North coast miner Metgasco has sent shockwaves through the coal seam gas (CSG) industry in NSW this morning, announcing it has suspended exploration, blaming the state government’s recent changes for the move.
The company, which has faced a massive groundswell of community opposition, issued a statement this morning announcing the suspension, but failed to mention proposed new federal powers to halt new CSG mining projects if they impact on groundwater.
Yesterday, Page MP Janelle Saffin, who had lobbied environment minister Toby Burke to intervene, warned that the new federal laws would ‘effectively put an end to the aspirations of CSG companies on the north coast’.
The state government’s recent changes to CSG exploration and mining laws to keep the controversial boom industry out of urban areas was cited by Metgasco as one of the reasons for the suspension of its Clarence-Moreton Basin exploration and development program.
It did not mention the proposed new federal changes to use impacts on groundwater as a trigger for environmental assessment, but said the ‘uncertain operating environment’ created by the NSW government’s announcement last month led to the move.
The company, which will shed some local jobs as a result, says it will resume operations once the state’s CSG regulations were ‘firmly established’, and that it would pursue opportunities outside the Clarence-Moreton Basin (covering the northern rivers area).
Metgasco managing director Peter Henderson said that ‘as the regulations currently stand, it is not clear exactly how they will affect the approval, timing and conditions for new wells and developments’.
‘With the NSW Chief Scientist report not due until mid-year, Metgasco, like all other energy companies looking to undertake CSG developments in NSW, is potentially faced with another six months or more of regulatory uncertainty and delays,’ he said.
Mr Henderson said the decision was not an easy one, but ‘necessary to preserve shareholder value’.
‘Until the NSW CSG regulations are firmly established and tested, Metgasco plans to scale back its organisation while maintaining a small presence in the northern rivers region to manage community consultation and maintain key relationships,’ he said.
‘The company will rehabilitate most, if not all, wells and facilities located on its permits.’
Mr Henderson said the company had been exploring for gas in the northern rivers for almost 10 years and had spent nearly $100 million in acquiring its licences and undertaking exploration.
He said the exploration had confirmed ‘a very large scale CSG resource with an estimated 2,500 petajoules of natural gas reserves in place’.
He said the company currently had the ‘largest uncontracted gas reserves on the east coast’.
Not once did he mention community protest campaigns that have dogged his company for the past two years.
Meanwhile, north coast anti-CSG campaigners say the federal changes don’t go far enough while impacts on agricultural land, air quality and farmland are ignored.
Lock The Gate Alliance campaign co-ordinator, Carmel Flint, said that while a water trigger was a useful addition to the federal laws, ‘it means nothing unless it is backed up by the political courage to reject damaging coal and gas mining projects’.
‘The current federal government has approved every coal mine and gasfield that has ever been referred to it, there have been many environmental triggers, just not the courage to act on them,’ Ms Flint said.
‘The real test of this change will be in whether the federal government rejects the coal mines planned for the Liverpool Plains, and the Arrow coal seam gas project in Queensland which was slammed in a review by the Expert Scientific Committee yesterday.
‘There is plenty more to be done and we will continue to work with communities all around Australia to implement our Call to Country to deliver far-reaching reforms.
‘We are amazed that the Coalition is planning to oppose the changes, this is a major test for them and they need to listen to farming communities and rural constituents.
‘We will be seeking changes as the reform is debated in Parliament to give the Expert Scientific Committee a full decision-making role in determining projects, and to ensure these new powers can’t be handed straight back to the states after the election,’ Ms Flint said.
Lock the Gate Tweed spokesman Michael McNamara said focusing on water was not enough to determine the impact of CSG, and he would like to see a number of triggers around air quality, community health and on agricultural land also included in the proposed federal law changes.
‘The rapid, and rabid, expansion of coal, coal seam gas and other forms of unconventional gas has had a massive impact on communities, rural industries and the environment right across Australia,’ Mr McNamara said.
‘These changes go some way to addressing community concerns, but much more remains to be done. Cumulative impacts over time and impacts on productive farmland, air quality and community health remain unaddressed.’
Mr McNamara said the federal government could halt the CSG industry if it had major impacts, just as it did in 1976 when it stopped sand mining on Fraser Island.
He praised federal MPs Justine Elliot and Janelle Saffin for their involvement in toughening the federal laws, but called on them to redouble their efforts ‘to bring about further changes to safeguard communities against the cumulative impacts of these developments, to protect our air and soils and productive farmlands and to protect community and individual health’.
He also called on the north coast’s National Party MPs Geoff Provest, Don Page, Thomas George and Chris Gulaptis to support the move.
Lock the Gate Alliance spokesperson Boudicca Cerese has warned decisions on CSG mining could be left to the political whims of the day.
Ms Cerese told APN Media that federal powers to break or make CSG projects had already been triggered over three multi-billion-dollar CSG projects in Queensland in 2010 and documented threats to biodiversity and world heritage areas were still deemed insufficient to reject them.
‘So far we haven’t seen the federal government refuse any major coal or CSG projects, so the test will be whether they’re prepared to refuse projects that are going to have significant impact on water resources,’ she told the Northern Star.
She said politicians would need ‘political courage’ to act accordingly.
Ms Saffin said the new rules were likely to be passed by parliament later this month, giving the government the power to individually assess each new CSG proposal and refuse those that endangered ground water.
Richmond MP Justine Elliot said that ‘without water there is no life and it’s important we take steps to ensure our water systems are protected’.