CSG crackdown in NSW

WHAT does a state do when it is facing a gas shortage yet has abundant gas resources of its own waiting to be tapped? Does it (a) streamline approvals processes for oil and gas explorers to rapidly but sensibly develop its own resources or (b) strangle any hope of a natural gas industry within its borders?

Noel Dyson

In the case of New South Wales (b) is the overwhelming response.

Instead of clearing the way for sensible natural gas development, the NSW government has locked away even more land from explorers.

It has created CSG exclusion zones for 95% of dwellings covered by petroleum licences and also put in place tough regulations for the state’s agricultural land.

The move that puts “safeguards” in place for more than 5 million hectares comes despite the final report from the NSW chief scientist not being finalised.

NSW Premier Barry O’Farrell said the report would “provide an evidence base to support better understanding of the CSG industry in NSW and identify any gaps in the management of risks arising from CSG activities”

Coal seam gas exclusion zones will apply across NSW to cover critical industry clusters, residential zones, an additional seven rural villages and future growth areas in 55 council areas.

The exclusion zones will apply to 2.7Mha in NSW.

Some of the land in the CSG zones will also be subject to what the NSW government calls the Gateway process for other state significant mining activities.

The state government says it is safeguarding about 2.8Mha of its “most valuable farming land” by ensuring the impacts of land and water or resource proposals are considered through the Gateway process.

These “safeguards” initially only applied to the Upper Hunter and New England North West regions but have been extended state wide.

The government is also creating critical industry clusters for 60,000ha of viticulture land and 254,000ha of equine land in the Upper Hunter.

However, as some of that land overlaps, the total CIC safeguarded area is 288,000ha.

No new CSG activity will be allowed in any critical industry cluster and mining proposals in CICs must go through the independent assessment of the Gateway process.

Industry lobby group the Australian Petroleum Production & Exploration Association says the government has “dreamt up another layer of arbitrary and politically driven regulations for an industry the state desperately needs”

The NSW government will no doubt be well aware that the gas it normally gets from South Australia and Queensland will soon be diverted to LNG export plants.

Instead of helping explorers carefully prove up the state’s abundant CSG resources, the government has been among the most strident in screaming for a domestic gas allocation policy.

Deputy Premier Andrew Stoner, Planning and Infrastructure Minister Brad Hazzard and Resources and Energy Minister Anthony Roberts made the announcement yesterday, claiming the changes “struck the right balance for communities and industry”

“We’ve consulted with the community to identify millions of hectares of biophysical strategic agricultural land and critical industry clusters and today we have acted to ensure this important land is formally recognised and safeguarded,” Stoner said.

Clearly that consultation worked because not only had the rules upset the oil and gas industry, they also put farmers offside.

NSW Farmers president Fiona Simson expressed frustration at the latest tranche of reforms.

“We are unimpressed the NSW government cannot effect real and meaningful rules around coal seam gas that provide certainty for landholders and exploration companies alike,” Simson told Energy News’ sister publication Farming Ahead.

"We are not opposed to coal seam gas and extraction. But we do insist on a suite of strong safeguards to protect agricultural land and water, as well as a level playing field between the landholder and the exploration company when it comes to negotiations.”

Simson said while the association welcomed the increased mapping that had been done across the state, the gateway process was still flawed.

“It means little when the only additional hurdle is a gateway process that has no mechanism to stop inappropriate development. It’s simple really – put a gate in the gateway,” Simson said.

APPEA eastern region chief operating officer Paul Fennelly said it was not surprising NSW’s reputation as a place to do business was slipping.

“The measures announced yesterday put a stranglehold on natural gas development, business investment, job creation, regional growth and small business opportunities,” he said.

“The state’s failure to allow development of its gas reserves means NSW now faces unnecessary energy risks.

“The government should urgently reconsider blanket exclusion of vast tracts of land from gas development.”

Former Howard government minister Peter Reith recently singled out O’Farrell for his government’s inaction with regard to the development of the state’s natural gas reserves.

“If you are the premier of NSW you are paid to consider the state’s interests and just to join up with the greenies is walking away from an important issue,” Reith told The Australian.

“The issue is getting more important because I don’t think there is much doubt there will be days when Sydney goes without gas.

“It’s a real likelihood, which means jobs will be lost and businesses put under unnecessary pressure.”

Fennelly said in Queensland the government, industry, landholders, councils and communities were working together to ensure natural gas projects worth more than $60 billion could proceed in a way that benefited all Queenslanders.

“Thirty thousand Queensland jobs have been created; more than 4000 land access agreements are in place between landholders and gas companies; farmers have additional income and agricultural benefits; and more than $A100 million has been invested by gas companies in regional community projects,” he said.

Green lobby group Lock The Gate Alliance reckons the NSW government has not gone far enough.

It says the government still has plans pending to weaken the Petroleum (Onshore) Act 1991 and to introduce a land access code that will help CSG drillers get easier access to farm land.

“The announcements today are mostly smoke and mirrors by the NSW government – they have gazetted some important agricultural areas as strategic agricultural land but done absolutely nothing to protect those areas,” Lock the Gate Alliance spokesman Phil Laird said.

“The government claims that it is striking a ‘balanced position’ simply don’t ring true because gas mining giants still have the powers to force themselves onto farmers land.”

Laird reckons the moves only deliver certainty to gas extractors and that other industries such as agriculture and tourism have been “hung out to dry”

“Perhaps the biggest betrayal in this package is the betrayal of farming families – urban areas trigger a 2km buffer but families living in farmhouses in rural NSW will have gas drillers on their doorsteps,” he said.

So the one thing out of all of this is that NSW has struck quite a balance. It has managed to put just about every side of the debate offside.

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