Shoalwater Bay Shoalwater Bay is a large bay on the Capricorn Coast of Central Queensland , Australia 100 km north of the coastal town of Yeppoon and 628 km north - north - west of the state capital , Brisbane . Since 1966 , the land surrounding Shoalwater Bay has been under the ownership of the Australian Defence Force , for the purpose of military training exercises . Shoalwater Bay is also a noted dugong habitat and is part of the Great Barrier Reef Marine Park . The bay is bounded by the Torilla Peninsula to the west and the Warginburra Peninsula and Leicester and Townshend islands to the east . History . The first recorded European to sight Shoalwater Bay was British navigator James Cook on 28 May 1770 . Cook referred to the entire region , from Cape Palmerston ( south of Mackay ) to Cape Townshend , including Shoalwater Bay , as the " Bay of Inlets " , a name which is no longer in use . Cook bestowed the name " Shoalwater Bay " on the southeasternmost of these bays , a reference to the number of sandbars in the bay . Following Cook , Matthew Flinders conducted further exploration of Shoalwater Bay in 1802 , landing on Akens Island ( a small island on the western side of Shoalwater Bay ) and exploring the head of the bay . Flinders described the land as such : Settlement of the Rockhampton region commenced in 1853 . By 1860 , vast areas of the Shoalwater Bay region has been claimed by settlers . This settlement resulted in the dispersal - often violently - of the traditional inhabitants of Shoalwater Bay , the Darumbal people . Shoalwater Bay Military Training Area . The Shoalwater Bay Military Training Area encompasses 454 , 500 hectares ( 4 , 545 km² ) , which includes the Warginburra Peninsula , the Torilla Peninsula east of the Stanage Bay Road , Townshend and Leicester Islands , and a sizable chunk of the Shoalwater Bay hinterland north of the village of Byfield . Suggestions that the Shoalwater Bay region be acquired for the purpose of a training ground first appeared in 1960 . The army formally took control of the land on 1 July 1965 ; by the following year , the last landholder had vacated his property . The training area was used by troops who were deployed to the Vietnam War . In 2005 the federal government entered into a long - term agreement with the US over the use of Shoalwater Bay for military training purposes . Similar agreements over a shorter time span have been agreed to with the Singapore Ministry of Defence . Military exercises with the United States have aroused considerable controversy in the Rockhampton - Yeppoon area , due to the threat of environmental damage to the Shoalwater Bay region . In recent years , concern has been raised about the possibility of depleted uranium weaponry been used during training exercises at Shoalwater Bay . Peace activists protesting Exercise Talisman Saber were arrested in 2009 . Support for a permanent US presence has been expressed by the former Rockhampton mayor , Brad Carter in 2011 , and by current mayor , Margaret Strelow . Environment . The bay contains one of the most important seagrass habitats in the Great Barrier Reef Marine Park . A plan of management for the bay ' s dugong population was released in 1997 to protect the dugong population and reduce impacts on the seagrass meadows . Important Bird Area . A 483 km area of the bay and its surrounds , covering all the habitat types suitable for migratory wader s , or shorebirds , has been identified by BirdLife International as an Important Bird Area ( IBA ) because it supports over 1 % of the world populations of Pied Oystercatcher s , Far Eastern Curlew s and Grey - tailed Tattler s , and over 1 % of the East Asian – Australasian Flyway populations of Bar - tailed Godwit s , Whimbrel s and Terek Sandpiper s . It also contains populations of Beach Stone - curlew s and Mangrove Honeyeater s . EPBC Act decisions . In September 2008 , the then Environment Minister , Peter Garrett decided under s . 74B of the EPBC Act that a proposal by Waratah Coal Inc . ( as set out in referral No . 2008 / 4366 ) to undertake the Galilee Coal Project in Central Queensland was ' clearly unacceptable ' for reason of the likely impacts it would have on , firstly , wetlands of international importance , and secondly , the environment on Commonwealth land . In popular culture . Shoalwater Bay is mentioned in I Was Only Nineteen , the # 1 single by Redgum from the 1983 album Caught in the Act . It is also mentioned in the video game Arma 2 , when a USMC Private name Kowalski mentions he had a fun time with the " Aussies at Shoalwater Bay "