What does the change of government mean for Queensland's energy and resources sector?

In brief

With the results of the Queensland election having now been declared and the Labor Party invited to form government (with the support of an independent), Partner Ben Zillmann, Managing Associate John Hedge and Associate Andrea Moffatt look at the key policies announced by Labor before the election that could impact on the energy and resources sector. 

Background

While the media has principally focused on privatisations and environmental issues relating to port dredging at Abbot Point, many of the policies announced by Labor before the recent state election have direct and/or indirect implications for the energy and resources sector.

An overview of the policies of most relevance to the sector are set out below.

Electricity

• Electricity assets will not be privatised. Cost savings will be sought through the consolidation of the three electricity network businesses (Ergon, Energex and Powerlink) into a single network business and consolidation of the two generation businesses (CS Energy and Stanwell) into a single generation business.¹
• The potential for electricity supply in remote areas to be opened up to competition from local government will be investigated, including consideration of a legislative mechanism for local governments to take control of power generation and distribution needs.²
• A Queensland Productivity Commission will be established as an independent economic review body, and will initially be tasked with conducting a public inquiry into electricity pricing.³

Other resources infrastructure

• Government-owned infrastructure assets used by the resources industry (most evidently the Ports of Gladstone and Townsville, Mt Isa-Townsville rail line and SunWater industrial water pipelines) will not be privatised.4
• Government funding will not be provided for rail lines that service private commercial projects (ie the proposed Galilee basin infrastructure co-investment).⁵

Royalties

• No increase in royalties received from the mining and resources sector.⁶

Uranium and sand mining

• The previous policy ban on uranium mining in Queensland will be reinstated.
• The policy for phasing out sand mining on Stradbroke Island by 2019 will be reinstated.⁷

Solar power

• A joint review will be undertaken by the Queensland Productivity Commission and Queensland Competition Authority into pricing for solar energy.
• A 40MW solar auction will be conducted. Under the proposed 'contract for difference' model, the government will pay the contracted generator(s) the difference between a feed in tariff rate for large-scale renewable energy generation (established through the auction process), and the prevailing wholesale price of electricity in the National Electricity Market.⁸

FIFO arrangements

It was initially understood that existing fly-in-fly-out (FIFO) arrangements would be reviewed. However, since the election it has been clarified that the policy only applies to new projects.⁹

For new projects:

• a 100 per cent FIFO workforce for the operation of mines located near a regional centre or existing mining community will not be permitted;
• the State Development and Public Works Organisation Act 1971 (Qld) will be amended to require the Coordinator-General to report to Parliament on an annual basis on the number of non-resident workers (including contractors) near the Bowen and Surat Basins, including an assessment of flow on social, community and economic impacts on regional communities;
• when making an approval decision on an environmental impact statement, the Coordinator-General will be required to consider, monitor and report on whether workers are being provided with the choice to live in regional communities;
• mining proponents will be required to utilise existing housing when applying for an environmental impact statement;
• significant financial and other penalties to ensure compliance with the Coordinator-General's decisions will be introduced;
• a Parliamentary Inquiry will be held into the mental health impacts of FIFO on workers; and
• legislation associated with the approval, monitoring and maintenance of mining will be reviewed and amended to facilitate the policy framework.¹⁰

Other environmental and planning policies

Proposed legislative amendments to environment legislation include:

• reinstatement of the coastal planning and vegetation protection laws repealed by the previous government, and reintroduction of riverine protection permits;
• repeal of water laws enacted by the previous government identified as having the potential to allow for over-allocation of the state's water resources; and
• amendment of the Water Act 2000 (Qld) to incorporate principles of ecologically sustainable development.¹¹

In respect of dredging and port development:

• the use of existing port infrastructure in the four ports within the World Heritage Area (Townsville, Abbot Point, Hay Point and Gladstone) will be optimised. Where expansion of any of those four ports is necessary, the beneficial reuse of dredge spoil will be mandated (for example, such as for use in land reclamation in port development areas). Capital dredging outside those ports will be prohibited;
• proponents of new dredging works will need to demonstrate that their project is commercially viable before the commencement of works;
• sea dumping of capital dredge spoil within the Great Barrier Reef World Heritage Area will be prohibited;
• development in the Greater Fitzroy River Delta Area will be prohibited, with current plans to allow dredging at Trinity Inlet at Cairns being set aside, unless there is a workable plan to use dredge spoil for land reclamation or safe disposal on the land; and
• dredging of Abbot Point and dumping of the dredge spoil onto the Caley Valley Wetlands will not be permitted to go ahead until Adani has demonstrated its project has financial close.¹²

Labor has also announced its intention to:

• work with traditional owners, stakeholders and communities to legislate protections for Queensland’s rivers from large-scale industrial operations; and
• reinstate third-party objection and appeal rights to development approvals.¹³

Project-specific issues

Other policies relating to specific projects include:

• a commitment to back the previous government's planned amendments to the Environment Protection Act 1994 (Qld) to extend the life of the Mount Isa copper smelter;¹⁴ and
• consideration of a review of approvals previously given in relation to the New Acland expansion.¹⁵