Farmers stand ground against CSG claims

ON Queensland's Darling Downs, fortunes have been made by farmers who have embraced the state's spreading gas boom.

Dan Laffy and family

ON the plains west of Dalby on Queensland's Darling Downs, fortunes have been made by farmers who have embraced the Sunshine State's spreading gas boom.

Three massive gas plants being built at Gladstone at a cost of $70 billion will need to be fed by tens of thousands of CSG wells dotted across the state's vast farming lands.

Ducklo farmer Veronica Laffy has seen the riches made by those prepared to negotiate with the gas companies, but says she'll fight to stop the claims that have been made over her land.

More than that, she and husband Dan are prepared to be arrested as they block any move to access their farm - which has been in the family for generations - but which now has claims on it by two CSG players. Mrs Laffy, a mother of six, says individual farming families do not have the power or the resources to bargain with the gas companies.

In the US, landowners mostly own both the above and below surface rights, meaning many are making millions from royalties out of the production of gas.

In Australia, the states own the mineral resources and take most of the royalties, leaving farmers to negotiate a deal with the gas company for access to their land.

"Under the legislation, I do not have an equal place at the table. It's my business, my home, we have great investment here in our children, we see a future here for our kids, but I don't have the ability to say your business can't co-exist with mine," she said.

"If I say to the gas company I don't agree to what you've offered, you can't come on my land, they can take me to land court, lodge their application with the land court and still come on my property - legally, I can't stop them."

Two separate companies have rights to the resources tenements under her land - Arrow Energy, which was taken out by Shell and PetroChina, and the Queensland Gas Company (QGC), which was bought by British giant BG Group.

While some farmers are enjoying the extra income stream from gas companies drilling on their land and have found a way for the businesses to get along, Mrs Laffy has decided that the energy industry cannot co-exist with her organic livestock operation.

The couple bought the farm, in Ducklo, which is not far from Dalby - around 210km west of Brisbane - in 1999 after they married.

The property had been in Dan's family for three generations before they bought it and his parents owned a farm across the road at that time but sold out to Arrow Energy five years ago.

After years of cropping, the Laffys decided to transform the 380ha farm into an organic operation, a move which Mrs Laffy says dramatically changed the approach to any land-access talks. "Once we start talking about our organics, we can't have any chemical spills on our land or you would immediately lose your certification," she said.

A QGC spokesman said the company already had gas wells on an organic farm near Chinchilla and its main pipeline was built through an organic property between Miles and Wandoan.

"Weed washdown, topsoil and chemical management are vital and we have worked with the landowners successfully on these issues," the spokesman said.

Arrow Energy was the first company to approach the family, in about 2008, to access its land for CSG exploration, an experience that Mrs Laffy said informed her view for future talks. Once Arrow was taken out by Shell, the talks stopped without an outcome and then QGC came knocking.

Paying landholders for their time to negotiate access agreements should be a given, Mrs Laffy says, because of the time it takes to research and understand the impacts. She argues it is not offered and landholders are told that will be covered in the compensation payment.

She points out that with QGC offering $3000 per well a year, the compensation would not come close to covering the time she would have to give the negotiations - time when she isn't at her other business, a childcare centre, or with her own children.

"I had had the experience with Arrow and saw the time that took and I've decided that I won't meet with them (QGC) and negotiate unless I'm paid for my time," she said.

"They don't want to pay me, so I won't engage."

The next step for the Laffys will come if QGC decides to take the family to court.

"We've gone through the process and now we are at the end of the line. The next step for them is to take us to court and once they do that, they can access our property, whether they have a plan around our organics or our kids, that's the legislation," Mrs Laffy said. "We don't want them to come on our land and the scenario for us is if they insist to come on, we will need to blockade our farm or stand in front of a gate and potentially be arrested."

QGC said it had sought, unsuccessfully, to have discussions with the Laffys many times since November 2010. "We would welcome the opportunity to talk with them about a plan for their property and a compensation agreement," a QGC spokesman said. "We want to reach a voluntary agreement with the Laffys, although they are equally entitled to ask the Land Court to determine appropriate compensation. We have about 1900 voluntary agreements with landowners and we'd like the Laffys to be another one."

Additional reporting: Matt Chambers