of beneficial groundwater used for agriculture, the Director-General's EA Report stated that the Department was satisfied that dewatering of deepwater aquifers by the project would "pose a low risk of affecting water security in the region".

1. The Department was also satisfied that:

(a)   dewatering activities were unlikely to pose a significant risk of migration of saline groundwater from targeted seams;

(b)   gas well installation was unlikely to pose significant risks of creating fractures and connectivity between seams;

(c)   the additive component of the fraccing liquid would not pose a material risk to groundwater quality due to the relatively small quantity of fraccing liquid used, its highly diluted nature rendering it non-toxic, its confinement to the deep bedrock aquifer, its ultimate extraction and transportation to storage ponds and the fact that the proponent was not proposing the use of benzene, toluene, ethylbenzene and xylene ("BTEX chemicals") in the fraccing process;

(d)   gas well development was unlikely to pose a significant risk of creating connectivity between strata which would encourage gas migration; and

(e)   through the implementation of measures specifically designed to minimise gas migration to the surface via old coal exploration wells, this risk could be appropriately managed.

1. The Director-General's EA Report stated as follows (p 25, emphasis added):

In summary based on the Proponent's assessment, the Department is satisfied that gas well development is unlikely to pose a significant risk of gas migration and/ or dewatering or water quality risk to shallow aquifers (and associated groundwater users or groundwater dependent waterways/ species. Notwithstanding, given the large area of proposed extraction, the Department accepts that there is likely to be spatial differences in hydro-geological conditions across the basin, with localised geological conditions having the potential to pose higher risk of gas migration or groundwater impact as a result of increased connectivity/ permeability between deep and shallow aquifers in the case of fault and fracture features. However, the Department considers that prudent well location based on further detailed field monitoring and seismic surveys designed to confirm hydro-geological conditions at a finer scale (as proposed by the Proponent), would enable such risks to be minimised and avoided as far as possible and has therefore, recommended conditions in this regard. The Department specifically required that a minimum of six months of baseline monitoring be undertaken to establish detailed pre-constructions hydro-geological conditions, which would form the basis of gas well location.

To monitor any interactions of the gas production wells with the surrounding hydro-geological environment during the operational phase, the Proponent has committed to establishing and implementing a detailed monitoring network covering both shallow and deep water aquifers as well as surface waters. The Department supports this operational monitoring strategy and has recommended conditions reinforcing these commitments. The Department has also specified that the monitoring locations are determined in consultation with NOW and are representative of registered bores in the area to ensure that any impacts to these users from any extraction activities in the vicinity can be identified early. The Proponent has identified that the information gathered from the monitoring network could be used to continually update the hydro-geological model developed of the area to date as new information becomes available and enable its use as a predictive and verification tool as gas well development progresses. The Department supports this strategy and considers that it should be coupled with a precautionary approach of staged gas well development so as to enable potential impacts from a limited number of well development to be confirmed via monitoring prior to whole scale development of the area, which may lead to cumulative impacts that are more difficult to manage. The Department considers that this approach would also enable any adverse impacts to be quickly identified and acted upon, including amendment of the location of future wells. The Department has consequently recommended conditions of approval in this regard. The Department has also required a contingency strategy to form part of the Proponent's groundwater management strategy, such that adverse impacts attributable to the project can be addressed, including compensation to affected bore users, if applicable.

The Department considers that the above approach provides a prudent and robust framework for the development of the gas wells based on appropriate well location, ongoing information gathering and adaptive management. The Department notes that such a monitoring network and hydro-geological model will also form a strong basis for information gathering in relation to any future development in the concept plan area and has recommended assessment of groundwater issues for any future extraction wells in the concept plan area, on this basis. NOW has indicated that it can support project approval for the Stage 1 Gas Field Development Area (as well as concept plan approval for the broader project) subject to the conditions framework proposed by the Department.

1. In terms of the management of extracted water, the Director-General's EA Report noted the Department's satisfaction that implementation of appropriate remediating measures meant that the storage areas for the extracted untreated water from the wells, including fraccing liquid and concentrated saline wastewater, would neither pose a significant risk of groundwater contamination to shallow aquifers via leaching nor of surface water contamination through flooding during periods of heavy rain (p 25).

1. With respect to the disposal of treated waters, the Director-General's EA Report rejected the preferred option of re-use of extracted water as irrigation water on the basis that the Department considered that this option could pose "additional risks of aquifer interference" and "that there has been insufficient assessment of this option to determine with any level of certainty whether this would comprise a safe and feasible option." Thus the Department did not support this use, in the absence of any further assessment, as part of a separate modification application that assessed the risks to groundwater aquifers. Of the remaining water re-use options, the Report noted that the Department was satisfied that there were no significant water quality constraints to preclude the option of surface discharge to waterways or drinking water use.

1. Accordingly, with the exception of groundwater re-injection, none of the water quality options identified "should be precluded from an approval". Instead the Department "required the Proponent to further investigate and determine the final suite of disposal options in consultation with relevant agencies (including the Department of Environment, Climate Change and Water, or "DECCW"), prior to the commencement of construction" (p 26). This was intended to provide maximum flexibility in the range of options and opportunities to be explored.

1. In summary the Director-General's EA Report noted that (pp 26-27):

...the Department is satisfied that the surface and groundwater impacts of the gas extraction component of the project can be managed so as to not result in unacceptable groundwater outcomes. Based on this, the Department is also satisfied there are no significant surface or groundwater constraints to the future development of wells within the broader concept plan area. The Department has incorporated comprehensive further environmental assessment requirements in relation to surface and groundwater impacts as part of the recommended concept plan approval, which the Proponent must address in seeking any further approval for gas wells within the concept plan area.

1. Relevantly, the Director-General's EA Report concluded that the central processing facility and gas delivery station components of the project would not pose "a material risk" to biodiversity as they would be located on an already disturbed site (p 36). Similarly, the gas wells and associated linear infrastructure (for example, gas gathering lines) would pose "a low risk" of impact to existing remnant vegetation as this infrastructure would also be located on disturbed sites (p 37).

1. In addition, in relation to the development of future gas wells in the concept plan area, the generally disturbed nature of the area, together with the inherent flexibility of gas well locations, meant that this could be undertaken without posing "a significant risk to biodiversity" and that there were no unacceptable biodiversity constraints for future development within the concept plan area. The Department had, in any event, incorporated comprehensive further assessment requirements in relation to flora and fauna as part of the recommended concept plan approval (p 42).

1. Thus it was concluded that "the Department is satisfied based on its assessment that the residual biodiversity impacts of the proposal can be appropriately managed, mitigated or offset and is therefore satisfied that there are no unmanageable biodiversity constraints to the development of the project" (p 42).

1. And the "Conclusions and Recommendations" contained in the Director-General's EA Report were to the effect that the Department was satisfied that the proponent had undertaken "an appropriate and conservative level of assessment covering all aspects of the project", that there were "no significant environmental or amenity constraints" to the project, and that the Department was "satisfied that the Proponent has undertaken sufficient assessment of all project elements for which project approval has been sought" (p 55). Thus (p 55):

On balance, the Department considers the project to be justified and in the public's interest and should be approved subject to conditions in relation to the concept plan and project components, and the Proponent's Statement of Commitments.

1. It was therefore recommended that the PAC, having considered all the matters in the Director-General's EA Report, approve the concept plan and project application.

1. On 21 December 2010, the Department recommended that the Deputy Director-General forward the Director-General's EA Report to the PAC for determination. In the "Background" section, the briefing note stated that (emphasis added):

The Proponent originally raised concerns regarding the requirement for staged gas well development to minimise the potential for groundwater impacts, recommended in condition 3.9 of the instrument of project approval. This approach has been recommended by the Department as it is considered consistent with a precautionary approach of monitoring and confirming potential groundwater impacts from a limited number of wells prior to full scale development of the area, which may lead to cumulative impacts that are more difficult to manage.

The PAC Determination Report and Concept Plan Approval

1. On 22 February 2011, following its own consideration of the matter, the PAC issued a report in respect of the project ("the PAC Determination Report").

1. The PAC Determination Report identified as among the key issues "surface and groundwater" and "flora and fauna". In particular, the PAC stated that, in making its decision it "considered closely...impacts on groundwater".

1. The PAC Determination Report detailed the various site inspections that the PAC had made of the project to view, amongst other things, existing groundwater monitoring bores and storage ponds. It also described a site visit to the AGL's Camden Gas Project, which was undertaken to enable the PAC to gain a further understanding of the extraction processes anticipated for the project, including fraccing and the recovery of fraccing fluids. The PAC, "conscious of both the limited extent of experience with commercial coal seam gas extraction in New South Wales to date" and the likely expansion of this type of extraction in the future in the State, reviewed some of the extensive material from the United States concerning coal seam gas extraction in that country and related environmental issues.

1. Turing first to issues concerning "groundwater and surface water", the PAC Determination Report noted that "a key concern in the assessment" was the risk that the extraction process would adversely impact upon these waters. Risk possibilities associated with geological fault zones in the gas field included the release of coal seam waters to surface waters or shallow aquifers, the possible loss of waters from existing surface streams and shallow aquifers, the possible contamination of these waters by substances in coal seam waters and fraccing fluids, and the escape of gas into ground and/or surface waters.

1. The PAC Determination Report referred to and quoted extracts from the SRK Report that discussed these risks in the context of a number of geological faults reported in the relevant area. The PAC Determination Report then stated the following (pp 6-7, emphasis added):

While these extracts need to be read in the broader context of the above report, they indicate a level of uncertainty at various points in the predictions. Some geological uncertainty is, of course, inevitable in underground gas extraction and mining operations. But, a greater degree of definition of the geology and groundwater modelling in the Environmental Assessment and supporting documents would have given a greater degree of assurance that risks such as those outlined above were negligible. This is especially the case in moving from the Project Approval for Stage 1 to the Concept Plan approval for the whole gas field development area.

The Commission nevertheless accepts the position implicit in the Department's recommendation for approval, that it is possible to develop the gas field by adaptive management, using modern geological, hydrogeological and drilling techniques, with acceptable minimisation of risks. The proponent has proposed, and the Department's conditions of approval require, the progressive development of the preliminary conceptual hydrogeological model supporting the application into a fully operational numerical model. This model will be based on the results of the more extensive drilling and geological testing which will accompany the gas field development. It will be an important tool in adaptive management. Since this development will be a complex task requiring the DG's approval, the Commission has included a requirement in the conditions of approval that the model be peer reviewed to assist the Department and relevant agencies in their assessment of the model, its outputs and its application in adaptive management.

The conditions of approval also require extensive monitoring of groundwaters and surface waters for quantity and quality through the life of the project in order to continually assess any adverse or non-planned environmental impacts. 'Hold Point' conditions are specified in the approval conditions, should any such impacts become apparent, with the 'Hold Points' being established using risk analysis. These are important measures to ensure adaptive management action is initiated early enough to avoid any adverse impacts arising from unanticipated geological faults encountered during development of the gas field.

The Commission also noted conditions requiring water quality criteria to be met in relation to possible surface water discharges. It is not uncommon for existing water quality in rural areas to exceed the nominal relevant water quality criteria specified in the Australian and New Zealand Guidelines for Fresh and Marine Water Quality 2000 (ANZECC 2000 Guidelines) In such a situation site-specified water quality criteria need to be developed in accordance with the ANZECC 2000 Guidelines and this has been incorporated into the final condition of approval.

7.2 Impacts from the Fraccing Process

The hydraulic fracturing ('fraccing') process opens the coal seam to allow depressurisation, desorption and flow of the coal seam gas to the collection wells. A wide variety of materials has been employed to achieve the desired gas production outcomes. The fraccing fluids are designed to meet several engineering criteria. There has been an evolution in the development of this specialised technology, which can be expected to continue into the future. Future tailoring of fraccing fluids to optimise the development of this field can be anticipated. The Commission has added a condition which requires detailed specification of the fraccing fluids to be used, with relevant toxicity and carcinogenicity information, and for the information to be updated annually.

Concern has arisen in other places related to the risk of some chemicals used in fraccing entering groundwaters. Specifically benzene, toluene, ethylbenzene and xylene (BTEX), a component in the diesel fuel sometimes added to fraccing fluids, has drawn attention in this industry. The proponent has not proposed to use BTEX in its fraccing operations. The Commission has added a condition specifically banning the use of fraccing fluids containing BTEX.

1. In considering the concept plan approval, the PAC deemed it prudent to incorporate an additional environmental assessment requirement on future project applications. This would require a demonstration that the nature of the environmental impacts associated with the development of the whole gas field would be consistent with the nature of environmental impacts identified for the current project (p 8).

1. The PAC had regard to the project application and the associated documentation provided by the Department, including the Director-General's EA Report. The PAC noted the Department's assessment of key issues raised in the submissions to it.

1. The PAC Determination Report indicated that it would approve the concept plan and the major project application subject to the Department's recommended conditions. In so doing, although the PAC was satisfied that the Department's recommended conditions adequately addressed all aspects of environmental impacts for the project, it nevertheless supplemented and strengthened them by making the following amendments:

Condition #	Amendments to Condition	Reason
Project Approval Conditions
3.7 Groundwater Management	Add new condition: "The Proponent shall ensure that no fraccing fluids containing Benzene, Toluene, Ethylbenzene and Xylene (BTEX) chemicals are used in gas field development".	Although AGL have indicated the use of BTEX is not anticipated, it is considered this commitment needs to be explicitly stated as a condition.
3.9 Groundwater Management	Add new item (d): "d) include an independent peer review by an appropriately experienced and qualified hydrogeolist (who is approved by the Director-General for the purposes of this condition) on the robustness and technical veracity of the model".	To assist the Department and agencies in their decision on the veracity and robustness of the hydrogeological modelling required for the Stage 1 Project.
3.12 Extracted Water Management	Add new item (i) "i) provide for the development of site specific water quality criteria in accordance with Australian and New Zealand Guidelines for Fresh and Marine Water Quality 2000 (ANZECC 2000 Guidelines), as necessary, in consultation with DECCW, for the purposes of conditions b),c), d) and e) above".	The water quality criteria established for the site are likely to involve the development of site-specific criteria in the Gloucester region according to the ANZECC 2000 Guidelines. The Proponent should be responsible for this development in consultation with DECCW.
4.1 Ground Water Monitoring	Amend item (c) as follows: "Identify performance criteria for gas well development, including monitoring criteria to detect early indicators for drawdown impacts to beneficial aquifers or of cumulative drawdown effects and hold points (based on risk assessment) for further development where adverse impacts are identified; Amend item (e) as follows: "include provisions for the monitoring of coal seam dewatering rates and hold points (based on risk assessment) in the case that water volumes are greater than the predicated two mega litres per day (unless managed in accordance with condition 3.12g);"	The "hold points" are critical parts of the adaptive management proposed. They need to be adequately defined based on environmental risk management criteria.
4.1 Ground Water Monitoring	Amend item (g): "g) provide detailed specifications (including information on toxicity and/or carcinogenicity) of fraccing fluids to be used in gas well development, with annual updates;"	Technological changes are anticipated with likely changes in fraccing fluids. The condition will allow for such development while keeping close track of any potential environmental risks.

1. Ultimately, the PAC considered that adequate measures had been included in the amended conditions of approval to ensure that the project "achieved acceptable environmental standards in relation to impacts on surface and ground water...flora and fauna".

1. Thus, on the same day, the PAC determined, pursuant to s 75O of the EPAA, to approve the concept plan. The concept plan approval stipulated in detail future environmental assessment requirements for subsequent stages of the project. These included an assessment of the "key issues" in consideration of all components of the project and, importantly, "cumulative impacts from other projects associated with the Concept Plan", namely:

a comprehensive groundwater impact assessment;

a comprehensive extracted water management strategy;

a flora and fauna impact assessment;

a heritage impact assessment;

an air quality impact assessment;

a visual impact assessment;

a noise impact assessment;

a construction traffic assessment; and

a gas well decommissioning and rehabilitation strategy.

The Major Project Approval and Conditions

1. In addition, pursuant to s 75J of the EPAA the PAC determined to approve the major project as set out in the terms of that approval insofar as it related to "the Proposal" as defined, namely the Stage 1 area; the central processing facility; the gas transmission pipeline; the Hexham delivery station; and associated ancillary infrastructure.

1. Section 1 of the major project approval sets out the terms of the approval and the limits of the approval. Condition 1.6 expressly states, "to avoid any doubt", that the approval does not authorise "b) direct re-injection of groundwater produced during gas well development, back into groundwater aquifers as a water disposal option." Section 2 deals with the project design requirements. In particular, conditions 2.1 and 2.2 are concerned with the minimisation of the risk of groundwater impacts in the location of gas wells (condition 2.1) and the finalisation of the route alignment of the gas transmission pipeline (condition 2.2).

1. Conditions 1.1, 1.2, 2.1 and 2.2 state:

Administrative Conditions

Terms of Approval

1.1 The Proponent shall carry out the project generally in accordance with the:

a) Major Project Application 08_0154;

b) Gloucester Gas Project Environmental Assessment, dated November 2009 and prepared by AECOM;

c) Gloucester Gas Project Submissions Report, dated May 2010, and prepared by AECOM;

d) Gloucester Basin Stage 1 Gas Field Development Project Preliminary Groundwater Assessment and Initial Conceptual Hydrogeological Model, dated July 2010, and prepared by SRK Consulting;

e) additional information on offset site(s) and pre-construction surveys submitted to the Department by email on 10 August 2010 and 31 August 2010, respectively;

f) draft management plans on acid sulphate soil and the threatened species Grevillea Parviflora sub. Species parviflora, submitted to the Department by email on 12 October 2010;

g) the concept plan approval granted with respect to the Gloucester Gas Project (08_0154); and

h) the conditions of this approval.

1.2 In the event of an inconsistency between:

a) the conditions of this approval and any document listed from condition 1.1a) to 1.1f) inclusive, the conditions of this approval shall prevail to the extent of the inconsistency; and

b) any document listed from condition 1.1a) to 1.1f) inclusive, the most recent document shall prevail to the extent of the inconsistency.

...

2.1 The Proponent shall in consultation with DII and NOW ensure that gas wells within the Stage 1 Gas Field Development Area are located consistent with the locational principles identified in Statement of Commitment 3 (concept area) of the Environmental Assessment, with consideration to flood prone land and with consideration to minimising the risk of groundwater impacts consistent with the requirements of condition 3.10. Prior to the commencement of construction of the Stage 1 Gas Field Development Area, the Proponent shall submit to DII location sheets identifying the final location of wells including associated infrastructure such as gas/water gathering lines and access roads. Where gas development is phased, the Proponent shall submit the above information (with appropriate updates) to DII prior to the commencement of each phase.

Nothing in this condition precludes the Proponent from submitting the above required information as part of the Field Development Plan referred to in Condition 3.10.

2.2 The Proponent shall finalise the route alignment of the gas transmission pipeline within the 100 metre assessment corridor identified in the Environmental Assessment, in consultation with affected landowners, within the aim of maximising the length of route within existing disturbed areas (including existing infrastructure easements) and minimising conflict with private properties and landuse. Where the route is proposed to traverse existing infrastructure easements the Proponent shall ensure that the pipeline route is located in consultation with the owners of existing infrastructure within the easement with the aim of minimising conflict with the ongoing operation and future upgrade/ maintenance requirements of that infrastructure. Prior to the commencement of construction of the gas transmission pipeline, the Proponent shall submit to the Department route alignment sheets identifying the final location of the pipeline.

1. Section 3 concerns the imposition of specific environmental conditions. Conditions 3.1 to 3.13 are concerned with the impact of the project on water. In relation to "Surface Water Quality", conditions 3.1 and 3.2 provide as follows:

3.1 Except as may be expressly provided by an Environment Protection Licence for the project, the Proponent shall comply with section 120 of the Protection of the Environment Operations Act 1997 which prohibits the pollution of waters.

3.2 Soil and water management measures consistent with Landcom's Managing Urban Stormwater: Soils and Conservation shall be employed during the construction of the project for erosion and sediment control.

1. In relation to "Groundwater Management" conditions 3.5 to 3.7 state:

3.5 The Proponent shall implement all reasonable and feasible measures to ensure that gas wells are constructed, operated and decommissioned to avoid and minimise gas migration risks and adverse impacts to beneficial aquifers including associated groundwater users, surface waters and groundwater dependent ecosystems.

3.6 Unless otherwise agreed to by the Director-General, prior to the commencement of construction of the Stage 1 Gas Field Development Area, the Proponent shall identify and plug with cement any abandoned or old exploration wells located within a 500 metre radius of finalised gas well locations to minimise the risk of gas migration via these wells.

3.7 The Proponent shall ensure that no fraccing fluids containing Benzene, Toluene, Ethylbenzene and Xylene (BTEX) chemicals are used in gas field development.

1. In terms of hydrogeological modelling, the following conditions are imposed:

3.8 Prior to the commencement of construction the project, the Proponent shall in consultation with NOW update the conceptual hydrogeological model developed during the assessment stage of the project (referred to in the document listed in condition 1.1d) based on baseline data gathered from (but not necessarily limited to), the pre-construction investigations identified below:

a) seismic surveys of the site to identify geological features of risk;

b) preliminary field sampling of hydraulic conductivity, groundwater levels, groundwater quality and surface water quality based on a packer, pump and slug testing program and surface water sampling; and

c) long-term baseline monitoring (i.e. at least six months) at groundwater and surface water locations determined in consultation with NOW, to ensure representative baseline data on pre-construction conditions (including seasonal variability) in relation to the shallow rock and alluvial beneficial aquifers, deeper coal seam water bearing zones, groundwater users and surface waters.

3.9 The updated conceptual hydrogeological model referred to in condition 3.8 shall be submitted for the Director-General's approval, prior to the commencement of construction and shall include:

a)updated assessment of the potential for drawdown and displacement of shallow rock and alluvial beneficial aquifers, considering impacts to nearby registered bore users, based on detailed baseline data gathered from condition 3.8 a) to c);

b)optimal areas for gas well location within the Stage 1 Gas Field Development Area based on minimising the risk of gas migration and of interaction with beneficial aquifers and the outcomes of the updated assessment;

c)recommendations for phased gas well development including identifying the maximum number of gas wells that would be developed during the first phase of development and associated operational groundwater monitoring strategy consistent with the requirements of condition 4.1; and

d)include an independent peer review by an appropriately experienced and qualified hydrogeologist (who is approved by the Director-General for the purposes of this condition) on the robustness and technical veracity of the model.

In submitting the updated conceptual hydrogeological model for the Director-General's approval, the Proponent shall provide written evidence of consultation with NOW on the robustness and technical veracity of the model (including well location areas and phasing program) identifying the issues raised by NOW and how these have been addressed by the Proponent.

1. Condition 3.10 imposes a requirement on the proponent to ensure that gas wells within the Stage 1 area are developed in a manner that avoids and minimises adverse impacts to beneficial aquifers consistent with condition 3.5. In consultation with NOW, AGL must develop and submit to the Director-General a Field Development Plan. The condition states:

Field Development Plan Implementation during Operation

3.10 Unless otherwise agreed to by the Director-General, the Proponent shall ensure that gas wells within the Stage 1 Gas Field Development Area are developed in a phased manner to avoid and minimise adverse impacts to beneficial aquifers consistent with the requirements of condition 3.5. Prior to the commencement of construction of the Stage 1 Gas Field Development Area, the Proponent shall in consultation with NOW develop and submit to the Director-General a Field Development Plan, which includes a phasing program for the development of gas wells and details of the final location of gas wells and associated infrastructure such as gas/water gathering lines and access roads for at least the first phase of gas well development identified in the Field Development Plan. As gas field development progresses, the Proponent shall in consultation with NOW update the Field Development Plan with phasing and location details of gas wells and associated infrastructure for subsequent phases, and submit the plan to the Director-General prior to the commencement of each phase.

The first phase of gas well development within the Field Development Plan shall be as per the requirements of condition 3.9c). All subsequent phases of gas field development shall be consistent with the outcomes of the groundwater monitoring program and associated numerical hydro-geological model implemented in accordance with conditions 4.1 and 4.2, requirements of condition 3.5, to the satisfaction of the Director-General in consultation with NOW. Subsequent phases shall be undertaken in accordance with any requirements of the Director-General (in consultation with NOW) following its review of groundwater monitoring results in accordance with conditions 4.1 and 4.2.

1. Condition 3.11 sets the maximum rate of groundwater extraction at 2ML per day over a 12 month period in relation to any water licences obtained from NOW.

1. Prior to the commencement of the project, AGL is required to develop an Extracted Water Management Strategy in consultation with, amongst others, NOW, DECCW and relevant local councils, dealing with water disposal and re-use options (condition 3.12). Specifically, condition 3.12 c), d), e) and i) provide that AGL will develop an Extracted Water Management Strategy which:

c) if discharge to surface waters is proposed - identifies details of all practical measures investigated to prevent, control, abate or mitigate that discharge; details of the receiving environment including water quality and flow conditions; proposed discharge rate and frequency; and details of all practical measures investigated to protect the environment from harm as a result of that discharge including demonstration that any discharge would satisfy the requirements of condition 3.1;

d) if re-use for irrigation is proposed - demonstrates that there is demand for the volumes of water to be generated, details of all practical measures investigated to protect the environment from harm including details of optimal application rates to prevent over-irrigation and associated salinity issues or groundwater contamination, and demonstration that any discharge would satisfy the requirements of condition 3.1;

e) if extracted water is proposed to be made available to the market - demonstrates that suitable buyers of the water have been secured and where the water is proposed to supplement drinking water supplies, demonstration that the water quality is suitable for drinking water supplies;

...

i) provides for the development of site specific water quality criteria in accordance with the Australian and New Zealand Guidelines for Fresh and Marine Water Quality 2000 (ANZECC 2000 Guidelines), as necessary, in consultation with DECCW, for the purposes of conditions b), c), d) and e) above.

1. Specific conditions concerning heritage impacts (conditions 3.35 to 3.39) and waste generation and management are imposed, including conditions for generated liquid waste (conditions 3.51 to 3.53). AGL is also required to ensure that all gas wells are decommissioned and rehabilitated at the cessation of operation (condition 3.56).

1. Section 4 imposes conditions with respect to environmental monitoring and auditing. In relation to groundwater monitoring, conditions 4.1 and 4.2 state:

4.1 Prior to the commencement of construction of the Project, the Proponent shall develop a Groundwater Monitoring Program in consultation with NOW and to the satisfaction of the Director-General, covering the operation of the Stage 1 Gas Field Development Area. The program shall detail the monitoring strategy that would be implemented to measure dewatering and water quality impacts of gas well development on beneficial aquifers (including associated groundwater users, surface waters and groundwater dependent ecosystems) during the implementation of the Field Development Plan for the Stage 1 Gas Field Development Area and measure any residual impacts following the decommissioning of wells. The program shall:

a) identify surface and groundwater monitoring locations demonstrating their appropriateness for obtaining representative water quality and water level data on operational impacts in relation to beneficial aquifers, groundwater users and surface waters. In the first instance the monitoring locations shall focus on the first phase of gas well development in the Field Development Plan, as identified under condition 3.10 and shall be updated as well development progresses;

b)provide details of the monitoring points (including location, depth of monitoring, duration and frequency of monitoring and parameters to be monitored);

c)identify performance criteria for gas well development, including monitoring criteria to detect early indicators of drawdown impacts to beneficial aquifers or of cumulative drawdown effects and hold points (based on risk assessment) for further development where adverse impacts are identified;

d)identify the frequency of on monitoring results including at a minimum prior to the commencement of each phase of the Field Development Plan (subsequent to the first phase) in accordance with the requirements of condition 3.10;

e)include provisions for the monitoring of coal seam dewatering rates and hold points (based on risk assessment) in the case that water volumes are greater than the predicted two mega litres per day (unless managed in accordance with condition 3.12g);

f)include provisions for monitoring the potential for gas migration to the surface;

g)provide detailed specifications (including information on toxicity and/or carcinogenicity) of fraccing fluids to be used in gas well development, with annual updates;

h)include provisions for ongoing monitoring, post decommissioning of wells to determine any residual impacts;

i)identify a procedure for contingency or remedial action where adverse impacts are identified including compensation to groundwater users and/or rehabilitation measures where affects to groundwater dependent ecosystems/communities are attributed to the project; and

j)identify mechanisms for the regular review and update of the program in consultation with NOW as required.

In submitting the program for the Director-General's approval, the Proponent shall provide written evidence of consultation with NOW on the robustness and acceptability of the monitoring program, including issues raised by NOW and how these have been addressed.

The monitoring program shall be updated in consultation with NOW to the satisfaction of the Director-General, prior to the commencement of each phase of the Field Development Plan, taking into account the recommendations of the Numerical Hydrogeological Model developed in accordance with condition 4.2.

4.2 The Proponent shall in consultation with NOW develop a Numerical Hydrogeological Model of the Stage 1 Gas Field Development Area building on the detailed conceptual hydrogeological model developed in accordance with conditions 3.8 and 3.9 and based on the monitoring results from the operation of the project, obtained in accordance with condition 4.1. The Model shall be used as a predictive, adaptive management and verification tool to guide the ongoing operation and implementation of gas wells as part of the Field Development Plan including feeding into recommendations on the phasing of gas wells in accordance with condition 3.10 (this includes identifying any impacts of the project from the previous phase of gas well development and the mitigation and contingency measure employed to control any impacts including their effectiveness and the recommended number and location of gas well to be developed in the next phase). The Model shall also feed into recommendations on updates to the Groundwater Monitoring program in accordance condition 4.1.

1. Section 5 expressly deals with compliance monitoring and tracking.

1. Section 7 stipulates the requirement to prepare and implement a Construction Environmental Management Plan, which includes a Flora and Fauna Management Plan and a Soil and Water Management Plan detailing pre-construction investigations, base-line water quality monitoring and a downstream water quality monitoring strategy to monitor down stream impacts to water quality during construction (condition 7.3).

1. Condition 7.4 states that the proponent must prepare and implement an Operation Environmental Management Plan that includes an environmental risk analysis to identify key environmental performance issues associated with the operation phase of the project. Issues to be addressed in the Plan include measures to monitor and manage groundwater impacts and flood risks and risks of equipment damage or disconnection during flood events (condition 7.4 e)(i) and (ii)). This Plan must be submitted to the Director-General for approval one month prior to the commencement of the operation of the project. If no approval is received, operation cannot commence:

Operation Environmental Management Plan

7.4 The Proponent shall prepare and implement an Operation Environmental Management Plan to detail an environmental management framework, practices and procedures to be followed during operation of the project. The Plan shall be consistent with Guideline for the Preparation of Environmental Management Plans (DIPNR 2004) and shall include, but not necessarily be limited to:

a) a description of key operational and maintenance activities associated with the project;

b) identification of all statutory and other obligations that the Proponent is required to fulfill in relation to operation of the project, including any approvals, licenses, approvals and consultations;

c) a description of the roles and responsibilities for all relevant employees and contractors involved in the operation of the project including relevant training and induction provisions for ensuring that all employees, contractors and sub-contractors are aware of their environmental and compliance obligations under these conditions of approval;

d) overall environmental policies and principles to be applied to the operation of the project;

e) an environmental risk analysis to identify the key environmental performance issues associated with the operation phase and details of how environmental performance would be monitored and managed to meet acceptable outcomes including what actions will be taken to address identified potential adverse environmental impacts. In particular, the following environmental performance issues shall be addressed in the Plan:

(i) measures to monitor and manage groundwater impacts including residual impacts following decommissioning of gas wells in accordance with conditions 4.1and 4.2;

(ii) measures to monitor and manage flood risks including risks of equipment damage or disconnection during flood events and measures for clean up and restoration;

(iii) measures to monitor and manage noise emissions including measures for regular performance monitoring of noise generated by the project (in addition to measures identified in conditions 4.3) and 4.4), measures to proactively respond to and deal with noise complaints and procedure for the development of a case-specific noise management protocol in consultation with DECCW to manage short-term noise amenity impacts at surrounding receptors in the case of works identified in condition 3.22b);

(iv) measures to monitor and manage air quality impacts in accordance with the requirements of this approval;

(v) measures to monitor and manage landscape plantings and revegetation measures;

(vi) measures to monitor and manage operational traffic impacts particularly during maintenance events where operational traffic volumes associated with the project may increase and procedures for restoring any damage attributable to the project during the operation phase;

(vii) hazard and safety and emergency management measures including measures to control bushfires; and

(viii) rehabilitation and completion criteria for the decommissioning and rehabilitation of the project; and

f) procedures for the periodic review and update of the Operation Environmental Management Plan as necessary.

The Operation Environmental Management Plan shall be submitted for the approval of the Director-General no later than one month prior to the commencement of Operation of the

project or within such period as otherwise agreed by the Director-General. Operation shall not commence until written approval has been received from the Director-General. Uncertainty and Lack of Finality

Grounds 1 and 2: the Major Project Approval Conditions are Invalid due to Uncertainty

1. Given their underlying legal and factual similarities, it is convenient to deal with these two grounds together. Each concern an allegation that the imposition of the conditions attached to the project approval resulted in the PAC impermissibly:

(a)   deferring matters which were essential to the consideration of the major project;

(b)   giving approval to a potentially significantly different development from that which was sought in the project application, with significantly different environmental impacts from those for which approval was sought; and

(c)   delegating its power.

Invalidity by Reason of Uncertainty: Applicable Legal Principles

1. The PAC's jurisdiction, as a delegate of the Minister, to approve or disapprove major project applications derives from s 75J of the EPAA. It states:

75J Giving of approval by Minister to carry out project

(1) If:

(a) the proponent makes an application for the approval of the Minister under this Part to carry out a project, and

(b) the Director-General has given his or her report on the project to the Minister,

the Minister may approve or disapprove of the carrying out of the project.

(2) The Minister, when deciding whether or not to approve the carrying out of a project, is to consider:

(a) the Director-General's report on the project and the reports, advice and recommendations (and the statement relating to compliance with environmental assessment requirements) contained in the report, and

(b) if the proponent is a public authority-any advice provided by the Minister having portfolio responsibility for the proponent, and

(c) any findings or recommendations of the Planning Assessment Commission following a review in respect of the project.

(3) In deciding whether or not to approve the carrying out of a project, the Minister may (but is not required to) take into account the provisions of any environmental planning instrument that would not (because of section 75R) apply to the project if approved. However, the regulations may preclude approval for the carrying out of a class of project (other than a critical infrastructure project) that such an instrument would otherwise prohibit.

(4) A project may be approved under this Part with such modifications of the project or on such conditions as the Minister may determine.

(5) The conditions of approval for the carrying out of a project may require the proponent to comply with any obligations in a statement of commitments made by the proponent (including by entering into a planning agreement referred to in section 93F).

1. Section 75X(5) of the same Act relevantly provides:

The only requirement of this Part that is mandatory in connection with the validity of an approval of a project or of a concept plan for a project is a requirement that an environmental assessment with respect to the project is made publicly available under section 75H (or under that section as applied by section 75N). This subsection does not affect the operation of section 75T in relation to a critical infrastructure project.

1. The Alliance relied upon a suite of cases in support of the proposition that a development consent will fail for uncertainty where it leaves open the possibility of a significantly different decision (Mison v Randwick Municipal Council (1991) 23 NSWLR 734 at 737, Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 at [24] and Mid Western Community Action Group Inc v Mid-Western Regional Council & Stockland Development Pty Limited [2007] NSWLEC 411 at [21]). However, it must be borne in mind that the principles articulated in those cases concern approvals given pursuant to Pt 4 of the EPAA, not Pt 3A, and a separate line of authority has emerged in respect of approvals granted under Pt 3A of that Act (Ulan Coal Mines Ltd v Minister for Planning [2008] NSWLEC 185; (2008) 160 LGERA 20, Rivers SOS Inc v Minister for Planning [2009] NSWLEC 213; (2009) 178 LGERA 347, Pittwater Council v Minister for Planning [2011] NSWLEC 162; (2011) 184 LGERA 419 and Coffs Harbour City Council v The Minister for Planning and Infrastructure [2012] NSWLEC 4).

1. As was noted by Preston J in Ulan, there is no common law principle that an exercise of statutory power must be certain or final in order to be valid (King Gee Clothing Co Pty Ltd v Commonwealth (1945) 71 CLR 184 at 194-195 cited in Ulan at [49]).

1. Rather, a condition will only be invalid because it lacks certainty or finality if it falls outside the class of conditions that the statute impliedly or expressly permits (Ulan at [50] and the authorities cited thereat, Rivers SOS at [133] and Coffs Harbour at [162]). This will involve a question of statutory construction of the provision empowering the imposition of the impugned condition and its application to the circumstances of the particular project (Ulan at [51], Rivers SOS at [133] and Coffs Harbour at [163]).

1. Where a condition does fall outside what the statute permits and it is not severable, the purported approval will be no approval at all (Ulan at [50], Rivers SOS at [133] and Coffs Harbour at [162]).

1. But merely because there is ambiguity or uncertainty in the meaning of words will not axiomatically lead to invalidity. This is because courts will strive to avoid uncertainty by adopting a construction which gives statutory instruments and decisions practical effect (Ulan at [66] and [72] and Pittwater Council at [64]).

1. Specifically with respect to the power to grant approval on conditions pursuant to s 75J of the EPAA, in Ulan Preston J relevantly opined as follows (at [74] and [75], cited with approval in Coffs Harbour at [163]):

74 However, the power to grant approval on conditions in s 75J of the Act, neither expressly nor impliedly requires, in order for a condition to be valid, that a condition set the parameters for adjustment of a project to achieve an outcome or an objective specified in the conditions. The power to impose conditions on an approval under Pt 3A of the Act is not confined in the manner specified for conditions of development consent under Pt 4 of the Act (see ss 80 and 80A of the Act). The power to grant approval under s 75J is expressly stated to be able to be exercised, first, "with such modifications of the project" and, secondly, "on such conditions", as the Minister may determine in both cases.

75 Clearly, the power to impose conditions on an approval under Pt 3A is wide. There is no warrant to read that power down by imposing the limitation argued by Ulan that parameters of any adjustment to the Project to meet any outcome or objective specified, must also be specified.

1. In Ulan, a project approval was granted under Pt 3A of the EPAA in relation to a number of open cut coal mines and an underground coal mine. At issue was whether a condition imposed as part of the approval fell outside the power contained in s 75J of the Act. It was contended that a condition relating to water use was uncertain because it required an adjustment to the scale of the mining operations that gave rise to the potential for a significantly different project to that approved. The challenge failed: while the relevant clause did not permit the carrying out of mining operations exceeding or otherwise in breach of the permissible outer parameters of the project, it did allow flexibility in the carrying out of mining operations within those parameters. The failure of the condition under challenge to specify the permissible parameters for adjustments of the scale of mining operations did not cause the condition to be outside the class of conditions that s 75J permits.

1. As Preston J observed in Ulan, "questions of degree are always involved in determining whether a condition is sufficiently uncertain so as to be outside power" (at [77]). As his Honour emphasised, particularly in light of the size and scale of the projects approved under Pt 3A (at [78] and [80]):

78 Retention of practical flexibility, leaving matters of detail for later determination, and delegation of supervision of some stage or aspect of the development, may all be desirable and be in accordance with the statutory scheme: see Scott v Wollongong City Council (1992) 75 LGRA 112 at 118; Transport Action Group Against Motorways v Roads and Traffic Authority [1999] NSWCA 196; (1999) 46 NSWLR 598 at 629 [117] - 630 [122]; Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 at 292 [55] and Hurstville City Council v Renaldo Plus 3 Pty Limited [2006] NSWCA 248 (8 September 2006) at [89].

...

80 The scale of the projects subject to approval under Part 3A, which are often complex, extensive and multi-stage projects, make the retention of such flexibility appropriate and inevitable, a point also made in relation to other large scale projects under Part 5 of the Act (see Transport Action Group Against Motorways v Roads and Traffic Authority [1999] NSWCA 196; (1999) 46 NSWLR 598 at 630 [124] - 631 [125]) and under Part 4 (see Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 at 292 [54]).

1. Thus, if follows that while the principle of finality of administrative decision making applies in the context of a project approval given pursuant to Pt 3A of the EPAA, the extent of its application will be derived from the statutory and factual framework within which the decision is made and cannot be considered in isolation (Pittwater Council at [60]).

1. Ulan was followed by Rivers SOS, in which the applicant sought judicial review of the approval of a long wall coalmine project under Pt 3A of the EPAA. The mine traversed rivers, swamps and a reservoir. Conditions were imposed that prevented the proponent from undertaking certain mining activities without the approval of the Director-General and a series of conditions requiring the preparation of plans to the satisfaction of the Director-General. In particular, condition 6 required the provision of suitable offsets to compensation for the proponent exceeding specified performance measures. It was argued that the conditions lacked finality, were uncertain or involved a purported sub-delegation of the Minister's power to approve the activities constituting the project to the Director-General. The arguments were rejected on the basis that the Minister had approved the entire project, even if subject to conditions requiring that various steps be taken and criteria satisfied before certain activities could commence. Moreover, even though condition 6 did not specify the offsets the Director-General required the proponent to provide, it did not fall outside the power expressly or impliedly permitted under s 75J(4) of the EPAA to impose conditions having regard to the condition, its relationship with other conditions of the approval, its likely operation and the nature and extent of the project.

1. As Pain J noted in Pittwater Council (at [69]), both Ulan and Rivers SOS make it clear that, because of the complexity of the projects considered under Pt 3A, the principles in Mison developed in relation to Pt 4 do not apply as rigidly to those projects approved under Pt 3A. I endorse and apply her Honour's remarks to the present proceedings.

1. In Pittwater Council, the council alleged that in purporting to grant a project and concept plan approval subject to conditions requiring the preparation of amended plans which would decrease the number of dwellings, the height of the buildings and their positioning, and make other design modifications, the conditions imposed by the PAC were either uncertain because too much discretion was left to the Director-General to approve the modified plans, or amounted to an impermissible delegation to the Director-General of the PAC's function (at [37]). Pain J rejected the submission, holding that the discretion conferred on the Director-General and the proponent by the imposition of the conditions by the PAC was suitably confined (at [76]). The limits on the modifications imposed by the PAC had the effect of limiting the changes in the building envelopes and hence limiting the discretion of the Director-General to approve the modified plans (at [77]). Therefore, there was sufficient certainty in the conditions of approval that the modifications fell within s 75J(4) of the EPAA "taking into account the need to allow flexibility in relation to Pt 3A matters" (at [77]).

The Conditions Under Challenge

1. Initially, the Alliance relied on the preliminary hydrogeological model contained in the SRK Report to submit that the level of environmental impact of the project was "unknown". But in circumstances where the model was prepared on the basis of available data from the region, including data from the Stratford Pilot Project, this description is not apt. Moreover, the Department did not rely only on the SRK Report in informing itself on the impact of dewatering on groundwater levels and contamination. As the chronology detailed above plainly demonstrates, the Department and the PAC had regard to a range of sources as to the impacts of Stage 1 of the project on groundwater.

Of particular relevance to the environmental impact assessment and eventual determination of the subject project application by the Minister, are those objects stipulated under section 5(a). Relevantly, the objects stipulated under (i), (ii), (vi) and (vii) are significant factors informing determination of the application (noting that the proposal does not raise significant issues relating to communication and utility services, land for public purposes, community services and facilities or affordable housing). With respect to ecologically sustainable development, the EP&A Act adopts the definition in the Protection of the Environment Administration Act 1991, including the precautionary principle, the principle of inter-generational equity, the principle of conservation of biological diversity and ecological integrity, and the principle of improved valuation, pricing and incentive mechanisms. In applying the precautionary principle, public decisions should be guided by careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment and an assessment of the risk-weighted consequences of various options.

1. It is the expression "whenever practicable" that is the genesis of the Alliance's submission that the precautionary principle has been misconstrued and therefore not considered by the PAC.

1. I do not accept the Alliance's submissions in this regard.

1. First, when regard is had to the definition given to the precautionary principle contained in s 6(2)(a) of the Protection of the Environment Administration Act it is plain that no error of construction, and thus consideration, has occurred. Section 6(2)(a) states that, in the application of the precautionary principle, public and private decisions "should be guided by (i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment, and (ii) an assessment of the risk-weighted consequences of various options" (emphasis added).

1. On any view, the test articulated both in the EA and in the Director-General's EA Report is consistent with the statutory description of the precautionary principle in s 6(2) of the Protection of the Environment Administration Act 1991, which in turn is picked up by s 4(1) of the EPAA.

1. Second, to the extent that the Alliance places considerable emphasis on the articulation of the precautionary principle in Telstra, not only was that decision concerned with proceedings within Class 1 of this Court's jurisdiction, and not a case concerning judicial review, but the statement by Preston J cannot supplant the plain and unambiguous words of the statute in either s 6(2) of Protection of the Environment Administration Act or s 4(1) of the EPAA.

1. Third, the submission impermissibly invites the Court to examine the adequacy, that is to say the merits, of the PAC's assessment of the risk of irreversible environmental damage and scientific uncertainty (Notaras v Waverley Council [2007] NSWCA 333; (2007) 161 LGERA 230 at [117]).

1. Fourth, even in the PAC incorrectly assessed either the risk of serious environmental harm or the state of scientific uncertainty accompanying coal seam gas extraction, properly analysed, this amounts to an error of fact, which is not reviewable in these proceedings (Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 356 per Mason CJ).

There Was No Failure to Properly Consider the Precautionary Principle in Respect of Groundwater

1. The Alliance's third ground of review as pleaded in the points of claim contains an implicit acceptance that the precautionary principle was considered by the PAC. This is correct.

1. A brief survey of the background as to the assessment of groundwater reveals that adequate consideration of the precautionary principle in respect of groundwater occurred. For example, the Director-General set out a number of general requirements and key assessment requirements in relation to groundwater. As one of a number of such requirements, the environmental assessment process was required to address the issue of groundwater, including the likely volume of extraction, watercourses to be traversed by the proposed pipeline and an assessment of erosion and sedimentation risk. A general environmental risk analysis was also required. In response, AGL submitted the EA. In the EA reference was made to historic exploration activities in the area, including the development of a number of production evaluation wells, and the establishment of the Stratford Pilot Project. The EA made express reference to the precautionary principle in relation to assessment of the ecological, air quality, ground and surface water impacts of the project. Land use was considered, and it was noticed that Stage 1 of the project was situated on rural land used for a mix of grazing and rural residential land uses. The agricultural suitability of the land was considered and it was noted that the land was suitable for grazing. Surface water was considered, particularly in relation to any impacts on pipeline water crossings, and potential impacts on groundwater were considered.

1. In relation to groundwater, three recognised aquifer systems were recorded (a shallow alluvial aquifer, a shallow bedrock aquifer and a deep bedrock aquifer). The water quality of each aquifer was discussed. The properties of each of the aquifers were described based on previous studies undertaken, bore hole drilling logs and information gathered from the Stratford Pilot Project and associated monitoring. Extraction trials were undertaken. On the basis of these trials it was considered that migration between the deep bedrock aquifers and the alluvial aquifers was unlikely and that the rocks covering the coal seams formed a relatively impermeable confining layer. Features of the well design were also contemplated with a view to maintaining the integrity of the aquifers. Potential impacts were listed, together with migration measures to be adopted. It was noted that data from the pilot testing indicated that little, if any, response from the pilot wells monitored suggested an increase in aquifer permeability as a result of fraccing and the removal of the groundwater. To further manage any potential impacts a Groundwater Management Plan was prescribed in detail.

1. In addition to the consideration of the potential groundwater issues in the EA, an overall assessment of the ecology of the environment and the potential impacts of the project was undertaken. This analysis was supported by the Ecological Assessment appended to the EA. This assessment considered the potential impacts arising from the project on flora and fauna. The analysis expressly adopted the precautionary principle in assuming the potential existence of threatened flora or fauna species where field sampling was not adequate for the purposes of detection. The EA also contained a hazard and risk analysis, an examination of soils and geology and the management of potential impacts of the project on those soils, waste management measures, general environmental management measures that would be applied, including the Groundwater Management Plan, and a further Soil and Water Management Plan. In addition, the Statement of Commitments included matters relating to water. Finally there was an overall consideration of the proposal justification.

1. Following the exhibition process, the Submissions Report was prepared. It similarly identified and discussed potential impacts with respect to groundwater management. Water quality issues in relation to the use of fraccing fluids were addressed, including the additives that were to be used.

1. Communications involving AGL, the Department and NOW as to hydrogeological modelling occurred. As a consequence, the Preliminary Groundwater Assessment and Initial Conceptual Hydrogeological Model Report prepared by SRK was provided. AGL also outlined the staged investigation approach it proposed to adopt, comprising five individual phases, the first of which was an initial desktop study to provide recommendations regarding further phases. The SRK Report represented this first phase. As a result, NOW confirmed that the proposed program appeared to be consistent with developing the level of knowledge required to inform its assessment regarding the possible issue of water licences. NOW also confirmed that it was satisfied that project approval could be granted. However, NOW stated that production well entitlements could not be issued until the modelling was complete. AGL undertook to obtain groundwater and/or bore licences for each well through NOW prior to drilling.

1. In the Director-General's EA Report, the Department considered the views expressed by AGL as to the potential impacts of Stage 1 of the project, and the subsequent material on which it relied in support of its contention that the proposal to conduct coal seam gas mining in the Gloucester Basin would not have a significant impact on groundwater. The Report focused on the principles of ESD in relation to the concept plan approval and the project approval, in the context of a discussion of the objects of the EPAA. It set out an assessment of the environmental impacts that included a section dedicated specifically to surface and groundwater. The Report identified, as one of the risks arising from the project, the potential risks to groundwater aquifers and outlined the information available in respect of the aquifer system and proposed well construction methods. The Department's assessment was that there was expected to be low hydrological connectivity between the coal seams targeted and the surface and/or alluvial aquifer systems. It was therefore satisfied that dewatering activities associated with the project were unlikely to pose a significant risk to those alluvial systems. It was the Department's view that prudent well location, based on further detailed field monitoring and seismic surveys designed to confirm hydrogeological conditions, would enable any risks associated with spatial differences in hydrogeological conditions across the relevant geographical area to be minimised. Accordingly, the Department recommended various conditions to provide for the implementation of a monitoring framework. It was also satisfied, on the basis of the information given to it as to the composition of the fraccing fluids, that these fluids would not pose a water contamination risk.

1. To ensure the impacts of Stage 1 of the project on groundwater were managed, the Department recommended conditions of approval that contained "a precautionary approach of staged gas well development", which "would also enable any adverse impacts to be quickly identified and acted upon, including amendment of the location of future wells".

1. The Department considered the project was justified in the public interest, noting that the project had the potential to generate significant gas reserves for the New South Wales market, with new transmission lines also serving to supply gas directly to a significant domestic and industrial area in New South Wales (the Hunter region) and to increase the total capacity of the distribution network. In addition, the project would involve direct economic benefits to the State, including capital investment of up to $276 million.

1. The PAC conducted its own review of the concept plan and the Stage 1 project. In granting the concept plan approval and the project approval, the PAC imposed detailed conditions addressing water issues as set out earlier in this judgment. The conditions of the project approval were expressly imposed in order to:

prevent, minimise and/or offset adverse environmental impacts;

set standards and performance measures for acceptable environmental performance;

require regular monitoring and reporting; and

provide for the ongoing environmental management of the project.

1. The PAC Report recorded that the PAC had considered the issues raised in the Director-General's EA Report and that it was satisfied that the Department had carried out an adequate assessment. Nevertheless, the PAC also undertook further consideration of groundwater and surface water related issues, and noted that there were several risk possibilities associated with the fault zones in the gas fields. The PAC recognised that there were information limitations, however, it accepted that it was possible to develop the gas field by adaptive management in order to achieve an acceptable minimisation of risks. It referred to various considerations proposed in the Director-General's EA Report designed to achieve an acceptable minimisation of risks and added further conditions in order to "ensure adaptive management action is initiated early enough to avoid any adverse impacts arising from an unanticipated geological faults encountered during development of the gas field".

1. The PAC Report specifically considered potential risks relating to groundwater, identified uncertainties in the information before it, and came to the view that those risks could be appropriately managed through precautionary conditions adopting an adaptive management regime (see, in particular, section 7 of that Report).

1. The PAC implemented conditions relating to groundwater issues. It adopted the conditions recommended in the Director-General's EA Report and imposed additional conditions. These were imposed by way of "adaptive management". At the risk of repetition, the conditions included provisions concerning, amongst other things:

(a)   a requirement to implement all reasonable and feasible measures to minimise gas migration risks and adverse impacts to beneficial aquifers (condition 3.5);

(q)   a prohibition of certain fraccing fluids (condition 3.7);

(r)   a requirement to identify and plug old wells within a 500 m radius of finalised gas well locations to minimise the risk of gas migration (condition 3.6);

(s)   a limitation on the volume of groundwater that could be extracted (up to 2 ML per day unless NOW permitted a greater level when it granted the necessary water licence) (condition 3.11);

(t)   the preparation of a detailed baseline monitoring regime as a precursor to an updated hydrogeological model (conditions 3.8 and 3.9);

(u)   the phased development of gas wells (condition 3.10 and 3.9(c));

(v)   the development of a Groundwater Monitoring Program (condition 4.1);

(w)   as part of the Groundwater Monitoring Program, the identification of performance criteria and coal seam dewatering rates, coupled with hold points that would require operations to cease at a particular well in the event that certain criteria and rates were exceeded (conditions 4.1(c) and (e)). The PAC saw these hold points as "critical parts of the adaptive management proposed";

(x)   the obtaining of water licences from NOW authorising AGL to extract groundwater as part of Stage 1 of the project (condition 3.11);

(y) prohibiting AGL from causing any water pollution unless authorised by an environmental protection licence issued by DECCW under the POEOA (condition 3.1);

(z)   the development of a new Numerical Hydrogeological Model (condition 4.2);

(aa)   the preparation and implementation of a Construction Environmental Management Plan including a Soil and Water Management Plan (conditions 7.2 and 7.3);

(bb)   the preparation and implementation of an Operation Environmental Management Plan, to include an environmental risk analysis and adopt measures to monitor and manage groundwater impacts and flood risks (condition 7.4).

1. The conditions imposed involve monitoring of impacts, licencing, phasing, the provision of hold points based on indicators, periodic evaluation and a compliance system in relation to groundwater directed towards adaptive management. They are intended to deal with risks from expected and unexpected events, in accordance with the precautionary principle, and collectively amount to an adequate consideration of scientific uncertainty as to the impacts of the project and the possibility of irreversible environmental damage.

1. The PAC undertook its own further investigations. The members of the PAC met with the Department on two occasions and discussed issues concerning groundwater and hydrogeology, including the imposition of conditions relevant to these issues. Members of the PAC also attended a site visit of the Gloucester Gas Project where they inspected existing groundwater monitoring bores and discussed geology and groundwater within the Gloucester area, the fraccing process and fraccing chemicals. The PAC also undertook a site visit to AGL's coal seam gas project in Camden. The PAC Report expressly recorded that the condition concerning staged gas well development was adopted on the basis that it was considered consistent with a precautionary approach. Further, the Report indicated that consideration had been given to the materials provided to it, including the EA, the Submissions Report, the responses to that Report and the SRK Report. All of those materials recorded issues raised in relation to groundwater.

1. In addition, the PAC was "conscious" of the "limited experience with commercial coal seam gas extraction in New South Wales" and undertook the step of educating itself by having regard to the extensive documented experience of coal seam gas extraction in the USA. It specifically referred to the report of the United States Environmental Protection Agency, Evaluation of impacts to underground sources of drinking water by hydraulic fracturing of coalbed methane reservoirs. This information informed the PAC in considering the level of risk and the appropriate precautionary measures.

1. In my opinion, it cannot therefore be said that the PAC failed to consider ESD principles, and in particular the precautionary principle, in relation to groundwater. Nor can it be said, in my view, that the PAC had insufficient information before it to make an informed decision in this regard. The material before the PAC contained an extensive analysis of the issues concerning groundwater, which resulted in the imposition of conditions aimed at ensuring that appropriate measures were adopted and implemented having regard to the precautionary principle. In short, the Alliance has not discharged its onus of proof that the PAC did not consider the substance of ESD principles, including the precautionary principle.

1. Ultimately, this ground may be characterised as an allegation that the PAC did not consider the precautionary principle adequately because it did not have enough information to be satisfied as to the impacts of the project on groundwater. To the extent that the Alliance submits that the conditions are inadequate, I agree with the submissions of both AGL and the Minister that an examination posed in these terms descends to the merits of the conditions, and is not a matter appropriate for judicial review.

1. I therefore dismiss this ground of review.

There Was No Failure to Properly Consider the Precautionary Principle in Respect of Water Re-Use and/or Disposal

1. No separate submissions were put in relation to the fourth ground of review, either in written form or orally. To this extent, much of the reasoning expressed above is repeated and applied. In my opinion, it is plain that factually the PAC did consider, at the very least, the substance of the precautionary principle in relation to the water produced and extracted by the project.

1. In addition, for example, the DGRs necessitated that the Environmental Assessment address how extracted water would be stored, used, disposed of and re-supplied. Four disposal options were initially contemplated in the EA: first, aquifer reinjection; second, discharge to surface water; third, irrigation; and fourth, the sale of water. As indicated above, a detailed discussion of the treatment processes was contained in the EA as well as the Submissions Report. Various treatment options were considered and the proposed method of treatment was reverse osmosis, which was considered capable of treating water to whatever standard is required.

1. The Director-General's EA Report specifically referred to the precautionary principle and concluded that the Department's assessment of the ecological impacts of the project had been undertaken consistent with that principle. The Report went on to specifically consider the issue of extracted water management, including disposal options. It noted that public submissions had raised concerns about this topic. The Department's view was that the option of reinjection could pose additional risks of aquifer interference and that there had been insufficient assessment of that option to determine, with an appropriate degree of certainty, that it was a safe and feasible option. Accordingly, aquifer reinjection was not supported. However, the Director-General's EA Report recorded that it was satisfied with the remaining options. It considered that a water management strategy should provide details of the final disposal options selected and proposed conditions in relation to that matter.

1. In the PAC Report it was evident that the PAC had considered the issues raised in the Director-General's EA Report and was satisfied that the Department had carried out an adequate assessment. Further, the PAC consulted the project documentation and related submissions and took additional steps (described above) to inform itself more fully about the project and associated issues concerning water. The PAC identified that a key concern in its assessment was the risk of the extraction process impacting adversely on surface and groundwaters, which it went on to give express consideration to. The PAC expressly noted that the proposed conditions regarding the development of water quality criteria to be met in relation to possible surface water discharges were likely to involve the development of site-specific criteria in the Gloucester region. It considered that site specific water quality criteria needed to be developed in accordance with the ANZECC 2000 Guidelines. Therefore, PAC specifically added item (i) to condition 3.12 requiring the development of these criteria as an additional precaution.

1. Furthermore, other conditions were imposed relevant to the treatment of processed water. These include requiring the appropriate lining of storage ponds and a design to conform with a one in 100 year flood design standard (condition 3.13); a specific limitation as to the volume of groundwater that can be extracted (condition 3.11); and the implementation of various plans and monitoring regimes. As seen above, relevant licence and legislative obligations also apply so as to control activities concerning produced and extracted water treatment and disposal.

1. In my view, given the express discussion of water reuse and disposal in the DG's EA Report and the PAC Report, as well as the implementation of specific precautionary conditions concerning water reuse and disposal, the allegation that the precautionary principle was not considered in respect of this issue cannot stand.

1. For these reasons, this ground of review is also rejected.

Costs

1. These being proceedings filed in Class 4 of the Court's jurisdiction, normally costs would follow the event. However, one or more of the parties may seek to argue that some other costs order is appropriate in light of the nature of this litigation. This ought to be reflected in the orders.

Orders

1. The orders of the Court are as follows:

(1)   the amended summons is dismissed;

(2)   the applicant is to pay the respondents' costs of the proceedings, unless within 21 days a notice of motion is filed, together with appropriate affidavit evidence in support, seeking an alternative costs order; and

(3)   the exhibits are to be returned.

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Amendments

25 October 2013 - Admin error

Amended paragraphs: Index Added before Judgment

Decision last updated: 25 October 2013