The NSW government will receive $20 million from the federal government, which is part of its $50 million incentive budget for the states to join up to the NPA and is on top of the $150 million already secured by Windsor for scientific studies on the environmental impact of coal and coal seam gas drilling in “priority regions”

Windsor’s electorate of New England – which contains the Watermark project – has been designated a priority region.

Queensland signed up to the agreement and collected its $20 million two weeks ago as it struggled to deal with a growing backlash against coal mining and CSG from the rural lobby ahead of its state election.

Shenhua Energy is planning to submit an environmental impact statement for the project in mid-2012 which will consider ecology, geochemistry and water resources in the project area.

The Watermark project, located 35km southeast of Gunnedah, is targeting 10 million tonnes per annum of coal over a 30-year mine life.

If approved, it could create up to 600 full-time construction jobs and 425 jobs during operation of the mine.

The NSW government confirmed the Watermark project would be assessed as a state significant development under the new part 4, division 4.1 of the Environmental Planning and Assessment Act, following an overhaul of the part 3A planning system.

Prime Minister Julia Gillard said the NPA was in response to community concerns about the management of the impacts of large coal mining developments and CSG activities on important water resources and would fill the critical gaps in scientific understanding about the impacts.

She said it would also help to build stronger community confidence in the industry and help to underpin its safe and reliable expansion.

“The NPA will ensure that future decisions are informed by substantially improved science and independent expert advice, by establishing an Independent Expert Scientific Committee (IESC) that will provide governments with expert scientific advice on CSG and large coal mining development proposals that are likely to have a significant impact on water resources; commission public research and bioregional assessments in areas of high CSG and large coal mining developments in order to improve scientific knowledge and understanding of the impacts of these developments, both in specific locations and on water resources more broadly; and make public its advice and the findings of all research undertaken,” Gillard said.