The Queensland government has banned underground coal gasification in the state, following environmental concerns surrounding Linc Energy.
The Queensland government has immediately banned underground coal gasification in the state, arguing the environmental risks outweigh economic benefits.
Natural Resources Minister Dr Anthony Lynham says the ban, which would apply immediately as government policy, would be made official by the end of the year through legislation introduced into parliament.
The ban came after UCG pilot company Linc Energy, which last week went into voluntary administration, was recently committed for trial in the District Court on five counts of wilfully and unlawfully causing serious environmental harm.
"The potential risk to Queensland's environment and our valuable agricultural industries outweigh any potential economic benefits from the particular industry," Dr Lynham said on Monday.
Queensland's three trial sites, including Linc Energy's site at Hopeland in the western Darling Downs, would now be decommissioned, he said.
Dr Lynham said although the pilot program was a failure and the industry wasn't operating in the state anymore, there was still value in banning it by law.
"We have to send a clear message to this industry that this industry has not been successful here in Queensland," he said.
"This is a sensible step for the Queensland government (and) it's a sensible step forward for the resources sector."
Environment Minister Steven Miles said he'd seen first hand how much Hopeland residents had suffered due to the effects of UCG.
"What we have in Hopeland, near Chinchilla, is the biggest pollution event probably in Queensland's history," Dr Miles said.
"Certainly the biggest pollution investigation and prosecution in Queensland's history."
Lock the Gate Alliance president Drew Hutton said he'd been fighting for at least six years to have the government ban UCG.
The impacts on the Hopeland community indicate why, he said.
"They've had underground coal gasification, which has poured poisonous gases across their land for a long period of time," he said.
"They've got potentially their soils and their water threatened and they're devastated.
"This is some of the best agricultural country in Queensland, so they are just stressed out there."
Mr Hutton said the government now had to ensure the land was properly rehabilitated and made safe.
Cougar Energy's UCG trial was shut down in 2010 after benzene was detected in nearby water bores, while Carbon Energy is decommissioning and rehabilitating its site at Bloodwood Creek near Dalby.
The Queensland Resources Council said it was disappointed the government made its decision without consultation.
"This unexpected announcement of another commodity ban without the release of the triggering evidence can only raise concern for business confidence and investment in this state," acting chief executive Greg Lane said in a statement.
Opposition environment spokesman Steve Bennett agreed, despite conceding all three companies had been fined previously and had a history of not complying with environmental regulations.
"The LNP took these issues seriously, but we also take Queensland's investment reputation seriously," he said.
"So we call on the Palaszczuk Labor government to release the evidence it has relied on to make this decision."