The NSW government has revoked the licences of a coal seam gas company run by a lone director whose titles span 5500 square kilometres of prime rural land, in a move hailed as a "landmark" win for farmers and the community.
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It is the first time the current state government has cancelled a coal seam gas licence for compliance breaches, as it seeks to crack down on shoddy operators and build public confidence in the controversial industry.
Minister for Resources and Energy Anthony Roberts on Tuesday announced the government had cancelled three licenses held by Leichhardt Resources, which had permission to explore for coal seam gas near Nowra, Rylstone and Moree.
Mr Roberts said the licenses were cancelled because the company, solely directed by Queensland lawyer Simon Tolhurst, failed to fulfil its licence conditions.
The alleged breaches included not complying with community engagement requirements for all three licenses. It is understood that Leichhardt Resources repeatedly failed to lodge annual reports detailing community consultation it had carried out.
The Office of Coal Seam Gas also alleged the company did not complete a program of work at its Moree site to the required schedule.
The government issued a "show cause" notice to Leichhardt Resources in August, asking it to explain why its licences should not be cancelled.
Mr Roberts said titleholders must "abide by their work programs to ensure they adequately explore for the state's resources and to provide certainty for the community".
He has previously claimed that, under the former Labor government, it was too easy for "speculators and cowboys" to be granted licences over large tracts of land with little regulation or oversight.
The titles were granted to Leichhardt Resources in 2009 under Labor, and renewed in February 2013, with conditions, under the present government.
Three months later Leichhardt Resources' operator Planet Gas announced its withdrawal from coal seam gas activities in NSW, raising questions over whether gas exploration activity would ever be conducted at the sites.
Mr Tolhurst could not be contacted for comment. The Leichhardt Resources website says the company is "owned and managed by technical and commercial staff with over 50 years of combined industry experience".
Lock the Gate national co-ordinator Phil Laird said the "landmark" ruling set a legal precedent. He credited the decision to investigative work and campaigning by community members who "shone a light" on the company's failings.
NSW Greens MP Jeremy Buckingham said the Leichhardt Resources licenses "put at risk productive agricultural land" and the announcement was a win for farmers and communities.
He said similar problems plagued exploration licences covering the Sydney metropolitan area and water catchments, and called on the government to cancel those titles.
Mr Buckingham said a report by the NSW Chief Scientist released last month warned coal seam gas could have "unintended consequences". He said the state should be transitioning from fossil fuels to renewable energy.
Professor O'Kane's report said the technical challenges and risks posed by the industry could be managed, partly through high standards of engineering and professionalism from operators.
