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The influence of an oil or gas operation on its host communities continues beyond the decommissioning of assets. The extent of influence and/ or impact will vary depending on the nature of the operations, in particular the proximity of sensitive receptors (e.g. communities, commercial and recreational fisheries). When done well, planning for closure serves as a foundation for sustained socio-economic well-being, beneficial reuse of project assets, and accountable decision-making. This ultimately contributes to an operator's social license. However, without effective planning, stakeholders often find themselves unable to adapt to the changes brought about through decommissioning. The outcome is an operator with undue expectations and stakeholder grievances. This has been shown to impact an operator's social license to operate, which, in recent times, has been amplified by the transparency created through avenues like social media. Social license to operate is not a new concept for the industry. To date, much of the focus has been on obtaining a social license to operate in the early stages of a project, and maintaining it during the operation phase. What is emerging is the need to obtain and maintain a social license during the decommissioning process (and beyond). This requires good planning and extensive engagement with stakeholders, including affected communities and regulators.

The coal seam gas (CSG) industry in New South Wales (NSW) has reached a stalemate, despite a growing demand for domestic gas. The present paper suggests that a key reason for this is the industry’s loss of its social licence to operate, which resulted from a loss in trust and a lack of perceived procedural fairness.

The coal seam gas (CSG) industry in NSW is now largely defunct due to the loss of social licence to operate. Six years of community outrage and Government indecision resulted in increased regulation and eventually withdrawals by the major operators. The demise of this industry occurred despite a gas shortage in the State, existing operational CSG fields with a good track record, initial government support, a neighbouring state, Queensland, with over 3,500 production wells, and a detailed investigation by the Government's Chief Scientist supporting the industry. Despite this, a groundswell of community opposition brought pressure to bear on the governments, operators and banks to force the effective closure of this potential industry. This paper analyses the history of this battle to identify lessons for the industry and operators in order that they are able to make earlier and better decisions should similar circumstances arise in future. It identifies the key milestones in this debate, including; Formation and consolidation of major community opposition groupsEnquiries set up be the GovernmentIndecisive politics and ineffective regulationThe Metgasco saga of community blockades and eventual Government buy back of the licenceWithdrawal of major operators The paper draws conclusions and provides recommendations on how the industry as a whole, and individual operators, could have identified and responded to these issues in a more productive manner. The recommendation provide guidance on how the industry could have : Recognised the groundswell of opposition much earlierUnderstood the complexities of the alliance that formed against the industryEngaged with the opponents to determine whether there was a way forwardMade better investment decisions, based on a detailed understanding of the scale of community concerns.

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