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Linc Energy

Site management

The Queensland Government inherited responsibility for the management of Linc Energy’s (Linc) underground coal gasification site in Hopeland after Linc entered liquidation, and took immediate action to secure the facility. The Department of Environment and Science (DES) formally engaged contractors with expertise in the management of petroleum facilities to provide care and maintenance of the site.

The Department of Natural Resources and Mines and Energy (DNRME) now has responsibility for the site. Queries in relation to the site can be directed to DNRME on 13 QGOV (13 74 68).

DES remains actively involved in environmental management and site rehabilitation.

Rehabilitation

DES has commenced preliminary steps in relation to site rehabilitation. There are two major aspects to this work—the expansion and maintenance of the groundwater monitoring network on the Linc site, and the characterisation of Linc’s underground coal gasification cavities.

Groundwater monitoring network

DES’ expanded groundwater monitoring network surrounds the perimeter of the Linc site and enhances the existing environmental protection measures. The new and existing networks will be regularly monitored as part of the rehabilitation process.

Onsite drilling works commenced in September 2017 with construction being completed in April 2018. Sampling from the new and existing networks is expected to commence in late May 2018.

This work is largely funded by Linc’s financial assurance, which DES secured from the company’s liquidators in late 2016.

Cavity characterisation

Characterisation of Linc’s underground gasification cavities will involve drilling into the cavities to understand their spatial extent and composition. This will inform further decision making in relation to rehabilitation. DES expects this work to commence in 2018.

Minimising clean-up costs

DES has used enforcement tools under the Environmental Protection Act 1994 (Qld) (EP Act) in relation to the rehabilitation of the Linc site. DES is currently doing everything in its power to minimise costs to the taxpayer through various compliance actions.

Environmental Protection Order directed to Linc

Prior to Linc entering liquidation, DES issued Linc with an Environmental Protection Order (EPO) which required it to retain critical infrastructure on-site, conduct a site audit and undertake basic environmental monitoring to characterise the current status of the site.

Linc’s liquidators launched a legal challenge associated with this EPO in the Supreme Court seeking orders that they were justified in not causing Linc to comply with the EPO (or any future EPO). DES opposed this application.

In April 2017, the Supreme Court directed that Linc’s liquidators are not justified in causing Linc not to comply with the EPO. The Court accepted DES’ argument that the relevant provisions of the EP Act prevail over the Commonwealth Corporations Act and that Linc’s liquidators are executive officers of the company. Subject to any appeal decision, this confirms DES’s ability to enforce compliance with environmental obligations owed by resource companies who have gone into administration or liquidation.

Linc’s liquidators have since appealed the decision to the Court of Appeal. This appeal was heard in September 2017 and the decision was reserved.

Environmental Protection Order directed to a related person of Linc

DES used the ‘chain of responsibility’ amendments to the EP Act to issue an EPO to a ‘related person’ of Linc. The EPO requires the recipient to take steps to decommission most of the site’s dams and provide a bank guarantee of $5.5 million to secure compliance with the order.

The recipient of the EPO has appealed to the Planning and Environment Court and that litigation is ongoing.

The recipient of the EPO also applied for an order that the appeal be allowed and the EPO be set aside on the basis that DES denied him procedural fairness. The Planning and Environment Court dismissed that application. The recipient of the EPO appealed that decision to the Court of Appeal. That appeal was heard in March 2017 and judgment in favour of DES was delivered in August 2017. Subject to any further appeal, this decision confirms that the recipient was not denied procedural fairness and that DES’ interpretation of the EP Act was correct.

The earlier appeal in relation to the EPO (regarding the substance of the document) is yet to be heard by the Planning and Environment Court.

Investigation and prosecution of Linc and former executives

On 9 April 2018, a Brisbane District Court jury convicted Linc Energy Limited of all five counts of wilfully and unlawfully causing serious environmental harm, in contravention of the Environmental Protection Act 1994. These verdicts conclude a ten week trial, which is the culmination of the largest and most complex environmental investigation conducted by the environmental regulator in Queensland’s history.

On 11 May 2018, the Brisbane District Court sentenced Linc Energy Limited to a total fine of $4.5 million for five offences of wilfully and unlawfully causing serious environmental harm, over a period of seven years, in contravention of the Environmental Protection Act 1994. Convictions were also recorded against the company.

In addition, the Queensland Government has charged five former Linc Energy executives over the operation of the UCG site in Chinchilla. A committal hearing in the Brisbane Magistrates Court is expected to take place in mid-2018.

Media releases

Last updated
11 May 2018