Coal seam gas activities in Queensland and NSW have created scenes of confusion, conflict, and sometimes, chaos. At the heart of much of this conflict has been land — in particular whether a landholder has the right to refuse coal seam gas companies’ access to the access to land when the company wants to explore for coal seam gas, or produce the gas from a landowner’s property.
Such conflict has given rise to the creation of a number of community groups that seek to limit the access of the companies. Such notable organisations include the Caroona Coal Action Group and Lock the Gate.
What rights do property owners have?
As CSG activities rapidly expand in Queensland, community concern over the capacity of companies to come onto and damage land has increased landholders’ anxiety. It has also led to some confusion over what the rights of property owners are in relation to their land: can they exclude the companies, or do they have to let them come onto the land with unfettered discretion? The answer to both questions is a resounding NO.
Your property is not your castle
Australians perceive their home as their castle, and this was represented in the movie The Castle, as the Kerrigan family fought attempts by the government to resume their land in order to expand the airport. This view of a man’s land as his castle harks back to the 17th Century, when the early Jurist Lord Coke pronounced that ‘everyone is to him as his castle and fortress’. This view of land captures the common Australian perception of rights over their land. Such a view is generally accepted in the common law, where the landowner has an absolute right to determine who enters his land, and who remains on his land. In doing so, the landowner essentially enjoys a right to exclude any person from entering his land.
This common law position a landowner’s right to control those who enter his land over land has been altered by statute in all jurisdictions in Australia, granting the Crown the right to reserve ownership and control over petroleum (including Coal Seam Gas) and minerals.
The case Plenty v Dillon confirmed in law that a landholder has a right to exclude others from entering their land as a trespasser. This case involved a successful action for trespass brought by a landowner against two police officers who entered premises without consent. The High Court of Australia concluded the landowner did not grant an implied consent to the police offers to enter the premises, and therefore held that the police officers were trespassing.
How Australia’s land tenure system works
This right enjoyed by the Crown is a result of Australia’s system of land. This is known as the Doctrine of Tenure, was incorporated into the Colony of NSW at the time of the proclamation of sovereignty in 1788, thereby granting the Crown (the government who represents the Crown) the right to grant interests in the petroleum and minerals if it so choses to, regardless of your interest in land. There are two common forms of interests in land granted by the Crown under the Australian common law system: Leasehold interest and Freehold (Fee Simple) interest.
A Leasehold interest is an interest where a lease is granted by the landowner, conferring on the lessee exclusive possession of the land. A common form of leasehold interest in Australia is a Crown Lease, where the Crown, as owner of the land, leases the land for pastoral purposes. These pastoral leases have existed since the 19th Century, and are usually either perpetual pastoral leases (ongoing), or long term (up to 99 years). Approximately two thirds of Australian land is held as Crown leasehold.
A Freehold (Fee Simple) interest is an interest in land granted by the Crown that confers ownership of land. It is the closest form of ownership to absolute ownership. Most landowners in Australia presume that they have absolute ownership over their land, and therefore the right to refuse others from coming onto their land.
Given the common law position regarding rights over land, and the concept of trespass to land that was reinforced by Plenty v Dillon, landholders mistakenly presume that they have the right to exclude petroleum companies from entering their land.
However, as a result of the Doctrine of Tenure, neither the fee simple landowner nor the leaseholder (together known as the landholder) enjoys absolute ownership. Rather, the landholder only has the right to exclude all others except those whose interest in the land has been granted by the Crown. This is because under the Doctrine of Tenure, the Crown reserves rights over the land, entitling it to claim ownership in the minerals and petroleum that lie on and under land owned in fee simple. This right is known as a Crown reservation in respect of minerals and petroleum.
Queensland – Crown rights over Coal Seam Gas under the land
In Queensland, this reservation is outlined in section 27 of the Petroleum and Gas (Production and Gas) 2004 (Qld) (PGPGA), which notes that a Crown grant is taken to contain a reservation to the state of all petroleum on or below the surface, and the exclusive right to undertake petroleum activities of to authorize others to undertake petroleum activities. Furthermore, section 26 of the PGPGA states that petroleum is the property of the State, and a person does not acquire any property in relation to the property irrespective of whether the property is freehold or leasehold.
Therefore, under the concept of Crown reservation, the Crown in Queensland owns all of the petroleum under the land, and has the right to take the petroleum or grant a title to another in order to explore for and/or produce petroleum, including coal seam, tight, or shale gas.
This means that under the system of law in Australia, the Queensland government can allow separate interests to be held over a single property. This concept, known as fragmentation of property rights, means that the land can be owned by a farmer as a freehold interest, yet entitle a petroleum company to hold a title that allows it to enter the property to search for and produce gas.
Australia is not the United States
The position in the United States regarding minerals ownership and Crown reservation differs to the Australia. In the US, the development of onshore gas resources operates under a system of private ownership of resources, known as the law of capture.
Under the US system of land tenure, a landowner has absolute ownership over his land (known as allodial title). This includes ownership over all of the resources (including petroleum) that lie under the land he owns. Since the landowner owns all of the resources under his land, he has the right to accept or refuse offers from a company to develop these onshore gas resources.
It is important to note that where the US government owns the land, and the occupier of the land leases the land from the government, the right of the refusal to grant access to the land lies with the owner of the land, not the occupier of the land.
The rights of Queensland landholders
However, this does not mean that a titleholder has an unfettered discretion to come onto a landholder’s land. There are many rules that have been put in place, as well as guidance for companies when negotiating access agreements. Under the PGPGA, although a petroleum titleholder has a right of access onto a property (section 502), the titleholder is required to provide the landholder with an entry notice in order to carry out petroleum activities (section 497). Furthermore, the landholder has the right to negotiate an access agreement under section 506 of the PGPGA. In addition, the Queensland government has implemented the Land Access Code, which provides a framework for companies and landholders that are negotiation access to land for the purposes of carrying out petroleum activities.
Dr Tina Hunter is Assistant Professor of Law at Bond University, and a member of the Legal Culture Research Group and the Research Group for Natural Resources, Environment and Development Law at the University of Bergen, Norway. Read more about FAQ Research writers here.