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Lessons CSG operators can learn from southern Queensland towns

What changes to community character and wellbeing are being brought about by the initial phases of development? University of Queensland researchers investigate the matter.

Development of the substantial coal seam gas (CSG) resources in the Darling Downs region of Queensland has offered local towns attractive prospects for growth and the promise of economic opportunity.

These prospects have been accompanied by high hopes in government and business that the CSG boom will counteract an ongoing decline of population and economic stress caused by drought in rural areas. That was five to ten years ago. How have these towns gone?

The onshore gas operators in the region have undertaken measures that demonstrate a genuine commitment to identifying and mitigating potentially negative social impacts. However, their social impact management plans (SIMPs) are typically centred on the effects of their own activities with a focus on the towns central to their construction activities.

The aggregated, “˜cumulative’ impacts of CSG development across the region and over time need to be understood. This has been the focus of a study by UoQ researchers.

The research has identified impacts that are both positive and negative. Unemployment has dropped, but skills shortages have been felt. Housing prices have spiked, but population has moved steadily upward nonetheless. Reported crimes in some categories have increased, but they have remained steady in other categories.

An influx of non-resident workers in fluorescent work gear has changed the look and character of some towns. Also affecting the character of certain towns is an outward migration of older residents who took the opportunity to sell their house for a good price. As a result, there are reports that towns are losing their volunteering resources and their informal childcare providers.

So, while many of the impacts of CSG development are obvious and expected, others could be characterised as indirect and unanticipated. However, certain impacts could become problematic if left unmanaged.

For example, the pace and scale of development experienced in the Downs is unprecedented for an Australian regional area. Rapid change can often lead to social instability, a reduction of community cohesiveness, and perceptions that individual and community wellbeing are in decline. Evidence of these changes suggests that the social evolution of the region has presented challenges, though the financial injection from CSG development seems positive.

UoQ’s methodology for measuring cumulative impacts of CSG developments

Not surprisingly, detecting – much less predicting – cumulative social and economic impacts involves a complex array of factors. Impacts can be experienced differently by different towns, families and individuals.

To understand the range and magnitude of these cumulative impacts, a UoQ study has assembled a set of indicators. These indicators monitor changes in core community “˜assets’ that include financial capital, infrastructure, skills base, social connections, and the environment. The particular indicators that have been prioritised in the UoQ research relate to population, income, employment, housing affordability, safety, and wellbeing.

The research team has gathered data on these indicators for three towns in the Western Downs local government area. Historical data goes back to 2001. That has enabled researchers to track changes in the indicators from before CSG development took hold through to the recent boom years. The intention is to have the indicators track changes as the construction phase gives way to 20-30 years of operations.

The indicators have been presented as timeline charts. The charts were taken to key stakeholders in industry, government, and the communities. They were used to stimulate discussion and assess the extent to which the data reflect the impacts that individuals perceived. They have enabled exploration of possible causal factors for certain changes (like spikes in housing costs) and how local residents and businesses responded to mitigate those impacts (such as subsidising the wages for service employees).

The UoQ research team elicited stories about individual experiences of these impacts and explored concerns about how impacts might have become, or might yet become, problematic. This process of collecting and then “˜ground truthing’ data has allowed the team to compare evidence with perceptions of change.

Evidence vs perceptions of change

Key stakeholders interviewed in the Western Downs tended to be leaders of community or business organisations, serving in consultation committees, or sitting in local or state government.

They stated that some of the research collated by the UoQ team adequately explained what they had experienced, but other data did not. For example, they imagined that average personal income levels would be higher than the data showed due to their view that the resources sector pays high wages.

Interviewees also told of a “˜two-speed economy’ that seemed to have emerged in their communities. There were businesses and individuals who were able to win jobs or contracts associated with CSG development and were seen as able to prosper. Others were perceived to have missed out, appearing to receive few benefits or even additional stresses from the CSG developments.

Some identified an apparent arbitrariness in the awarding of contracts and in selection of where community investment by CSG companies occurred. Such perceptions contributed to some bitterness and divisiveness in the communities between those seen to be benefiting (the “˜haves’) and those not seeming to benefit (the “˜have-nots’).

That aside, the positive outcomes from community investment by CSG companies were generally appreciated. Interestingly, those interviewed did not appear to share a common understanding of the logic or strategy in CSG companies’ delivery of these community initiatives. In general, they stated a desire to see a more equitable distribution of social and economic benefits from CSG development.

Perceptions of population growth seem to reflect the relatively large influx of non-resident workers in an area that had a relatively steady population.

Chinchilla, for example, was described in an interview as a “sleepy town of around 3,000 people”?. Since 2008, population in Chinchilla has increased at around three to four per cent per year. Annual growth rates reached nearly 10 per cent in 2008 and over five per cent in 2011. A population increase of greater than five per cent per year matches criteria for designation as a resource “˜boom town’ according to studies in the western United States. In those regions of North America, a rapid increase in population was documented as overstretching the ability of local government and business to provide needed social services. Having inadequate social services can make an area less attractive to live and invest in, which can generate a downward spiral as residents leave and the local skills base gets depleted.

A big part of the population changes has been the number of non-resident workers staying temporarily in towns or in nearby workers’ camps. The small Queensland town of Miles, for example, has a steady town population of around 1,200 with estimates of the non-resident workforce in town and in camps ranging up to 1,000. One interviewee lamented how “nine out of ten people you see on the street are strangers”?. In a small country town with traditionally strong social cohesion, the presence of “strangers”?, mostly men, was described by local residents as being “disturbing”?.

With all of the unfamiliar men in town, women were said to initially fear for their safety and for that of their children. It was observed that women changed how they socialised, avoiding pubs full of CSG workers. However, reported assaults on women did not increase, according to police statistics. Over time, concerns reportedly dissipated as residents stated that they “got used to”? the presence of non-resident workers.

Unexpected and indirect impacts

Indirect, and often two-pronged, impacts of Darling Downs’ CSG developments on social structures, culture and wellbeing were noted. For example, the influx of non-resident workers as part of the CSG construction phase was a boon for those providing temporary accommodation and housing. Motel rooms were booked out year round with few vacancies available for tourists. Conversely, tourism-based enterprises reportedly suffered as a result.

Similarly, rising house and rental prices caught the attention of property market investors, as houses sold by long-term residents were bought as rental properties by investors in the capital cities. On the flip side, the cost of housing was said to have become “˜unaffordable’ for many local renters. Real estate agents stated that lower-income families had been forced to move away into smaller towns away from the CSG development and into Toowoomba.

Meanwhile, the larger and more economically diverse town of Dalby remained relatively affordable. As a result, some CSG-related workers reportedly moved from Chinchilla or Miles to Dalby, and their daily commute to work increased traffic on the roads. Traffic was the most common complaint received by the CSG companies’ community engagement staff. One long-term resident in Dalby noted how this commuting was a reversal of the traditional trend, where people living in the smaller towns would travel to Dalby for work opportunities.

Camps constructed to accommodate the increasing number of non-resident workers did not become operational in time to avoid a housing shortfall. CSG companies were required, as part of their Queensland government approval process, to construct permanent housing in some towns. Other housing was built by private developers capitalising on the property “˜boom’. Some houses were purpose-built and unsympathetic to the rural character of the towns. Homes with four or five bedrooms, each with an ensuite, were expected to be potentially difficult to sell as family homes in the future.

More recently, the tailing off of the CSG construction boom has reduced the need for a large non-resident workforce. Chinchilla is reported now to have 230 vacant houses, or a 20 per cent vacancy rate. One real estate agent described the situation as “disastrous”?.

Size matters

The CSG boom in the Darling Downs has brought with it an increase in population as well as some temporary and long-term employment opportunities. However, a look at individual experiences town-by-town has revealed how each is impacted differently and responds differently to changes.

The UoQ research found that the level of benefits and negative impacts in each town was influenced by town size, connectivity, and the degree of fragmentation in decision-making, i.e. the extent to which decision-making can potentially be misaligned between local government and the private sector.

Currently, gas operators report the expected, and measured, socio-economic impacts of their activities mainly at the regional level only. More reporting at the town scale is called for. The companies seem to affiliate themselves with specific towns, usually the ones closest to their gas field leases. A positive impact in such towns enables the gas operators to forge a “˜social license to operate’, in part through local community investment and local procurement of goods and services.

However, it can be argued that the well-intended policies and protocols employed by a single company for managing impacts at the town level ought to be co-ordinated and aligned with the efforts of other companies in that town and in the region. Such co-ordination is done to some extent, with all four gas operators supporting science enrichment programs in schools of the Darling Downs, for example, and some sharing of community consultation committees. Extending that co-ordination both locally and across the region could synergise benefits to counteract potentially negative cumulative impacts.

With the peak construction phase of CSG development in the Darling Downs now tapering off, residents and business owners are voicing concerns about uncertainty. Gas operators need to address that uncertainty to help local stakeholders make wise decisions and to ensure community, government and the industry avoid the negative consequences that can accompany any resource development.

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