A RURAL property agent at the centre of the rapidly expanding coal seam gas industry in Queensland has warned that properties affected by gas mining are becoming increasingly harder to sell.
Vince O'Brien has been a rural property agent with Elders at Roma for more than 35 years, and in the past five years has had a front-row seat to the explosive growth that has occurred in the CSG well and pipeline infrastructure across the region.
The burgeoning industry has brought thousands of jobs and millions of dollars' worth of investment to regional Queensland, but with those gains have come hidden and, some say substantial, costs.
Among them is Mr O'Brien, who says he has been astounded at the way in which many rural landowners have "rolled over" and accepted CSG wells on their properties without paying sufficient heed to the potential damage that CSG mining can cause to their water, land and long-term property values.
Before CSG companies can drill, they must first negotiate arrangements with property owners to compensate for mining impacts.
Agreements often involve initial payments followed by ongoing annual payments for each well on a property.
While the details of these payments are often hidden in confidentiality agreements, figures of $3000-$6000/well/ year are understood to be representative of the current market. Such compensation packages can amount to substantial and welcome cash flows for producers, particularly in dry years when farming or grazing incomes are restrained.
However, Mr O'Brien said signs were mounting that CSG mining could cause greater losses to long-term property values than affected producers realised when negotiating access agreements.
He believes compensation packages as a minimum should be set at 20 percent of the market value of the property, based on the levels of buyer resistance that were evident for properties with CSG infrastructure.
"The bottom line is you can't sell them," he said. "No-one wants to buy these places because they have mining activity on them ? they say show me something else.
"People say to me before they even want to inspect: is there any mining activity? If there is, I'm not coming ? I don't want to be involved. They can't stand it."
Mr O'Brien recently provided a statement as an expert witness in a court case in which a large rural company sought compensation for value to property lost as a result of CSG mining.
In his statement he observed: "I know as a fact there is a strong buyer resistance (I'd call it 100 percent resistance) to rural properties which are affected by CSG activities."
Indicative of the trend was the increasingly common sight of property advertising material declaring that a property had no gas or mining activity "because this was such a strong selling point", Mr O'Brien said.
"From time to time I am asked by clients wanting to sell properties affected by CSG activities for advice.
"What I say to them is that they should not waste their money on any form of advertising if their properties are affected by gas or mining activities.
"I also tell them that because of the concerns prospective purchasers have about these types of activities, the values of their properties have definitely softened considerably."
He conceded that it was difficult to produce evidence of a link between CSG mining and declining rural property values because of the limited number of property sales that had occurred in the district in recent years.
The problem was compounded because the few isolated sales of properties with existing or proposed gas infrastructure that had occurred had largely been sold directly to CSG companies.
Mr O'Brien also questioned the extent to which regional economies benefitted from the CSG mining boom.
This was because most CSG workers operated on a fly in, fly out basis and spent their earnings away from the areas in which they were earned. Money was being taken out and not being put back.
While businesses such as motels in Roma were booming, others were struggling. A major car dealership in town recently closed its doors, followed soon after by the Maranoa Club, a long-running licensed social club.
Locals were having to pay mining company prices, such as rates of $120/hour for tradesmen.
"A lot of businesses around town would not be going well."
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