Australian communities are lobbying governments to improve regulation of the Coal Seam Gas (CSG), a fast growing industry. This article examines the effect of CSG extraction on agriculture, water resources and ecosystems in Queensland where CSG development is most intense. Supporters of the industry view Queensland's regulatory framework as ‘best-practice’. Whilst policy documents adopt an ‘adaptive management’ framework, legislation provides an enabling environment for industry, allowing unlimited volumes of groundwater to be extracted as a by-product. In an important agricultural region, the Darling Downs, irrigators who access groundwater in the same area as the CSG mining are experiencing water quality and quantity problems. Regulation provides limited ‘make-good’ arrangements for individuals if groundwater wells suffer impact. While potential impacts on individual wells and farmers are locally significant, there is limited recognition of cumulative risk management of CSG development at the regional scale. Contrasting two risk assessment approaches, the authors suggest a more appropriate pre-emptive regulatory framework for a stronger focus on cumulative risk management to satisfactorily address sustainable water management, irrigated agriculture and development issues. Lessons may assist other countries grappling with managing impacts on agriculture and the environment.